PARKSTONE
VARIABLE ANNUITY
ANNUITY CONTRACT
THE COMPANY'S PROMISE
In consideration for the Purchase Payments and the attached application,
Security Benefit Life Insurance Company will pay the benefits of this Contract
according to its provisions.
LEGAL CONTRACT
PLEASE READ YOUR CONTRACT CAREFULLY. It is a legal Contract between the Owner
and the Company, Security Benefit Life Insurance Company. The Contract's table
of contents is on page 2.
RIGHT TO CANCEL
THIS CONTRACT MAY BE RETURNED WITHIN 10 DAYS AFTER RECEIVING IT BY DELIVERING OR
MAILING IT TO THE HOME OFFICE OR THE AGENT THROUGH WHOM IT WAS PURCHASED.
IMMEDIATELY ON SUCH DELIVERY OR MAILING, THE CONTRACT SHALL BE DEEMED VOID FROM
THE BEGINNING. ANY PURCHASE PAYMENTS PAID AND ALLOCATED TO THE FIXED ACCOUNT
WILL BE REFUNDED. THE VARIABLE ACCOUNT CONTRACT VALUE WILL BE REFUNDED AS OF THE
DATE THE CONTRACT IS RECEIVED BY THE COMPANY. ANY FEES OR CHARGES ON PURCHASE
PAYMENTS PAID AND ALLOCATED TO THE VARIABLE ACCOUNT WILL BE REFUNDED.
SIGNED FOR SECURITY BENEFIT LIFE INSURANCE COMPANY ON THE CONTRACT DATE.
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary President
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT
* Purchase Payments may be made until the earlier of the Annuity Start Date or
termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Start Date according to the
contract provisions.
* Annuity Payments begin on the Annuity Start Date using the method as
specified in this Contract.
* This is a participating Contract.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND THESE DOLLAR AMOUNTS ARE
NOT GUARANTEED. (SEE "CONTRACT VALUE AND EXPENSE PROVISIONS" AND "ANNUITY
PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGL]
Security Benefit Life Insurance Company
A Member of The Security Benefit Group of Companies
700 ▇▇▇▇▇▇▇▇, Topeka, KS 66636-0001
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Form V6020-1 (R4-94) ▇▇-▇▇▇▇▇-▇▇
BP 602PP1
TABLE OF CONTENTS
CONTRACT SPECIFICATIONS ........................................... 3
DEFINITIONS ....................................................... 4, 5
GENERAL PROVISIONS ................................................ 6, 7
The Contract ................................................. 6
Compliance ................................................... 6
Misstatement of Age and Sex .................................. 6
Evidence of Survival ......................................... 6
Incontestability ............................................. 6
Assignment ................................................... 6
Received By The Company ...................................... 7
Transfers .................................................... 7
Claims of Creditors .......................................... 7
Nonforfeiture Values ......................................... 7
Dividends .................................................... 7
Reports ...................................................... 7
OWNERSHIP, ANNUITANT AND
BENEFICIARY PROVISIONS ............................................ 8
Ownership .................................................... 8
Joint Ownership .............................................. 8
Annuitant .................................................... 8
Primary and Contingent Beneficiaries ......................... 8
Ownership and Beneficiary Changes ............................ 8
PURCHASE PAYMENT PROVISIONS ....................................... 9
Flexible Purchase Payments ................................... 9
Purchase Payment Limitations ................................. 9
Purchase Payment Allocation .................................. 9
Place of Payment ............................................. 9
CONTRACT VALUE AND EXPENSE PROVISIONS ............................. 9, 11
Contract Value ............................................... 9
Fixed Account Contract Value ................................. 9
Fixed Account Interest Crediting ............................. 9
Variable Account Contract Value .............................. 10
Determining Accumulation Units ............................... 10
Accumulation Unit Value ...................................... 10
Net Asset Value .............................................. 10
Contract Maintenance Charge .................................. 10
Mortality and Expense Risk Charge ............................ 11
Administration Charge ........................................ 11
Premium Tax Expense .......................................... 11
WITHDRAWAL PROVISIONS ............................................. 11-13
Withdrawals .................................................. 11
Withdrawal Value ............................................. 11
Withdrawal Charge ............................................ 12
Free Withdrawals ............................................. 12
Systematic Withdrawals ....................................... 12
Free Systematic Withdrawals .................................. 12
Disability Waiver ............................................ 12
Date of Request .............................................. 13
Payment of Withdrawal Benefits ............................... 13
DEATH BENEFIT PROVISIONS .......................................... 13, 14
Death Benefit ................................................ 13
Proof of Death ............................................... 13
Distribution Requirements .................................... 14
ANNUITY PAYMENT PROVISIONS ........................................ 14-17
Annuity Start Date ........................................... 14
Change of Annuity Start Date ................................. 14
Annuity Start Amount ......................................... 14
Annuity Payment Guarantees ................................... 15
Annuity Payments ............................................. 15
Change of Annuity Payments ................................... 15
Fixed Annuity Payments ....................................... 15
Variable Annuity Payments .................................... 15
First Variable Annuity Payment ............................... 15
Annuity Unit Value ........................................... 15
Net Investment Factor ........................................ 16
Net Asset Value per Share .................................... 16
Subsequent Variable Annuity Payments ......................... 16
Annuity Options .............................................. 17
ANNUITY OPTION RATES .............................................. 18
AMENDMENTS OR ENDORSEMENTS, if any
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BP 602PP1
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PARKSTONE TRUST VARIABLE ANNUITY POLICY SPECIFICATIONS
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OWNER NAME: ▇▇▇▇ ▇. ▇▇▇
OWNER DATE OF BIRTH: 10-30-1953
JOINT OWNER NAME: ▇▇▇▇ ▇. ▇▇▇
JOINT OWNER DATE OF BIRTH: 7-18-1981
ANNUITANT NAME: ▇▇▇▇▇ ▇. ▇▇▇
ANNUITANT DATE OF BIRTH: 5-13-1987
ANNUITANT SEX: Female
PRIMARY BENEFICIARY NAME: ▇▇▇▇▇ ▇. ▇▇▇
CONTRACT NUMBER: Specimen
TRUST ACCT. NUMBER: 04201
CONTRACT DATE: 6-30-1993
ISSUE DATE: 6-30-1993
ANNUITY START DATE: 7-1-2052
PLAN: TSA
ASSIGNMENT: This Policy may not be assigned
See Assignment Provision of your Policy.
CONTINGENT BENEFICIARY NAME: ▇▇▇▇ ▇. ▇▇▇
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INITIAL PURCHASE PAYMENT ............................... $500,000
MINIMUM SUBSEQUENT PURCHASE PAYMENTS ................... $5,000
MORTALITY AND EXPENSE RISK CHARGE ...................... 0.65% Annually
ADMINISTRATION CHARGE .................................. 0.05% Annually
CONTRACT MAINTENANCE CHARGE ............................ $0
WITHDRAWAL CHARGES: .................................... None
FREE SYSTEMATIC WITHDRAWAL AVAILABILITY DATE ........... 7-1-1993
MINIMUM GUARANTEED INTEREST RATE ....................... 3.5%
ANNUITY OPTION ......................................... Option 2
SUB-ACCOUNTS:
Prime Obligations
Bond
Equity
International Discovery
Small Capitalization
METHOD FOR DEDUCTIONS:
Deductions for any Contract Maintenance Charge, any Transfer Charges,
any Premium Taxes collected after the Purchase Payments are applied,
and any unallocated partial withdrawals will be made sequentially from
the Contract Value. In descending order of the Sub-Accounts listed
above, the value of each account will be depleted before the next is
charged. The Fixed Account is the last account charged.
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V6020 A (3-93) SBL 20
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DEFINITIONS
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ACCUMULATION UNIT
The Accumulation Unit is a unit of measure. It is used to calculate the
Variable Account Contract Value prior to the Annuity Start Date. It is
also used to calculate the Variable Account Contract Value after the
Annuity Start Date for Annuity Options 5 and 6.
ANNUITANT
The Annuitant is the person named by the Owner to receive Annuity
Payments under this Contract. Please see "Annuitant" provisions on page
8.
ANNUITY OPTION
The Annuity Option is the method for making Annuity Payments. The
Annuity Option is selected prior to the Annuity Start Date. Please see
"Annuity Options" on page 17.
ANNUITY START DATE
The Annuity Start Date is the date on which Annuity Payments are
scheduled to begin. This date may be changed by the Owner. The Annuity
Start Date is shown on Page 3.
ANNUITY UNIT
The Annuity Unit is a unit of measure. It is used to calculate Variable
Annuity Payments after the Annuity Start Date for Annuity Options 1
through 4.
COMPANY
The Company is Security Benefit Life Insurance Company.
CONTRACT ANNIVERSARY
A Contract Anniversary is a 12-month anniversary of the Contract Date
as defined below.
CONTRACT DATE
The Contract Date is the date the Contract begins. The Contract Date is
shown on page 3.
CONTRACT YEAR
Contract Years are measured from the Contract Date.
DESIGNATED BENEFICIARY
Upon the first death of the Owner or Joint Owner, the Designated
Beneficiary will be the first person on the following list who is alive
on the date of death:
1. Primary Beneficiary;
2. Contingent Beneficiary;
3. Owner;
4. Joint Owner;
5. Annuitant; and
6. the Owner's estate if no one listed above is alive.
The Designated Beneficiary may receive a death benefit upon the death
of the Owner. For more information please see "Ownership, Annuitant,
and Beneficiary Provisions" on page 8 and the "Death Benefit
Provisions" on pages 13 and 14.
EARNINGS
Earnings include interest, dividends, realized gains or losses, and
unrealized gains or losses.
FIXED ACCOUNT
The Fixed Account invests in the general account of the Company. The
Company manages the general account and guarantees that an effective
rate of return of at least 3 1/2% will be credited to the Fixed Account
Contract Value.
HOME OFFICE
The Address of the Home Office is ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇.
ISSUE DATE
The Issue Date is the date the Company uses to determine the date the
Contract becomes incontestable. The Issue Date is shown on Page 3.
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DEFINITIONS (Continued)
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JOINT OWNER
The Joint Owner, if any, possesses an undivided interest in the entire
Contract in conjunction with the Owner. The Joint Owner, if any, is
named on page 3. Please see "Joint Ownership" provisions on page 8.
NONNATURAL PERSON
Any group or entity that is not a living person such as a trust or
corporation.
OWNER
The Owner is the person who possesses all rights under the Contract.
The Owner is named on page 3. Please see "Ownership" provisions on page
8.
PREMIUM TAX
Any Premium Taxes levied by a state or other governmental entity will
be charged against this Contract. When Premium Tax is assessed after
the premium is applied, it will be deducted as described on page 3.
PURCHASE PAYMENT
A Purchase Payment is money received by the Company and applied to the
Contract.
PURCHASE PAYMENT ANNIVERSARY
A Purchase Payment Anniversary is a 12-month anniversary of the date
the Purchase Payment is applied.
PURCHASE PAYMENT YEAR
A Purchase Payment Year is each 12-month period starting with either
the Purchase Payment Anniversary or the date the Purchase Payment is
applied. The first Purchase Payment year begins on the date the
Purchase Payment is applied and increases by one on each successive
Purchase Payment Anniversary.
SUB-ACCOUNTS
The Variable Account is divided into Sub-Accounts which invest in
shares of mutual funds. Each Sub-Account may invest its assets in a
separate class or series of a designated investment company or
companies. The Sub-Accounts are shown on page 3. Subject to the
regulatory requirements then in force, the Company reserves the right
to:
1. change or add designated investment companies;
2. add, remove or combine Sub-Accounts;
3. add, delete or make substitutions for securities that are held or
purchased by the Variable Account or any Sub-Account;
4. operate the Variable Account as a managed investment company;
5. combine the assets of the Variable Account with other Variable
Accounts of the Company or an affiliate thereof; and
6. restrict or eliminate any voting rights of the Owner with respect
to the Variable Account or other persons who have voting rights as
to the Variable Account.
If any of these changes result in a material change to the Variable
Account or a Sub-Account, the Company will notify the Owner of the
change. The Company will not change the investment policy of any
Sub-Account without the filing and other procedures established by
insurance regulators of the state of issue.
VALUATION DATE
A Valuation Date is each day the New York Stock Exchange and the
Company's Home Office are open for business.
VALUATION PERIOD
A Valuation Period is the interval of time from one Valuation Date to
the next Valuation Date.
VARIABLE ACCOUNT
The Variable Account is a separate account established and maintained
by the Company under Kansas law. The Variable Account is divided into
Sub-Accounts which are listed on page 3. The assets held in the
Variable Account supporting Contract liabilities are not chargeable
with liabilities arising from any other business the Company may
conduct.
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BP 602011
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GENERAL PROVISIONS
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THE CONTRACT
The entire Contract between the Owner and the Company consists of this
Contract, the attached Application, and any Amendments, Endorsements or
Riders attached to the Policy. All statements made in the Application
will, in the absence of fraud, as determined by a court of competent
jurisdiction, be deemed representations and not warranties. The Company
will use no statement made by or on behalf of the Owner or the
Annuitant to void this Contract unless it is in the written Application
and unless successfully contested by the Company. Any change in the
Contract can be made only with the written consent of the President, a
Vice President, or the Secretary of the Company.
The Purchase Payment(s) and the Application must be acceptable to the
Company under its rules and practices. If they are not, the Company's
liability will be limited to a return of the Purchase Payment(s).
COMPLIANCE
The Company reserves the right to make any change to the provisions of
this Contract to comply with or give the Owner benefit of any federal
or state statute, rule or regulation. This includes, but is not limited
to, requirements for annuity contracts under the Internal Revenue Code
or that of any state. The Company will provide the Owner with a copy of
any such change and will also file such a change with the insurance
regulatory officials of the state in which the contract is delivered.
MISSTATEMENT OF AGE AND SEX
If the age or sex of the Annuitant has been misstated, all payments and
benefits under this Contract will be adjusted when legally permitted.
Payments and benefits will be made on the basis of the Annuitant's
correct age or sex. Proof of the age of an Annuitant may be required at
any time, in a form suitable to the Company. When the age or sex of an
Annuitant has been misstated, the dollar amount of any overpayment plus
interest will be deducted from the next payment(s) due under this
Contract. The dollar amount of any underpayment made by the Company as
a result of any such misstatement will be paid in full plus interest
with the next payment due under this Contract. The interest portion of
these adjustments will be calculated at 6%.
EVIDENCE OF SURVIVAL
When any payments under this contract depend on the recipient being
alive on a given date, proof that the recipient is living may be
required by the Company. Such proof must be in a form acceptable to the
Company, and may be required prior to making the payments.
INCONTESTABILITY
This Contract will not be contested after it has been in force for two
years from the Issue Date during the lifetime of the Owner. This
provision does not apply to any benefits payable in the event of
disability.
ASSIGNMENT
No Assignment under this Contract is binding unless received by the
Company in writing. The Company assumes no responsibility for the
validity, legality, or taxability of any Assignment. The Assignment
will be subject to any payment made or other action taken by the
Company before the Assignment is received by the Company. Once filed,
the rights of the Owner, Annuitant and Beneficiary are subject to the
Assignment. Any claim is subject to proof of interest of the assignee.
Please refer to page 3 to see if this Contract may be assigned.
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V 6020 C (3-93) BP 602FF1
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GENERAL PROVISIONS (Continued)
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RECEIVED BY THE COMPANY
The phrase "Received by the Company" means receipt by the Company at
its Home Office.
TRANSFERS
The Owner may Transfer funds among the Fixed Account and Sub-Accounts
subject to the following.
Prior to the Annuity Start Date: The Owner may make 12 Transfers per
calendar year without charge. For each additional Transfer, a $25
dollar charge is deducted from the Contract Value. Transfers are not
permitted within 30 days of the Annuity Start Date.
After the Annuity Start Date: For Annuity Options 1, 2, 3, and 4, the
Owner may make 1 Transfer per calendar year without charge. It must be
between Sub-Accounts and no additional Transfers are permitted in a
calendar year. For Annuity Options 5 and 6, the Owner may make 12
Transfers per calendar year without charge. For each additional
Transfer in a calendar year, a $25 charge is deducted from the Contract
Value.
TRANSFER RIGHTS (PRIOR TO THE EFFECTIVE DATE OF A SETTLEMENT OPTION):
The Company reserves the right to limit: (1) the size of Transfers; (2)
the number of Transfers to 12 per calendar year; and (3) the amount
remaining in an account after a Transfer. Transfers must be at least
$500 or the lesser remaining balance in the Fixed Account or a
Sub-Account. The total dollar amount that may be Transferred from the
Fixed Account in a Contract Year is the greatest of:
1. $5,000;
2. 1/3 of the Accumulated Value in the Fixed Account at the time of
the first Transfer in the Contract Year; or
3. 120% of the dollar amount Transferred from the Fixed Account in
the prior Contract Year subject to the limitation below.
The Company reserves the right for a period of time to allow Transfers
from the Fixed Account in amounts that exceed the limits set forth
above ("Waiver Period"). In any Contract Year following such a Waiver
Period, the total dollar amount that may be Transferred from the Fixed
Account is the greatest of: 1 above; 2 above; or
3. 120% of the lesser of:
a. the dollar amount Transferred from the Fixed Account in the
prior Contract Year; or
b. The maximum total dollar amount that would have been allowed
in the prior Contract Year under the Transfer provisions above
absent the Waiver Period.
When a Transfer charge is deducted from the Contract Value, it shall be
deducted as described on page 3. The Company reserves the right to
delay Transfers from the Fixed Account for up to 6 months. The Company
will notify you if there will be a delay.
CLAIMS OF CREDITORS
The Contract Value and other benefits under this Contract are exempt
from the claims of creditors to the extent permitted by law.
NONFORFEITURE VALUES
The Death Benefits, Surrender Values and Annuity Start Values will at
least equal the minimum required by law.
DIVIDENDS
The Company is a mutual life insurance company. Consequently, it pays
dividends on some of its contracts. However, the Company does not
expect any dividends to become payable on this Contract. At the end of
each Contract Year the Company will determine the Contract's dividend,
if any. The Owner may choose to have it: (1) added to the Contract
Value, or (2) paid in cash. If the Owner does not make a choice, it
will be added to the Contract Value.
REPORTS
At least once each Contract Year the Owner shall be sent a statement
including the current Contract Value and any other information required
by law.
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BP 602FF1
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OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS
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OWNERSHIP
The Owner has all rights in the Contract unless otherwise provided. All
rights in the Contract remain with the Owner after the Annuity Start
Date. If the purchaser names someone other than himself as Owner, the
purchaser has no rights in the Contract, unless later changed by the
Owner. If the Owner dies, a distribution may be made to the Designated
Beneficiary. No Owner, named in the Contract, may be older than 80 on
the Contract Date.
JOINT OWNERSHIP
If a Joint Owner is named in the application, then the Owner and Joint
Owner will share an undivided interest in the entire Contract. When an
Owner and Joint Owner have been named, the Company will only honor
requests for changes and the exercise of other Ownership rights made by
both the Owner and Joint Owner. When a Joint Owner is named, all
references to "Owner" throughout this Contract should be construed to
mean both the Owner and Joint Owner, except for the "Reports" provision
on page 7 and the "Death Benefit Provisions" on pages 13 and 14.
ANNUITANT
The Owner may change the Annuitant prior to the Annuity Start Date. The
request for this change must be made in writing and Received by the
Company at least 30 days prior to the Annuity Start Date. No Annuitant
may be named who is more than 80 years old on the Contract Date. When
the Annuitant dies prior to the Annuity Start Date, the Owner must name
a new Annuitant within 30 days. If a new Annuitant is not named, the
Owner becomes the Annuitant. The Annuitant is named on page 3.
PRIMARY AND CONTINGENT BENEFICIARIES
The Primary Beneficiary and any Contingent Beneficiary are named in the
Application, unless later changed by the Owner. If the Primary
Beneficiary dies prior to the Owner, the Contingent Beneficiary becomes
the Primary Beneficiary. Unless the Owner has provided otherwise, when
there are two or more Primary Beneficiaries, they will receive equal
shares, unless otherwise specified.
OWNERSHIP AND BENEFICIARY CHANGES
Subject to the terms of any existing Assignment, the Owner may name a
new Owner, new Primary Beneficiary or a new Contingent Beneficiary. Any
new choice of Owner, Primary Beneficiary or Contingent Beneficiary will
automatically revoke any prior choice of Owner, Primary Beneficiary or
Contingent Beneficiary. Any change must be made in writing and recorded
at the Home Office. The change will become effective as of the date the
written request is signed, whether or not the Owner is living at the
time the change is recorded. A new choice of Primary Beneficiary or
Contingent Beneficiary will not apply to any payment made or action
taken by the Company prior to the time it was recorded. The Company may
require the Contract be returned so these changes may be made.
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V 6020 D (3-93) BP 602031
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PURCHASE PAYMENT PROVISIONS
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FLEXIBLE PURCHASE PAYMENTS
The Contract becomes in force when the initial Purchase Payment is
applied. The Owner is not required to continue Purchase Payments in the
amount or frequency originally anticipated. The Owner may: (1) increase
or decrease the amount of Purchase Payments, subject to any Contract or
administrative limitations; or (2) change the frequency of Purchase
Payments. A change in frequency or amount of Purchase Payments does not
require a written request. After the Annuity Start Date, the Company
will not apply any new Purchase Payments to this Contract.
PURCHASE PAYMENT LIMITATIONS
Purchase Payments may not be greater than $1,000,000 without prior
approval by the Company. The Minimum Subsequent Purchase Payment amount
is shown on page 3.
PURCHASE PAYMENT ALLOCATION
Purchase Payments may be allocated among the Fixed Account and the
Sub-Accounts. The allocations may be made by specifying the dollar
amount or the whole percentage to go to each account. However, no less
than $25 per Purchase Payment may be allocated to any account. The
Owner may change the allocations by written notice to the Company.
PLACE OF PAYMENT
All Purchase Payments under this Contract are payable to the Company at
its Home Office. Purchase Payments are applied after they are received
by the Company at its Home Office.
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CONTRACT VALUE AND EXPENSE PROVISIONS
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CONTRACT VALUE
On any Valuation Date, the Contract Value is the sum of (1) the
Variable Account Contract Value; and (2) the Fixed Account Contract
Value. At any time after the first Contract Year and before the Annuity
Start Date, the Company reserves the right to pay to the Owner the
Contract Value as a lump sum if it is below $2,000.
FIXED ACCOUNT CONTRACT VALUE
On any Valuation Date, the Fixed Account Contract Value is based on the
following transactions with respect to this Contract:
1. the sum of all Purchase Payments allocated under the Contract to
the Fixed Account;
2. any Transfers from the Variable Account;
3. the interest credited to the Fixed Account;
4. any Withdrawals and applicable Withdrawal Charges deducted from the
Fixed Account;
5. any Transfers to the Variable Account;
6. any applicable Contract Maintenance Charges and Transfer Charges
deducted from the Fixed Account;
7. any applicable Premium Taxes;
8. any amounts held in the Fixed Account which are applied towards
Annuity Options 1 through 4.
FIXED ACCOUNT INTEREST CREDITING
The Company will credit interest on the Fixed Account Contract Value
from the Contract Date. The renewal interest rates will be declared and
reset at the Company's discretion. However, the renewal interest rate
will be at least the Minimum Guaranteed Interest Rate shown on page 3.
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BP 602031
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
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VARIABLE ACCOUNT CONTRACT VALUE
The Variable Account Contract Value is the sum of the value in each
Sub-Account for this Contract. Each Sub-Account value is the product of
the Accumulation Units under this Contract and the Accumulation Unit
Value.
DETERMINING ACCUMULATION UNITS
The number of Accumulation Units for a particular Sub-Account is found
by dividing: (1) the value of the Sub-Account; by (2) the Accumulation
Unit Value for the Sub-Account. The number of Accumulation Units will
not change as a result of investment experience. Events that change the
number of Accumulation Units are:
1. Purchase Payments that are applied to the Sub-Account;
2. funds that are Transferred into or out of the Sub-Account;
3. Withdrawals that are deducted from the Sub-Account; and
4. certain charges or taxes that are deducted.
ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Sub-Account was set at
$10. The subsequent Accumulation Values are found by dividing (1) by
(2), where:
1. is the net result of:
a. the Net Asset Value determined at the end of the current
Valuation Period, plus
b. any dividends declared by the Sub-Account's underlying mutual
fund that are not reflected in the Net Asset Value; less
c: the accrued Mortality and Expense Risk Charge and the accrued
Administrative Charge.
2. the number of Accumulation Units at the beginning of the Valuation
Period.
The Accumulation Unit Value may increase or decrease from one Valuation
period to the next.
NET ASSET VALUE
The Net Asset Value is the net value of all shares of the underlying
mutual fund held by the Sub-Account. The Net Asset Value is: (1) the
value of the securities; plus (2) any cash or other assets; less (3)
all liabilities.
CONTRACT MAINTENANCE CHARGE
Except as noted below, the Company deducts a Contract Maintenance
Charge on each Contract Anniversary. The applicable Contract
Maintenance Charge is shown on page 3. When a Contract is Withdrawn for
its full Contract Value, a pro rata portion of this charge is deducted
at the time of Withdrawal. No Contract Maintenance Charge is deducted
on or after the Annuity Start Date when one of the first four Annuity
Options is used. When Contract Maintenance Charges are deducted from
the Contract Value, they shall be deducted as described on page 3.
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
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MORTALITY AND EXPENSE RISK CHARGE
The Company will deduct the annualized Mortality and Expense Risk
Charge shown on page 3. The deduction will be: (1) made from each
Sub-Account; (2) computed on a daily basis; and (3) made in the same
proportion that the Sub-Account Contract Value bears to the Variable
Account Contract Value. This charge is not directly taken from each
Sub-Account Contract Value. It is factored into the Accumulation Unit
Value and the Annuity Unit Value on a daily basis.
ADMINISTRATION CHARGE
The Company will deduct the annualized Administration Charge shown on
page 3. The deduction will be: (1) made from each Sub-Account; (2)
computed on a daily basis; and (3) made in the same proportion that the
Sub-Account Contract Value bears to the Variable Account Contract
Value. This charge is not directly taken from each Sub-Account Contract
Value. It is factored into the Accumulation Unit Value and the Annuity
Unit Value on a daily basis.
PREMIUM TAX EXPENSE
Any applicable Premium Taxes may be deducted from the Contract Value.
The Company reserves the right to deduct premium tax when due or any
time thereafter.
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WITHDRAWAL PROVISIONS
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WITHDRAWALS
The Owner may Withdraw all or part of the Contract Value at any time.
This provision is subject to any federal or state Withdrawal
restrictions. All Withdrawals must meet the following conditions.
1. The request for Withdrawal must be Received by the Company in
writing.
2. The Owner must apply: (a) while this contract is in force; and (b)
prior to the Annuity Start Date.
3. The amount Withdrawn must be at least $500.00 except for
Systematic Withdrawals, as discussed below, or when terminating
the Contract.
A partial Withdrawal request should specify the allocations for
deducting the Withdrawal from each account. In the absence of these
instructions the Company will make the deductions as described on page
3.
WITHDRAWAL VALUE
The Withdrawal Value at any time will be the Contract Value less;
1. any applicable Withdrawal Charges; and
2. any applicable Contract Maintenance Charges; and
3. any uncollected Premium Taxes.
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BP 602051
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WITHDRAWAL PROVISIONS (continued)
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WITHDRAWAL CHARGE
If part or all of the Contract Value is Withdrawn, Withdrawal Charges
may be applied at the time of Withdrawal. The Withdrawal Charges apply
to each Purchase Payment based on the number of Purchase Payment Years
it has been in the Contract as shown on page 3. For the purpose of
determining the Withdrawal Charges, Purchase Payments are deducted
before Earnings. Also, when determining the Withdrawal Charges,
Purchase Payments are deducted from the Contract Value on a first in
first out basis. This means the oldest Purchase Payment with the lowest
Withdrawal Charge is deducted first. The Withdrawal Charge will not be
assessed against:
1. any Free Withdrawal amounts;
2. any Free Systematic Withdrawal amounts;
3. any Purchase Payments kept in the Contract at least 84 months;
4. any amounts remaining after all the Purchase Payments are deducted;
5. Annuity Options 1 through 4.
6. Annuity Options 5 and 6 provided that Annuity Payments are made for
at least 7 years.
The Withdrawal charge will be assessed against the Sub-Accounts and the
Fixed Account in the same proportion as the Withdrawal is Allocated.
FREE WITHDRAWALS
Beginning in the second Contract Year, one Free Withdrawal may be made
per Contract Year. The Maximum Free Withdrawal amount is equal to the
Free Withdrawal Percentage, as shown on page 3, times the Contract
Value at the time of the Withdrawal. The Free Withdrawal amount is
applied only to the first Withdrawal in a Contract Year. A Free
Withdrawal is not available in any Contract Year that Free Systematic
Withdrawals have been made. Free Withdrawals are not available after
the Annuity Start Date. This Free Withdrawal Provision waives any
Withdrawal Charges on the Withdrawn amount up to the amount of the Free
Withdrawal. The Free Withdrawal is non-cumulative. Unused Free
Withdrawal amounts cannot be carried from one Contract Year to the
next.
SYSTEMATIC WITHDRAWALS
Systematic Withdrawals are automatic periodic distributions from the
Contract prior to the Annuity Start Date. In order to initiate
Systematic Withdrawals, the Owner must make the request in writing.
Each Systematic Withdrawal must be at least $50.00. The Owner must
indicate the type of payment and its frequency. The payment frequency
may be: (1) monthly; (2) quarterly; (3) semiannually; or (4) annually.
FREE SYSTEMATIC WITHDRAWALS
Free Systematic Withdrawals are Systematic Withdrawals without the
imposition of a Withdrawal Charge. Free Systematic Withdrawals are
available after the Free Systematic Withdrawal Availability Date shown
on page 3. Free Systematic Withdrawals are not available in any
Contract Year in which a Free Withdrawal has been made. Free Systematic
Withdrawals may be made until the cumulative distributions in a
Contract Year equal that year's Free Withdrawal limit. The limit for
each Contract Year is the Free Withdrawal Percentage, as shown on page
3, times the Contract Value on the date of the first Systematic
Withdrawal in that Contract Year. Any amounts exceeding this limit will
incur a Withdrawal Charge as described above.
DISABILITY WAIVER
The Company will waive the Withdrawal Charges if an Owner becomes
totally and permanently disabled prior to age 65. To qualify, the Owner
must provide: (1) a certified copy of their birth certificate; and (2)
proof of total and permanent disability within the meaning of Internal
Revenue Code Section 72(m)(7) or any successor provision. The Company
reserves the right to: (1) investigate any disability claim; and (2)
require current proof of qualification with each withdrawal request.
DATE OF REQUEST
The day on which the Company receives all the required information to
process a Transfer or a Withdrawal will determine the date used in
calculating these benefits.
PAYMENT OF WITHDRAWAL BENEFITS
The Company reserves the right to suspend or delay the payment date of
a Transfer or a Withdrawal payment from the Variable Account for any
period:
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V 6020 F (3-94) BP 602BB1
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WITHDRAWAL PROVISIONS (continued)
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1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which: (a) disposal of
securities held in the Variable Account is not reasonably
practicable; or (b) it is not reasonably practicable to fairly
determine the value of the net assets of the Variable Account; or
4. during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of
securityholders.
Rules and regulations of the Securities and Exchange Commission will
govern as to whether the conditions set forth above exist.
The Company further reserves the right to delay payment of a Withdrawal
from the Fixed Account for up to six months. This right is required by
most states. The Company will notify you if there will be a delay.
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DEATH BENEFIT PROVISIONS
--------------------------------------------------------------------------------
DEATH BENEFIT
If any Owner dies prior to the Annuity Start Date, a Death Benefit will
be payable to the Designated Beneficiary when due Proof of Death and
instructions regarding payment are Received by the Company within 6
months of the date of death. If the Owner is a Nonnatural Person, then
the Death Benefit is payable in the event of the death of the Annuitant
prior to the Annuity Start Date. Also, if the Owner is a Nonnatural
Person, the amount of the death benefit is based on the age of the
Annuitant on the Issue Date.
If the age of each Owner was 75 or younger on the Issue Date, the Death
Benefit during the first seven Contract Years will be the greater of:
(1) the cumulative Purchase Payments, less any Premium Tax and
reductions caused by previous Withdrawals; or (2) the Contract Value on
the date due Proof of Death is received by the Company, less any
Premium Tax. If the age of each Owner was 75 or younger on the Issue
Date, the Death Benefit during any subsequent seven Contract Year
period will be the greater of: (1) the cumulative Purchase Payments,
less any Premium Tax and any reductions caused by previous Withdrawals;
(2) the Contract Value on the date due Proof of Death is received by
the Company less any Premium Tax; or (3) the Stepped-Up Death Benefit
described below.
If the age of any Owner on the Issue Date was 76 or older, or if due
Proof of Death and instructions regarding payment are not Received by
the Company within six months of the date of the Owner's death, the
lump sum Death Benefit will be the Withdrawal Value. If a lump sum
payment is requested, the payment will be made in accordance with any
applicable laws and regulations governing the payment of Death
Benefits. The value of the Death Benefit is determined as of the date
that both Proof of Death and the election of a lump sum settlement are
Received by the Company in good order.
STEPPED-UP DEATH BENEFIT
The Stepped-Up Death Benefit is:
1. the largest Death Benefit on any Contract Anniversary that is both
an exact multiple of seven and occurs prior to the oldest Owner
attaining age 76; plus
2. any Purchase Payments received since the applicable seventh
Contract Anniversary; less
3. any reductions caused by previous Withdrawals since the applicable
seventh Contract Anniversary; less
4. any Premium Tax.
PROOF OF DEATH
Any of the following will serve as proof of death:
1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as to the
finding of death;
3. written statement by a medical doctor who attended the deceased
Owner; or
4. any proof satisfactory to the Company.
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BP 602BB1
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DEATH BENEFIT PROFISIONS (Continued)
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DISTRIBUTION REQUIREMENTS
The entire Death Benefit with interest shall be paid within 5 years
after the death of the Owner, except as provided below. In the event
that the Designated Beneficiary elects an Annuity Option, the length of
time for the payment period may be longer than 5 years if: (1) the
Designated Beneficiary is a natural person; (2) the Death Benefit is
paid out under Annuity Options 1 through 6; (3) payments are made over
a period that does not exceed the life expectancy of the Designated
Beneficiary; and (4) annuity payments begin within one year of the
death of the Owner. If the Owner's spouse is the sole Designated
Beneficiary, the spouse shall become the sole Owner of the Contract,
and he or she may keep it in force until the earlier of the spouse's
death or the Annuity Start Date.
If any Owner dies after the Annuity Start Date, the Ownership rights
pass to the Designated Beneficiary and Annuity Payments shall continue
to be distributed at least as rapidly as under the method of
distribution being used as of the date of the Owner's death.
If the Owner is a Nonnatural Person, the distribution rules set forth
above apply in the event of the death of or a change in the Annuitant.
This Contract is deemed to incorporate any provision of Section 72(s)
of the Internal Revenue Code of 1986, as amended (the "Code"), or any
successor provision, as interpreted by the Company and deemed necessary
to qualify this Contract as an annuity.
The foregoing distribution requirements do not apply to qualified plans
as defined in Section 401(a) of the Code.
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS
--------------------------------------------------------------------------------
ANNUITY START DATE
The Annuity Start Date may be chosen by the Owner at the time of
application. For Annuity Options 1 through 4, this date must be at
least 3 years after the Contract Date. For Annuity Options 5 and 6,
this date must be after the Free Systematic Withdrawal Availability
Date. The Annuity Start Date must be prior to the later of: (1) the
oldest Annuitant's eighty-fifth birthday; or (2) the tenth Contract
Anniversary.
The Annuity Start Date is the date the first payment will be made to
the Annuitant under Annuity Options 1 through 6.
CHANGE OF ANNUITY START DATE
The Owner may change the Annuity Start Date. A request for the change
must be made in writing. The written request must be Received by the
Company at least 30 days prior to the new Annuity Start Date as well as
30 days prior to the previous Annuity Start Date.
ANNUITY START AMOUNT
The Annuity Start Amount is applied to one of the Annuity Options
listed on page 17. The Annuity Start Amount is used with the annuity
rates to determine the Annuity Payments. The Annuity Start Amount is:
(1) the entire Contract Value on the Annuity Start Date; less (2) any
applicable Premium Tax.
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V 6020 G (R4-94) BP 602JJ1
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
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ANNUITY PAYMENT GUARANTEES
The Annuity Payments made under each Annuity Option will reflect
current annuity rates in effect on the Annuity Start Date. The current
annuity rates will not be less than the guaranteed Annuity Option
rates. The guaranteed Annuity Option rates are guaranteed for the life
of the Contract. The guaranteed rates are based on interest credited at
3 1/2% per year and the 1983 Table A individual annuity mortality table
updated for 45 years with factors from Projection Scale G. Tables A and
B illustrate some of these guaranteed rates per $1,000. Rates not shown
will be provided upon request.
ANNUITY PAYMENTS
The Owner may select any form of Annuity Payments that is satisfactory
to the Company. Several guaranteed Annuity Options are listed on page
17. No Annuity Option can be selected that requires the Company to make
periodic payments of less than $50.00. The standard Annuity Option is
Option 2 with 10 years of payments certain. This Annuity Option will
automatically be used if no Annuity Option is elected prior to the
Annuity Start Date. Each Annuity Option allows for making payments
annually, semiannually, quarterly or monthly.
CHANGE OF ANNUITY PAYMENTS
Prior to the Annuity Start Date, the Owner may change the Annuity
Option selected. The change must be made in writing. The written
request must be received by the Company at least 30 days prior to the
Annuity Start Date.
After the Annuity Start Date, the Owner may change the Annuity Option
if payments are being made under Annuity Options 5 or 6. The change
must be requested in writing.
After the change is recorded by the Company, it will be effective as of
the date it was requested. A change will not apply to any payment made
or action taken by the Company prior to the time it was recorded.
FIXED ANNUITY PAYMENTS
Fixed Annuity Payments provide a minimum interest rate which is
guaranteed by the Company during the Annuity Payment period for Annuity
Options 1 through 4. On the Annuity Start Date, the Annuity Start
Amount will be applied to the applicable Annuity Table.
VARIABLE ANNUITY PAYMENTS
For Annuity Options 1 through 4, Variable Annuity Payments are payments
which: (1) are not predetermined or guaranteed as to dollar amount; and
(2) vary in amount with the investment experience of the Sub-Account.
FIRST VARIABLE ANNUITY PAYMENT
On the Annuity Start Date, the Annuity Start Amount will be applied to
the applicable Annuity Table for Annuity Options 1 through 4. This will
be done in accordance with the Annuity Option selected.
ANNUITY UNIT VALUE
An Annuity Unit is used to calculate the value of Annuity Payments. The
value of an Annuity Unit for each Sub-Account was originally set at $1.
The value for any later Valuation Period is found as follows:
1. For each Sub-Account the Annuity Unit Value for the prior
Valuation Period is multiplied by the Net Investment Factor for
the second Valuation Period preceding the current one.
2. The result is multiplied by an interest factor. This is done to
neutralize the assumed investment rate of 3.5% per year, which is
built into the Annuity Tables.
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BP 602JJ1
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
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NET INVESTMENT FACTOR
The Net Investment Factor is an index used to update the investment
performance of a Sub-Account from one Valuation Period to the next. The
Net Investment Factor may be more than or less than one; therefore, the
value of an Annuity Unit may increase or decrease.
The Net Investment Factor for any Sub-Account in any Valuation Period
is determined by dividing (1) by (2) and subtracting (3) from the
result, where:
1. is the net result of:
a. the Net Asset Value Per Share of the mutual fund held in the
Sub-Account, determined at the end of the current Valuation
Period; plus
b. the per share amount of any dividend or capital gain
distributions made by the Sub-Account's underlying the mutual
fund that is not included in the Net Asset Value Per Share;
plus or minus
c. a per share charge or credit for any taxes reserved for, which
is determined by the Company to have resulted from the
investment operations of the Sub-Account.
2. is the net result of:
a. the Net Asset Value per share of the Sub-Account's underlying
the mutual fund as determined at the end of the prior
Valuation Period; plus or minus
b. the per share charge or credit for any taxes reserved for the
prior valuation Period.
3. is a factor representing the Mortality and Expense Risk Charge and
the Administration Charge deducted from the Variable Account.
For underlying mutual funds that credit dividends on a daily basis and
pay such dividends once a month, the Net Investment Factor allows for
the monthly reinvestment of these daily dividends. As described above,
the gains and losses from each Sub-Account is credited or charged
against the Sub-Account without regard to the gains or losses in the
Company or other Sub-Accounts.
NET ASSET VALUE PER SHARE
The Net Asset Value Per Share is found by dividing the Net Asset Value
by the number of outstanding shares.
SUBSEQUENT VARIABLE ANNUITY PAYMENTS
After the first Variable Annuity Payment the payments vary in amount.
The amount of each payment changes with the investment performance of
the Sub-Accounts. The dollar amount of such payments is determined as
follows:
1. The dollar amount of the first Variable Annuity Payment is divided
by the Annuity Unit Value on the Annuity Start Date. The result
establishes the fixed number of Annuity Units for each subsequent
payment. This number of Units remains fixed during the Annuity
Payment period.
2. The fixed number of Annuity Units is multiplied by the Annuity
Unit Value for the Valuation Period for which the payment is due.
This result establishes the dollar amount of the payment.
After the first payment the Company guarantees that the dollar amount
of each payment will not be affected by variations in expenses or
mortality experience.
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V 6020 H (3-93) BP 602081
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
--------------------------------------------------------------------------------
ANNUITY OPTIONS
OPTION 1
LIFE OPTION: This option provides payments for the lifetime of the
Annuitant. Table A illustrates some of the guaranteed rates for this
option.
OPTION 2
LIFE WITH FIXED PERIOD OPTION: This option provides payments for the
lifetime of the Annuitant. A fixed period of 5, 10, 15 or 20 years may
be chosen. Payments will continue to the end of this period even if the
Annuitant dies prior to the end of the period. If the Annuitant dies
before receiving all the payments during the fixed period, the
remaining payments will be made to the Designated Beneficiary. Table A
illustrates some of the guaranteed rates for this option.
OPTION 3
LIFE WITH INSTALLMENT REFUND OPTION: This option provides payments for
the lifetime of the Annuitant. A fixed number of payments will be
determined by dividing the benefit amount by the payment amount. A
fixed number of payments will be made even if the Annuitant dies. If
the Annuitant dies before receiving the fixed number of payments, any
remaining payments will be made to the Designated Beneficiary. Table A
illustrates some of the guaranteed rates for this option.
OPTION 4
JOINT AND LAST SURVIVOR OPTION: This option provides payments for the
lifetime of the Annuitant and Joint Annuitant. Payments will continue
as long as either is living. Table B illustrates some of the guaranteed
rates for this option.
OPTION 5
FIXED PERIOD OPTION: This option provides payments for a fixed number
of years between 5 and 20. If the Contract Value is held in the Fixed
Account, then the amount of the payments will vary as a result of the
interest rate (as adjusted periodically) credited on the Fixed Account.
If the Contract Value is held in the Variable Account, then the amount
of the payments will vary as a result of the investment performance of
the specific Sub-Accounts chosen. If all the Annuitants dies before
receiving the fixed number of payments, any remaining payments will be
made to the Designated Beneficiary.
OPTION 6
FIXED PAYMENT OPTION: This option provides a fixed payment amount. This
amount is paid until the initial amount applied, including daily
interest adjustments, is paid. If the Contract Value is held in the
Fixed Account, then the number of payments will vary as a result of the
interest rate (as adjusted periodically) credited on the Fixed Account.
If the Contract Value is held in the Variable Account, then the number
of payments will vary as a result of the investment performance of the
specific Sub-Accounts chosen. If all the Annuitants dies before
receiving all the payments, any remaining payments will be made to the
Designated Beneficiary.
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BP 602081
ANNUITY OPTION RATES
--------------------------------------------------------------------------------
SINGLE LIFE INCOME OPTIONS
Table A - Monthly
Payments for a fixed term and
afterwards as long as the Annuitant lives
per $1,000 of benefit amount
--------------------------------------------------------------------------------
GUARANTEED MONTHLY PAYMENTS
Age of Payee 0 60 120 180 240 Unit Refund
MALE
--------------------------------------------------------------------------------
55 4.45 4.44 4.41 4.37 4.30 4.31
56 4.52 4.51 4.48 4.43 4.36 4.37
57 4.60 4.59 4.56 4.50 4.42 4.44
58 4.68 4.67 4.64 4.57 4.47 4.51
59 4.77 4.76 4.72 4.65 4.53 4.58
60 4.87 4.85 4.81 4.72 4.60 4.65
61 4.97 4.95 4.90 4.80 4.66 4.73
62 5.07 5.05 5.00 4.89 4.72 4.82
63 5.19 5.17 5.10 4.97 4.79 4.90
64 5.31 5.29 5.20 5.06 4.85 5.00
65 5.44 5.41 5.32 5.15 4.92 5.09
66 5.58 5.55 5.44 5.24 4.98 5.20
67 5.73 5.69 5.56 5.34 5.05 5.30
68 5.89 5.84 5.69 5.44 5.11 5.41
69 6.06 6.00 5.82 5.54 5.17 5.53
70 6.24 6.17 5.97 5.64 5.23 5.66
FEMALE
55 4.11 4.11 4.10 4.08 4.05 4.05
56 4.17 4.17 4.16 4.14 4.10 4.10
57 4.23 4.23 4.22 4.19 4.15 4.15
58 4.30 4.29 4.28 4.25 4.21 4.21
59 4.37 4.36 4.35 4.32 4.27 4.27
60 4.44 4.44 4.42 4.38 4.33 4.34
61 4.52 4.51 4.49 4.45 4.39 4.40
62 4.60 4.59 4.57 4.52 4.45 4.47
63 4.69 4.68 4.65 4.60 4.52 4.55
64 4.78 4.77 4.74 4.68 4.58 4.63
65 4.88 4.87 4.84 4.76 4.65 4.71
66 4.99 4.98 4.93 4.85 4.72 4.80
67 5.10 5.09 5.04 4.94 4.79 4.89
68 5.23 5.21 5.15 5.04 4.86 4.99
69 5.36 5.34 5.27 5.14 4.94 5.09
70 5.50 5.48 5.39 5.24 5.01 5.20
Rates not shown will be provided on request.
--------------------------------------------------------------------------------
JOINT & LAST
SURVIVOR
TABLE B - MONTHLY FEMALE MALE AGE
INSTALLMENTS AGE 55 60 62 65 70
--------------------------------------------------------------------------------
Until last Death 55 3.85 3.93 3.95 3.99 4.03
of Two Payees 60 3.98 4.10 4.15 4.21 4.29
per $1,000 of 62 4.03 4.18 4.23 4.30 4.40
benefit amount 65 4.11 4.28 4.35 4.45 4.59
70 4.21 4.45 4.54 4.69 4.92
Option 1, 2, 3, or 4 available at ages 40 through 80.
Annual, semiannual, or quarterly payments can be determined from Table A or B by
multiplying the monthly payments by 11.812854, 5.9572233, and 2.9914201,
respectively.
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V 6020 I (3-93) BP 60209
PARKSTONE
VARIABLE ANNUITY
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT
* Purchase Payments may be made until the earlier of the Annuity Start Date or
termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Start Date according to the
contract provisions.
* Annuity Payments begin on the Annuity Start Date using the method as
specified in this Contract.
* This is a participating Contract.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND THESE DOLLAR AMOUNTS ARE
NOT GUARANTEED. (SEE "CONTRACT VALUE AND EXPENSE PROVISIONS" AND "ANNUITY
PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGO]
Security Benefit Life Insurance Company
A Member of The Security Benefit Group of Companies
700 ▇▇▇▇▇▇▇▇, Topeka, KS 66636-0001
▇-▇▇▇-▇▇▇-▇▇▇▇
▇▇-▇▇▇▇▇-▇▇
BP 602PP4
PARKSTONE
VARIABLE ANNUITY
ANNUITY CONTRACT
THE COMPANY'S PROMISE
In consideration for the Purchase Payments and the attached application,
Security Benefit Life Insurance Company will pay the benefits of this Contract
according to its provisions.
LEGAL CONTRACT
PLEASE READ YOUR CONTRACT CAREFULLY. It is a legal Contract between the Owner
and the Company, Security Benefit Life Insurance Company. The Contract's table
of contents is on page 2.
RIGHT TO CANCEL
THIS CONTRACT MAY BE RETURNED WITHIN 10 DAYS AFTER RECEIVING IT BY DELIVERING OR
MAILING IT TO THE HOME OFFICE OR THE AGENT THROUGH WHOM IT WAS PURCHASED.
IMMEDIATELY ON SUCH DELIVERY OR MAILING, THE CONTRACT SHALL BE DEEMED VOID FROM
THE BEGINNING. ANY PURCHASE PAYMENTS PAID AND ALLOCATED TO THE FIXED ACCOUNT
WILL BE REFUNDED. THE VARIABLE ACCOUNT CONTRACT VALUE WILL BE REFUNDED AS OF THE
DATE THE CONTRACT IS RECEIVED BY THE COMPANY. ANY FEES OR CHARGES ON PURCHASE
PAYMENTS PAID AND ALLOCATED TO THE VARIABLE ACCOUNT WILL BE REFUNDED.
SIGNED FOR SECURITY BENEFIT LIFE INSURANCE COMPANY ON THE CONTRACT DATE.
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary President
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT
* Purchase Payments may be made until the earlier of the Annuity Start Date or
termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Start Date according to the
contract provisions.
* Annuity Payments begin on the Annuity Start Date using the method as
specified in this Contract.
* This is a participating Contract.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND THESE DOLLAR AMOUNTS ARE
NOT GUARANTEED. (SEE "CONTRACT VALUE AND EXPENSE PROVISIONS" AND "ANNUITY
PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGL]
Security Benefit Life Insurance Company
A Member of The Security Benefit Group of Companies
700 ▇▇▇▇▇▇▇▇, Topeka, KS 66636-0001
▇-▇▇▇-▇▇▇-▇▇▇▇
Form V6020 (R4-94) ▇▇-▇▇▇▇▇-▇▇
BP 602001
TABLE OF CONTENTS
CONTRACT SPECIFICATIONS ............................................. 3
DEFINITIONS ......................................................... 4, 5
GENERAL PROVISIONS .................................................. 6, 7
The Contract ................................................... 6
Compliance ..................................................... 6
Misstatement of Age and Sex .................................... 6
Evidence of Survival ........................................... 6
Incontestability ............................................... 6
Assignment ..................................................... 6
Received By The Company ........................................ 7
Transfers ...................................................... 7
Claims of Creditors ............................................ 7
Nonforfeiture Values ........................................... 7
Dividends ...................................................... 7
Reports ........................................................ 7
OWNERSHIP, ANNUITANT AND
BENEFICIARY PROVISIONS .............................................. 8
Ownership ...................................................... 8
Joint Ownership ................................................ 8
Annuitant ...................................................... 8
Primary and Contingent Beneficiaries ........................... 8
Ownership and Beneficiary Changes .............................. 8
PURCHASE PAYMENT PROVISIONS ......................................... 9
Flexible Purchase Payments ..................................... 9
Purchase Payment Limitations ................................... 9
Purchase Payment Allocation .................................... 9
Place of Payment ............................................... 9
CONTRACT VALUE AND EXPENSE PROVISIONS ............................... 9, 11
Contract Value ................................................. 9
Fixed Account Contract Value ................................... 9
Fixed Account Interest Crediting ............................... 9
Variable Account Contract Value ................................ 10
Determining Accumulation Units ................................. 10
Accumulation Unit Value ........................................ 10
Net Asset Value ................................................ 10
Contract Maintenance Charge .................................... 10
Mortality and Expense Risk Charge .............................. 11
Administration Charge .......................................... 11
Premium Tax Expense ............................................ 11
WITHDRAWAL PROVISIONS ............................................... 11-13
Withdrawals .................................................... 11
Withdrawal Value ............................................... 11
Withdrawal Charge .............................................. 12
Free Withdrawals ............................................... 12
Systematic Withdrawals ......................................... 12
Free Systematic Withdrawals .................................... 12
Disability Waiver .............................................. 12
Date of Request ................................................ 13
Payment of Withdrawal Benefits ................................. 13
DEATH BENEFIT PROVISIONS ............................................ 13, 14
Death Benefit .................................................. 13
Proof of Death ................................................. 13
Distribution Requirements ...................................... 14
ANNUITY PAYMENT PROVISIONS .......................................... 14-17
Annuity Start Date ............................................. 14
Change of Annuity Start Date ................................... 14
Annuity Start Amount ........................................... 14
Annuity Payment Guarantees ..................................... 15
Annuity Payments ............................................... 15
Change of Annuity Payments ..................................... 15
Fixed Annuity Payments ......................................... 15
Variable Annuity Payments ...................................... 15
First Variable Annuity Payment ................................. 15
Annuity Unit Value ............................................. 15
Net Investment Factor .......................................... 16
Net Asset Value per Share ...................................... 16
Subsequent Variable Annuity Payments ........................... 16
Annuity Options ................................................ 17
ANNUITY OPTION RATES ................................................ 18
AMENDMENTS OR ENDORSEMENTS, if any
- 2 -
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BP 602001
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PARKSTONE ADVANTAGE VARIABLE ANNUITY POLICY SPECIFICATIONS
--------------------------------------------------------------------------------
OWNER NAME: ▇▇▇▇ ▇. ▇▇▇
OWNER DATE OF BIRTH: 10-30-1953
JOINT OWNER NAME: ▇▇▇▇ ▇. ▇▇▇
JOINT OWNER DATE OF BIRTH: 7-18-1981
ANNUITANT NAME: ▇▇▇▇▇ ▇. ▇▇▇
ANNUITANT DATE OF BIRTH: 5-13-1987
ANNUITANT SEX: Female
PRIMARY BENEFICIARY NAME: ▇▇▇▇▇ ▇. ▇▇▇
CONTRACT NUMBER: Specimen
CONTRACT DATE: 6-30-1993
ISSUE DATE: 6-30-1993
ANNUITY START DATE: 7-1-2052
PLAN: Non-qualified
ASSIGNMENT: This Policy may be assigned
See Assignment Provision of your Policy.
CONTINGENT BENEFICIARY NAME: ▇▇▇▇ ▇. ▇▇▇
--------------------------------------------------------------------------------
INITIAL PURCHASE PAYMENT ........................... $500,000
SUBSEQUENT PURCHASE PAYMENTS ....................... $10,000
SUBSEQUENT PURCHASE PAYMENT FREQUENCY .............. Annual
MINIMUM SUBSEQUENT PURCHASE PAYMENTS ............... $2,000 or $50 through
an automatic
investment program
MORTALITY AND EXPENSE RISK CHARGE .................. 1.25% Annually
ADMINISTRATION CHARGE .............................. .15% Annually
CONTRACT MAINTENANCE CHARGE ........................ $30
WITHDRAWAL CHARGES:
Purchase Payment Year ......... 1 2 3 4 5 6 7 8+
Withdrawal Charge ............. 5% 5% 5% 5% 4% 3% 2% 0%
FREE WITHDRAWAL PERCENTAGE ......................... 10%
FREE SYSTEMATIC WITHDRAWAL AVAILABILITY DATE ....... 7-1-1993
MINIMUM GUARANTEED INTEREST RATE ................... 3.5%
ANNUITY OPTION ..................................... Option 2
SUB-ACCOUNTS:
Prime Obligations
Bond
Equity
International Discovery
Small Capitalization
METHOD FOR DEDUCTIONS:
Deductions for any Contract Maintenance Charge, any Transfer Charges,
any Premium Taxes collected after the Purchase Payments are applied,
and any unallocated partial withdrawals will be made sequentially from
the Contract Value. In descending order of the Sub-Accounts listed
above, the value of each account will be depleted before the next is
charged. The Fixed Account is the last account charged.
- 3 -
V6020 A (3-93) SBL 21
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DEFINITIONS
--------------------------------------------------------------------------------
ACCUMULATION UNIT
The Accumulation Unit is a unit of measure. It is used to calculate the
Variable Account Contract Value prior to the Annuity Start Date. It is
also used to calculate the Variable Account Contract Value after the
Annuity Start Date for Annuity Options 5 and 6.
ANNUITANT
The Annuitant is the person named by the Owner to receive Annuity
Payments under this Contract. Please see "Annuitant" provisions on page
8.
ANNUITY OPTION
The Annuity Option is the method for making Annuity Payments. The
Annuity Option is selected prior to the Annuity Start Date. Please see
"Annuity Options" on page 17.
ANNUITY START DATE
The Annuity Start Date is the date on which Annuity Payments are
scheduled to begin. This date may be changed by the Owner. The Annuity
Start Date is shown on Page 3.
ANNUITY UNIT
The Annuity Unit is a unit of measure. It is used to calculate Variable
Annuity Payments after the Annuity Start Date for Annuity Options 1
through 4.
COMPANY
The Company is Security Benefit Life Insurance Company.
CONTRACT ANNIVERSARY
A Contract Anniversary is a 12-month anniversary of the Contract Date
as defined below.
CONTRACT DATE
The Contract Date is the date the Contract begins. The Contract Date is
shown on page 3.
CONTRACT YEAR
Contract Years are measured from the Contract Date.
DESIGNATED BENEFICIARY
Upon the first death of the Owner or Joint Owner, the Designated
Beneficiary will be the first person on the following list who is alive
on the date of death:
1. Primary Beneficiary;
2. Contingent Beneficiary;
3. Owner;
4. Joint Owner;
5. Annuitant; and
6. the Owner's estate if no one listed above is alive.
The Designated Beneficiary may receive a death benefit upon the death
of the Owner. For more information please see "Ownership, Annuitant,
and Beneficiary Provisions" on page 8 and the "Death Benefit
Provisions" on pages 13 and 14.
EARNINGS
Earnings include interest, dividends, realized gains or losses, and
unrealized gains or losses.
FIXED ACCOUNT
The Fixed Account invests in the general account of the Company. The
Company manages the general account and guarantees that an effective
rate of return of at least 3 1/2% will be credited to the Fixed Account
Contract Value.
HOME OFFICE
The Address of the Home Office is ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇.
ISSUE DATE
The Issue Date is the date the Company uses to determine the date the
Contract becomes incontestable. The Issue Date is shown on Page 3.
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V 6020 B (3-93) BP 602011
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DEFINITIONS (Continued)
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JOINT OWNER
The Joint Owner, if any, possesses an undivided interest in the entire
Contract in conjunction with the Owner. The Joint Owner, if any, is
named on page 3. Please see "Joint Ownership" provisions on page 8.
NONNATURAL PERSON
Any group or entity that is not a living person such as a trust or
corporation.
OWNER
The Owner is the person who possesses all rights under the Contract.
The Owner is named on page 3. Please see "Ownership" provisions on page
8.
PREMIUM TAX
Any Premium Taxes levied by a state or other governmental entity will
be charged against this Contract. When Premium Tax is assessed after
the premium is applied, it will be deducted as described on page 3.
PURCHASE PAYMENT
A Purchase Payment is money received by the Company and applied to the
Contract.
PURCHASE PAYMENT ANNIVERSARY
A Purchase Payment Anniversary is a 12-month anniversary of the date
the Purchase Payment is applied.
PURCHASE PAYMENT YEAR
A Purchase Payment Year is each 12-month period starting with either
the Purchase Payment Anniversary or the date the Purchase Payment is
applied. The first Purchase Payment year begins on the date the
Purchase Payment is applied and increases by one on each successive
Purchase Payment Anniversary.
SUB-ACCOUNTS
The Variable Account is divided into Sub-Accounts which invest in
shares of mutual funds. Each Sub-Account may invest its assets in a
separate class or series of a designated investment company or
companies. The Sub-Accounts are shown on page 3. Subject to the
regulatory requirements then in force, the Company reserves the right
to:
1. change or add designated investment companies;
2. add, remove or combine Sub-Accounts;
3. add, delete or make substitutions for securities that are held or
purchased by the Variable Account or any Sub-Account;
4. operate the Variable Account as a managed investment company;
5. combine the assets of the Variable Account with other Variable
Accounts of the Company or an affiliate thereof; and
6. restrict or eliminate any voting rights of the Owner with respect
to the Variable Account or other persons who have voting rights as
to the Variable Account.
If any of these changes result in a material change to the Variable
Account or a Sub-Account, the Company will notify the Owner of the
change. The Company will not change the investment policy of any
Sub-Account without the filing and other procedures established by
insurance regulators of the state of issue.
VALUATION DATE
A Valuation Date is each day the New York Stock Exchange and the
Company's Home Office are open for business.
VALUATION PERIOD
A Valuation Period is the interval of time from one Valuation Date to
the next Valuation Date.
VARIABLE ACCOUNT
The Variable Account is a separate account established and maintained
by the Company under Kansas law. The Variable Account is divided into
Sub-Accounts which are listed on page 3. The assets held in the
Variable Account supporting Contract liabilities are not chargeable
with liabilities arising from any other business the Company may
conduct.
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BP 602011
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GENERAL PROVISIONS
--------------------------------------------------------------------------------
THE CONTRACT
The entire Contract between the Owner and the Company consists of this
Contract, the attached Application, and any Amendments, Endorsements or
Riders attached to the Policy. All statements made in the Application
will, in the absence of fraud, as determined by a court of competent
jurisdiction, be deemed representations and not warranties. The Company
will use no statement made by or on behalf of the Owner or the
Annuitant to void this Contract unless it is in the written Application
and unless successfully contested by the Company. Any change in the
Contract can be made only with the written consent of the President, a
Vice President, or the Secretary of the Company.
The Purchase Payment(s) and the Application must be acceptable to the
Company under its rules and practices. If they are not, the Company's
liability will be limited to a return of the Purchase Payment(s).
COMPLIANCE
The Company reserves the right to make any change to the provisions of
this Contract to comply with or give the Owner benefit of any federal
or state statute, rule or regulation. This includes, but is not limited
to, requirements for annuity contracts under the Internal Revenue Code
or that of any state. The Company will provide the Owner with a copy of
any such change and will also file such a change with the insurance
regulatory officials of the state in which the contract is delivered.
MISSTATEMENT OF AGE AND SEX
If the age or sex of the Annuitant has been misstated, all payments and
benefits under this Contract will be adjusted when legally permitted.
Payments and benefits will be made on the basis of the Annuitant's
correct age or sex. Proof of the age of an Annuitant may be required at
any time, in a form suitable to the Company. When the age or sex of an
Annuitant has been misstated, the dollar amount of any overpayment plus
interest will be deducted from the next payment(s) due under this
Contract. The dollar amount of any underpayment made by the Company as
a result of any such misstatement will be paid in full plus interest
with the next payment due under this Contract. The interest portion of
these adjustments will be calculated at 6%.
EVIDENCE OF SURVIVAL
When any payments under this contract depend on the recipient being
alive on a given date, proof that the recipient is living may be
required by the Company. Such proof must be in a form acceptable to the
Company, and may be required prior to making the payments.
INCONTESTABILITY
This Contract will not be contested after it has been in force for two
years from the Issue Date during the lifetime of the Owner. This
provision does not apply to any benefits payable in the event of
disability.
ASSIGNMENT
No Assignment under this Contract is binding unless received by the
Company in writing. The Company assumes no responsibility for the
validity, legality, or taxability of any Assignment. The Assignment
will be subject to any payment made or other action taken by the
Company before the Assignment is received by the Company. Once filed,
the rights of the Owner, Annuitant and Beneficiary are subject to the
Assignment. Any claim is subject to proof of interest of the assignee.
Please refer to page 3 to see if this Contract may be assigned.
- 6 -
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V 6020 C (3-93) BP 602021
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GENERAL PROVISIONS (Continued)
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RECEIVED BY THE COMPANY
The phrase "Received by the Company" means receipt by the Company at
its Home Office.
TRANSFERS
The Owner may Transfer funds among the Fixed Account and Sub-Accounts
subject to the following.
Prior to the Annuity Start Date: The Owner may make 12 Transfers per
calendar year without charge. For each additional Transfer, a $25
dollar charge is deducted from the Contract Value. Transfers are not
permitted within 30 days of the Annuity Start Date.
After the Annuity Start Date: For Annuity Options 1, 2, 3, and 4, the
Owner may make 1 Transfer per calendar year without charge. It must be
between Sub-Accounts and no additional Transfers are permitted in a
calendar year. For Annuity Options 5 and 6, the Owner may make 12
Transfers per calendar year without charge. For each additional
Transfer in a calendar year, a $25 charge is deducted from the Contract
Value.
The Company reserves the right to limit the size of Transfers and to
limit Transfers to 12 per calendar year. Transfers must be at least
$500 or the remaining balance in the Fixed Account or a Sub-Account.
The total dollar amount that may be Transferred from the Fixed Account
in a Contract Year is limited to the greatest of:
1. $5,000;
2. 1/3 of the Fixed Account value at the time of Transfer; or
3. 120% of the dollar amount Transferred from the Fixed Account in
the prior Contract Year.
When a Transfer charge is deducted from the Contract Value, it shall be
deducted as described on page 3. The Company reserves the right to
delay Transfers from the Fixed Account for up to 6 months. The Company
will notify you if there will be a delay.
CLAIMS OF CREDITORS
The Contract Value and other benefits under this Contract are exempt
from the claims of creditors to the extent permitted by law.
NONFORFEITURE VALUES
The Death Benefits, Surrender Values and Annuity Start Values will at
least equal the minimum required by law.
DIVIDENDS
The Company is a mutual life insurance company. Consequently, it pays
dividends on some of its contracts. However, the Company does not
expect any dividends to become payable on this Contract. At the end of
each Contract Year the Company will determine the Contract's dividend,
if any. The Owner may choose to have it: (1) added to the Contract
Value, or (2) paid in cash. If the Owner does not make a choice, it
will be added to the Contract Value.
REPORTS
At least once each Contract Year the Owner shall be sent a statement
including the current Contract Value and any other information required
by law.
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BP 602021
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OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS
--------------------------------------------------------------------------------
OWNERSHIP
The Owner has all rights in the Contract unless otherwise provided. All
rights in the Contract remain with the Owner after the Annuity Start
Date. If the purchaser names someone other than himself as Owner, the
purchaser has no rights in the Contract, unless later changed by the
Owner. If the Owner dies, a distribution may be made to the Designated
Beneficiary. No Owner, named in the Contract, may be older than 80 on
the Contract Date.
JOINT OWNERSHIP
If a Joint Owner is named in the application, then the Owner and Joint
Owner will share an undivided interest in the entire Contract. When an
Owner and Joint Owner have been named, the Company will only honor
requests for changes and the exercise of other Ownership rights made by
both the Owner and Joint Owner. When a Joint Owner is named, all
references to "Owner" throughout this Contract should be construed to
mean both the Owner and Joint Owner, except for the "Reports" provision
on page 7 and the "Death Benefit Provisions" on pages 13 and 14.
ANNUITANT
The Owner may change the Annuitant prior to the Annuity Start Date. The
request for this change must be made in writing and Received by the
Company at least 30 days prior to the Annuity Start Date. No Annuitant
may be named who is more than 80 years old on the Contract Date. When
the Annuitant dies prior to the Annuity Start Date, the Owner must name
a new Annuitant within 30 days. If a new Annuitant is not named, the
Owner becomes the Annuitant. The Annuitant is named on page 3.
PRIMARY AND CONTINGENT BENEFICIARIES
The Primary Beneficiary and any Contingent Beneficiary are named in the
Application, unless later changed by the Owner. If the Primary
Beneficiary dies prior to the Owner, the Contingent Beneficiary becomes
the Primary Beneficiary. Unless the Owner has provided otherwise, when
there are two or more Primary Beneficiaries, they will receive equal
shares, unless otherwise specified.
OWNERSHIP AND BENEFICIARY CHANGES
Subject to the terms of any existing Assignment, the Owner may name a
new Owner, new Primary Beneficiary or a new Contingent Beneficiary. Any
new choice of Owner, Primary Beneficiary or Contingent Beneficiary will
automatically revoke any prior choice of Owner, Primary Beneficiary or
Contingent Beneficiary. Any change must be made in writing and recorded
at the Home Office. The change will become effective as of the date the
written request is signed, whether or not the Owner is living at the
time the change is recorded. A new choice of Primary Beneficiary or
Contingent Beneficiary will not apply to any payment made or action
taken by the Company prior to the time it was recorded. The Company may
require the Contract be returned so these changes may be made.
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V 6020 D (3-93) BP 602031
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PURCHASE PAYMENT PROVISIONS
--------------------------------------------------------------------------------
FLEXIBLE PURCHASE PAYMENTS
The Contract becomes in force when the initial Purchase Payment is
applied. The Owner is not required to continue Purchase Payments in the
amount or frequency originally anticipated. The Owner may: (1) increase
or decrease the amount of Purchase Payments, subject to any Contract or
administrative limitations; or (2) change the frequency of Purchase
Payments. A change in frequency or amount of Purchase Payments does not
require a written request. After the Annuity Start Date, the Company
will not apply any new Purchase Payments to this Contract.
PURCHASE PAYMENT LIMITATIONS
Purchase Payments may not be greater than $1,000,000 without prior
approval by the Company. The Minimum Subsequent Purchase Payment amount
is shown on page 3.
PURCHASE PAYMENT ALLOCATION
Purchase Payments may be allocated among the Fixed Account and the
Sub-Accounts. The allocations may be made by specifying the dollar
amount or the whole percentage to go to each account. However, no less
than $25 per Purchase Payment may be allocated to any account. The
Owner may change the allocations by written notice to the Company.
PLACE OF PAYMENT
All Purchase Payments under this Contract are payable to the Company at
its Home Office. Purchase Payments are applied after they are received
by the Company at its Home Office.
--------------------------------------------------------------------------------
CONTRACT VALUE AND EXPENSE PROVISIONS
--------------------------------------------------------------------------------
CONTRACT VALUE
On any Valuation Date, the Contract Value is the sum of (1) the
Variable Account Contract Value; and (2) the Fixed Account Contract
Value. At any time after the first Contract Year and before the Annuity
Start Date, the Company reserves the right to pay to the Owner the
Contract Value as a lump sum if it is below $2,000.
FIXED ACCOUNT CONTRACT VALUE
On any Valuation Date, the Fixed Account Contract Value is based on the
following transactions with respect to this Contract:
1. the sum of all Purchase Payments allocated under the Contract to
the Fixed Account;
2. any Transfers from the Variable Account;
3. the interest credited to the Fixed Account;
4. any Withdrawals and applicable Withdrawal Charges deducted from
the Fixed Account;
5. any Transfers to the Variable Account;
6. any applicable Contract Maintenance Charges and Transfer Charges
deducted from the Fixed Account;
7. any applicable Premium Taxes;
8. any amounts held in the Fixed Account which are applied towards
Annuity Options 1 through 4.
FIXED ACCOUNT INTEREST CREDITING
The Company will credit interest on the Fixed Account Contract Value
from the Contract Date. The renewal interest rates will be declared and
reset at the Company's discretion. However, the renewal interest rate
will be at least the Minimum Guaranteed Interest Rate shown on page 3.
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BP 602031
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
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VARIABLE ACCOUNT CONTRACT VALUE
The Variable Account Contract Value is the sum of the value in each
Sub-Account for this Contract. Each Sub-Account value is the product of
the Accumulation Units under this Contract and the Accumulation Unit
Value.
DETERMINING ACCUMULATION UNITS
The number of Accumulation Units for a particular Sub-Account is found
by dividing: (1) the value of the Sub-Account; by (2) the Accumulation
Unit Value for the Sub-Account. The number of Accumulation Units will
not change as a result of investment experience. Events that change the
number of Accumulation Units are:
1. Purchase Payments that are applied to the Sub-Account;
2. funds that are Transferred into or out of the Sub-Account;
3. Withdrawals that are deducted from the Sub-Account; and
4. certain charges or taxes that are deducted.
ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Sub-Account was set at
$10. The subsequent Accumulation Values are found by dividing (1) by
(2), where:
1. is the net result of:
a. the Net Asset Value determined at the end of the current
Valuation Period, plus
b. any dividends declared by the Sub-Account's underlying mutual
fund that are not reflected in the Net Asset Value; less
c: the accrued Mortality and Expense Risk Charge and the accrued
Administrative Charge.
2. the number of Accumulation Units at the beginning of the Valuation
Period.
The Accumulation Unit Value may increase or decrease from one Valuation
period to the next.
NET ASSET VALUE
The Net Asset Value is the net value of all shares of the underlying
mutual fund held by the Sub-Account. The Net Asset Value is: (1) the
value of the securities; plus (2) any cash or other assets; less (3)
all liabilities.
CONTRACT MAINTENANCE CHARGE
Except as noted below, the Company deducts a Contract Maintenance
Charge on each Contract Anniversary. The applicable Contract
Maintenance Charge is shown on page 3. When a Contract is Withdrawn for
its full Contract Value, a pro rata portion of this charge is deducted
at the time of Withdrawal. No Contract Maintenance Charge is deducted
on or after the Annuity Start Date when one of the first four Annuity
Options is used. When Contract Maintenance Charges are deducted from
the Contract Value, they shall be deducted as described on page 3.
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V 6020 E (3-93) BP 602051
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
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MORTALITY AND EXPENSE RISK CHARGE
The Company will deduct the annualized Mortality and Expense Risk
Charge shown on page 3. The deduction will be: (1) made from each
Sub-Account; (2) computed on a daily basis; and (3) made in the same
proportion that the Sub-Account Contract Value bears to the Variable
Account Contract Value. This charge is not directly taken from each
Sub-Account Contract Value. It is factored into the Accumulation Unit
Value and the Annuity Unit Value on a daily basis.
ADMINISTRATION CHARGE
The Company will deduct the annualized Administration Charge shown on
page 3. The deduction will be: (1) made from each Sub-Account; (2)
computed on a daily basis; and (3) made in the same proportion that the
Sub-Account Contract Value bears to the Variable Account Contract
Value. This charge is not directly taken from each Sub-Account Contract
Value. It is factored into the Accumulation Unit Value and the Annuity
Unit Value on a daily basis.
PREMIUM TAX EXPENSE
Any applicable Premium Taxes may be deducted from the Contract Value.
The Company reserves the right to deduct premium tax when due or any
time thereafter.
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
--------------------------------------------------------------------------------
WITHDRAWALS
The Owner may Withdraw all or part of the Contract Value at any time.
This provision is subject to any federal or state Withdrawal
restrictions. All Withdrawals must meet the following conditions.
1. The request for Withdrawal must be Received by the Company in
writing.
2. The Owner must apply: (a) while this contract is in force; and (b)
prior to the Annuity Start Date.
3. The amount Withdrawn must be at least $500.00 except for
Systematic Withdrawals, as discussed below, or when terminating
the Contract.
A partial Withdrawal request should specify the allocations for
deducting the Withdrawal from each account. In the absence of these
instructions the Company will make the deductions as described on page
3.
WITHDRAWAL VALUE
The Withdrawal Value at any time will be the Contract Value less;
1. any applicable Withdrawal Charges; and
2. any applicable Contract Maintenance Charges; and
3. any uncollected Premium Taxes.
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BP 602051
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS (Continued)
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WITHDRAWAL CHARGE
If part or all of the Contract Value is Withdrawn, Withdrawal Charges
may be applied at the time of Withdrawal. The Withdrawal Charges apply
to each Purchase Payment based on the number of Purchase Payment Years
it has been in the Contract as shown on page 3. For the purpose of
determining the Withdrawal Charges, Purchase Payments are deducted from
the Contract Value on a first in first out basis. This means the oldest
Purchase Payment with the lowest Withdrawal Charge is deducted first.
The Withdrawal Charge will not be assessed against.
1. any Free Withdrawal amounts;
2. any Free Systematic Withdrawal amounts;
3. any Purchase Payments kept in the Contract at least 84 months;
4. any amounts remaining after all the Purchase Payments are deducted;
5. Annuity Options 1 through 4.
6. Annuity Options 5 and 6 provided that Annuity Payments are made for
at least 7 years.
The Withdrawal charge will be assessed against the Sub-Accounts and the
Fixed Account in the same proportion as the Withdrawal is Allocated.
FREE WITHDRAWALS
Beginning in the second Contract Year, one Free Withdrawal may be made
per Contract Year. The Maximum Free Withdrawal amount is equal to the
Free Withdrawal Percentage, as shown on page 3, times the Contract
Value at the time of the Withdrawal. The Free Withdrawal amount is
applied only to the first Withdrawal in a Contract Year. A Free
Withdrawal is not available in any Contract Year that Free Systematic
Withdrawals have been made. Free Withdrawals are not available after
the Annuity Start Date. This Free Withdrawal Provision waives any
Withdrawal Charges on the Withdrawn amount up to the amount of the Free
Withdrawal. The Free Withdrawal is non-cumulative. Unused Free
Withdrawal amounts cannot be carried from one Contract Year to the
next.
SYSTEMATIC WITHDRAWALS
Systematic Withdrawals are automatic periodic distributions from the
Contract prior to the Annuity Start Date. In order to initiate
Systematic Withdrawals, the Owner must make the request in writing.
Each Systematic Withdrawal must be at least $50.00. The Owner must
indicate the type of payment and its frequency. The payment frequency
may be: (1) monthly; (2) quarterly; (3) semiannually; or (4) annually.
FREE SYSTEMATIC WITHDRAWALS
Free Systematic Withdrawals are Systematic Withdrawals without the
imposition of a Withdrawal Charge. Free Systematic Withdrawals are
available after the Free Systematic Withdrawal Availability Date shown
on page 3. Free Systematic Withdrawals are not available in any
Contract Year in which a Free Withdrawal has been made. Free Systematic
Withdrawals may be made until the cumulative distributions in a
Contract Year equal that year's Free Withdrawal limit. The limit for
each Contract Year is the Free Withdrawal Percentage, as shown on page
3, times the Contract Value on the date of the first Systematic
Withdrawal in that Contract Year. Any amounts exceeding this limit will
incur a Withdrawal Charge as described above.
DISABILITY WAIVER
The Company will waive the Withdrawal Charges if an Owner becomes
totally and permanently disabled prior to age 65. To qualify, the Owner
must provide: (1) a certified copy of their birth certificate; and (2)
proof of total and permanent disability within the meaning of Internal
Revenue Code Section 72(m)(7) or any successor provision. The Company
reserves the right to: (1) investigate any disability claim; and (2)
require current proof of qualification with each withdrawal request.
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V 6020 E (3-93) BP 602051
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WITHDRAWAL PROVISIONS (Continued)
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DATE OF REQUEST
The day on which the Company receives all the required information to
process a Transfer or a Withdrawal will determine the date used in
calculating these benefits.
PAYMENT OF WITHDRAWAL BENEFITS
The Company reserves the right to suspend or delay the payment date of
a Transfer or a Withdrawal payment from the Variable Account for any
period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which: (a) disposal of
securities held in the Variable Account is not reasonably
practicable; or (b) it is not reasonably practicable to fairly
determine the value of the net assets of the Variable Account; or
4. during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of
securityholders.
Rules and regulations of the Securities and Exchange Commission will
govern as to whether the conditions set forth above exist.
The Company further reserves the right to delay payment of a Withdrawal
from the Fixed Account for up to six months. This right is required by
most states. The Company will notify you if there will be a delay.
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
--------------------------------------------------------------------------------
DEATH BENEFIT
If any Owner dies prior to the Annuity Start Date, a Death Benefit will
be payable to the Designated Beneficiary when due Proof of Death and
instructions regarding payment are Received by the Company within 6
months of the date of death. If the Owner is a Nonnatural Person, then
the Death Benefit is payable in the event of the death of the Annuitant
prior to the Annuity Start Date. Also, if the Owner is a Nonnatural
Person, the amount of the death benefit is based on the age of the
Annuitant on the Issue Date.
If the age of each Owner was 75 or younger on the Issue Date, the Death
Benefit will be the larger of: (1) the cumulative Purchase Payments
less any Withdrawals and any Premium Tax; or (2) the Contract Value
less any Premium Tax. If the age of any Owner on the Issue Date was 76
or older, or if due Proof of Death and instructions regarding payment
are not Received by the Company within six months of the date of the
Owner's death, the lump sum Death Benefit will be the Withdrawal Value.
If a lump sum payment is requested, the payment will be made in
accordance with any applicable laws and regulations governing the
payment of Death Benefits. The value of the Death Benefit is determined
as of the date that both Proof of Death and the election of a lump sum
settlement are Received by the Company in good order.
PROOF OF DEATH
Any of the following will serve as proof of death:
1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as to the
finding of death;
3. written statement by a medical doctor who attended the deceased
Owner; or
4. any proof satisfactory to the Company.
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BP 602061
--------------------------------------------------------------------------------
DEATH BENEFIT PROFISIONS (Continued)
--------------------------------------------------------------------------------
DISTRIBUTION REQUIREMENTS
The entire Death Benefit with interest must be paid within 5 years
after the death of the Owner. In the event that the Designated
Beneficiary elects an Annuity Option, Annuity Payments must begin
within one year of the death of the Owner. However, the length of time
for the payment period may be longer than 5 years if: (1) the
Designated Beneficiary is a natural person; (2) the Death Benefit is
paid out under Annuity Options 1 through 6; and (3) payments are made
over a period that does not exceed the life expectancy of the
Designated Beneficiary. If the Owner's spouse is the sole Designated
Beneficiary, the spouse will become the sole Owner of the Contract, and
he or she may keep it in force until the earlier of the spouse's death
or the Annuity Start Date.
If any Owner dies after the Annuity Start Date, the Ownership rights
pass to the Designated Beneficiary and Annuity Payments will continue
to be distributed at least as rapidly as under the method of
distribution being used as of the date of the Owner's death.
If the Owner is a Nonnatural Person, the distribution rules set forth
above apply in the event of the death of or a change in the Annuitant.
This Contract is deemed to incorporate any provision of Section 72(s)
of the Internal Revenue Code of 1986, as amended (the "Code"), or any
successor provision, as interpreted by the Company and deemed necessary
to qualify this Contract as an annuity.
The foregoing distribution requirements do not apply to qualified plans
as defined in Section 401(a) of the Code.
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS
--------------------------------------------------------------------------------
ANNUITY START DATE
The Annuity Start Date may be chosen by the Owner at the time of
application. For Annuity Options 1 through 4, this date must be at
least 3 years after the Contract Date. For Annuity Options 5 and 6,
this date must be after the Free Systematic Withdrawal Availability
Date. When the Annuity Start Date occurs while the Contract Value is
subject to a Withdrawal Charge the Annuity Payment period must be at
least 7 years. The Annuity Start Date must be prior to the later of:
(1) the oldest Annuitant's eighty-fifth birthday; or (2) the tenth
Contract Anniversary.
The Annuity Start Date is the date the first payment will be made to
the Annuitant under Annuity Options 1 through 6.
CHANGE OF ANNUITY START DATE
The Owner may change the Annuity Start Date. A request for the change
must be made in writing. The written request must be Received by the
Company at least 30 days prior to the new Annuity Start Date as well as
30 days prior to the previous Annuity Start Date.
ANNUITY START AMOUNT
The Annuity Start Amount is applied to one of the Annuity Options
listed on page 17. The Annuity Start Amount is used with the annuity
rates to determine the Annuity Payments. The Annuity Start Amount is:
(1) the entire Contract Value on the Annuity Start Date; less (2) any
applicable Premium Tax.
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V 6020 G (3-93) BP 602071
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
--------------------------------------------------------------------------------
ANNUITY PAYMENT GUARANTEES
The Annuity Payments made under each Annuity Option will reflect
current annuity rates in effect on the Annuity Start Date. The current
annuity rates will not be less than the guaranteed Annuity Option
rates. The guaranteed Annuity Option rates are guaranteed for the life
of the Contract. The guaranteed rates are based on interest credited at
3 1/2% per year and the 1983 Table A individual annuity mortality table
updated for 45 years with factors from Projection Scale G. Tables A and
B illustrate some of these guaranteed rates per $1,000. Rates not shown
will be provided upon request.
ANNUITY PAYMENTS
The Owner may select any form of Annuity Payments that is satisfactory
to the Company. Several guaranteed Annuity Options are listed on page
17. No Annuity Option can be selected that requires the Company to make
periodic payments of less than $50.00. The standard Annuity Option is
Option 2 with 10 years of payments certain. This Annuity Option will
automatically be used if no Annuity Option is elected prior to the
Annuity Start Date. Each Annuity Option allows for making payments
annually, semiannually, quarterly or monthly.
CHANGE OF ANNUITY PAYMENTS
Prior to the Annuity Start Date, the Owner may change the Annuity
Option selected. The change must be made in writing. The written
request must be received by the Company at least 30 days prior to the
Annuity Start Date.
After the Annuity Start Date, the Owner may change the Annuity Option
if payments are being made under Annuity Options 5 or 6. The change
must be requested in writing.
After the change is recorded by the Company, it will be effective as of
the date it was requested. A change will not apply to any payment made
or action taken by the Company prior to the time it was recorded.
FIXED ANNUITY PAYMENTS
Fixed Annuity Payments provide a minimum interest rate which is
guaranteed by the Company during the Annuity Payment period for Annuity
Options 1 through 4. On the Annuity Start Date, the Annuity Start
Amount will be applied to the applicable Annuity Table.
VARIABLE ANNUITY PAYMENTS
For Annuity Options 1 through 4, Variable Annuity Payments are payments
which: (1) are not predetermined or guaranteed as to dollar amount; and
(2) vary in amount with the investment experience of the Sub-Account.
FIRST VARIABLE ANNUITY PAYMENT
On the Annuity Start Date, the Annuity Start Amount will be applied to
the applicable Annuity Table for Annuity Options 1 through 4. This will
be done in accordance with the Annuity Option selected.
ANNUITY UNIT VALUE
An Annuity Unit is used to calculate the value of Annuity Payments. The
value of an Annuity Unit for each Sub-Account was originally set at $1.
The value for any later Valuation Period is found as follows:
1. For each Sub-Account the Annuity Unit Value for the prior
Valuation Period is multiplied by the Net Investment Factor for
the second Valuation Period preceding the current one.
2. The result is multiplied by an interest factor. This is done to
neutralize the assumed investment rate of 3.5% per year, which is
built into the Annuity Tables.
- 15 -
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BP 602071
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
--------------------------------------------------------------------------------
NET INVESTMENT FACTOR
The Net Investment Factor is an index used to update the investment
performance of a Sub-Account from one Valuation Period to the next. The
Net Investment Factor may be more than or less than one; therefore, the
value of an Annuity Unit may increase or decrease.
The Net Investment Factor for any Sub-Account in any Valuation Period
is determined by dividing (1) by (2) and subtracting (3) from the
result, where:
1. is the net result of:
a. the Net Asset Value Per Share of the mutual fund held in the
Sub-Account, determined at the end of the current Valuation
Period; plus
b. the per share amount of any dividend or capital gain
distributions made by the Sub-Account's underlying the mutual
fund that is not included in the Net Asset Value Per Share;
plus or minus
c. a per share charge or credit for any taxes reserved for, which
is determined by the Company to have resulted from the
investment operations of the Sub-Account.
2. is the net result of:
a. the Net Asset Value per share of the Sub-Account's underlying
the mutual fund as determined at the end of the prior
Valuation Period; plus or minus
b. the per share charge or credit for any taxes reserved for the
prior valuation Period.
3. is a factor representing the Mortality and Expense Risk Charge and
the Administration Charge deducted from the Variable Account.
For underlying mutual funds that credit dividends on a daily basis and
pay such dividends once a month, the Net Investment Factor allows for
the monthly reinvestment of these daily dividends. As described above,
the gains and losses from each Sub-Account is credited or charged
against the Sub-Account without regard to the gains or losses in the
Company or other Sub-Accounts.
NET ASSET VALUE PER SHARE
The Net Asset Value Per Share is found by dividing the Net Asset Value
by the number of outstanding shares.
SUBSEQUENT VARIABLE ANNUITY PAYMENTS
After the first Variable Annuity Payment the payments vary in amount.
The amount of each payment changes with the investment performance of
the Sub-Accounts. The dollar amount of such payments is determined as
follows:
1. The dollar amount of the first Variable Annuity Payment is divided
by the Annuity Unit Value on the Annuity Start Date. The result
establishes the fixed number of Annuity Units for each subsequent
payment. This number of Units remains fixed during the Annuity
Payment period.
2. The fixed number of Annuity Units is multiplied by the Annuity
Unit Value for the Valuation Period for which the payment is due.
This result establishes the dollar amount of the payment.
After the first payment the Company guarantees that the dollar amount
of each payment will not be affected by variations in expenses or
mortality experience.
- 16 -
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V 6020 H (3-93) BP 602081
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
--------------------------------------------------------------------------------
ANNUITY OPTIONS
OPTION 1
LIFE OPTION: This option provides payments for the lifetime of the
Annuitant. Table A illustrates some of the guaranteed rates for this
option.
OPTION 2
LIFE WITH FIXED PERIOD OPTION: This option provides payments for the
lifetime of the Annuitant. A fixed period of 5, 10, 15 or 20 years may
be chosen. Payments will continue to the end of this period even if the
Annuitant dies prior to the end of the period. If the Annuitant dies
before receiving all the payments during the fixed period, the
remaining payments will be made to the Designated Beneficiary. Table A
illustrates some of the guaranteed rates for this option.
OPTION 3
LIFE WITH INSTALLMENT REFUND OPTION: This option provides payments for
the lifetime of the Annuitant. A fixed number of payments will be
determined by dividing the benefit amount by the payment amount. A
fixed number of payments will be made even if the Annuitant dies. If
the Annuitant dies before receiving the fixed number of payments, any
remaining payments will be made to the Designated Beneficiary. Table A
illustrates some of the guaranteed rates for this option.
OPTION 4
JOINT AND LAST SURVIVOR OPTION: This option provides payments for the
lifetime of the Annuitant and Joint Annuitant. Payments will continue
as long as either is living. Table B illustrates some of the guaranteed
rates for this option.
OPTION 5
FIXED PERIOD OPTION: This option provides payments for a fixed number
of years between 5 and 20. If the Contract Value is held in the Fixed
Account, then the amount of the payments will vary as a result of the
interest rate (as adjusted periodically) credited on the Fixed Account.
If the Contract Value is held in the Variable Account, then the amount
of the payments will vary as a result of the investment performance of
the specific Sub-Accounts chosen. If all the Annuitants dies before
receiving the fixed number of payments, any remaining payments will be
made to the Designated Beneficiary.
OPTION 6
FIXED PAYMENT OPTION: This option provides a fixed payment amount. This
amount is paid until the initial amount applied, including daily
interest adjustments, is paid. If the Contract Value is held in the
Fixed Account, then the number of payments will vary as a result of the
interest rate (as adjusted periodically) credited on the Fixed Account.
If the Contract Value is held in the Variable Account, then the number
of payments will vary as a result of the investment performance of the
specific Sub-Accounts chosen. If all the Annuitants dies before
receiving all the payments, any remaining payments will be made to the
Designated Beneficiary.
- 17 -
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BP 602081
--------------------------------------------------------------------------------
ANNUITY OPTION RATES
--------------------------------------------------------------------------------
SINGLE LIFE INCOME OPTIONS
Table A - Monthly
Payments for a fixed term and
afterwards as long as the Annuitant lives
per $1,000 of benefit amount
GUARANTEED MONTHLY PAYMENTS
--------------------------------------------------------------------------------
Age of Payee 0 60 120 180 240 Unit Refund
MALE
--------------------------------------------------------------------------------
55 4.45 4.44 4.41 4.37 4.30 4.31
56 4.52 4.51 4.48 4.43 4.36 4.37
57 4.60 4.59 4.56 4.50 4.42 4.44
58 4.68 4.67 4.64 4.57 4.47 4.51
59 4.77 4.76 4.72 4.65 4.53 4.58
60 4.87 4.85 4.81 4.72 4.60 4.65
61 4.97 4.95 4.90 4.80 4.66 4.73
62 5.07 5.05 5.00 4.89 4.72 4.82
63 5.19 5.17 5.10 4.97 4.79 4.90
64 5.31 5.29 5.20 5.06 4.85 5.00
65 5.44 5.41 5.32 5.15 4.92 5.09
66 5.58 5.55 5.44 5.24 4.98 5.20
67 5.73 5.69 5.56 5.34 5.05 5.30
68 5.89 5.84 5.69 5.44 5.11 5.41
69 6.06 6.00 5.82 5.54 5.17 5.53
70 6.24 6.17 5.97 5.64 5.23 5.66
FEMALE
55 4.11 4.11 4.10 4.08 4.05 4.05
56 4.17 4.17 4.16 4.14 4.10 4.10
57 4.23 4.23 4.22 4.19 4.15 4.15
58 4.30 4.29 4.28 4.25 4.21 4.21
59 4.37 4.36 4.35 4.32 4.27 4.27
60 4.44 4.44 4.42 4.38 4.33 4.34
61 4.52 4.51 4.49 4.45 4.39 4.40
62 4.60 4.59 4.57 4.52 4.45 4.47
63 4.69 4.68 4.65 4.60 4.52 4.55
64 4.78 4.77 4.74 4.68 4.58 4.63
65 4.88 4.87 4.84 4.76 4.65 4.71
66 4.99 4.98 4.93 4.85 4.72 4.80
67 5.10 5.09 5.04 4.94 4.79 4.89
68 5.23 5.21 5.15 5.04 4.86 4.99
69 5.36 5.34 5.27 5.14 4.94 5.09
70 5.50 5.48 5.39 5.24 5.01 5.20
Rates not shown will be provided on request.
--------------------------------------------------------------------------------
JOINT & LAST
SURVIVOR
TABLE B - MONTHLY FEMALE MALE AGE
INSTALLMENTS AGE 55 60 62 65 70
--------------------------------------------------------------------------------
Until last Death 55 3.85 3.93 3.95 3.99 4.03
of Two Payees 60 3.98 4.10 4.15 4.21 4.29
per $1,000 of 62 4.03 4.18 4.23 4.30 4.40
benefit amount 65 4.11 4.28 4.35 4.45 4.59
70 4.21 4.45 4.54 4.69 4.92
Option 1, 2, 3, or 4 available at ages 40 through 80.
Annual, semiannual, or quarterly payments can be determined from Table A or B by
multiplying the monthly payments by 11.812854, 5.9572233, and 2.9914201,
respectively.
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V 6020 I (3-93) BP 60209
PARKSTONE
VARIABLE ANNUITY
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT
* Purchase Payments may be made until the earlier of the Annuity Start Date or
termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Start Date according to the
contract provisions.
* Annuity Payments begin on the Annuity Start Date using the method as
specified in this Contract.
* This is a participating Contract.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND THESE DOLLAR AMOUNTS ARE
NOT GUARANTEED. (SEE "CONTRACT VALUE AND EXPENSE PROVISIONS" AND "ANNUITY
PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGO]
Security Benefit Life Insurance Company
A Member of The Security Benefit Group of Companies
700 ▇▇▇▇▇▇▇▇, Topeka, KS 66636-0001
▇-▇▇▇-▇▇▇-▇▇▇▇
▇▇-▇▇▇▇▇-▇▇
BP 602004
ENDORSEMENT FOR ANNUITY POLICY LOAN PROVISION
INTRODUCTION AND REQUIREMENTS FOR A LOAN:
This endorsement is attached to and made part of your Contract/Policy
(referred to herein as the "Policy"). Notwithstanding any other provision of the
Policy to the contrary, the following provisions shall apply. The Owner of the
Policy is herein called "the Borrower", "you", or "your". Security Benefit Life
Insurance Company is herein called "SBL". The General or Fixed Account of your
policy is herein referred to a the "Fixed Account".
Prior to the start of retirement annuity installments (the "maturity date")
SBL will lend an amount applied for to the Borrower subject to the limitations,
interest rates, and repayment procedures set out in this endorsement and in the
loan agreement between the Borrower and SBL. Any loan applied for must be for a
minimum of $1,000. All annuity policy loans must be repaid before the maturity
date. Only two new loans will be permitted per policy year.
The maximum loan amount for all policies combined, is generally equal to
the lesser of: (1) $50,000 reduced by the excess of: (a) the highest outstanding
loan balance within the preceding 12-month period ending on the day before the
date the loan is made; over (b) the outstanding loan balance on the date the
loan is made; or (2) 50% of your account value or $10,000, whichever is greater.
However, you may not borrow an amount which exceeds your total annuity account
value minus the amount needed as security described below.
When your loan is approved, SBL will transfer to an account within the
Fixed Account, referred to as the Loan Account, an amount equal to the amount of
your loan. In addition, 10% of the loaned amount will be held in the Fixed
Account as security for the loan.
REPAYMENT PROCEDURES:
All loans under this and prior loan endorsements must be repaid as
specified in the loan agreement and endorsement. Except for cases that qualify
under the Internal Revenue Code as determined by SBL, all loans must be repaid
within 5 years of approval. All loan repayments must be scheduled to be paid in
equal amounts on the same day of each calendar month or calendar quarter. For
monthly repayments the first scheduled repayment may not be later than 30 days
after the date of approval of the loan application by SBL. For quarterly
repayments, the first scheduled repayment may not be later than 90 days after
the date of approval of the loan application by SBL. Before a loan is permitted
a written application and loan agreement must be received by SBL. The written
application and loan agreement must be completed on a form acceptable to SBL.
SBL may postpone final approval or disapproval of a loan for up to six months
after the application for a loan is received.
Each loan payment must be labeled as such. Any payment not labeled as a
loan payment will be treated as a purchase payment. Each loan payment will
reduce the Loan Account by the amount the payment reduces the outstanding loan
balance. The amount held as security will also be reduced by each loan payment
so that the security is equal to 10% of the outstanding loan balance immediately
after the loan payment is made. Amounts which are no longer needed in the Loan
Account will be allocated in accordance with current purchase payment allocation
instructions. However, amounts which are no longer needed as security will NOT
automatically be allocated in accordance with purchase payment allocation
instructions. The loan may be repaid in full at any time. When repaid in full,
the Loan Account and the amount held as security will be reduced to $0.
FAILURE TO MAKE PAYMENTS:
If any required loan payment is not paid, within 30 days of the due date
for loans with a month repayment schedule or within 90 days of the due date for
loans with a quarterly repayment schedule, the TOTAL OUTSTANDING LOAN BALANCE
will be deemed to be in default. The entire loan balance, with any accrued
interest, will be reported to the Internal Revenue Service ("IRS") on Form
1099-R for the year the default occurred. Once a loan has gone into default,
regularly scheduled payments will not be accepted. However, the principal plus
accrued interest may be paid in full at any time. Notwithstanding any other
provision of the Policy or this endorsement to the contrary, no new loans will
be allowed when there is a loan in default.
Interest will continue to accrue on a loan in default. You may pay accrued
interest each year when notified by SBL. If such interest is not paid by
December 31st of each year, it will be added to the outstanding balance of the
loan and will be reported to the IRS on Form 1099-R. Account value equal to the
amount of the accrued interest will be transferred to the Loan Account. Account
value held in the Fixed Account as security for the loan will also be increased
so that the security is again equal to 10% of the outstanding loan. If a loan
continues to be in default when you attain age 59 1/2, the total outstanding
balance will be deducted from your account value. The Policy will be
automatically terminated if the outstanding loan balance on a loan in default
equals or exceeds the amount for which the Policy may be surrendered. The
proceeds from the Policy will be used to repay the debt and any applicable
surrender or withdrawal charges.
V6047 L-3 (1-97) NON-ERISA SP 6047B1
INTERNAL REVENUE CODE:
SBL makes no representations or guarantees as to the tax effect a loan may
have on the Borrower. ▇▇▇ suggests that the Borrower consult independent tax
counsel for specific advice.
INTEREST RATES:
The loan rate of interest is 2% more than the minimum interest rate
guaranteed in the Policy. Account value securing the loan will be credited with
the current interest rate. Amounts allocated to the Loan Account will be
credited with the minimum guaranteed rate specified in the Policy. Interest will
be charged each day that the debt (i.e. principal of loan outstanding plus
interest) is not repaid. Account value securing the loan will also be credited
with interest each day that the debt remains unrepaid.
OTHER EFFECTS ON POLICY PROVISIONS:
Partial withdrawals, surrenders or transfers will not be allowed on amounts
held in the Loan Account or on amounts held as security for the loan.
If the Policy is surrendered, or if a death benefit becomes payable, the
amount otherwise receivable will be reduced by the amount of the outstanding
loan, plus any accrued interest.
SECURITY BENEFIT LIFE INSRUANCE COMPANY
▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
-----------------------------------------
Endorsement Effective Date, if other than
Date of Issue of Policy
ENDORSEMENT FOR ANNUITY CONTRACT LOAN PROVISION
INTRODUCTION AND GENERAL INFORMATION
This endorsement is attached to and made part of this Contract as of the
Contract Date or as of the date shown below. If attached after the date of
issue, any new loans permitted on or after the date shown below will be governed
by this endorsement, not by any loan endorsement with an earlier effective date.
The Owner of the Contract is herein called "the Borrower", "you", or "your".
Security Benefit Life Insurance Company is herein called the "Company", "we", or
"our". Regardless of any other provision of the Contract to the contrary, the
following provisions shall apply.
Prior to the Annuity Start Date, the Company shall lend an amount applied
for to the Borrower subject to the limits, interest rates, and repayment
procedures set forth in this endorsement and in the loan agreement between the
Borrower and the Company. Any loan applied for must be for a minimum of $1,000
and a maximum of $50,000. Only two loans shall be allowed per Contract Year. All
loans under this and prior loan endorsements must be repaid as specified in the
loan agreement and this endorsement. All loans must be repaid before the Annuity
Start Date. The Annuity Start Date may not be changed so that annuity payments
begin before any outstanding loan balance is repaid in full. Except for cases
that qualify under the Internal Revenue Code as determined by the Company, all
loans must be repaid within five years of approval. All loan repayments must be
scheduled to be paid in equal amounts on the same day of each month or quarter.
For monthly repayments the first scheduled repayment may not be later than 30
days after the date the loan application is approved by the Company. For
quarterly repayments the first scheduled repayment may not be later than 90 days
after the date the loan application is approved by the Company. Before a loan is
allowed, a written application adn loan agreement on a form acceptable to the
Company must be received by the Company. The Company may postpone final approval
or disapproval of a loan for up to six months after the application for a loan
is received.
INTERNAL REVENUE CODE:
The Company makes no representations or guarantees as to the tax
consequences of a loan to the Borrower. The Company suggests that the Borrower
consult independent tax counsel for specific advice.
SECURITY FOR THE LOAN INTEREST RATE AND LOAN PAYMENTS:
For Contracts with Contract Value of $20,000 or less, the maximum loan that
can be taken is the amount that produces a loan balance immediately after the
loan that is the lesser of $10,000 or 75% of the Contract Value. For Contracts
with Contract Value over $20,000 the maximum loan that can be taken is the
amount that produces a loan balance immediately after the loan that is the
lesser of: (1) $50,000 reduced by the excess of (a) the highest outstanding loan
balance within the preceding 12-month period ending on the date the loan is made
over (b) the outstanding loan balance on the date the loan is made; or (2) 50%
of the Contract Value.
When your loan is approved we will transfer Contract Value from the
Subaccounts to the Fixed Account in an amount equal to the loan amount into an
account called the Loan Account. Amounts allocated to the Loan Account earn the
Minimum Guaranteed Interest Rate as specified in your Contract. In addition,
after your loan is approved, a certain amount of Contract Value will be
transferred to the Fixed Account as security for the loan. The amount of
security required depends on your Contract Value. If your Contract Value is
$20,000 or less, upon approval of a loan, we will transfer Contract Value from
the Subaccounts to the Fixed Account in an amount equal to one-third of: (i) the
amount of the current loan; and (ii) all previous loans which have not been
repaid. If your Contract Value exceeds $20,000, upon approval of a loan we will
transfer Contract Value from the Subaccounts to the Fixed Account in an amount
equal to: (i) the current loan; and (ii) all previous loans which have not been
repaid. This Contract Value allocated to the Fixed Account earns the current
renewal rate of interest and is the security for the loan.
The Borrower may transfer or withdraw amounts from the Fixed Account only
to the extent that after such a transfer or partial withdrawal, including any
withdrawal charges resulting from such withdrawal, the value of the Contract in
the Fixed Account is sufficient to meet the security requirements outlined above
for the then outstanding debt.
Interest shall be charged for the loan and shall accrue on the loan balance
from the effective date of any loan. The loan interest rate shall be the minimum
rate of interest guaranteed under the Contract, plus 2%.
Each loan payment must be labeled as such. Upon receipt of a loan payment,
we will transfer Contract Value from the Loan Account to the Fixed Account
and/or the Subaccounts according to the Borrower's current allocation
instructions with respect to the purchase payments. The amount of Contract Value
transferred from the Loan Account shall be equal to the amount by which the
payment reduces the outstanding loan balance. The loan may be repaid in full at
any time, in which event, the Loan Account shall be reduced to $0. After a loan
is repaid, the Contract Value in the Fixed Account which served as security for
the loan will not automatically be reallocated to the Subaccounts. Such
reallocation, if desired, must be requested by the Borrower.
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V6840 A (3-94) SP 684021
FAILURE TO MAKE PAYMENTS:
If a loan payment is not made as specified and scheduled herein and in the
loan agreement, the Company shall withdraw the amount of Contract Value from the
Contract required to make the payment, including interest accrued thereon. Any
withdrawal charges which apply on such withdrawal shall be imposed in addition
to the loan payment and interest. If the Contract provides for a free withdrawal
percentage, the withdrawal charges shall be calculated assuming a free
withdrawal percentage of 0%. The amount of Contract Value withdrawn to make a
payment, including interest, will be withdrawn first from the value of the
Contract in the Fixed Account serving as security for the loan and if
insufficient, then from other Contract Value. Any withdrawal charges resulting
from amounts withdrawn to make a payment will be deducted first from the value
of the Contract in the Fixed Account other than that serving as security for any
loan and then from other Contract Value.
FULL WITHDRAWALS, ANNUITY START AMOUNT, DEATH BENEFIT:
Before calculating the Withdrawal Value for a full withdrawal, the Annuity
Start Amount or the Death Benefit under the Contract, the Company shall withdraw
that amount of Contract Value required to reduce the outstanding loan balance to
$0. As a result, the Contract Value shall be reduced by the amount of the
withdrawal and any withdrawal charges which apply to such withdrawal. If the
Contract provides for a fee withdrawal percentage, the withdrawal charges shall
be calculated assuming a free withdrawal percentage of 0%. The Contract Value
which remains after the withdrawal and deduction of applicable withdrawal
charges shall be used to calculate the Withdrawal Value, Annuity Start Amount or
Death Benefit as set forth in the Contract.
DOLLAR VALUE LIMIT ON DEBT:
The total outstanding balance of all loans under this Contract may not exceed:
1. If the Contract Value is less than or equal to $13,333, 75% of the Contract
Value.
2. If the Contract Value is greater than $13,333.33 but less than or equal to
$20,000, $10,000.
3. If the Contract Value exceeds $20,000, the lesser of: (1) $50,000 reduced
by the excess of (a) the highest outstanding loan balance within the
preceding 12 month period ending on the day before the date the loan is
made over (b) the outstanding loan balance on the date the loan is made; or
(2) 50% of Contract Value.
SECURITY BENEFIT LIFE INSURANCE COMPANY
▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
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Endorsement Effective Date, if other
than Contract Date
TAX-SHELTERED ANNUITY
ENDORSEMENT
TAX-SHELTERED ANNUITY ENDORSEMENT
This Contract is established as a Tax-Sheltered Annuity ("TSA") under
Section 403(b) of the Internal Revenue Code of 1986, as amended (the
"Code") or any successor provision, pursuant to the Owner's request in
the application. Accordingly, this Endorsement is attached to and made
part of the Contract as of its issue date or, if later, the date shown
below. If this is a group contract, references to the "Owner" and to
the "Contract" shall, respectively, be deemed to include the
Participant and the Participant's Certificate where appropriate.
TAX-SHELTERED ANNUITY PROVISIONS
To ensure treatment as a TSA, this Contract will be subject to the
requirements of Code Section 403(b), which are briefly summarized
below:
(a) Purchase Payments made on behalf of the Owner pursuant to a
salary reduction agreement when added to "elective deferral"
contributions under all other plans, contracts or arrangements
in which the Owner participates, may not exceed the annual
limitation on such contributions as provided in Code Section
401(a)(30).
(b) Purchase Payments applied to the Contract on behalf of the
Owner which exceed the applicable "exclusion allowance"
(within the meaning of Code Section 403(b)(2)) or the
limitations contained in Code Section 415 shall not be
excludable from gross income.
(c) Purchase Payments that exceed any of the foregoing limitations
may be returned, distributed or otherwise corrected using any
method permissible under the Code.
NONDISCRIMINATION REQUIREMENTS
(a) Except if this Contract is purchased by a "church" (within the
meaning of Code Section 3121(w)), the Plan must satisfy the
nondiscrimination requirements of Code Section 403(b)(12).
(b) Purchase Payments not made pursuant to a salary reduction
agreement will satisfy the nondiscrimination requirements of
Code Section 403(b)(12) provided they satisfy the requirements
of Code Section 401(a)(4) (nondiscrimination in
contributions), Code Section 401(a)(5) (permitted disparity),
Code Section 401(a)(17) (annual limit on compensation), Code
Section 401(m) (average contribution percentage test) and Code
Section 410(b) (coverage).
(c) Purchase Payments made pursuant to a salary reduction
agreement will satisfy the nondiscrimination requirements of
Code Section 403(b)(12) provided that every employee of the
Employer sponsoring the Plan, may elect to make Purchase
Payments of more than $200 pursuant to a salary reduction
agreement.
6832 A (R9-96) -1-
DISTRIBUTION RESTRICTIONS AND REQUIREMENTS
(a) Distributions attributable to Purchase Payments made pursuant
to a salary reduction agreement may be made only when the
Owner attains age 59 1/2, separates from service, dies,
becomes "disabled" (within the meaning of Code Section
403(b)(11)) or incurs a hardship. A distribution made due to a
hardship may not include income attributable to such Purchase
Payments.
(b) Distributions from this Contract must comply with the minimum
distribution and incidental death benefit requirements of Code
Section 403(b)(10). Accordingly, an Owner's entire interest
under the Contract generally must be distributed (or begin to
be distributed) by April 1 of the calendar year following the
later of (i) the calendar year in which the Owner attains age
70 1/2, or (ii) the calendar year in which the Owner retires
(the "Required Beginning Date").
Distributions commencing not later than the Required Beginning
Date may be made over the life of the Owner or over the lives
of the Owner and his or her Designated Beneficiary (or over a
period not extending beyond the life expectancy of the Owner
or the life expectancy of the Owner and his or her Designated
Beneficiary).
(c) If the Owner dies before distribution of his or her interest
in the Contract has begun in accordance with paragraph (b)
above, the Owner's entire interest must be distributed within
five years, unless: (i) such interest is distributed to a
Designated Beneficiary over his or her life (or over a period
not extending beyond such Designated Beneficiary's life
expectancy); and (ii) such distribution begins not later than
one year after the Owner's death. If the Designated
Beneficiary is the Owner's surviving spouse, the date on which
the distributions are required to begin shall not be earlier
than the date on which the Owner would have attained age 70
1/2.
(d) If the Owner dies after distribution of his or her interest in
this Contract has begun in accordance with paragraph (b) above
but before his or her entire interest has been distributed,
the remaining interest must be distributed at least as rapidly
as under the method of distribution being used prior to the
Owner's death.
(e) All distributions must comply with a method of distribution
offered by the Company under this Contract.
(f) If the Owner receives a distribution from this Contract that
qualifies as an "eligible rollover distribution" (within the
meaning of Code Section 402(f)(2)(A)) and elects to have such
distribution paid directly to an "eligible retirement plan"
(within the meaning of Code Section 402(c)), such distribution
shall be made in the form of a direct transfer to the eligible
retirement plan. The Company may establish reasonable
administrative rules applicable to such direct transfers.
NONFORFEITABILITY
(a) The Owner's rights under this Contract shall be nonforfeitable
except for failure to pay future Premiums.
(b) This Contract may not be transferred, sold, assigned or
pledged as collateral for a loan or as security for the
performance of an obligation or for any other purposes to any
person other than the Company.
MULTIPLE CONTRACTS
(a) If for any taxable year an Owner is covered by this Contract
and any other TSA, all such contracts shall be treated as a
single contract.
PLAN PROVISIONS
The Plan, including certain Plan provisions required by the Employee
Retirement Income Security Act of 1974 or other applicable law, may
limit the Owner's rights under this Contract. The Plan provisions may:
(a) Limit the Owner's right to make Purchase Payments;
(b) Restrict the time when the Owner may elect to receive payments
under this Contract;
(c) Require the consent of the Owner's spouse before the Owner may
elect to receive payments under this Contract;
(d) Require that all distributions be made in the form of a joint
and survivor annuity for the Owner and the Owner's spouse
unless both consent to a different form of distribution;
(e) Require that the Owner's spouse be the Designated Beneficiary;
(f) Require that the Owner remain employed by the Employer
sponsoring the Plan for a specified period of time before the
Owner's rights under this Contract become fully vested; or
(g) Otherwise restrict the Owner's exercise of rights under the
Contract or give the Employer sponsoring the Plan (or a Plan
representative) the right to exercise certain rights on the
Owner's behalf.
No such Plan provision shall limit an Owner's rights under this
Contract, unless the Employer sponsoring the Plan has provided the
Company with written notification of such provision. In no event shall
any such Plan provision enlarge the Company's obligations under this
Contract.
TAX CONSEQUENCES
(a) The Company will not incur any liability or be responsible for
the timing, purpose or propriety of any contribution or
distribution; any tax or penalty imposed on account of any
such contribution or distribution; or any other failure, in
whole or in part, by the Owner or the Employer to comply with
the provisions set forth in the Code or any other law.
ADMINISTRATION
The Company does not act as the Administrator of the Plan. Accordingly,
the Company will not incur any liability or be responsible for
interpreting the Plan or deciding any question arising thereunder.
SECURITY BENEFIT LIFE INSURANCE COMPANY
▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
----------------------------
Endorsement Effective Date
(If Other Than Issue Date)
INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
For the purpose of qualifying the Contract applied for as a retirement annuity
or an annuity under a retirement account, described in Section 408 of the
Internal Revenue Code, notwithstanding any other provision of the Contract to
the contrary, the following provisions shall apply:
1. The Contract is established for the exclusive benefit of the individual or
his or her beneficiaries. The Owner shall e the Annuitant.
2. The Contract shall be nontransferable and the entire interest of the Owner
in the Contract is nonforfeitable.
3. Paragraph I
Notwithstanding any provision of the Contract to the contrary, the
distribution of an individual's interest shall be made in accordance with
the minimum distribution requirements of Section 401(a)(9) of the Internal
Revenue Code and the regulations thereunder, including the incidental death
benefit provisions of Section 1.401(a)(9)-2 of the proposed regulations,
all of which are herein incorporated by reference.
Paragraph II
The Owner's entire interest in the Contract must be distributed, or begin
to be distributed, by the Owner's required beginning date, which is the
April 1 following the calendar year in which the Owner reaches age 70 1/2.
For each succeeding year, a distribution must be made on or before December
31. By the required beginning date, the Owner may elect to have the balance
in the account distributed in one of the following forms:
a. a single sum payment;
b. equal or substantially equal payments over the life of the Owner;
c. equal or substantially equal payments over the lives of the Owner and
his or her designated beneficiary;
d. equal or substantially equal payments over a specified period that may
not be longer than the Owner's life expectancy;
e. equal or substantially equal payments over a specified period that may
not be longer than the joint life and last survivor expectancy of the
Owner and his or her designated beneficiary.
Paragraph III
If the Owner dies before his or her entire interest is distributed, the
entire remaining interest will be distributed as follows:
a. If the Owner dies on or after distributions have begun under Paragraph
II, the entire remaining interest must be distributed at least as
rapidly as provided under Paragraph II.
b. If the Owner dies before distributions have begun under Paragraph II,
the entire remaining interest must be distributed as elected by the
Owner or, if the Owner has not so elected, as elected by the
beneficiary or beneficiaries, as follows:
1) by December 31 of the year containing the fifth anniversary of
the Owner's death; or
2) in equal or substantially equal payments over the life or life
expectancy of the Designated Beneficiary or Beneficiaries
starting by December 31 of the year following the year of the
Owner's death. If, however, the Designated Beneficiary is the
Owner's surviving spouse, then this Distribution is not required
to begin until December 31 of the later of: (1) the calendar year
immediately following the calendar year in which the Owner died;
or (2) the calendar year in which the Owner would have attained
age 70 1/2.
Flexible Payment & Variable Annuities
Form 4453 C-5 (R9-96) SP 445381
Paragraph IV
An individual may satisfy the minimum distribution requirements under
section 401(a)(9) of the Code by receiving a distribution from one IRA that
is equal to the amount required to satisfy the minimum distribution
requirements for two or more IRAs. For this purpose, the Owner of two or
more IRAs may use the "alternative method" described in Notice 88-38,
1988-1 C.B. 524, to satisfy the minimum distribution requirements described
above.
4. Any refund of premiums (other than those attributable to excess
contributions) will be applied before the close of the calendar year
following the year of the refund toward the payment of future premiums or
the purchase of additional benefits.
5. The Company may at its option either accept additional future payments or
terminate the Contract by payment in cash of the then present value for the
paid-up benefit if no premiums have been received for two full consecutive
policy years and the paid-up annuity benefit at maturity would be less than
$20 per month.
6. The annual premium shall not exceed the lesser of $2,000 or 100 percent of
compensation ($4,000 or 100 percent of compensation for Spousal IRAs
however, no more than $2,000 can be contributed to either spouse's IRA),
except for plans defined in Section 408(K) of the Code, for which annual
premiums shall not exceed $30,000.
7. Rollover contributions from other qualified plans permitted by the Internal
Revenue Code Sections 402(c), 403(a)(4), 403(b)(8)), and 408(d)(3), are
excluded from the limit set forth in item six.
8. Notwithstanding the Contract provisions, no amount may be borrowed under
the Contract and no portion may be used as security for a loan.
9. Notwithstanding the Contract provisions, the Optional Modes or Settlement
described as Deposit Option and Fixed Amount Installment Option are not
available.
10. The premiums under this Contract are not fixed.
11. Annuity payments may not begin before the Annuitant attains the age of 59
1/2 without incurring a penalty tax except in the situations described in
Section 72(t) of the Code.
This Endorsement is attached to and made a part of the Contract as of the
Contract Date.
SECURITY BENEFIT LIFE INSURANCE COMPANY
▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary