<PAGE>
As filed with the Securities and Exchange Commission on July 29, 1999
Registration No. 333 - _____
811 - _____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 __X__
Pre-Effective Amendment No. ___
Post-Effective Amendment No. ___
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 __X__
Amendment No.
----
PFL LIFE VARIABLE ANNUITY ACCOUNT C
(Exact Name of Registrant)
PFL LIFE INSURANCE COMPANY
(Name of Depositor)
4333 Edgewood Road N.E.
Cedar Rapids, IA 52499-0001
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number: (319) 297-8468
Frank A. Camp, Esq.
PFL Life Insurance Company
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499-0001
(Name and Address of Agent for Service)
Copy to:
Frederick R. Bellamy, Esq.
Sutherland Asbill and Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2415
<PAGE>
Title of Securities Being Registered: Flexible Premium Variable Annuity
Policies
Approximate date of proposed offering:
As soon as practicable after effectiveness of Registration Statement.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
<PAGE>
THE ENDEAVOR
GENERATIONS PLUS The flexible premium deferred variable
VARIABLE ANNUITY annuity has many investment choices. The
mutual fund account has 13 subaccounts
Issued Through that are available in this annuity. The
mutual fund subaccounts are listed
PFL LIFE VARIABLE below. You bear the enitre investment
ANNUITY ACCOUNT C risk for all amounts you put in the
mutual fund account. There is also a
By fixed account, which offers interest at
rates that are guaranteed by PFL Life
PFL LIFE INSURANCE COMPANY Insurance Company (PFL). You can choose
any combination of these investment
Prospectus - ______________ choices.
This prospectus and the mutual fund ENDEAVOR SERIES TRUST
prospectuses give you important Subadvised by Morgan Stanley Asset
information about the Endeavor Management Inc.
Generations Plus variable annuity Endeavor Asset Allocation Portfolio
and the mutual funds. Please read Endeavor Money Market Portfolio
them carefully before you invest Subadvised by T. Rowe Price
and keep them for future reference. Associates, Inc.
T. Rowe Price Equity Income Portfolio
If you would like more information T. Rowe Price Growth Stock Portfolio
about The Endeavor Generations Plus Subadvised by Rowe Price-Fleming
Variable Annuity, you can obtain a International, Inc.
free copy of the Statement of T. Rowe Price International Stock
Additional Information (SAI) dated Portfolio
__________________. Please call us Subadvised by OpCap Advisors
at (800) 525-6205 or write us at: Endeavor Value Equity Portfolio
PFL Life Insurance Company, Endeavor Opportunity Value Portfolio
Financial Markets Division, Variable Subadvised by J.P. Morgan Investment
Annuity Department, 4333 Edgewood Management Inc.
Road N.E., Cedar Rapids, Iowa, Endeavor Enhanced Index Portfolio
52499-0001. A registration statement, Subadvised by The Dreyfus Corporation
including the SAI, has been filed Dreyfus U.S. Government Securities
with the Securities and Exchange Portfolio
Commission (SEC) and is incorporated Dreyfus Small Cap Value Portfolio
herein by reference. Information Subadvised by Montgomery Asset
about the variable annuity can be Management, LLC
reviewed and copied at the SEC's Endeavor Select 50 Portfolio
Public Reference Room in Washington, Subadvised by Massachusetts Financial
D.C. You may obtain information about Services Company
the operation of the public reference Endeavor High Yield Portfolio
room by calling the SEC at Subadvised by Janus Capital Corporation
1-800-SEC-0330. The SEC also maintains Endeavor Janus Growth Portfolio
a web site (http://www.sec.gov) that
contains the prospectus, the SAI, The Securities and Exchange Commission
material incorporated by reference, has not approved or disapproved these
and other information. The table of securities, or passed upon the adequacy
contents of the SAI is included at of this prospectus. Any representation
the end of this prospectus. to the contrary is a criminal offense.
Please note that the variable
annuity and the mutual funds:
. are not bank deposits
. are not federally insured
. are not endorsed by any bank or
government agency
. are not guaranteed to achieve
their goal
. are subject to risks,including
loss of premium
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
<S> <C> <C>
GLOSSARY OF TERMS.............................. Withdrawals - 403(b) Annuities................
Diversification and Distribution
SUMMARY........................................ Requirements..............................
Taxation of Death Benefit Proceeds............
ANNUITY CERTIFICATE FEE TABLE.................. Annuity Payments..............................
Transfers, Assignments or Exchanges...........
EXAMPLES....................................... Possible Tax Law Changes......................
1. THE GENERATIONS PLUS VARIABLE 7. ACCESS TO YOUR MONEY..........................
ANNUITY ................................... Surrenders....................................
Delay of Payment and Transfers................
Excess Interest Adjustment....................
2. ANNUITY PAYMENTS........................... Systematic Payout Option......................
(THE INCOME PHASE)......................... Nursing Care and Terminal Condition
Annuity Payment Options.................... Withdrawal Option.........................
Unemployment Waiver...........................
3. PURCHASE...................................
Certificate Issue Requirements............. 8. PERFORMANCE...................................
Issue Requirements.........................
Premium Payments........................... 9. DEATH BENEFIT.................................
Initial Premium Requirements............... When We Pay A Death Benefit...................
Additional Premium Payments................ When We Do Not Pay A Death Benefit............
Maximum Total Premium Payments............. Amount of Death Benefit.......................
Premium Enhancement........................ Guaranteed Minimum Death Benefit..............
Allocation of Premium Payments............. Adjusted Partial Withdrawal...................
Certificate value..........................
10. OTHER INFORMATION.............................
4. INVESTMENT CHOICES......................... Ownership.....................................
The Mutual Fund Account.................... Assignment....................................
The Fixed Account.......................... PFL Life Insurance Company....................
Transfers.................................. The Mutual Fund Account.......................
Family Income Protector.................... Mixed and Shared Funding......................
Dollar Cost Averaging Program.............. Reinstatements................................
Asset Rebalancing.......................... Voting Rights.................................
Telephone Transactions..................... Distributor of the Annuity....................
Non-participating.............................
5. EXPENSES................................... Variations in Certain Provisions..............
Surrender Charges.......................... Year 2000 Matters.............................
Mortality and Expense Risk Fee............. IMSA..........................................
Administrative Charges..................... Legal Proceedings.............................
Premium Taxes.............................. Financial Statements..........................
Federal, State and Local Taxes.............
Transfer Fee............................... TABLE OF CONTENTS OF THE STATEMENT
Family Income Protector.................... OF ADDITIONAL INFORMATION.........................
Portfolio Management Fees..................
APPENDIX A
6. TAXES......................................
Annuities in General....................... Historical Performance Data
Qualified and Nonqualified Annuities...... The Mutual Fund Account.......................
Withdrawals - Nonqualified Annuities.......
Withdrawals - Qualified Annuities.........
</TABLE>
2
<PAGE>
GLOSSARY OF TERMS
Accumulation Unit--An accounting and/or surrender charges on such
unit of measure used in calculating withdrawals); plus
the certificate value in the mutual . interest credited in the fixed
fund account before the annuity account; plus or minus
commencement date. . accumulated gains or losses in
the mutual fund account; minus
Adjusted Certificate value - An . service charges, premium taxes,
amount equal to the certificate and transfer fees, if any.
value increased or decreased by any
excess interest adjustments. Certificate Year - A certificate
year begins on the certificate date
Annuitant--The person entitled to and on each certificate
receive annuity payments after the anniversary.
annuity commencement date and
during whose life any annuity Excess Interest Adjustment--A
payments involving life positive or negative adjustment to
contingencies will continue. amounts withdrawn upon partial
withdrawals, full surrenders, or
Annuity Commencement Date--The date transfers from the guaranteed
upon which annuity payments are to period options, or to amounts
commence. This date may be any date applied to annuity payment options.
at least thirty days after the The adjustment reflects changes in
certificate date and may not be the interest rates declared by PFL
later than the last day of the since the date any payment was
certificate month starting after received by, or an amount was
the annuitant attains age 85, transferred to, the guaranteed
except as expressly allowed by PFL. period option. The excess interest
In no event will this date be later adjustment can either decrease or
than the last day of the month increase the amount to be received
following the month in which the by the certificate owner upon full
annuitant attains age 95. surrender or commencement of
annuity payments, depending upon
Annuity Payment Option--A method of whether there has been an increase
receiving a stream of annuity or decrease in interest rates,
payments selected by the respectively.
certificate owner.
Fixed Account--One or more
Cash Value--The certificate value investment choices under the
increased or decreased by an excess certificate that are part of the
interest adjustment, less any general assets of PFL and are not
applicable surrender charge, in the mutual fund account.
premium taxes, and Family Income
Protector rider fee, and less the Group Contract - The contract
annual Service Charge. issued to the group contract owner,
under which certificates are issued
Certificate - The document issues to eligible participants.
under the group contract to the
eligible participants who apply for Group Contract Owner- The entity
coverage. The certificate is not which owns the group contract.
part of the group contract.
Guaranteed Period Options--The
Certificate Owner or Owner- The various guaranteed interest rate
person who may exercise all rights periods of the fixed account which
and privileges under the may be offered by PFL and into
certificate. The owner during the which premium payments may be paid
lifetime of the annuitant and prior or amounts transferred.
to the annuity commencement date is
the person designated as the owner Mutual Fund Account--A separate
or a successor owner in the account established and registered
enrollment form. Also referred to as a unit investment trust under
as "you". the Investment Company Act of 1940,
as amended, to which premium
Certificate value--On or before the payments under the certificates may
annuity commencement date, the be allocated and which invests in
certificate value is equal to the designated portfolios of the
certificate owner's: Endeavor Series Trust and such
other mutual funds as PFL may
. premium payments (including any determine from time to time.
premium enhancement); minus
. partial withdrawals (including
the net effect of any applicable
excess interest adjustments
3
<PAGE>
Mutual Fund Subaccount--A (Note: The Statement of Additional
subdivision within the mutual fund Information contains a more
account, the assets of which are extensive Glossary.)
invested in a specified portfolio
of the Endeavor Series Trust.
4
<PAGE>
SUMMARY
The sections in this summary can accumulate during the
correspond to sections in this accumulation phase will largely
prospectus, which discuss the determine the income payments you
topics in more detail. Words receive during the income phase.
printed in italics in this
prospectus are defined in the 2. ANNUITY PAYMENTS
Glossary. (THE INCOME PHASE)
1. THE VARIABLE ANNUITY The certificate allows you to
CERTIFICATE receive income under one of five
annuity payment options. You may
The Flexible Premium Variable choose from fixed payment options,
Annuity certificate offered by PFL variable payment options, or a
Life Insurance Company (PFL, we, us combination of both. If you select
or our) provides a way for you to a variable payment option, the
invest on a tax-deferred basis in dollar amount of your payments may
the following investment choices: go up or down.
thirteen subaccounts of the mutual
fund account and a fixed account of 3. PURCHASE
PFL. The certificate is intended to
accumulate money for retirement or You can buy a nonqualified
other long-term investment certificate with $5,000 or more,
purposes. and a qualified certificate with
$2,000 or more, under most
This certificate offers thirteen circumstances. You can add as
subaccounts in the mutual fund little as $50 at any time during
account that are listed in Section the accumulation phase.
4. Each mutual fund subaccount
invests exclusively in shares of Each premium payment will receive a
one of the portfolios of the premium enhancement that PFL adds
Endeavor Series Trust. The to your Certificate Value. We may
certificate value may depend on the change the enhancement rate at any
investment experience of the time. Under certain circumstances,
selected subaccounts. Therefore, you might forfeit (or lose) the
you bear the entire investment risk premium enhancement.
with respect to all certificate
value in any subaccount. You could 4. INVESTMENT CHOICES
lose the amount that you invest.
You can allocate your premium
The fixed account offers an payments to one or more of the
interest rate that is guaranteed by investment choices listed below.
PFL. We guarantee to return your
investment with interest credited The following thirteen mutual fund
for all amounts allocated to the portfolios are described in the
fixed account. Endeavor Series Trust prospectus:
You can transfer money between any SUBADVISED BY MORGAN STANLEY
of the investment choices. We ASSET MANAGEMENT INC.
reserve the right to impose a $10 Endeavor Asset Allocation
fee for each transfer in excess of Endeavor Money Market
12 transfers per certificate year. SUBADVISED BY T. ROWE PRICE
ASSOCIATES, INC.
The certificate, like all deferred T. Rowe Price Equity Income
annuities, has two phases: the T. Rowe Price Growth Stock
"accumulation phase" and the
"income phase." During the
accumulation phase, earnings
accumulate on a tax-deferred basis
and are taxed as income when you
take them out of the certificate.
The income phase occurs when you
begin receiving regular payments
from your certificate. The money
you
5
<PAGE>
SUBADVISED BY ROWE PRICE-FLEMING an annual rate of 1.75% from the
INTERNATIONAL, INC. assets in each mutual fund
T. Rowe Price International Stock subaccount.
SUBADVISED BY OPCAP ADVISORS
Endeavor Value Equity During the accumulation phase, we
Endeavor Opportunity Value deduct an annual service charge of
SUBADVISED BY J.P. MORGAN no more than $40 from the
INVESTMENT MANAGEMENT INC. certificate value on each
Endeavor Enhanced Index certificate anniversary and at the
SUBADVISED BY THE DREYFUS time of surrender. The charge is
CORPORATION waived if either the certificate
Dreyfus U.S. Government Securities value or the sum of all premium
Dreyfus Small Cap Value payments, minus all partial
SUBADVISED BY MONTGOMERY withdrawals, is at least $100,000.
ASSET MANAGEMENT, LLC
Endeavor Select 50 We will deduct state premium taxes,
SUBADVISED BY MASSACHUSETTS which currently range from 0% to
FINANCIAL SERVICES COMPANY 3.50%, upon total surrender,
Endeavor High Yield payment of a death benefit, or when
SUBADVISED BY JANUS CAPITAL annuity payments begin.
CORPORATION
Endeavor Janus Growth Portfolio If you elect the "family income
protector" rider, then there is an
Depending upon their investment annual fee during the accumulation
performance, you can make or lose phase of 0.30% of the minimum
money in any of the mutual fund annuitization value. If you
subaccounts. annuitize under the rider, then
during the income phase there is a
You can also allocate your premium guaranteed payment fee at an annual
payments to the fixed account. rate of 1.25% of the daily net
asset value in the mutual fund
5. EXPENSES account.
No deductions are made from premium The value of the net assets of the
payments at the time you buy the mutual fund subaccounts will
certificate so that the full amount reflect the investment advisory fee
of each premium payment is invested and other expenses incurred by the
in one or more of your investment underlying portfolios. Those fees
choices. and expenses are detailed in the
Endeavor Series Trust prospectus
We may deduct a surrender charge of that is attached to this
up to 8% of premium payments prospectus.
withdrawn within nine years after
the premium is paid. To calculate 6. TAXES
surrender charges, we consider the
premium you paid to come out before Your earnings, if any, are not
any earnings. taxed until you take them out. If
you take money out during the
Full surrenders, partial accumulation phase, earnings come
withdrawals, and transfers from a out first for federal tax purposes,
guaranteed period option of the and are taxed as income. If you are
fixed account may also be subject younger than 59 when you take money
to an excess interest adjustment, out, you may be charged a 10%
which may increase or decrease the federal penalty tax. Payments
amount you receive. This adjustment during the income phase may be
may also apply to amounts applied considered partly a return of your
to an annuity payment original investment so that part of
option from a guaranteed period option each payment would not be taxable
of the fixed account. as income.
We deduct daily mortality and
expense risk fees, distribution and
administrative expense charges at
6
<PAGE>
7. ACCESS TO YOUR MONEY have to return the certificate will
depend on the state where the
You can take out $500 or more certificate was issued. It is
anytime during the accumulation generally only 10 days. The amount
phase. After one year, you may take of the refund will generally be the
out up to 10% of your cumulative certificate value, less any premium
premium payments free of surrender enhancement. We may reduce the
charges or excess interest refund by less than the dollar
adjustments once each certificate amount of the premium enhancement,
year. Amounts withdrawn in the if necessary, to ensure that you
first year, or in excess of 10% of would not ever be worse off because
your cumulative premium payments of the credit than if we never gave
thereafter, may be subject to a you the credit. We will pay the
surrender charge and/or excess refund within 7 days after we
interest adjustment. You may also receive written notice of
have to pay income tax and a tax cancellation and the returned
penalty on any money you take out. certificate. The certificate will
then be deemed void. In some states
8. PERFORMANCE you may have more than 10 days to
return a certificate, or receive a
The value of the certificate will refund of more (or less) than the
vary up or down depending upon the certificate value.
investment performance of the
mutual fund subaccounts you choose. No Probate. Usually when you die
We provide performance information the person you choose as your
in Appendix B and in the Statement beneficiary will receive the death
of Additional Information. This benefit under this certificate
data is not intended to indicate without going through probate.
future performance. State laws vary on how the amount
that may be paid is treated for
9. DEATH BENEFIT estate tax purposes.
If you are both the certificate Who should purchase the
owner and the annuitant and you die Certificate? This certificate is
before the income phase begins, designed for people seeking long-
then your beneficiary will receive term tax-deferred accumulation of
a death benefit. assets, generally for retirement or
other long-term purposes; and for
Naming different persons as persons who have maximized their
certificate owner and annuitant can use of other retirement savings
affect whether the death benefit is methods, such as 401(k) plans and
payable and to whom amounts will be individual retirement accounts. The
paid. Use care when naming tax-deferred feature is most
certificate owners, annuitants and attractive to people in high
beneficiaries, and consult your federal and state tax brackets. You
agent if you have questions. should not buy this certificate if
you are looking for a short-term
The guaranteed minimum death investment or if you cannot take
benefit is a Step-Up Death Benefit the risk of losing money that you
(before age 76). put in.
No death benefit is paid if the There are various additional fees
certificate owner dies; if the and charges associated with
certificate owner is not also the variable annuities. You should
annuitant. consider whether the features and
benefits unique to variable
10. OTHER INFORMATION annuities, such as the opportunity
for lifetime income payments, a
Right to Cancel Period. You may company guaranteed death benefit
return your certificate for a and the guaranteed level of certain
refund. The amount of time you charges are appropriate for your
needs. Because variable annuities
also provide tax-deferral when
purchased outside of qualified
plans, the tax deferral features of
variable annuities are unnecessary
when purchased to fund a qualified
plan.
7
<PAGE>
Financial Statements. Financial . Under certain medically related
Statements for PFL and the mutual circumstances, we will allow you
fund subaccounts are in the to surrender or partially
Statement of Additional withdraw your certificate value
Information. without a surrender charge and
excess interest adjustment. This
Additional Features. This feature is called the "nursing
certificate has additional features care and terminal condition
that might interest you. These withdrawal option."
include the following:
. Under certain unemployment
. You can arrange to have money circumstances, you may withdraw
automatically sent to you all or a portion of the
monthly, quarterly, semi- certificate value free of
annually or annually while your surrender charges and excess
certificate is in the interest adjustments. This
accumulation phase. This feature feature is called the
is referred to as the "unemployment waiver."
"systematic payout option."
Amounts you receive may be . You may make transfers and/or
included in your gross income, change the allocation of
and in certain circumstances, additional premium payments by
may be subject to penalty taxes. telephone.
. You can arrange to have a These features are not available in
certain amount of money all states and may not be suitable
automatically transferred from for your particular situation.
the fixed account, either
monthly or quarterly, into your Inquiries
choice of mutual fund
subaccounts. This feature is If you need more information,
called "dollar cost averaging." please contact us at:
. You can elect an optional rider Administrative and Service Office
that guarantees you a minimum Financial Markets Division
annuitization value. This Variable Annuity Department
feature is called the "family PFL Life Insurance Company
income protector." 4333 Edgewood Road N.E.
P.O. Box 3183
. We will, upon your request, Cedar Rapids, IA 52406-3183
automatically transfer amounts
among the mutual fund
subaccounts on a regular basis
to maintain a desired allocation
of the certificate value among
the various mutual fund
subaccounts. This feature is
called "asset rebalancing."
8
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================================================
ANNUITY CERTIFICATE FEE TABLE
=============================================================================================================================
Separate Account Annual Expenses
Certificate Owner Transaction Expenses (as a percentage of average account value)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales Load On Purchase Payments.......... 0 Mortality and Expense Risk 1.35%
Maximum Surrender Charge Administrative
(as a % of Premium Payments (and Distribution) Charge 0.40%
Surrendered)/(1)(2)/................ 8%
Surrender Fees .......................... 0 TOTAL SEPARATE ACCOUNT
Annual Service Charge/(1)/............... $40 Per Certificate ANNUAL EXPENSES 1.75%
Transfer Fee/(1)/........................ Currently No Fee
Family Income Protector (optional)/(3)/
Rider Fee............................ 0.30%
<CAPTION>
=============================================================================================================================
Portfolio Annual Expenses/(4)/
(as a percentage of average net assets and after expense reimbursements)
=============================================================================================================================
Total Total
Rule Portfolio Account and
Management Other 12b-1 Annual Portfolio
Fees Expenses Fees/(5)/ Expenses/(6)/ Expenses
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Endeavor Asset Allocation...................... 0.75% 0.03% 0.02% 0.78% 2.33%
Endeavor Money Market.......................... 0.50% 0.10% - 0.60% 2.15%
T. Rowe Price Equity Income.................... 0.80% 0.05% - 0.85% 2.40%
T. Rowe Price Growth Stock..................... 0.80% 0.07% - 0.87% 2.42%
T. Rowe Price International Stock/(7)/......... 0.90% 0.08% - 0.98% 2.53%
Endeavor Value Equity.......................... 0.80% 0.04% 0.01% 0.84% 2.39%
Endeavor Opportunity Value/(8)/................ 0.80% 0.18% 0.01% 0.98% 2.53%
Endeavor Enhanced Index........................ 0.75% 0.35% - 1.10% 2.65%
Dreyfus U.S. Government Securities/(9)/........ 0.60% 0.12% - 0.72% 2.27%
Dreyfus Small Cap Value........................ 0.80% 0.06% 0.08% 0.86% 2.41%
Endeavor Select 50/(10)/....................... 1.10% 0.39% - 1.49% 3.04%
Endeavor High Yield/(11)/...................... 0.775% 0.525% - 1.30% 2.85%
Endeavor Janus Growth/(12)/.................... 0.775% 0.095% - 0.87% 2.42%
=============================================================================================================================
</TABLE>
9
<PAGE>
/(1)/ The surrender charge and be greater or less than those
transfer fee, if any is shown in the Table.
imposed, apply to each
certificate, regardless of how
certificate value is allocated /(5)/ The Board of Trustees of
among the mutual fund account Endeavor Series Trust has
and the fixed account. The authorized an arrangement
service charge applies to the whereby, subject to best price
fixed account and the mutual and execution, executing
fund account, and is assessed brokers will share commissions
on a pro rata basis relative to with the Trust's affiliated
each account's certificate broker. Under supervision of
value as a percentage of the the Trustees, the affiliated
certificate's total certificate broker will use the "recaptured
value. The service charge is commission" to promote
deducted on each certificate marketing of the Trust's
anniversary and at the time of shares. The staff of the
surrender, if surrender occurs Securities and Exchange
during a certificate year. Commission believes that,
There is no fee for the first through the use of these
12 transfers per year. For recaptured commissions, the
additional transfers, PFL may Trust is indirectly paying for
charge a fee of $10 per distribution expenses and such
transfer, but currently does amounts must be shown as 12b-1
not charge for any transfers. fees in the above table. The
use of recaptured commissions
/(2)/ The surrender charge is to promote the sale of the
decreased based on the number Trust's shares involves no
of years since the premium additional costs to the Trust
payment was made, from 8% in or any Owner. Endeavor Series
the year in which the premium Trust, based on advice of
payment was made, to 0% in the counsel, does not believe that
tenth year after the premium recaptured brokerage
payment was made. If applicable commissions should be treated
a surrender charge will only be as 12b-1 fees. For more
applied to withdrawals that information on the Trust's
exceed the amount available Brokerage Enhancement Plan, see
under certain listed the Trust's prospectus
exceptions. accompanying this Prospectus.
/(3)/ The annual rider fee for the /(6)/ Endeavor Management Co. has
optional Family Income agreed, until further notice,
Protector rider (only deducted to assume expenses of the
during the accumulation phase) Portfolios that exceed the
is currently equal to 0.30% of following rates: Endeavor Asset
the minimum annuitization value Allocation--1.25%; Endeavor
on the previous certificate Money Market--0.99%; T. Rowe
anniversary; PFL may at its Price Equity Income--1.30%; T.
discretion change the rate in Rowe Price Growth Stock--1.30%;
the future, but the rate will T. Rowe Price International
never be greater than 0.50% per Stock--1.53%; Endeavor Value
year. The guaranteed payment Equity--1.30%; Endeavor
fee is only charged if you Opportunity Value--1.30%;
annuitize under the family Endeavor Enhanced Index--1.30%;
income protector rider, and Dreyfus U.S. Government
then only after annuitization. Securities--1.00%; Dreyfus
This fee is reflected in the Small Cap Value--1.30%;
amount of the variable Endeavor Select 50--1.50%;
payments. The guaranteed Endeavor High Yield--1.30%.
payment fee is currently equal Endeavor Management Co. has
to an effective annual rate of agreed for a period of at least
1.25% of the daily net asset one year to assume the expenses
value in the variable of the Endeavor Janus Growth
investment options; PFL may at Portfolio that exceed 0.87%.
its discretion change the rate Expenses shown for the Endeavor
in the future, but the rate Janus Growth Portfolio are
will never be greater than estimated for 1999. Expenses
2.25% per year. Once the family shown for the Endeavor Select
income protector rider is added 50 and Endeavor High Yield
to your certificate, neither Portfolios are annualized.
the rider fee nor the
guaranteed payment fee that is /(7)/ Total Portfolio Annual Expenses
in effect at that time will for the T. Rowe Price
change during the life of that International Stock Portfolio
family income protector rider. before credits allowed by the
They could change if you custodian for the period ended
upgrade. December 31, 1998 were 1.10%.
/(4)/ The fee table information
relating to the Endeavor Series
Trust was provided to PFL by
Endeavor Management Co., and
PFL has not independently
verified such information.
Actual future expenses of the
portfolios may
10
<PAGE>
/(8)/ Total Portfolio Annual the custodian for the period
Expenses for the Endeavor ended December 31, 1998 were
Opportunity Value Portfolio 1.55% annualized.
before waivers/reimbursement
and credits allowed by the /(11)/ Total Portfolio Annual
custodian for the period ended Expenses for the Endeavor High
December 31, 1998 were 0.99%. Yield Portfolio before
waivers/reimbursement and
/(9)/ Total Portfolio Annual credits allowed to the
Expenses for the Dreyfus U.S. custodian for the period ended
Government Securities December 31, 1998 were 1.58%
Portfolio before annualized.
waiver/reimbursements and
credits allowed by the /(12)/ The Endeavor Janus Growth
custodian for the period ended Portfolio is new, so the Total
December 31, 1998 were 0.73%. Portfolio Annual Expenses
before waivers/reimbursement
/(10)/ Total Portfolio Annual for the period ending December
Expenses for the Endeavor 31, 1999 are estimated to be
Select 50 Portfolio before 0.895%.
waivers/reimbursement and
credit allowed by
11
<PAGE>
EXAMPLES
You would pay the following entire certificate value is in the
expenses on a $1,000 investment applicable mutual fund subaccount
(plus a 5% premium enhancement), and assuming the family income
assuming a hypothetical 5% annual protector rider has been selected:
return on assets, assuming the
<TABLE>
<CAPTION>
===============================================================================================================================
If the Certificate is annuitized at
If the Certificate is surrendered the end of the applicable time period or
at the end of the applicable if the Certificate is not surrendered or
time period. annuitized.
-----------------------------------------------------------------------------------
Subaccounts 1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Endeavor Asset Allocation $111 $ 166 $215 $369 $31 $ 95 $162 $343
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Endeavor Money Market $109 $ 160 $205 $323 $29 $ 89 $152 $323
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $111 $ 168 $218 $374 $31 $ 97 $165 $348
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Growth Stock $111 $ 168 $219 $376 $31 $ 97 $166 $350
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $112 $ 172 $225 $387 $32 $101 $171 $360
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Endeavor Value Equity $111 $ 168 $218 $374 $31 $ 97 $165 $348
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Endeavor Opportunity Value $113 $ 172 $225 $388 $33 $101 $172 $361
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Endeavor Enhanced Index $114 $ 175 $231 $398 $34 $104 $178 $372
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Dreyfus U.S. Government Securities $110 $ 164 $211 $361 $30 $ 93 $158 $335
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Dreyfus Small Cap Value $112 $ 171 $223 $383 $32 $ 99 $169 $357
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Endeavor Select 50 $118 $ 187 $250 $435 $38 $116 $197 $408
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Endeavor High Yield $116 $ 182 $241 $417 $36 $110 $187 $391
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Endeavor Janus Growth $111 $ 168 $219 $376 $31 $ 97 $166 $350
- ------------------------------------------------------------------------------------------------------------------------------
==============================================================================================================================
</TABLE>
The above tables should assist you those shown. The assumed 5% annual
in understanding the costs and return is hypothetical and should
expenses that you will bear, not be considered a representation
directly or indirectly. These of past or future annual returns,
include the 1998 expenses of the which may be greater or less than
underlying portfolios, except for the assumed rate.
Endeavor Janus Growth (whose
expenses listed above are estimates In the examples, the $40 annual
for the first full year of service charge is reflected as a
operations). In addition to the charge of ________% based on
expenses listed above, premium average certificate value of
taxes may be applicable. $___________.
These examples should not be These examples also reflect the
considered a representation of past annual fee of 0.30% for the family
or future expenses, and actual income protector rider.
expenses may be greater or less
than
12
<PAGE>
Expenses would be lower if you do The certificate is a "variable"
not elect that rider. annuity because the value of your
investments can go up or down based
Financial Information. The on the performance of your
subaccounts had not commenced investment choices. If you invest
operations as of December 31, 1998, in the mutual fund account, the
therefore there is no condensed amount of money you are able to
financial information to report as accumulate in your certificate
of the date of this prospectus. during the accumulation phase
depends upon the performance of
your investment choices. The amount
1. THE GENERATIONS PLUS VARIBLE of annuity payments you receive
ANNUITY during the income phase from the
mutual fund account also depends
This prospectus describes The upon the investment performance of
Endeavor Generations Plus Variable your investment choices for the
Annuity certificate offered by PFL income phase.
Life Insurance Company.
The certificate also contains a
An annuity is a contract between fixed account. The fixed account
you, the certificate owner, and an offers interest at rates that are
insurance company (in this case guaranteed by PFL not to decrease
PFL), where the insurance company during the selected guaranteed
promises to pay you an income in period. There may be different
the form of annuity payments. These interest rates for each different
payments begin on a designated guaranteed period that you select.
date, referred to as the annuity
commencement date. Until the 2. ANNUITY PAYMENTS
annuity commencement date, your (THE INCOME PHASE)
annuity is in the accumulation
phase and the earnings are tax You choose the annuity commencement
deferred. Tax deferral means you date. You can change this date by
generally are not taxed on your giving us 30 days written notice
annuity until you take money out of before the current annuity
your annuity. After the annuity commencement date. The new annuity
commencement date, your annuity commencement date must be at least
switches to the income phase. 30 days after we receive notice of
the change. The latest annuity
The Generations Plus Variable commencement date cannot be after
Annuity consists of (a) a group the certificate month following the
annuity contract that we, PFL Life month in which the annuitant
Insurance Company, issue to the attains age 95.
contract holder, and (b) an
individual certificate that we Election of Annuity Payment Option.
issue to you. This prospectus ----------------------------------
describes your certificate. The Before the annuity commencement
certificate is a flexible premium date, if the annuitant is alive,
variable annuity. You can use the you may choose an annuity payment
certificate to accumulate funds for option or change your election. If
retirement or other long-term the annuitant dies before the
financial planning purposes. Your annuity commencement date, the
individual investment and your beneficiary may elect to receive
rights are determined primarily by the death benefit in a lump sum or
your own certificate. under one of the annuity payment
options.
It is a "flexible premium" annuity
because after you purchase it, you Unless you specify otherwise, the
can generally make additional annuitant will receive the annuity
investments of any amount of $50 or payments. After the annuitant's
more, until the annuity death, the beneficiary will receive
commencement date. But you are not any remaining guaranteed payments.
required to make any additional
investments.
13
<PAGE>
Annuity Payment Options The annuity payment options are
explained below. Options 1, 2, and
The certificate provides five 4 are fixed only. Options 3 and 5
annuity payment options that are can be fixed or variable.
described below. You may chose any
combination of annuity payment Payment Option 1--Interest
options. We will use your adjusted --------------------------
certificate value to provide these Payments. We will pay the interest
annuity payments. The adjusted --------
certificate value is the on the amount we use to provide
certificate value increased or annuity payments in equal payments,
decreased by any applicable excess or this amount may be left to
interest adjustment. If the accumulate for a period of time you
adjusted certificate value on the and PFL agree to. You and PFL will
annuity commencement date is less agree on withdrawal rights when you
than $2,000, PFL reserves the right elect this option.
to pay it in one lump sum in lieu
of applying it under an annuity Payment Option 2--Income for a
payment option. You can receive ------------------------------
annuity payments monthly, Specified Period. We will make
quarterly, semi-annually, or ----------------
annually. level payments only for the fixed
period you choose. No funds will
Unless you choose to receive remain at the end.
variable payments under annuity
payment options 3 or 5, the amount Payment Option 3--Life Income. You
of each payment will be set on the -----------------------------
annuity commencement date and will may choose between:
not change. You may, however,
choose to receive variable payments Fixed Payments
under payment options 3 and 5. The
dollar amount of the first variable . No Period Certain--We will
payment will be determined in make level payments only
accordance with the annuity payment during the annuitant's
rates set forth in the applicable lifetime.
table contained in the group
contract and/or certificate. The . 10 Years Certain--We will
dollar amount of additional make level payments for the
variable payments will vary based longer of the annuitant's
on the investment performance of lifetime or ten years.
the mutual fund subaccount(s). The
dollar amount of each variable . Guaranteed Return of
payment after the first may Certificate Proceeds--We will
increase, decrease, or remain make level payments for the
constant. If the actual investment longer of the annuitant's
performance exactly matched the lifetime or until the total
assumed investment return of 5% at dollar amount of payments we
all times, the amount of each make to you equals the amount
variable annuity payment would applied to this option.
remain equal. If actual investment
performance exceeds the assumed Variable Payments
investment return, the amount of
the variable annuity payments would . No Period Certain--Payments
increase. Conversely, if actual will be made only during the
investment performance is lower lifetime of the annuitant.
than the assumed investment return,
the amount of the variable annuity . 10 Years Certain--Payments
payments would decrease. will be made for the longer
of the annuitant's lifetime
A charge for premium taxes and an or ten years.
excess interest adjustment may be
made when annuity payments begin. Payment Option 4--Income of a
-----------------------------
Specified Amount. Payments are made
----------------
for any specified amount until the
amount applied to this option, with
interest, is exhausted. This will
be a series of level payments
followed by a smaller final
payment.
14
<PAGE>
Payment Option 5--Joint and 3. PURCHASE
- ---------------------------
Survivor Annuity. You may choose Certificate Issue Requirements
- ----------------
between: PFL will issue a certificate IF:
Fixed Payments . PFL receives all information
needed to issue the certificate;
. Payments are made during the
joint lifetime of the payee . PFL receives a minimum initial
and a joint payee of your premium payment; and
selection. Payments will be
made as long as either person . You (annuitant and any joint
is living. certificate owner) are age 84 or
younger.
Variable Payments
Premium Payments
. Payments are made as long as
either the payee or the joint You should make checks for premium
payee is living. payments payable only to PFL Life
Insurance Company and send them to
Other annuity payment options may the administrative and service
be arranged by agreement with PFL. office. Your check must be honored
Certain annuity payment options may in order for PFL to pay any
not be available in all states. associated payments and benefits
due under the certificate.
NOTE CAREFULLY:
- --------------- Initial Premium Requirements
IF: The initial premium payment for
nonqualified certificates must be
. you choose Life Income with No at least $5,000, and at least
Period Certain or a Joint and $2,000 for qualified certificates.
Survivor Annuity; and There is no minimum initial premium
payment for certificates issued
. the annuitant(s) dies before the under section 403(b) of the
due date of the second annuity Internal Revenue Code; however,
payment; your premium must be received
within 90 days of the certificate
THEN: date or your certificate will be
canceled. We will credit your
. we may make only one annuity initial premium payment to your
payment. certificate within two business
days after the day we receive it
IF: and your complete certificate
information. If we are unable to
. you choose Income for a credit your initial premium
Specified Period, Life Income payment, we will contact you within
with 10 years Certain, Life five business days and explain why.
Income with Guaranteed Return of We will also return your initial
Certificate Proceeds, or Income premium payment at that time unless
of a Specified Amount; and you tell us to keep it and credit
it as soon as possible.
. the person receiving payments
dies prior to the end of the The date on which we credit your
guaranteed period; initial premium payment to your
certificate is the certificate
THEN date. The certificate date is used
to determine certificate years,
. the remaining guaranteed certificate months and certificate
payments will be continued to anniversaries.
that person's beneficiary, or
their present value may be paid
in a single sum.
We will not pay interest on amounts
represented by uncashed annuity
payment checks if the postal or
other delivery service is unable to
deliver checks to the payee's
address of record. The payee is
responsible to keep PFL informed of
the payee's current address of
record.
15
<PAGE>
Additional Premium Payments You may change allocations for
future additional premium payments
You are not required to make any by sending us written instructions
additional premium payments. or by telephone, subject to the
However, you can make additional limitations described under
premium payments as often as you "Telephone Transactions." The
like during the lifetime of the allocation change will apply to
annuitant and during the premium payments received after the
accumulation phase. Additional date we receive the change request.
premium payments must be at least
$50. We will credit additional Certificate value
premium payments to your
certificate as of the business day You should expect your certificate
we receive your premium and value to change from valuation
required information. period to valuation period. A
valuation period begins at the
Maximum Total Premium Payments close of trading on the New York
Stock Exchange on each business day
We allow premium payments up to a and ends at the close of trading on
total of $1,000,000 without prior the next succeeding business day. A
approval. business day is each day that the
New York Stock Exchange is open.
Premium Enhancement The New York Stock Exchange
generally closes at 4:00 p.m.
An amount equal to 5% of the eastern time. Holidays are
initial premium payment will be generally not business days.
added to the certificate value (4%
if you are 70 years old or older). 4. INVESTMENT CHOICES
The amount of the premium
enhancement is not considered a The Mutual Fund Account
premium payment. The premium
enhancement percentage may vary There are currently thirteen
from premium to premium on variable subaccounts available
subsequent premium payments, but under the certificates.
will never be less than 0.25% nor
more than 7%. A confirmation will The mutual fund subaccounts invest
be sent advising the certificate in shares of the various portfolios
holder of the amount of premium of the Endeavor Series Trust. The
enhancement applicable to each companies that provide investment
subsequent premium payment. No advice and administrative services
premium enhancement will apply if for the underlying portfolios
the certificate is cancelled offered through this certificate
pursuant to the Right to Cancel are listed below. The following
provision. mutual fund investment choices are
currently offered through this
Allocation of Premium Payments certificate:
When you purchase a certificate, we Subadvised by Morgan Stanley
will allocate your premium payment Asset Management Inc.
(plus the premium enhancement) to Endeavor Asset Allocation
the investment choices you select. Portfolio
Your allocation must be in whole Endeavor Money Market Portfolio
percentages and must total 100%. We Subadvised by T. Rowe Price
will allocate additional premium Associates, Inc.
payments the same way, unless you T. Rowe Price Equity Income
request a different allocation. If Portfolio
you allocate premium payments to T. Rowe Price Growth Stock
the dollar cost averaging fixed Portfolio
account, you must give us Subadvised by Rowe Price-Fleming
directions regarding the mutual International, Inc.
fund subaccount(s) to which T. Rowe Price International Stock
transfers are to be made or we Portfolio
cannot accept your premium payment. Subadvised by OpCap Advisors
Endeavor Value Equity Portfolio
Endeavor Opportunity Value
Portfolio
16
<PAGE>
Subadvised by J.P. Morgan Company Act of 1940 (the "1940
Investment Management Inc. Act"). Accordingly, neither the
Endeavor Enhanced Index Portfolio general account nor any interests
Subadvised by The Dreyfus therein are generally subject to
Corporation the provisions of the 1933 or 1940
Dreyfus U.S. Government Acts. PFL has been advised that the
Securities Portfolio staff of the SEC has not reviewed
Dreyfus Small Cap Value Portfolio the disclosures in this prospectus
Subadvised by Montgomery Asset which relate to the fixed account.
Management, LLC
Endeavor Select 50 Portfolio We guarantee that the interest
Subadvised by Massachusetts credited to the fixed account will
Financial not be less than 3% per year. At
Services Company the end of a guaranteed period
Endeavor High Yield Portfolio option you selected, the value in
Subadvised by Janus Capital that guaranteed period option will
Corporation automatically be transferred into a
Endeavor Janus Growth Portfolio new guaranteed period option of the
same length (or the next shorter
The general public may not purchase period if the same period is no
shares of these underlying longer offered) at the current
portfolios. The investment interest rate for that period. You
objectives and policies may be can transfer to another investment
similar to other portfolios and choice by giving us notice within
mutual funds managed by the same 30 days before the end of the
investment adviser or manager that expiring guaranteed period.
are sold directly to the public.
You should not expect that the Surrenders or partial withdrawals
investment results of the from a guaranteed period option of
underlying funds to be the same as the fixed account are subject to an
those of the other portfolios or excess interest adjustment. This
mutual funds. adjustment may increase or decrease
the amount of interest credited to
More detailed information, your certificate. The excess
including an explanation of the interest adjustment will not
portfolio's investment objectives, decrease the interest credited to
may be found in the current your certificate below 3% per year,
prospectus for the Endeavor Series however. You bear the risk that we
Trust, which is attached to this will not credit interest greater
prospectus. You should read the than 3% per year. We determine
prospectus for the Endeavor Series credited rates, which are
Trust carefully before you invest. guaranteed for at least one year,
in our sole discretion.
We may receive expense
reimbursements or other revenues If you select the fixed account,
from the Endeavor Series Trust or your money will be placed with the
its manager. The amount of these other general assets of PFL. The
reimbursements or revenues, if any, amount of money you are able to
may be based on the amount of accumulate in the fixed account
assets that PFL or the mutual fund during the accumulation phase
account invests in the underlying depends upon the total interest
portfolios. credited. The amount of annuity
payments you receive during the
The Fixed Account income phase from the fixed portion
of your certificate will remain
Premium payments allocated and level for the entire income phase.
amounts transferred to the fixed
account become part of the general Transfers
account of PFL. Interests in the
general account have not been During the accumulation phase, you
registered under the Securities Act may make transfers from any mutual
of 1933 (the "1933 Act"), nor is fund subaccount as often as you
the general account registered as wish within certain limitations.
an investment company under the
Investment
17
<PAGE>
Transfers from a guaranteed period Transfers may be made by telephone,
option of the fixed account are subject to the limitations
limited to the following: described below under "Telephone
At the end of a guaranteed period, Transactions."
you must notify us within 30 days
prior to the end of the guaranteed Currently, there is no charge for
period that you wish to transfer transfers. However, the number of
the amount in that guaranteed transfers permitted may be limited
period option to another investment in the future and charges per
choice. transfer may apply in the future.
We reserve the right to prohibit
. Transfers of amounts equal to transfers to the fixed account if
interest credited. This may we are crediting an effective
affect your overall interest- annual interest rate of 3.0%.
crediting rate, because
transfers are deemed to come Family Income Protector
from the oldest premium payment
first. The optional "family income
protector" rider assures you of a
. Other than at the end of a minimum level of income in the
guaranteed period, transfers of future by guaranteeing a minimum
amounts from the guaranteed annuitization value (discussed
period option in excess of below) after 10 years. You may
amounts equal to interest elect to purchase this benefit,
credited, are subject to an which guarantees a minimum amount
excess interest adjustment. If you will have to apply to a family
it is a negative adjustment, the income protector annuity payment
maximum amount you can transfer option and which guarantees a
is 25% of the amount in that minimum amounts of those payments
guaranteed period option, less once you begin to receive them. By
any previous transfers during electing this benefit, you can
the current certificate year. If participate in the gains of the
it is a positive adjustment, we underlying variable investment
do not limit the amount that you options you select while knowing
can transfer. that you are guaranteed a minimum
level of income in the future,
There are no transfers permitted regardless of the performance of
out of the dollar cost averaging the underlying variable investment
fixed account option except through options.
the dollar cost averaging program.
You can annuitize under the Family
Each transfer must be at least $500 Income Protector (subject to the
(or the entire mutual fund conditions described below) at the
subaccount value), except for greater of the adjusted certificate
transfers of guaranteed period value (described above) or the
option amounts equal to interest minimum annuitization value.
credited, for which there is a
minimum transfer amount of $50. If Minimum Annuitization Value. The
less than $500 remains, then we ---------------------------
reserve the right to either deny minimum annuitization value is:
the transfer or include that amount
in the transfer. . the certificate value on the
date the rider is issued,
During the income phase of your
certificate, you may transfer . plus any additional premium
values out of any mutual fund payments (not including any
subaccount up to four times per premium enhancement),
year. However, you cannot transfer
values out of the fixed account in . minus an adjustment for any
this phase. The minimum amount that withdrawals made after the date
can be transferred during this the rider is issued,
phase is the lesser of $10 of
monthly income, or the entire . accumulated at the annual growth
monthly income of the annuity units rate written on page one of the
in the mutual fund subaccount from rider,
which the transfer is being made.
. minus any premium taxes.
18
<PAGE>
The annual growth rate is currently after the rider is added. However,
6% per year; PFL may, at its all of these benefit specifications
discretion, change the rate in the may change if you elect to upgrade
future, but the rate will never be the minimum annuitization value.
less than 3% per year, and once the
rider is added to your certificate, Minimum Annuitization Value
the annual growth rate will not ---------------------------
vary during the life of that rider. Upgrade. You can upgrade your
Withdrawals may reduce the minimum -------
annuitization value on a basis minimum annuitization value to the
greater than dollar-for-dollar. See certificate value within 30 days
the Statement of Additional after any certificate anniversary
Information for more information. before your 85th birthday (earlier
if required by state law). For your
The minimum annuitization value may convenience, we will put the last
only be used to annuitize using the date to upgrade on page one of the
family income protector payment rider.
options and may not be used with
any of the other annuity payment If you upgrade, the current rider
options listed in section 2. The will terminate and a new one will
family income protector payment be issued with its own specified
options are: guaranteed benefits and fees.
Please note that the benefits and
. Life Income - An election may be fees under the new rider may differ
made for "No Period Certain" or from your benefits and fees prior
"10 Years Certain". In the event to upgrading.
of the death of the annuitant
prior to the end of the chosen Conditions of Exercise of the
period certain, the remaining -----------------------------
period certain payments will be Family Income Protector. You can
continued to the beneficiary. -----------------------
only annuitize using the family
. Joint and Full Survivor - An income protector within the 30 days
election may be made for "No after the tenth or later
Period Certain" or "10 Years certificate anniversary after the
Certain". Payments will be made family income protector is elected
as long as either the annuitant or, in the case of an upgrade of
or joint annuitant is living. In the minimum annuitization value,
the event of the death of both the tenth or later certificate
the annuitant and joint anniversary following the upgrade;
annuitant prior to the end of PFL may, at its discretion, change
the chosen period certain, the the waiting period before the
remaining period certain family income protector can be
payments will be continued to exercised in the future. You
the beneficiary. cannot, however, annuitize using
the family income protector after
The minimum annuitization value is the certificate anniversary after
used to calculate the family income your 94th birthday (earlier if
protector payment and does not required by state law). For your
establish or guarantee a convenience, we will put the first
certificate value or guarantee and last date to annuitize using
performance of any investment the family income protector on page
option. one of the rider.
In addition to the annual growth Note Carefully -- If you annuitize
rate, other benefits and fees under at any time other than indicated
the rider (the rider fee, the fee above, you cannot use the family
waiver threshold, guaranteed income protector.
payment fee, and the waiting period
before the family income protector Guaranteed Minimum Stabilized
can be exercised, as well as the -----------------------------
annual growth rate) are also Payments. Annuity payments under
guaranteed not to change --------
the family income protector are
guaranteed to never be less than
the initial payment. See the
Statement of Additional Information
for information concerning the
calculation of the initial payment.
The payments will also be
"stabilized" or held constant
during each certificate year.
19
<PAGE>
Under the family income protector, The guaranteed payment fee is
each annuity payment will be the included on page one of the rider.
greater of the stabilized payment
or the payment calculated without Termination. The family income
regard to the stabilized payments. -----------
During the first certificate year protector is irrevocable. You have
after annuitizing using the family the option not to use the benefit
income protector, each stabilized but you will not receive a refund
payment will equal the initial of any fees you have paid. The
payment. On each certificate family income protector will
anniversary thereafter, the terminate upon the earliest of the
stabilized payment will increase or following:
decrease depending on the
performance of the investment . annuitization (you will still
options you selected, and then be get guaranteed minimum
held constant at that amount for stabilized payments if you
that certificate year. The annuitize using the minimum
stabilized payment on each annuitization value under the
certificate anniversary will equal family income protector),
the greater of the initial payment
or the payment supportable by the . upgrade of the minimum
annuity units in the selected annuitization value (although a
investment options. See the new rider will be issued),
Statement of Additional Information
for additional information . termination of your certificate,
concerning stabilized payments. or
Family Income Protector Rider Fee. . 30 days after the certificate
- --------------------------------- anniversary after your 94th
A rider fee, currently 0.30% of the birthday (earlier if required by
minimum annuitization value on the state law).
previous certificate anniversary,
is charged annually prior to The family income protector does
annuitization. We will also charge not establish or guarantee
this fee if you take a complete certificate value or guarantee
withdrawal. PFL may change the performance of any investment
rider fee percentage in the future, option. Because this benefit is
but it will never be greater than based on conservative actuarial
0.50%. The rider fee is deducted factors, the level of lifetime
from each variable investment income that it guarantees may be
option in proportion to the amount less than the level that would be
of certificate value in each provided by application of the
subaccount. certificate value at otherwise
applicable adjusted annuity
The rider fee on any given factors. Therefore, the family
certificate anniversary will be income protector should be regarded
waived if the certificate value as a safety net. The costs of
exceeds the fee waiver threshold. annuitizing under the Family Income
The fee waiver threshold currently Protector include the guaranteed
is two times the minimum payment fee, and also the lower
annuitization value. PFL may, at payout levels inherent in the
its discretion, change the fee annuity tables used for those
waiver threshold in the future, but minimum payouts. These costs should
it will never be greater than two be balanced against the benefits of
and one-half times the minimum a minimum payout level.
annuitization value.
Dollar Cost Averaging Program
Guaranteed Payment Fee. A
- ---------------------- During the accumulation phase, you
guaranteed payment fee, currently may instruct us to automatically
equal to an effective annual rate transfer money from the dollar cost
of 1.25% of the daily net asset averaging fixed account option, the
value in the mutual fund account, Endeavor Money Market Subaccount,
is reflected in the amount of the or the Dreyfus U.S. Government
variable payments you receive if Securities Subaccount, into any
you annuitize under the family other mutual fund subaccounts. You
income protector rider. PFL may may specify the dollar amount to be
change the guaranteed payment fee transferred either monthly or
in the future, but it will never be quarterly; however each transfer
greater than 2.25%. must be at least $500. A minimum of
6 monthly or 4 quarterly transfers
are required and a maximum of 24
months or 8 quarterly transfers
20
<PAGE>
are allowed. Transfers must begin requesting a transaction by
within 30 days. We will make the telephone. We may also require
transfers on the 28th day of the written confirmation of your
applicable month. There is no request. We will not be liable for
charge for this program. following telephone requests that
we believe are genuine. Telephone
Dollar cost averaging buys more requests must be received while the
accumulation units when prices are New York Stock Exchange is open to
low and fewer accumulation units assure same-day pricing of the
when prices are high. It does not transaction. We may discontinue
guarantee profits or assure that this option at any time.
you will not experience a loss. You
should consider your ability to 5. EXPENSES
continue the dollar cost averaging
program during all economic There are charges and expenses
conditions. associated with your certificate
that reduce the return on your
We may credit different interest investment in the certificate.
rates for dollar cost averaging
programs of varying time periods. Surrender Charge
If you discontinue the dollar cost
averaging program before its During the accumulation phase, you
completion, then the interest can withdraw part or all of the
credited on amounts in the dollar cash value. Cash value is the
cost averaging fixed account may be certificate value increased or
adjusted downward, but not below decreased by any excess interest
the minimum guaranteed effective adjustment and decreased by any
annual interest rate of 3%. applicable surrender charge,
premium taxes, and Family Income
Asset Rebalancing Protector rider fees, and less the
annual Service Charge. We may apply
During the accumulation phase you a surrender charge to compensate us
can instruct us to automatically for expenses relating to sales,
rebalance the amounts in your including commissions to registered
mutual fund subaccounts to maintain representatives and other
your desired asset allocation. This promotional expenses. After the
feature is called asset rebalancing first year, you can withdraw up to
and can be started and stopped at 10% of your cumulative premium
any time free of charge. However, payments once each certificate year
we will not rebalance if you are in free of surrender charges. This
the dollar cost averaging program amount is referred to as the free
or if any other transfer is percentage and is determined at the
requested. Asset rebalancing time of the withdrawal. If you
ignores amounts in the fixed withdraw money in excess of 10% of
account. You can choose to your cumulative premium payments ,
rebalance monthly, quarterly, semi- you might have to pay a surrender
annually, or annually. charge, which is a contingent
deferred sales charge, on the
Telephone Transactions excess amount. The following
schedule shows the surrender
You may make transfers and change charges that apply during the nine
the allocation of additional years following each premium
premium payments by telephone IF: payment:
. you select the "Telephone
Transfer/Reallocation
Authorization" box in the
certificate enrollment form or
enrollment information; or
. you later make this request in
writing.
You will be required to provide
certain information for
identification purposes when
21
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------
Number of Years Surrender Charge The mortality and expense risk fee
Since Premium (as a percentage of is at an annual rate of 1.35% of
Payment Date premium withdrawn) assets. This annual fee is assessed
- ----------------------------------- daily based on the net asset value
<S> <C> of each mutual fund subaccount.
0 - 1 8%
- ----------------------------------- If this charge does not cover our
1 - 2 8% actual costs, we absorb the loss.
- ----------------------------------- Conversely, if the charge more than
2 - 3 8% covers actual costs, the excess is
- ----------------------------------- added to our surplus. We expect to
3 - 4 7% profit from this charge. We may use
- ----------------------------------- any profit for any proper purpose,
4 - 5 6% including distribution expenses.
- -----------------------------------
5 - 6 5% Administrative Charges
- -----------------------------------
6 - 7 4% We deduct an administrative charge
- ----------------------------------- to cover the costs of administering
7-8 3% the annuity (including certain
- ----------------------------------- distribution-related expenses).
8-9 2% This daily charge is equal to an
- ----------------------------------- annual rate of 0.40% of the daily
9 or more 0% net asset value of the mutual fund
- ----------------------------------- account.
</TABLE>
In addition, an annual service
For example, assume your premium charge of $40 (but not more than 2%
payments total $100,000 at the of the certificate value) is
beginning of certificate year 2 and charged on each certificate
you withdraw $30,000. Since that anniversary and at surrender. The
amount is more than your free service charge is waived if your
percentage, you would pay a certificate value is at least
surrender charge of $1,600 on the $100,000 or if the sum of your
$20,000 remaining after the free premiums, less all partial
percentage (8% of ($30,000 - withdrawals, is at least $100,000.
$10,000)).
Premium Taxes
You receive the full amount of a
requested partial withdrawal Some states assess premium taxes on
because we deduct any applicable the premium payments you make. We
excess interest adjustment and currently do not deduct for these
surrender charge from your taxes at the time you make a
remaining certificate value. You premium payment. However, we will
receive your cash value upon full deduct the total amount of premium
surrender. taxes, if any, from the certificate
value when:
For surrender charge purposes, the
oldest premium is considered to be . you elect to begin receiving
withdrawn first. annuity payments;
Keep in mind that withdrawals may . you surrender the certificate;
be taxable, and if made before age or
59 1/2, may be subject to a 10%
federal penalty tax. For tax . you die and a death benefit is
purposes, withdrawals are paid (you must also be the
considered to come from earnings annuitant for the death benefit
first. to be paid).
Surrender charges are waived if you Generally, premium taxes range from
withdraw money under the nursing 0% to 3.50%, depending on the
care and terminal condition state.
withdrawal option or unemployment
waiver.
Mortality and Expense Risk Fee
We charge a fee as compensation for
bearing certain mortality and
expense risks under the
certificate. Examples include a
guarantee of annuity rates, the
death benefits, certain expenses of
the certificate, and assuming the
risk that the current charges will
be insufficient in the future to
cover costs of administering the
certificate.
22
<PAGE>
Federal, State and Local Taxes Annuities in General
We may in the future deduct charges Deferred annuities are a way of
from the certificate for any taxes setting aside money for future
we incur because of the needs like retirement. Congress
certificate. However, no deductions recognized how important saving for
are being made at the present time. retirement is and provided special
rules in the Internal Revenue Code
Transfer Fee for annuities.
You are allowed to make 12 free Simply stated, these rules provide
transfers per year before the that generally you will not be
annuity commencement date. If you taxed on the earnings, if any, on
make more than 12 transfers per the money held in your annuity
year, we reserve the right to certificate until you take the
charge $10 for each transfer. money out. This is referred to as
Premium payments, asset rebalancing tax deferral. There are different
and dollar cost averaging transfers rules as to how you will be taxed
are not considered transfers. All depending on how you take the money
transfer requests made at the same out and the type of annuity -
time are treated as a single qualified or nonqualified
request. (discussed below).
Family Income Protector You will not be taxed on increases
in the value of your annuity until
If you elect the family income a distribution occurs - either as a
protector, there is an annual rider withdrawal or as annuity payments.
fee during the accumulation phase
of 0.30% of the minimum When a non-natural person (e.g.,
annuitization value, and a corporation or certain other
guaranteed payment fee during the entities other than tax-qualified
income phase of 1.25% of the daily trusts) owns a nonqualified
net asset value if you annuitize annuity, the certificate will
under the rider. The annual rider generally not be treated as an
fee is also deducted upon a annuity for tax purposes.
complete withdrawal. (See Section
4, "INVESTMENT CHOICES - Family Qualified and Nonqualified Annuities
Income Protector.")
If you purchase the certificate
Portfolio Management Fees under an individual retirement
annuity, a pension plan, or
The value of the assets in each specially sponsored program, your
mutual fund subaccount will reflect certificate is referred to as a
the fees and expenses paid by the qualified annuity.
underlying fund. A description of
these expenses is found in the Qualified annuities are issued in
prospectus for the Endeavor Series connection with the following
Trust. plans:
6. TAXES . Individual Retirement Annuity
(IRA): A traditional IRA allows
NOTE: PFL has prepared the individuals to make
following information on federal contributions, which may be
income taxes as a general deductible, to the certificate.
discussion of the subject. It is A Roth IRA also allows
not intended as tax advice to any individuals to make
individual. You should consult your contributions to the
own tax adviser about your own certificate, but it does not
circumstances. PFL has included an allow a deduction for
additional discussion regarding contributions, and distributions
taxes in the Statement of may be tax-free if the owner
Additional Information. meets certain rules.
. Tax-Sheltered Annuity (403(b)
Plan): A 403(b) Plan may be made
available to employees of
certain public school systems
and tax-exempt organizations and
permits
23
<PAGE>
contributions to the certificate on . which come from premium payments
a pre-tax basis. made prior to August 14, 1982.
. Corporate Pension and Profit- All deferred non-qualified annuity
Sharing and H.R. 10 Plan: annuities that are issued by PFL
Employers and self-employed Life (or its affiliates) to the
individuals can establish same owner during any calendar year
pension or profit-sharing plans are treated as one annuity for
for their employees or purposes of determining the amount
themselves and make includable in the owner's income
contributions to the certificate when a taxable distributions
on a pre-tax basis. occurs.
. Deferred Compensation Plan (457 Withdrawals - Qualified Annuities
Plan): Certain governmental and
tax-exempt organizations can The above information describing
establish a plan to defer the taxation of nonqualified
compensation on behalf of their annuities does not apply to
employees through contributions qualified annuities. There are
to the certificate. special rules that govern with
respect to qualified annuities.
If you purchase the certificate as Generally, these rules restrict:
an individual and not under an
individual retirement annuity, . the amount that can be
403(b) plan, 457 plan, or pension contributed to the certificate
or profit sharing plan, your during any year; and
certificate is referred to as a
nonqualified annuity. . the time when amounts can be
paid from the certificates.
Withdrawals - Nonqualified Annuities
In addition, a penalty tax may be
If you make a withdrawal from your assessed on amounts withdrawn from
certificate before the annuity the certificate prior to the date
commencement date, the Internal you reach age 59 1/2, unless you
Revenue Code treats that withdrawal meet one of the exceptions to this
as first coming from earnings and rule. You may also be required to
then from your premium payments. begin taking minimum distributions
When you make a withdrawal you are from the certificate by a certain
taxed on the amount of the date. The terms of the plan may
withdrawal that is earnings. (The limit the rights otherwise
excess interest adjustment available to you under the
resulting from the withdrawal may certificates.
affect the amount on which you are
taxed.) Different rules apply for We have provided more information
annuity payments. See "Annuity in the Statement of Additional
Payments" below. Information. You should consult
your legal counsel or tax adviser
The Internal Revenue Code also if you are considering purchasing a
provides that withdrawn earnings certificate for use with any
may be subject to a penalty. The retirement plan.
amount of the penalty is equal to
10% of the amount that is Withdrawals - 403(b) Annuities
includable in income. Some
withdrawals will be exempt from the The Internal Revenue Code limits
penalty. They include any amounts: the withdrawal of premium payments
from certain 403(b) annuities.
. paid on or after the taxpayer Withdrawals can generally only be
reaches age 59 1/2; made when a certificate owner:
. paid after the taxpayer dies;
. reaches age 59 1/2;
. paid if the taxpayer becomes
totally disabled (as that term . leaves his/her job;
is defined in the Internal
Revenue Code); . dies;
. paid in a series of . becomes disabled (as that term
substantially equal payments is defined in the Internal
made annually (or more Revenue Code); or
frequently) under a lifetime
annuity;
. paid under an immediate annuity;
or
24
<PAGE>
in the case of hardship. However, payments you receive will be
in the case of hardship, the includable in your gross income.
certificate owner can only
withdraw the premium payments and In general, the excludable portion
not any earnings. of each annuity payment you receive
will be determined as follows:
Diversification and Distribution
Requirements . Fixed payments - by dividing the
"investment in the contract" on
The Internal Revenue Code provides the annuity commencement date by
that the underlying investments for the total expected value of the
a variable annuity must satisfy annuity payments for the term of
certain diversification the payments. This is the
requirements in order to be treated percentage of each annuity
as an annuity. The annuity must payment that is excludable.
also meet certain distribution
requirements at the death of an . Variable payments - by dividing
owner in order to be treated as an the "investment in the contract"
annuity. These diversification and on the annuity commencement date
distribution requirements are by the total number of expected
discussed in the Statement of periodic payments. This is the
Additional Information. PFL may amount of each annuity payment
modify the group contract and that is excludable.
certificate to attempt to maintain
favorable tax treatment. The remainder of each annuity
payment is includable in gross
Taxation of Death Benefit Proceeds income. Once the "investment in the
contract" has been fully recovered,
Amounts may be distributed from the the full amount of any additional
certificate because of the death of annuity payments is includable in
a certificate owner or the gross income.
annuitant. Generally, such amounts
are includable in the income of the If you select more than one annuity
recipient: payment option, special rules
govern the allocation of the
. if distributed in a lump sum, certificate's entire "investment in
these amounts are taxed in the the contract" to each such option,
same manner as a full surrender; for purposes of determining the
or excludable amount of each payment
received under that option. We
. if distributed under an annuity advise you to consult a competent
payment option, these amounts tax adviser as to the potential tax
are taxed in the same manner as effects of allocating amounts to
annuity payments. any particular annuity payment
option.
For these purposes, the "investment
in the contract" is not affected by If, after the annuity commencement
the owner's or annuitant's death. date, annuity payments stop because
That is, the "investment in the an annuitant died, the excess (if
contract" remains generally the any) of the "investment in the
total premium payments, less contract" as of the annuity
amounts received, which were not commencement date over the
includable in gross income. (The aggregate amount of annuity
same tax treatment applies to any payments received that was excluded
amounts distributed after an from gross income is generally
owner's death.) The premium credit allowable as a deduction for your
that we add to your certificate last taxable year.
value is not included in the
investment in the contract. Transfers, Assignments or Exchanges
Annuity Payments A transfer of ownership or
assignment of a certificate, the
Although the tax consequences may designation of an annuitant or
vary depending on the annuity other beneficiary who is not also
payment option you select, in the owner, the
general, for nonqualified and
certain qualified annuities, only a
portion of the annuity
25
<PAGE>
selection of certain annuity Withdrawals from the fixed account
commencement dates, or a change of may also be subject to an excess
annnuitant, may result in certain interest adjustment.
income or gift tax consequences to
the owner that are beyound the Income taxes, federal tax penalties
scope of this discussion. An owner and certain restrictions may apply
contemplating any such transfer, to any withdrawals you make.
assignment, selection, or change
should contact a competent tax During the income phase, the
adviser with respect to the annuity payment option you select
potential tax effects of such a will determine your access to the
transaction. money in your certificate.
Possible Tax Law Changes Delay of Payment and Transfers
Although the likelihood of Payment of any amount due from the
legislative changes in uncertain, mutual fund account for a
there is always the possibility surrender, a death benefit, or the
that the tax treatment of the death of the owner of a
certificate could change by nonqualified certificate, will
legislation or otherwise. You generally occur within seven
should consult a tax adviser with business days from the date all
respect to legislative developments required information is received by
and their effect on the PFL. PFL may be permitted to defer
certificate. such payment from the mutual fund
account if:
7. ACCESS TO YOUR MONEY
. the New York Stock Exchange is
Surrenders closed other than for usual
weekends or holidays or trading
During the accumulation phase, you on the Exchange is otherwise
can have access to the money in restricted;
your certificate in several ways:
. an emergency exists as defined
. by making a withdrawal (either a by the SEC or the SEC requires
complete or partial withdrawal); that trading be restricted; or
or
. the SEC permits a delay for the
. by taking annuity payments. protection of owners.
If you want to make a complete In addition, transfers of amounts
withdrawal, you will receive the from the mutual fund subaccounts
value of your certificate plus or may be deferred under these
minus any excess interest circumstances.
adjustment, minus:
Pursuant to the requirements of
. surrender charges; certain state laws, we reserve the
right to defer payment of the cash
. premium taxes; value from the fixed account for up
to six months.
. the service charges; and
Excess Interest Adjustment
. Family Income Protector rider
fees. Money that you withdraw from a
guaranteed period option of the
If you want to take a partial fixed account before the end of its
withdrawal, in most cases it must guaranteed period (the number of
be for at least $500. Unless you years you specified the money would
tell us otherwise, we will take the remain in the guaranteed period
withdrawal from each of the option) may be subject to an excess
investment choices in proportion to interest adjustment. At the time
the certificate value. you request a withdrawal, if
interest rates set by PFL have
Remember that any withdrawal you risen since the date of the initial
take will reduce the certificate guarantee, the excess interest
value, and might reduce the amount adjustment will result in a lower
of the death benefit. See Section cash value on surrender. However,
9, Death Benefit, for more details. if interest rates have fallen since
Withdrawals may be subject to a the date of the initial guarantee,
surrender charge.
26
<PAGE>
the excess interest adjustment will This benefit may not be available
result in a lower cash value on in all states. See the group
surrender. However, if interest contract and certificate or
rates have fallen since the date of endorsement for details and
the initial guarantee, the excess conditions.
interest adjustment will result in
a higher cash value on surrender. Unemployment Waiver
There will be no excess interest
adjustment on any of the following: No surrender charges or excess
interest adjustment will apply to
. lump sum withdrawals of the free withdrawals if you or your spouse
percentage available (see is unemployed. In order to qualify,
Surrender Charge, page _____ you (or your spouse, whichever is
above);nursing care and terminal applicable) must have been:
condition withdrawals;
. employed full time for at least
. unemployment withdrawals; two years prior to becoming
unemployed; and
. withdrawals to satisfy any
minimum distribution . employed full time on the
requirements; and systematic certificate date; and
payout option payments, which do
not exceed 10% of your . unemployed for at least 60 days
cumulative premium payments in a row at the time of the
divided by the number of payouts withdrawal; and
made per year.
. must have a minimum cash value
Certain conditions must be at the time of withdrawal of
satisfied. See the Statement of $5,000.
Additional Information for more
details. This benefit is also available to
the annuitant or annuitant's spouse
Systematic Payout Option if the certificate owner is not a
natural person.
You can receive regular payments
from your certificate by using the You must provide written proof from
systematic payout option. Under your State's Department of Labor,
this option, you can receive up to which verifies that you qualify for
10% (annually) of your cumulative and are receiving unemployment
premium payments free of surrender benefits at the time of withdrawal.
charges. Payments can be made This benefit may not be available
monthly, quarterly, semi-annually, in all states. See the certificate
or annually. for details.
Nursing Care and Terminal Condition 8. PERFORMANCE
Withdrawal Option
The Mutual Fund Account
No surrender charges or excess
interest adjustment will apply if PFL periodically advertises
you or your spouse has been: performance of the various mutual
fund subaccounts. We may disclose
. confined in a hospital or at least four different kinds of
nursing facility for 30 days in performance. First, we may
a row; or calculate performance by
determining the percentage change
. diagnosed with a terminal in the value of an accumulation
condition (usually a life unit by dividing the increase
expectancy of 12 months or (decrease) for that unit by the
less). value of the accumulation unit at
the beginning of the period. This
This benefit is also available to performance number reflects the
the annuitant or annuitant's spouse deduction of the mortality and
if the owner is not a natural expense risk fees and
person. administrative charges. It does not
reflect the deduction of any
applicable premium taxes or
surrender charges. The deduction of
any applicable premium taxes or
27
<PAGE>
surrender charges would reduce the Distribution requirements apply to
percentage increase or make greater the certificate value upon the
any percentage decrease. death of any certificate owner.
These requirements are detailed in
Second, any advertisement will also the Statement of Additional
include total return figures, which Information.
reflect the deduction of the
mortality and expense risk fees, When We Pay A Death Benefit
administrative charges and
surrender charges. These figures Before the Annuity Commencement Date
will also reflect the premium ------------------------------------
enhancement. We will pay a death benefit to your
beneficiary
Third, for periods starting prior
to the date the annuities were IF:
first offered, the performance will
be based on the historical . you are both the annuitant and
performance of the corresponding an owner of the certificate; and
investment portfolios for the
periods commencing from the date on . you die before the annuity
which the particular investment commencement date.
portfolio was made available
through the mutual fund account. If the only beneficiary is your
Fourth, in addition, for certain surviving spouse, then he or she
investment portfolios, performance may elect to continue the
may be shown for the period certificate as the new annuitant
commencing from the inception date and owner, instead of receiving the
of the investment portfolio. These death benefit. All future surrender
figures should not be interpreted charges will be waived.
to reflect actual historical
performance of the mutual fund We will also pay a death benefit to
account. your beneficiary IF:
We also may, from time to time, . you are not the annuitant; and
include in our advertising and
sales materials, tax deferred . the annuitant dies before the
compounding charts and other annuity commencement date; and
hypothetical illustrations, which
may include, comparisons of . you specifically requested that
currently taxable and tax deferred the death benefit be paid upon
investment programs, based on the annuitant's death.
selected tax brackets.
After the Annuity Commencement Date
Appendix B contains performance -----------------------------------
information that you may find The death benefit payable, if any,
useful. It is divided into various on or after the annuity
parts, depending upon the type of commencement date depends on the
performance information shown. annuity payment option selected.
Future performance will vary and
future results will not be the same IF:
as the results shown.
. you are not the annuitant; and
9. DEATH BENEFIT
. you die on or after the annuity
We will pay a death benefit to your commencement date; and
beneficiary, under certain
circumstances, if the annuitant . the entire interest in the
dies before the annuity certificate has not been paid to
commencement date and the annuitant you;
was also an owner. (If the
annuitant was not an owner, a death THEN:
benefit may or may not be paid. See
below). The beneficiary may choose . the remaining portion of such
an annuity payment option, or may interest in the certificate will
choose to receive a lump sum. be distributed at least as
rapidly as under the method of
distribution being used as of
the date of your death.
When We Do Not Pay A Death Benefit
No death benefit is paid in the
-------------------------------
following cases:
---------------
28
<PAGE>
IF:
. you are not the annuitant; and Guaranteed Minimum Death Benefit
. the annuitant dies prior to the The guaranteed minimum death
annuity commencement date; and benefit is the Step-Up Death
Benefit - the largest certificate
. you did not specifically request value on the certificate date or on
that the death benefit be paid any certificate anniversary before
upon the annuitant's death; you reach age 76; plus any premium
payments you have made since then;
THEN: minus any adjusted partial
withdrawals (discussed below) we
. you will become the new have paid to you since then.
annuitant and the certificate will
continue. The Step-Up Death Benefit is not
available if the owner or annuitant
IF: is 75 or older on the certificate
date. In those instances, the death
. you are not the annuitant; and benefit will be a return of premium
- total premium payments, less any
. you die prior to the annuity adjusted partial withdrawals as of
commencement date; the date of death. This will not
include any premium enhancement.
THEN:
IF:
. the new owner must surrender the
certificate for the certificate . the surviving spouse elects to
value increased or decreased by continue the certificate instead
an excess interest adjustment of receiving the death benefit;
within five years of your death. and
Note carefully. If the owner does . the guaranteed minimum death
- -------------- benefit is greater than the
not name a contingent owner, the certificate value;
owner's estate will become the new
owner. If no probate estate is THEN:
opened (because, for example, the
owner has precluded the opening of . we will increase the certificate
a probate estate by means of a value to be equal to the
trust or other instrument), and PFL guaranteed minimum death
has not received written notice of benefit. This increase is made
the trust as a successor owner only at the time the surviving
signed prior to the owner's death, spouse elects to continue the
then that trust may not exercise certificate.
ownership rights to the
certificate. It may be necessary to Adjusted Partial Withdrawal
open a probate estate in order to
exercise ownership rights to the When you request a partial
certificate if no contingent owner withdrawal, your guaranteed minimum
is named in a written notice death benefit will be reduced by an
received by PFL. amount called the adjusted partial
withdrawal. Under certain
Amount of Death Benefit circumstances, the adjusted partial
withdrawal may be more than the
Death benefit provisions may differ amount of your withdrawal request.
from state to state. The death It is also possible that if a death
benefit may be paid as a lump sum benefit is paid after you have made
or as annuity payments. The death a partial withdrawal, then the
benefit will be the greatest of: total amount paid could be less
than the total premium payments. We
. certificate value on the date we have included a detailed
receive the required information; explanation of this adjustment in
or the Statement of Additional
Information.
. cash value on the date we
receive the required information;
or
. guaranteed minimum death benefit
(discussed below).
29
<PAGE>
10. OTHER INFORMATION The Mutual Fund Account
Ownership PFL established a mutual fund
account, called the PFL Life Variable
You, as owner of the certificate, Annuity Account C, under the laws of
exercise all rights under the the State of Iowa on February 20,
certificate. You can change the 1997. The mutual fund account
certificate owner at any time by receives and currently invests the
notifying us in writing. An premium payments that are allocated
ownership change may be a taxable to it for investment in shares of
event. the underlying mutual fund
portfolios.
Assignment
The mutual fund account is
You can also assign the certificate registered with the SEC as a unit
any time during your lifetime. PFL investment trust under the
will not be bound by the assignment Investment Company Act of 1940.
until we receive written notice of However, the SEC does not supervise
the assignment. We will not be the management, the investment
liable for any payment or other practices, or the policies of the
action we take in accordance with mutual fund account or PFL. Income,
the certificate before we receive gains and losses, whether or not
notice of the assignment. There may realized, from assets allocated to
be limitations on your ability to the mutual fund account are, in
assign a qualified annuity. accordance with the policies,
credited to or charged against the
PFL Life Insurance Company mutual fund account without regard
to PFL's other income, gains or
PFL Life Insurance Company was losses.
incorporated under the laws of the
State of Iowa on April 19, 1961 as The assets of the mutual fund
NN Investors Life Insurance account are held in PFL's name on
Company, Inc. It is engaged in the behalf of the mutual fund account
sale of life and health insurance and belong to PFL. However, those
and annuity policies. PFL is a assets that underlie the
wholly owned indirect subsidiary of certificates are not chargeable
AEGON USA, Inc. which conducts most with liabilities arising out of any
of its operations through other business PFL may conduct. The
subsidiary companies engaged in the mutual fund account includes other
insurance business or in providing subaccounts that are not available
non-insurance financial services. under these certificates.
All of the stock of AEGON USA,
Inc., is indirectly owned by AEGON Information about the mutual fund
N.V. of the Netherlands, the account can be reviewed and copied
securities of which are publicly at the SEC's Public Reference Room
traded. AEGON N.V., a holding in Washington, D.C. You may obtain
company, conducts its business information about the operation of
through subsidiary companies the public reference room by
engaged primarily in the insurance calling the SEC at 1-800-SEC-0330.
business. PFL is licensed in the In addition, the SEC maintains a
District of Columbia, Guam, and in web site (http://www.sec.gov) that
all states except New York. contains other information
regarding the mutual fund account.
All obligations arising under the
group contracts and certificates, Mixed and Shared Funding
including the promise to make
annuity payments, are general Before making a decision concerning
corporate obligations of PFL. the allocation of premium payments
to a particular mutual fund
subaccount, please read the
Endeavor Series Trust prospectus.
The Endeavor Series Trust is not
limited to selling its shares to
30
<PAGE>
this mutual fund account and can determine that we are permitted to
accept investments from any vote the shares in our own right,
separate account or qualified we may do so.
retirement plan. Since the
portfolios of the underlying funds Each person having a voting
are available to registered mutual interest will receive proxy
fund accounts offering variable material, reports, and other
annuity products of PFL, as well as materials relating to the
variable annuity and variable life appropriate portfolio.
products of other insurance
companies, and qualified retirement Distributor of the Annuity
plans, there is a possibility that
a material conflict may arise AFSG Securities Corporation is the
between the interests of this principal underwriter of the group
mutual fund account and one or more contract and certificates. Like
of the mutual fund accounts of PFL, it is an indirect wholly owned
another participating insurance subsidiary of AEGON USA, Inc. It is
company. In the event of a material located at 4333 Edgewood Road N.E.,
conflict, the affected insurance Cedar Rapids, IA 52499-0001. AFSG
companies, including PFL, agree to Securities Corporation is
take any necessary steps to resolve registered as a broker/dealer under
the matter. This includes removing the Securities Exchange Act of
their mutual fund accounts from the 1934. It is a member of the
underlying funds. See the National Association of Securities
underlying funds' prospectuses for Dealers, Inc.
more details.
Commissions of up to 5.5% of
Reinstatements premium payments or 4.5% of premium
payments plus an annual continuing
You may surrender your certificate fee based on certificate values
and transfer your money directly to will be paid to broker/dealers who
another life insurance company sell the certificates under
(sometimes referred to as a 1035 agreements with AFSG Securities
Exchange or a trustee-to-trustee Corporation. These commissions are
transfer). You may also ask us to not deducted from premium payments.
reinstate your certificate after In addition, certain production,
such a transfer by returning the persistency and managerial bonuses
same total dollar amount of funds may be paid. PFL may also pay
to the applicable investment compensation to financial
choices. The dollar amount will be institutions for their services in
used to purchase new accumulation connection with the sale and
units at the then current price. servicing of the group contract and
Because of changes in market value, certificates.
your new accumulation units may be
worth more or less than the units Non-participating
you previously owned. We recommend
that you consult a tax professional The certificates do not participate
to explain the possible tax or share in the profits or surplus
consequences of exchanges and/or earnings of PFL. No dividends are
reinstatements. payable on the certificates.
Voting Rights Variations in Certain Provisions
Mutual Fund Account. PFL will vote Certain provisions of the group
- ------------------- contract and certificates may vary
all shares of the Endeavor Series from the descriptions in this
Trust in accordance with prospectus in order to comply with
instructions we receive from you different state laws. See your
and other certificate owners that certificate for variations since
have voting interests in the any such state variations will be
portfolios. We will send you and included in your certificates or in
other certificate owners written riders or endorsements attached to
requests for instructions on how to your certificates
vote those shares. When we receive
those instructions, we will vote
all of the shares in proportion to
those instructions. If, however, we
31
<PAGE>
Year 2000 Matters
IMSA
We have in place a Year 2000
Project Plan (the "Plan") to review PFL is a member of the Insurance
and analyze existing hardware and Marketplace Standards Association
software systems, as well as voice (IMSA). IMSA members subscribe to a
and data communications systems, to set of ethical standards involving
determine if they are Year 2000 the sales and service of
compliant. As of the date of this individually sold life insurance
prospectus, all of our mission- and annuities. As a member, we may
critical systems are Year 2000 use the IMSA logo and language in
compliant and ready. The Year 2000 advertisements.
Project Plan is continuing as
scheduled, as we continue with the Legal Proceedings
validation of our mission-critical
and non-mission-critical systems, There are no legal proceedings to
including revalidation testing in which the mutual fund account is a
1999. In addition, PFL has party or to which the assets of the
undertaken aggressive initiatives account are subject. PFL, like
to test all systems that interface other life insurance companies, is
with any third parties and other involved in lawsuits. In some class
business partners. All of these action and other lawsuits involving
steps are aimed at allowing current other insurers, substantial damages
operations to remain unaffected by have been sought and/or material
the Year 2000 date change. settlement payments have been made.
Although the outcome of any
As of the date of this prospectus, litigation cannot be predicted with
we have identified and made certainty, PFL believes that at the
available what we believe are the present time there are no pending
appropriate resources of hardware, or threatened lawsuits that are
people, and dollars, including the reasonably likely to have a
engagement of outside third material adverse impact on the
parties, to ensure that the Plan mutual fund account or PFL.
will be completed.
Financial Statements
Our actions under The Year 2000
Project Plan are intended to The financial statements of PFL and
significantly reduce PFL's risk of the mutual fund account are
a material business interruption included in the Statement of
based on the Year 2000 issues. Additional Information.
Resolving the Year 2000 computer
problem is complex and TABLE OF CONTENTS OF THE STATEMENT
multifaceted. We cannot know OF ADDITIONAL INFORMATION
conclusively whether a response
plan is successful until the Year Glossary of Terms
2000 arrives (or an earlier date if The Certificate--General Provisions
the systems or equipment address Certain Federal Income Tax
Year 2000 data prior to the Year Consequences
2000). In spite of its efforts or Investment Experience
results, PFL's ability to function Family Income Protector -
unaffected to and through the Year Hypothetical Illustration
2000 may be adversely affected by Historical Performance Data
actions, or failure to act, of Published Ratings
third parties beyond our knowledge State Regulation of PFL
or control. Administration
Records and Reports
This statement is a Year 2000 Distribution of the Certificates
Readiness Disclosure pursuant to
Section 3(9) of the Year 2000
Information and Readiness
Disclosure Act, 15 U.S.C. (S) 1
(1998).
See the prospectus for the Endeavor
Series Trust for information on its
preparation for Year 2000.
32
<PAGE>
Voting Rights Independent Auditors
Other Products Other Information
Custody of Assets Financial Statements
Legal Matters
33
<PAGE>
APPENDIX A
HISTORICAL PERFORMANCE DATA
THE MUTUAL FUND ACCOUNT
Standardized Performance Data
PFL may advertise historical yields and total returns for the subaccounts of the
mutual fund account. In addition, PFL may advertise the effective yield of the
subaccount investing in the Endeavor Money Market Portfolio (the "Endeavor Money
Market Subaccount"). These figures are calculated according to standardized
methods prescribed by the SEC. They are based on historical earnings and are not
intended to indicate future performance.
Endeavor Money Market Subaccount. The yield of the Endeavor Money Market
Subaccount for a certificate refers to the annualized income generated by an
investment under a certificate in the subaccount over a specified seven-day
period. The yield is calculated by assuming that the income generated for that
seven-day period is generated each seven-day period over a 52-week period and is
shown as a percentage of the investment. The effective yield is calculated
similarly but, when annualized, the income earned by an investment under a
certificate in the subaccount is assumed to be reinvested. The effective yield
will be slightly higher than the yield because of the compounding effect of this
assumed reinvestment.
Other Subaccounts. The yield of a mutual fund subaccount (other than the
Endeavor Money Market Subaccount) for a certificate refers to the annualized
income generated by an investment under a certificate in the subaccount over a
specified thirty-day period. The yield is calculated by assuming that the income
generated by the investment during that thirty-day period is generated each
thirty-day period over a 12-month period and is shown as a percentage of the
investment.
The total return of a subaccount refers to return quotations assuming an
investment under a certificate has been held in the subaccount for various
periods of time including a period measured from the date the subaccount
commenced operations. When a subaccount has been in operation for one, five, and
ten years, respectively, the total return for these periods will be provided.
The total return quotations for a subaccount will represent the average annual
compounded rates of return that equate an initial investment of $1,000 in the
subaccount to the redemption value of that investment as of the last day of each
of the periods for which total return quotations are provided. The redemption
value will, of course, reflect the premium enhancement.
The yield and total return calculations for a subaccount do not reflect the
effect of any premium taxes that may be applicable to a particular certificate,
and they do not reflect the rider charge for the optional family income
protector. To the extent that any or all of a premium tax is applicable to a
particular certificate, the yield and/or total return of that certificate will
be reduced. For additional information regarding yields and total returns
calculated using the standard formats briefly summarized above, please refer to
the Statement of Additional Information, a copy of which may be obtained from
the administrative and service office upon request.
Based on the method of calculation described in the Statement of Additional
Information, the average annual total returns for periods from inception of the
subaccounts to December 31, 1998, and for the one and five year periods ended
December 31, 1998 are shown in Table 1 below. Total returns shown reflect
deductions for the mortality and expense risk fee, and the administrative
charges. Performance figures may reflect the 1.35% mortality and expense risk
fee for the Step-Up Death Benefit. Standard total return calculations will
reflect the effect of surrender charges that may be applicable to a particular
period.
Non-Standardized Performance Data
In addition to the standard data discussed above, similar performance data for
other periods may also be shown.
A-1
<PAGE>
PFL may also advertise or disclose average annual total return or other
performance data in non-standard formats for a subaccount of the mutual fund
account. The non-standard performance data may assume that no surrender charge
is applicable, and may also make other assumptions such as the amount invested
in a subaccount, differences in time periods to be shown, or the effect of
partial withdrawals or annuity payments.
All non-standard performance data will be advertised only if the standard
performance data is also disclosed. For additional information regarding the
calculation of other performance data, please refer to the Statement of
Additional Information.
The non-standardized average annual total return figures shown in Table 2 are
based on the assumption that the certificate is not surrendered, and therefore
the surrender charge is not imposed. Also, Table 2 does not reflect the rider
charge for the optional family income protector.
A-2
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE ENDEAVOR GENERATIONS PLUS VARIABLE ANNUITY
Issued through
PFL LIFE VARIABLE ANNUITY ACCOUNT C
Offered by
PFL LIFE INSURANCE COMPANY
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
__________________
This statement of additional information expands upon subjects discussed in the
current prospectus for the Endeavor Generations Plus Variable Annuity offered by
PFL Life Insurance Company. You may obtain a copy of the prospectus dated May 1,
1999 by calling 1-800-525-6205, or by writing to the Administrative and Service
Office, Financial Markets Division--Variable Annuity Dept., 4333 Edgewood Road,
N.E., Cedar Rapids, Iowa 52499-0001. Terms used in the current prospectus for
the variable annuity are incorporated in this Statement of Additional
Information.
This Statement of Additional Information is not a prospectus and should be read
only in conjunction with the prospectuses for the variable annuity and the
Endeavor Series Trust.
Dated: __________________, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
GLOSSARY OF TERMS.......................................................................
THE GENERATIONS PLUS VARIABLE ANNUITY--GENERAL PROVISIONS...............................
Certificate Owner..................................................................
Entire Contract....................................................................
Misstatement of Age or Sex.........................................................
Addition, Deletion or Substitution of Investments..................................
Excess Interest Adjustment.........................................................
Reallocation of Certificate Values After the Annuity Commencement Date.............
Annuity Payment Options............................................................
Death Benefit......................................................................
Death of Certificate Owner.........................................................
Assignment.........................................................................
Evidence of Survival...............................................................
Non-Participating..................................................................
Amendments.........................................................................
Employee and Agent Purchases.......................................................
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................................
Tax Status of the Certificate......................................................
Taxation of PFL....................................................................
INVESTMENT EXPERIENCE...................................................................
Accumulation Units.................................................................
Annuity Unit Value and Annuity Payment Rates.......................................
FAMILY INCOME PROTECTOR - HYPOTHETICAL ILLUSTRATION.....................................
HISTORICAL PERFORMANCE DATA.............................................................
Money Market Yields................................................................
Other Subaccount Yields............................................................
Total Returns......................................................................
Other Performance Data.............................................................
Adjusted Historical Performance Data - The Mutual Fund Account.....................
PUBLISHED RATINGS.......................................................................
STATE REGULATION OF PFL.................................................................
ADMINISTRATION..........................................................................
RECORDS AND REPORTS.....................................................................
DISTRIBUTION OF THE ANNUITY.............................................................
VOTING RIGHTS...........................................................................
The Mutual Fund Account............................................................
OTHER PRODUCTS..........................................................................
CUSTODY OF ASSETS.......................................................................
LEGAL MATTERS...........................................................................
INDEPENDENT AUDITORS....................................................................
OTHER INFORMATION.......................................................................
FINANCIAL STATEMENTS....................................................................
</TABLE>
-2-
<PAGE>
GLOSSARY OF TERMS
Accumulation Unit--An accounting unit of measure used in calculating the
certificate value in the mutual fund account before the annuity commencement
date.
Adjusted Certificate Value--An amount equal to the certificate value increased
or decreased by any excess interest adjustments.
Administrative and Service Office--Financial Markets Division--Variable Annuity
Dept., PFL Life Insurance Company, 4333 Edgewood Road, N.E., Cedar Rapids, Iowa
52499-0001.
Annuitant--The person entitled to receive annuity payments after the annuity
commencement date and during whose life any annuity payments involving life
contingencies will continue.
Annuity Commencement Date--The date upon which annuity payments are to commence.
This date may be any date at least thirty days after the certificate date and
may not be later than the last day of the certificate month starting after the
annuitant attains age 85, except as expressly allowed by PFL. In no event will
this date be later than the last day of the month following the month in which
the annuitant attains age 95.
Annuity Payment Option--A method of receiving a stream of annuity payments
selected by the certificate owner.
Annuity Unit--An accounting unit of measure used in the calculation of the
amount of the second and each subsequent variable annuity payment.
Enrollment form--A written application, order form, or any other information
received electronically or otherwise upon which the certificate is issued and/or
is reflected on the data or specifications page.
Beneficiary--The person who has the right to the death benefit set forth in the
certificate.
Business Day--A day when the New York Stock Exchange is open for business.
Cash Value--The certificate value increased or decreased by an excess interest
adjustment, less the surrender charge, premium taxes, and Family Income
Protector rider fees, if any, and less the Service Charge.
Certificate- The document issued under the Group Contract to the eligible
Participants who apply for coverage. The Certificate is not part of the Group
Contract.
Certificate Owner or Owner- The person who may exercise all rights and
privileges under the certificate. The owner during the lifetime of the
annuitant and prior to the annuity commencement date is the person designated as
the owner or a successor owner in the enrollment form.
Participant-A person who makes premium payments or for whom premium payments are
made under the Group Contract.
Certificate Value--On or before the annuity commencement date, the certificate
value is equal to the certificate owner's:
. premium payments (including any premium enhancement); minus
. partial withdrawals (including any applicable excess interest adjustments
and/or surrender charges on such withdrawals); plus
. interest credited in the fixed account; plus
. accumulated gains or losses in the mutual fund account; minus
. service charges, premium taxes, and transfer fees, if any.
-3-
<PAGE>
Certificate Year - A certificate year begins on the certificate date and on each
certificate anniversary.
Code--The Internal Revenue Code of 1986, as amended.
Due Proof of Death--A certified copy of a death certificate, a certified copy of
a decree of a court of competent jurisdiction as to the finding of death, a
written statement by the attending physician, or any other proof satisfactory to
PFL will constitute due proof of death.
Excess Interest Adjustment--A positive or negative adjustment to amounts
withdrawn upon partial withdrawals, full surrenders or transfers, from the
guaranteed period options, or to amounts applied to annuity payment options. The
adjustment reflects changes in the interest rates declared by PFL since the date
any payment was received by, or an amount was transferred to, the guaranteed
period option. The excess interest adjustment can either decrease or increase
the amount to be received by the certificate owner upon full surrender or
commencement of annuity payments, depending upon whether there has been an
increase or decrease in interest rates, respectively.
Fixed Account--One or more investment choices under the certificate that are
part of the general assets of PFL and which are not in the separate accounts.
Group Contract - The contract issued to the Group Contract Owner, under which
certificates are issued to eligible Participants.
Group Contract Owner- The entity which applies for the Group Contract.
Guaranteed Period Options--The various guaranteed interest rate periods which
may be offered by PFL under the fixed account into which premiums may be paid or
amounts may be transferred.
Investment Choices--Any of the guaranteed period options of the fixed account,
the dollar cost averaging fixed account option, and any of the mutual fund
subaccounts.
Mutual Fund Account--A separate account established and registered as a unit
investment trust under the Investment Company Act of 1940, as amended, to which
premium payments under the certificates may be allocated and which invests in
designated portfolios of the Endeavor Series Trust and such other mutual funds
as PFL may determine from time to time.
Mutual Fund Subaccount--A subdivision within the mutual fund account, the assets
of which are invested in a specified portfolio of the underlying funds.
Nonqualified Annuity--A certificate other than a qualified annuity.
Premium Payment--An amount paid to PFL by the certificate owner or on the
certificate owner's behalf as consideration for the benefits provided by the
certificate.
Qualified Annuity--A certificate issued in connection with retirement plans that
qualify for special federal income tax treatment under the Code.
Service Charge--An annual charge on each certificate anniversary (and a charge
at the time of surrender during any certificate year) for certificate
maintenance and related administrative expenses. This annual charge is $40, but
will not exceed 2% of the policy value.
Successor Owner--A person appointed by the certificate owner to succeed to
ownership of the certificate in the event of the death of the certificate owner
who is not the annuitant before the annuity commencement date.
Surrender Charge--A percentage of each premium payment in an amount from 8% to
0% depending upon the length of time from the date of each premium payment. The
surrender charge is assessed on surrenders of, or
-4-
<PAGE>
partial withdrawals from, the certificate. A surrender charge may also be
referred to as a "contingent deferred sales charge."
Valuation Period--The period of time from one determination of accumulation unit
values and annuity unit values to the next subsequent determination of values.
Such determination shall be made on each business day.
Variable Annuity Payments--Payments made pursuant to an annuity payment option
which fluctuate as to dollar amount or payment term in relation to the
investment performance of the specified subaccounts within the mutual fund
account.
Written Notice or Written Request--Written notice, signed by the certificate
owner, that gives PFL the information it requires and is received at the
administrative and service office. For some transactions, PFL may accept an
electronic notice such as telephone instructions. Such electronic notice must
meet the requirements PFL establishes for such notices.
-5-
<PAGE>
In order to supplement the description in the prospectus, the following provides
additional information about PFL and the Generations Plus Variable Annuity,
which may be of interest to a prospective purchaser. Words printed in italics in
this Statement of Additional Information are defined in the Glossary of Terms,
beginning on page 4.
THE GENERATIONS PLUS VARIABLE ANNUITY--GENERAL PROVISIONS
Certificate Owner
The certificate shall belong to the certificate owner upon issuance of the
certificate after completion of an enrollment form and delivery of the initial
premium payment. While the annuitant is living, the certificate owner may: (1)
assign the certificate; (2) surrender the certificate; (3) amend or modify the
certificate with PFL's consent; (4) receive annuity payments or name a payee to
receive the payments; and (5) exercise, receive and enjoy every other right and
benefit contained in the certificate. The exercise of these rights may be
subject to the consent of any assignee or irrevocable beneficiary, and of your
spouse in a community or marital property state.
Unless PFL has been notified of a community or marital property interest in the
certificate, it will rely on its good faith belief that no such interest exists
and will assume no responsibility for inquiry.
A successor owner can be named in the enrollment form, information provided in
lieu thereof, or in a written notice. The successor owner will become the new
certificate owner upon your death, if you predecease the annuitant. If no
successor owner survives you and you predecease the annuitant, your estate will
become the certificate owner.
Note carefully. If the certificate owner does not name a contingent owner, the
- --------------
certificate owner's estate will become the new certificate owner. If no probate
estate is opened because the owner has precluded the opening of a probate estate
by means of a trust or other instrument, unless PFL has received written notice
of the trust as a successor owner signed prior to the owner's death, that trust
may not exercise ownership rights to the certificate. It may be necessary to
open a probate estate in order to exercise ownership rights to the certificate
if no contingent owner is named in a written notice received by PFL.
The certificate owner may change the ownership of the certificate in a written
notice. When this change takes effect, all rights of ownership in the
certificate will pass to the new owner. A change of ownership may have tax
consequences.
When there is a change of certificate owner or successor owner, the change will
take effect as of the date the certificate owner signs the written notice,
subject to any payment PFL has made or action PFL has taken before recording the
change. Changing the certificate owner or naming a new successor certificate
owner cancels any prior choice of successor owner, but does not change the
designation of the beneficiary or the annuitant.
If ownership is transferred (except to the owner's spouse) because the
certificate owner dies before the annuitant, the cash value generally must be
distributed to the successor owner within five years of the certificate owner's
death, or payments must be made for a period certain or for the successor
owner's lifetime so long as any period certain does not exceed that successor
owner's life expectancy, if the first payment begins within one year of your
death.
Entire Contract
The group contract and certificate, any endorsements thereon, the enrollment
form, or information provided in lieu thereof constitute the entire contract
between PFL and the certificate owner. All statements in the enrollment form are
representations and not warranties. No statement will cause the certificate to
be void or to be used in defense of a claim unless contained in the enrollment
form or information provided in lieu thereof.
-6-
<PAGE>
Misstatement of Age or Sex
If the age or sex of the annuitant or certificate owner has been misstated, PFL
will change the annuity benefit payable to that which the premium payments would
have purchased for the correct age or sex. The dollar amount of any underpayment
made by PFL shall be paid in full with the next payment due such person or the
beneficiary. The dollar amount of any overpayment made by PFL due to any
misstatement shall be deducted from payments subsequently accruing to such
person or beneficiary. Any underpayment or overpayment will include interest at
5% per year, from the date of the wrong payment to the date of the adjustment.
The age of the annuitant or certificate owner may be established at any time by
the submission of proof satisfactory to PFL.
Addition, Deletion, or Substitution of Investments
PFL cannot and does not guarantee that any of the mutual fund subaccounts will
always be available for premium payments, allocations, or transfers. PFL retains
the right, subject to any applicable law, to make certain changes in the mutual
fund account and its investments. PFL reserves the right to eliminate the shares
of any portfolio held by a mutual fund subaccount and to substitute shares of
another portfolio of the underlying funds, or of another registered open-end
management investment company for the shares of any portfolio, if the shares of
the portfolio are no longer available for investment or if, in PFL's judgment,
investment in any portfolio would be inappropriate in view of the purposes of
the mutual fund account. To the extent required by the Investment Company Act of
1940, (the "1940 Act"), as amended, substitutions of shares attributable to your
interest in a mutual fund subaccount will not be made without prior notice to
you and the prior approval of the Securities and Exchange Commission ("SEC").
Nothing contained herein shall prevent the mutual fund account from purchasing
other securities for other series or classes of variable annuities, or from
effecting an exchange between series or classes of variable annuities on the
basis of your requests.
New subaccounts may be established when, in the sole discretion of PFL,
marketing, tax, investment or other conditions warrant. Any new subaccounts may
be made available to existing certificate owners on a basis to be determined by
PFL. Each additional subaccount will purchase shares in a mutual fund portfolio,
or other investment vehicle. PFL may also eliminate one or more subaccounts if,
in its sole discretion, marketing, tax, investment or other conditions warrant
such change. In the event any subaccount is eliminated, PFL will notify you and
request a reallocation of the amounts invested in the eliminated subaccount. If
no such reallocation is provided by you, PFL will reinvest the amounts in the
subaccount that invests in the Endeavor Money Market Portfolio (or in a similar
portfolio of money market instruments), in another subaccount, or in the fixed
account, if appropriate.
In the event of any such substitution or change, PFL may, by appropriate
endorsement, make such changes in the group contracts and certificates as may be
necessary or appropriate to reflect such substitution or change. Furthermore, if
deemed to be in the best interests of persons having voting rights under the
certificates, the mutual fund account may be (i) operated as a management
company under the 1940 Act or any other form permitted by law, (ii) deregistered
under the 1940 Act in the event such registration is no longer required or (iii)
combined with one or more other mutual fund accounts. To the extent permitted by
applicable law, PFL also may transfer the assets of the mutual fund account
associated with the certificates to another account or accounts.
Excess Interest Adjustment
Money that you withdraw from (or transfer out of) a guaranteed period option of
the fixed account before the end of its guaranteed period (the number of years
you specified the money would remain in the guaranteed period option) may be
subject to an excess interest adjustment. At the time you request a withdrawal,
if interest rates set by PFL have risen since the date of the initial guarantee,
the excess interest adjustment will result in a lower certificate value.
However, if interest rates have fallen since the date of the initial guarantee,
the excess interest adjustment will result in a higher certificate value.
Excess interest adjustments will not reduce the adjusted certificate value for a
guaranteed period option below the premium payments and transfers to that
guaranteed period option, less any prior partial withdrawals and transfers
-7-
<PAGE>
from the guaranteed period option, plus interest at the certificate's minimum
guaranteed effective annual interest rate of 3%. This is referred to as the EIA
floor.
The formula that will be used to determine the excess interest adjustment is:
S* (G - C)* (M/12)
S = Gross amount being withdrawn that is subject to the excess interest
adjustment
G = Guaranteed Interest Rate in effect for the certificate
C = Current Guaranteed Interest Rate then being offered on new premiums for the
next longer option period than "M". If this certificate or such an option
period is no longer offered, "C" will be the U.S. Treasury rate for the next
longer maturity (in whole years) than "M" on the 25th day of the previous
calendar month, plus up to 2%.
M = Number of months remaining in the current option period, rounded up to the
next higher whole number of months.
* = multiplication
. = exponentiation
The following examples assume no premium enhancement.
Example 1
(Surrender, rates increase by 3%):
<TABLE>
<S> <C>
Single Premium: $50,000
Guarantee Period: 5 Years
Guarantee Rate: 5.50% per annum
Surrender: Middle of Certificate Year 3
Certificate Value at middle of Certificate Year 3 = 50,000* (1.055) . 2.5 = 57,161.18
Penalty Free Amount at middle of Certificate Year 3 = 50,000* .10 = 5,000.00
Amount Subject to EIA = 57,161.18 - 5,000.00 = 52,161.18
EIA Floor = 50,000* (1.03) . 2.5 = 53,834.80
Excess Interest Adjustment
G = .055
C = .085
M = 30
Excess Interest Adjustment = S* (G - C)* (M/12)
= 52,161.18* (.055 - .085)* (30/12)
= -3,912.09, but excess interest adjustment cannot cause the adjusted
certificate value to fall below the EIA floor, so the adjustment is limited
to 53,834.80 - 57,161.18
= -3,326.38
Adjusted Certificate Value ("ACV") = PV + EIA = 57,161.18 + (-3,326.38)
= 53,834.80
Surrender Charges = (50,000 - 5,000) * .08
= 3,600
</TABLE>
-8-
<PAGE>
<TABLE>
<S> <C>
Cash Value at middle of Certificate
Year 3 = 53,834.80 - 3,600
= 50,234.80
</TABLE>
Example 2
(Surrender, rates decrease by 1%):
<TABLE>
<S> <C>
Single Premium: $50,000
Guarantee Period: 5 Years
Guarantee Rate: 5.50% per annum
Surrender: Middle of Certificate Year 3
Certificate Value at middle of Certificate Year 3 = 50,000* (1.055) . 2.5 = 57,161.18
Penalty Free Amount at middle of Certificate
Year 3 = 50,000* .10 = 5,000
Amount Subject to EIA = 57,161.18 - 5,000 = 52,161.18
EIA Floor = 50,000* (1.03) . 2.5 = 53,834.80
Excess Interest Adjustment
G = .055
C = .045
M = 30
Excess Interest Adjustment = S * (G - C) * (M/12)
= 52,161.18 * (.055 - .045) * (30/12)
= 1,304.03
Adjusted Certificate Value = 57,161.18 + 1,304.03 = 58,465.21
Surrender Charges = (50,000 - 5,000) * .08 = 3,600
Cash Value at middle of Certificate Year 3 = 58,447.31 - 3,600 = 54,847.31
</TABLE>
On a partial withdrawal, PFL will pay the certificate owner the full amount of
withdrawal requested (as long as the certificate value is sufficient). Amounts
withdrawn will reduce the certificate value by an amount equal to:
R - E + SC
R = the requested partial withdrawal;
E = the excess interest adjustment; and
SC = the surrender charges on (EPW - E); where
EPW = the excess partial withdrawal amount.
Example 3
(Partial Withdrawal, rates increase by 1%):
-9-
<PAGE>
<TABLE>
<S> <C>
Single Premium: $50,000
Guarantee Period: 5 Years
Guarantee Rate: 5.50% per annum
Partial Withdrawal: $20,000; Middle of Certificate Year 3
Certificate Value at middle of Certificate Year 3 = 50,000 * (1.055) . 2.5 = 57,161.18
Penalty Free Amount at middle of Certificate
Year 3 = 50,000 * .10 = 5,000
Excess Interest/Surrender Charge (SC) Adjustment
S = 20,000 - 5,000 = 15,000
G = .055
C = .065
M = 30
E = 15,000 * (.055 - .065) * (30/12) = -375
EPW = 20,000 - 5,000 = 15,000
SC = .08 * (15,000 - (- 375) = 1,230
Remaining Certificate Value at middle of
Certificate Year 3 = 57,161.18 - (R - E + SC)
= 57,161.18 - (20,000 - (- 375) + 1,230)
= 35,556.18
</TABLE>
Example 4
(Partial Withdrawal, rates decrease by 1%):
<TABLE>
<S> <C>
Single Premium: $50,000
Guarantee Period: 5 Years
Guarantee Rate: 5.50% per annum
Partial Withdrawal: $20,000; Middle of Certificate Year 3
Certificate Value at middle of Certificate Year 3 = 50,000 * (1.055) . 2.5 = 57,161.18
Penalty Free Amount at middle of Certificate Year 3 = 50,000 * .10 = 5,000
Excess Interest/Surrender Charge Adjustment
S = 20,000 - 5,000 = 15,000
G = .055
C = .045
M = 30
E = 15,000* (.055 - .045) * (30/12) = 375
EPW = 20,000 - 5,000 = 15,000
SC = .08 * (15,000 - 375) = 1,170
Remaining Certificate Value at middle of
Certificate Year 3 = 57,161.18 - (R - E + SC)
</TABLE>
-10-
<PAGE>
<TABLE>
<S> <C>
= 57,161.18 - (20,000 - 375 + 1,170)
= 36,366.18
</TABLE>
Reallocation of Certificate Values After the Annuity Commencement Date
After the annuity commencement date, you may reallocate the value of a
designated number of annuity units of a mutual fund subaccount then credited to
a certificate into an equal value of annuity units of one or more other mutual
fund subaccounts or the fixed account. The reallocation shall be based on the
relative value of the annuity units of the account(s) or subaccount(s) at the
end of the business day on the next payment date. The minimum amount which may
be reallocated is the lesser of (1) $10 of monthly income or (2) the entire
monthly income of the annuity units in the account or subaccount from which the
transfer is being made. If the monthly income of the annuity units remaining in
an account or subaccount after a reallocation is less than $10, PFL reserves the
right to include the value of those annuity units as part of the transfer. The
request must be in writing to PFL's administrative and service office. There is
no charge assessed in connection with such reallocation. PFL reserves the right
to limit the number of times a reallocation of annuity units may be made in any
given certificate year.
After the annuity commencement date, no transfers may be made from the fixed
account to the mutual fund account.
Annuity Payment Options
During the lifetime of the annuitant and prior to the annuity commencement date,
the certificate owner may choose an annuity payment option or change the
election, but written notice of any election or change of election must be
received by PFL at its administrative and service office at least thirty (30)
days prior to the annuity commencement date. If no election is made prior to the
annuity commencement date, annuity payments will be made under (i) Payment
Option 3, life income with level payments for 10 years certain, using the
existing adjusted certificate value of the fixed account, or (ii) under Payment
Option 3, life income with variable payments for 10 years certain using the
existing certificate value of the mutual fund account, or (iii) in a combination
of (i) and (ii).
The person who elects an annuity payment option can also name one or more
successor payees to receive any unpaid amount PFL has at the death of a payee.
Naming these payees cancels any prior choice of a successor payee.
A payee who did not elect the annuity payment option does not have the right to
advance or assign payments, take the payments in one sum, or make any other
change. However, the payee may be given the right to do one or more of these
things if the person who elects the option tells PFL in writing and PFL agrees.
Variable Payment Options The dollar amount of the first variable annuity payment
will be determined in accordance with the annuity payment rates set forth in the
applicable table contained in the group contract and/or certificate. The tables
are based on a 5% effective annual Assumed Investment Return and the "1983 Table
a" (male, female, and unisex if required by law) mortality table improved to the
year 2000 with projection Scale G. ("The 1983 Table a" mortality rates are
adjusted based on improvements in mortality since 1983 to more appropriately
reflect increased longevity. This is accomplished using a set of improvement
factors referred to as projection scale G.) The dollar amount of additional
variable annuity payments will vary based on the investment performance of the
subaccount(s) of the mutual fund account selected by the annuitant or
beneficiary.
Determination of the First Variable Payment. The amount of the first variable
payment depends upon the sex (if consideration of sex is allowed under state
law) and adjusted age of the annuitant. The adjusted age is the annuitant's
actual age nearest birthday, on the annuity commencement date, adjusted as
follows:
Annuity Commencement Date Adjusted Age
------------------------- ------------
Before 2001 Actual Age
2001-2010 Actual Age minus 1
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<PAGE>
2011-2020 Actual Age minus 2
2021-2030 Actual Age minus 3
2031-2040 Actual Age minus 4
After 2040 Actual Age minus 5
This adjustment assumes an increase in life expectancy, and therefore it results
in lower payments than without such an adjustment.
Determination of Additional Variable Payments. All variable annuity payments
other than the first are calculated using annuity units and are credited to the
certificate. The number of annuity units to be credited in respect of a
particular subaccount is determined by dividing that portion of the first
variable annuity payment attributable to that subaccount by the annuity unit
value of that subaccount on the annuity commencement date. The number of annuity
units of each particular subaccount credited to the certificate then remains
fixed, assuming no transfers to or from that subaccount occur. The dollar value
of variable annuity units in the chosen subaccount will increase or decrease
reflecting the investment experience of the chosen subaccount. The dollar amount
of each variable annuity payment after the first may increase, decrease or
remain constant, and is equal to the sum of the amounts determined by
multiplying the number of annuity units of each particular subaccount credited
to the certificate by the annuity unit value for the particular subaccount on
the date the payment is made.
Death Benefit
Adjusted Partial Withdrawal. The amount of your Guaranteed Minimum Death Benefit
is reduced due to a partial withdrawal called the adjusted partial withdrawal.
The reduction amount depends on the relationship between your Guaranteed Minimum
Death Benefit and certificate value. The adjusted partial withdrawal is equal to
(1) multiplied by (2), where:
(1) is the Gross Partial Withdrawals, where
gross partial withdrawal = requested withdrawal - excess interest
adjustment + surrender charges on (excess partial withdrawal - excess
interest adjustment); and
(2) is the adjustment factor = current death benefit prior to the
withdrawal divided by the current certificate value prior to the
withdrawal.
The following examples describe the effect of a withdrawal on the Guaranteed
Minimum Death Benefit and certificate value.
- --------------------------------------------------------------------------------
Example 1
(Assumed Facts for Example)
- --------------------------------------------------------------------------------
$75,000 current Guaranteed Minimum Death Benefit (GMDB) before withdrawal
- --------------------------------------------------------------------------------
$50,000 current certificate value before withdrawal
- --------------------------------------------------------------------------------
$75,000 current death benefit (larger of certificate value and GMDB)
- --------------------------------------------------------------------------------
6% current surrender charge percentage
- --------------------------------------------------------------------------------
$15,000 requested withdrawal
- --------------------------------------------------------------------------------
$40,000 Cumulative Premium Payments
- --------------------------------------------------------------------------------
$ 4,000 surrender charge-free amount (assumes 10% of premium penalty
free withdrawal is available)
- --------------------------------------------------------------------------------
$11,000 excess partial withdrawal - EPW (amount subject to surrender
charge)
- --------------------------------------------------------------------------------
$ 100 excess interest adjustment
(assumes interest rates have decreased since initial guarantee)
- --------------------------------------------------------------------------------
-12-
<PAGE>
- --------------------------------------------------------------------------------
$ 654 surrender charge on (EPW less EIA)=0.06*(11,000-100)
- --------------------------------------------------------------------------------
$11,554 reduction in certificate value due to excess partial withdrawal
= 11,000-100+654
- --------------------------------------------------------------------------------
$23,331 adjusted partial withdrawal = (4,000 + 11,554) * (75,000/50,000)
- --------------------------------------------------------------------------------
$51,669 New GMDB (after withdrawal) = 75,000- 23,331
- --------------------------------------------------------------------------------
$34,446 New certificate value (after withdrawal)=50,000-15,554
- --------------------------------------------------------------------------------
Summary:
- -------
Reduction in guaranteed minimum death benefit = $23,331
Reduction in certificate value = $15,554
Note, guaranteed minimum death benefit is reduced more than the certificate
value since the guaranteed minimum death benefit was greater than the
certificate value just prior to the withdrawal.
- --------------------------------------------------------------------------------
Example 2
---------
(Assumed Facts for Example)
- --------------------------------------------------------------------------------
$50,000 current Guaranteed Minimum Death Benefit (GMDB) before withdrawal
- --------------------------------------------------------------------------------
$75,000 current certificate value before withdrawal
- --------------------------------------------------------------------------------
$75,000 current death benefit (larger of certificate value and GMDB)
- --------------------------------------------------------------------------------
6% current surrender charge percentage
- --------------------------------------------------------------------------------
$15,000 requested withdrawal
- --------------------------------------------------------------------------------
$60,000 Cumulative Premium Payments
- --------------------------------------------------------------------------------
$ 6,000 surrender charge-free amount (assumes 10% of premium penalty
free withdrawal is available)
- --------------------------------------------------------------------------------
$ 9,000 excess partial withdrawal - EPW (amount subject to surrender
charge)
- --------------------------------------------------------------------------------
$ -100 excess interest adjustment
(assumes interest rates have increased since initial guarantee)
- --------------------------------------------------------------------------------
$ 546 surrender charge on (EPW less EIA)=0.06*[(9000-(-100)]
- --------------------------------------------------------------------------------
$ 9,646 reduction in certificate value due to EPW= 9000-(-100) +456
=9000 + 100 + 546
- --------------------------------------------------------------------------------
$15,646 adjusted partial withdrawal = (6,000 + 9,646) * (75,000/75,000)
- --------------------------------------------------------------------------------
$34,354 New GMDB (after withdrawal) = 50,000- 15,646
- --------------------------------------------------------------------------------
$59,354 New certificate value (after withdrawal)=75,000 - 15,646
- --------------------------------------------------------------------------------
Summary:
- -------
Reduction in guaranteed minimum death benefit = $15,646
Reduction in certificate value = $15,646
Note, the guaranteed minimum death benefit and certificate value are reduced by
the same amount since the certificate value was higher than the guaranteed
minimum death benefit just prior to the withdrawal.
Due proof of death of the annuitant is proof that the annuitant that is the
certificate owner died prior to the commencement of annuity payments. Upon
receipt of this proof and an election of a method of settlement and return of
the certificate, the death benefit generally will be paid within seven days, or
as soon thereafter as PFL has sufficient information about the beneficiary to
make the payment. The beneficiary may receive the amount payable in a lump sum
cash benefit, or, subject to any limitation under any state or federal law,
rule, or regulation, under
-13-
<PAGE>
one of the annuity payment options described above, unless a settlement
agreement is effective at the death of the certificate owner preventing such
election.
If the annuitant was the certificate owner, and the beneficiary was not the
annuitant's spouse, the death benefit must (1) be distributed within five years
of the date of the deceased certificate owner's death, or (2) payments under an
annuity payment option must begin no later than one year after the deceased
certificate owner's death and must be made for the beneficiary's lifetime or for
a period certain (so long as any certain period does not exceed the
beneficiary's life expectancy). Death proceeds which are not paid to or for the
benefit of a natural person, must be distributed within five years of the date
of the deceased certificate owner's death. If the sole beneficiary is the
deceased certificate owner's surviving spouse, such spouse may elect to continue
the certificate as the new annuitant and owner instead of receiving the death
benefit.
If the annuitant is not the certificate owner, and the certificate owner dies
prior to the annuity commencement date, a successor owner may surrender the
certificate at any time for the amount of the adjusted certificate value. If the
successor owner is not the deceased certificate owner's spouse, however, the
adjusted policy value must be distributed: (1) within five years after the date
of the deceased certificate owner's death, or (2) payments under an annuity
payment option must begin no later than one year after the deceased certificate
owner's death and must be made for the successor owner's lifetime or for a
period certain (so long as any period certain does not exceed the successor
owner's life expectancy).
Beneficiary. The beneficiary designation in the enrollment form will remain in
effect until changed. The owner may change the designated beneficiary by sending
written notice to PFL. The beneficiary's consent to such change is not required
unless the beneficiary was irrevocably designated or law requires consent. (If
an irrevocable beneficiary dies, the certificate owner may then designate a new
beneficiary.) The change will take effect as of the date the certificate owner
signs the written notice, whether or not the certificate owner is living when
the notice is received by PFL. PFL will not be liable for any payment made
before the written notice is received. If more than one beneficiary is
designated, and the certificate owner fails to specify their interests, they
will share equally.
Death of Certificate Owner
Federal tax law requires that if any certificate owner (including any joint
owner or any successor owner who has become a current owner) dies before the
annuity commencement date, then the entire value of the certificate must
generally be distributed within five years of the date of death of such owner.
Certain rules apply where (1) the spouse of the deceased certificate owner is
the sole beneficiary, (2) the certificate owner is not a natural person and the
primary annuitant dies or is changed, or (3) any certificate owner dies after
the annuity commencement date. See "Certain Federal Income Tax Consequences" for
a detailed description of these rules. Other rules may apply to qualified
annuities.
Assignment
During the lifetime of the annuitant you may assign any rights or benefits
provided by the certificate. An assignment will not be binding on PFL until a
copy has been filed at its administrative and service office. Your rights and
benefits and those of the beneficiary are subject to the rights of the assignee.
PFL assumes no responsibility for the validity or effect of any assignment. Any
claim made under an assignment shall be subject to proof of interest and the
extent of the assignment. An assignment may have tax consequences.
Unless you so direct by filing written notice with PFL, no beneficiary may
assign any payments under the certificate before they are due. To the extent
permitted by law, no payments will be subject to the claims of any beneficiary's
creditors.
Ownership under qualified annuities is restricted to comply with the Code.
-14-
<PAGE>
Evidence of Survival
PFL reserves the right to require satisfactory evidence that a person is alive
if a payment is based on that person being alive. No payment will be made until
PFL receives such evidence.
Non-Participating
The group contract and certificates will not share in PFL's surplus earnings; no
dividends will be paid.
Amendments
No change in the group contract or certificates is valid unless made in writing
by PFL and approved by one of PFL's officers. No registered representative has
authority to change or waive any provision of the group contract or
certificates.
PFL reserves the right to amend the group contract and certificates to meet the
requirements of the Code, regulations or published rulings. You can refuse such
a change by giving written notice, but a refusal may result in adverse tax
consequences.
Employee and Agent Purchases
The certificate may be acquired by an employee or registered representative of
any broker/dealer authorized to sell the certificate or their spouse or minor
children, or by an officer, director, trustee or bona-fide full-time employee of
PFL or its affiliated companies or their spouse or minor children. In such a
case, PFL may credit an amount equal to a percentage of each premium payment to
the certificate due to lower acquisition costs PFL experiences on those
purchases. The credit will be reported to the Internal Revenue Service as
taxable income to the employee or registered representative. PFL may offer
certain employer sponsored savings plans, in its discretion reduced fees and
charges including, but not limited to, the surrender charges, the mortality and
expense risk fee and the administrative charge for certain sales under
circumstances which may result in savings of certain costs and expenses. In
addition, there may be other circumstances of which PFL is not presently aware
which could result in reduced sales or distribution expenses. Credits to the
certificate or reductions in these fees and charges will not be unfairly
discriminatory against any owner.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary does not constitute tax advice. It is a general discussion
of certain of the expected federal income tax consequences of investment in and
distributions with respect to a certificate, based on the Code, as amended,
proposed and final Treasury Regulations thereunder, judicial authority, and
current administrative rulings and practice. This summary discusses only certain
federal income tax consequences to "United States Persons," and does not discuss
state, local, or foreign tax consequences. United States Persons means citizens
or residents of the United States, domestic corporations, domestic partnerships
and trusts or estates that are subject to United States federal income tax
regardless of the source of their income.
Tax Status of the Certificate
The following discussion is based on the assumption that the certificate
qualifies as an annuity contract for federal income tax purposes.
Distribution Requirements. The Code requires that nonqualified annuities contain
specific provisions for distribution of certificate proceeds upon the death of
any certificate owner. In order to be treated as an annuity contract for federal
income tax purposes, the Code requires that such certificates provide that if
any certificate owner dies on or after the annuity commencement date and before
the entire interest in the certificate has been distributed, the remaining
portion must be distributed at least as rapidly as under the method in effect on
such certificate owner's death. If any certificate owner dies before the annuity
commencement date, the entire interest in
-15-
<PAGE>
the certificate must generally be distributed within 5 years after such
certificate owner's date of death or be used to purchase an immediate annuity
under which payments will begin within one year of such certificate owner's
death and will be made for the life of the beneficiary or for a period not
extending beyond the life expectancy of the "designated beneficiary" as defined
in section 72(s) of the Code. However, if upon such certificate owner's death
prior to the annuity commencement date, such certificate owner's surviving
spouse becomes the sole new certificate owner, then the certificate may be
continued with the surviving spouse as the new certificate owner. Under the
certificate, the beneficiary is the designated beneficiary of an owner/annuitant
and the successor owner is the designated beneficiary of a certificate owner who
is not the annuitant. If any owner is not a natural person, then for purposes of
these distribution requirements, the primary annuitant shall be treated as a
certificate owner and any death or change of such primary annuitant shall be
treated as the death of an owner. The nonqualified annuities contain provisions
intended to comply with these requirements of the Code. No regulations
interpreting these requirements of the Code have yet been issued and thus no
assurance can be given that the provisions contained in the certificates satisfy
all such Code requirements. The provisions contained in the certificates will be
reviewed and modified if necessary to assure that they comply with the Code
requirements when clarified by regulation or otherwise.
Diversification Requirements. Section 817(h) of the Code provides that in order
for a variable contract which is based on a segregated asset account to qualify
as an annuity contract under the Code, the investments made by such account must
be "adequately diversified" in accordance with Treasury regulations. The
Treasury regulations issued under Section 817(h) (Treas. Reg. ss.1.817-5) apply
a diversification requirement to each of the mutual fund subaccounts. The mutual
fund account, through the Endeavor Series Trust and its portfolios, intends to
comply with the diversification requirements of the Treasury. PFL has entered
into agreements regarding participation in the Endeavor Series Trust which
requires the portfolios to be operated in compliance with the Treasury
regulations.
Owner Control. In certain circumstances, owners of variable annuity contracts
- -------------
may be considered the owners, for federal income tax purposes, of the assets of
the separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includable in the
variable annuity contract owner's gross income. Several years ago, the IRS
stated in published rulings that a variable annuity owner will be considered the
owner of the separate account assets if the owner possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. More recently, the Treasury Department announced in connection
with the issuance of regulations concerning investment diversification, that
those regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause the
investor (i.e., you), rather than the insurance company, to be treated as the
owner of the assets in the account." This announcement also stated that guidance
would be issued by way of regulations or rulings on the "extent to which
policyholders may direct their investments to particular subaccounts without
being treated as owners of the underlying assets."
The ownership rights under the contract are similar to, but different in certain
respects from those described by the IRS in rulings in which it was determined
that contract owners were not owners of separate account assets. For example,
you have the choice of one or more subaccounts in which to allocate premiums and
certificate values, and may be able to transfer among these accounts more
frequently than in such rulings. These differences could result in you being
treated as the owner of the assets of the mutual fund account. In addition, PFL
does not know what standards will be set forth, if any, in the regulations or
rulings that the Treasury Department has stated it expects to issue. PFL
therefore reserves the right to modify the group contract and certificates as
necessary to attempt to prevent you from being considered the owner of a pro
rata share of the assets of the mutual fund account.
-16-
<PAGE>
Withholding. The portion of any distribution under a certificate that is
includable in gross income will be subject to federal income tax withholding
unless the recipient of such distribution elects not to have federal income tax
withheld. Election forms will be provided at the time distributions are
requested or made. For certain qualified annuities, certain distributions are
subject to mandatory withholding. The withholding rate varies according to the
type of distribution and the owner's tax status. For qualified annuities,
"eligible rollover distributions" from section 401(a) plans and section 403(b)
tax-sheltered annuities are subject to a mandatory federal income tax
withholding of 20%. An eligible rollover distribution is the taxable portion of
any distribution from such a plan, except certain distributions such as
distributions required by the Code or distributions in a specified annuity form.
The 20% withholding does not apply, however, if the certificate owner chooses a
"direct rollover" from the plan to another tax-qualified plan or IRA.
Qualified Annuities. The qualified annuity is designed for use with several
types of tax-qualified retirement plans. The tax rules applicable to
participants and beneficiaries in tax-qualified retirement plans vary according
to the type of plan and the terms and conditions of the plan. Special favorable
tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from contributions in excess
of specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; and in other specified circumstances. Some
retirement plans are subject to distribution and other requirements that are not
incorporated into our administration procedures. Owners, participants and
beneficiaries are responsible for determining that contributions, distributions
and other transactions with respect to the certificates comply with applicable
law.
For qualified plans under Section 401(a), 403(a), 403(b), and 457, the Code
requires that distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the owner (or
plan participant) (i) reaches age 70 1/2 or (ii) retires, and must be made in a
specified form or manner. If the plan participant is a "5 percent owner" (as
defined in the Code), distributions generally must begin no later than April 1
of the calendar year in which the certificate owner (or plan participant)
reaches age 70 1/2. Each certificate owner is responsible for requesting
distributions under the certificate that satisfy applicable tax rules.
PFL makes no attempt to provide more than general information about use of the
certificate with the various types of retirement plans. Purchasers of
certificates for use with any retirement plan should consult their legal counsel
and tax adviser regarding the suitability of the certificate.
Individual Retirement Annuities. In order to qualify as a traditional individual
retirement annuity under Section 408(b) of the Code, a certificate must contain
certain provisions: (i) the certificate owner must be the annuitant; (ii) the
certificate generally is not transferable by the certificate owner, e.g., the
certificate owner may not designate a new certificate owner, designate a
contingent certificate owner or assign the certificate as collateral security;
(iii) the total premium payments for any calendar year may not exceed $2,000,
except in the case of a rollover amount or contribution under Section 402(c),
403(a)(4), 403(b)(8) or 408(d)(3) of the Code; (iv) annuity payments or
withdrawals must begin no later than April 1 of the calendar year following the
calendar year in which the annuitant attains age 70 1/2; (v) an annuity payment
option with a period certain that will guarantee annuity payments beyond the
life expectancy of the annuitant and the beneficiary may not be selected; and
(vi) certain payments of death benefits must be made in the event the annuitant
dies prior to the distribution of the policy value. Certificates intended to
qualify as a traditional individual retirement annuities under Section 408(b) of
the Code contain such provisions. Amounts in the IRA (other than nondeductible
contributions) are taxed when distributed from the IRA. Distributions prior to
age 59 1/2 (unless certain exceptions apply) are subject to a 10% penalty tax.
Section 408 of the Code also indicates that no part of the funds for a
traditional individual retirement account or annuity should be invested in a
life insurance contract, but the regulations thereunder allow such funds to be
invested in an annuity contract that provides a death benefit that equals the
greater of the premiums paid or the cash value for the contract. The certificate
provides an enhanced death benefit that could exceed the amount of such a
permissible death benefit, but it is unclear to what extent such an enhanced
death benefit could disqualify the certificate under Section 408 of the Code.
The Internal Revenue Service has not reviewed the certificate for
-17-
<PAGE>
qualification as an IRA, and has not addressed in a ruling of general
applicability whether an enhanced death benefit provision, such as the provision
in the certificate, comports with IRA qualification requirements.
Roth Individual Retirement Annuities (Roth IRA). The Roth IRA, under Section
408A of the Code, contains many of the same provisions as a traditional IRA.
However, there are some differences. First, the contributions are not deductible
and must be made in cash or as a rollover or transfer from another Roth IRA or
other IRA. A rollover from or conversion of an IRA to a Roth IRA may be subject
to tax and other special rules may apply. You should consult a tax adviser
before combining any converted amounts with any other Roth IRA contributions,
including any other conversion amounts from other tax years. The Roth IRA is
available to individuals with earned income and whose adjusted gross income is
under $110,000 for single filers, $160,000 for married filing jointly, and
$10,000 for married filing separately. The amount per individual that may be
contributed to all IRAs (Roth and traditional) is $2,000. Secondly, the
distributions are taxed differently. The Roth IRA offers tax-free distributions
when made from assets which have been held in the account for 5 tax years and
are made after attaining age 59 1/2, to pay for qualified first time homebuyer
expenses (lifetime maximum of $10,000) or due to death or disability. All other
distributions are subject to income tax when made from earnings and may be
subject to a premature withdrawal penalty tax unless an exception applies.
Unlike the traditional IRA, there are no minimum required distributions during
the certificate owner's lifetime; however, required distributions at death are
the same.
Section 403(b) Plans. Under Section 403(b) of the Code, payments made by public
school systems and certain tax exempt organizations to purchase certificates for
their employees are excludable from the gross income of the employee, subject to
certain limitations. However, such payments may be subject to FICA (Social
Security) taxes. The certificates include a death benefit that in some cases may
exceed the greater of the premium payments or the policy value. The death
benefit could be characterized as an incidental benefit, the amount of which is
limited in any tax-sheltered annuity under section 403(b). Because the death
benefit may exceed this limitation, employers using the certificates in
connection with such plans should consult their tax adviser. Additionally, in
accordance with the requirements of the Code, Section 403(b) annuities generally
may not permit distribution of (i) elective contributions made in years
beginning after December 31, 1988, and (ii) earnings on those contributions and
(iii) earnings on amounts attributed to elective contributions held as of the
end of the last year beginning before January 1, 1989. Distributions of such
amounts will be allowed only upon the death of the employee, on or after
attainment of age 59 1/2, separation from service, disability, or financial
hardship, except that income attributable to elective contributions may not be
distributed in the case of hardship.
Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans. Sections 401(a)
and 403(a) of the Code permit corporate employers to establish various types of
retirement plans for employees and self-employed individuals to establish
qualified plans for themselves and their employees. Such retirement plans may
permit the purchase of the certificates to accumulate retirement savings.
Adverse tax consequences to the plan, the participant or both may result if the
certificate is assigned or transferred to any individual as a means to provide
benefit payments. The certificates include a death benefit that in some cases
may exceed the greater of the premium payments or the policy value. The death
benefit could be characterized as an incidental benefit, the amount of which is
limited in an pension or profit sharing plan. Because the death benefit may
exceed this limitation, employers using the certificates in connection with such
plans should consult their tax adviser.
Deferred Compensation Plans. Section 457 of the Code, while not actually
providing for a qualified plan as that term is normally used, provides for
certain deferred compensation plans with respect to service for state
governments, local governments, political sub-divisions, agencies,
instrumentalities and certain affiliates of such entities, and tax exempt
organizations. The certificates can be used with such plans. Under such plans a
participant may specify the form of investment in which his or her participation
will be made. For non-governmental Section 457 plans, all such investments,
however, are owned by, and are subject to, the claims of the general creditors
of the sponsoring employer. Depending on the terms of the particular plan, a
non-government employer may be entitled to draw on deferred amounts for purposes
unrelated to its Section 457 plan obligations. In general, all amounts received
under a Section 457 plan are taxable and are subject to federal income tax
withholding as wages.
Non-natural Persons. Pursuant to Section 72(u) of the Code, an annuity contract
held by a taxpayer other than a natural person generally will not be treated as
an annuity contract under the Code; accordingly, an owner who is
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not a natural person will recognize as ordinary income for a taxable year the
excess of (i) the sum of the certificate value as of the close of the taxable
year and all previous distributions under the certificate over (ii) the sum of
the premium payments paid for the taxable year and any prior taxable year and
the amounts includable in gross income for any prior taxable year with respect
to the certificate. For these purposes, the certificate value at year-end may
have to be increased by any positive excess interest adjustment, which could
result from a full surrender at such time. There is, however, no definitive
guidance on the proper tax treatment of excess interest adjustments, and the
owner should contact a competent tax adviser with respect to the potential tax
consequences of an excess interest adjustment. Notwithstanding the preceding
sentences in this paragraph, Section 72(u) of the Code does not apply to (i) a
certificate the nominal certificate owner of which is not a natural person but
the beneficial owner of which is a natural person, (ii) a certificate acquired
by the estate of a decedent by reason of such decedent's death, (iii) a
qualified annuity (other than one qualified under Section 457) or (iv) a single-
payment annuity the annuity commencement date for which is no later than one
year from the date of the single premium payment; instead, such certificates are
taxed as described above under the heading "Taxation of Annuities."
Taxation of PFL
PFL at present is taxed as a life insurance company under part I of Subchapter L
of the Code. The mutual fund account are treated as part of PFL and,
accordingly, will not be taxed separately as "regulated investment companies"
under Subchapter M of the Code. PFL does not expect to incur any federal income
tax liability with respect to investment income and net capital gains arising
from the activities of the mutual fund account retained as part of the reserves
under the certificate. Based on this expectation, it is anticipated that no
charges will be made against the mutual fund account for federal income taxes.
If, in future years, any federal income taxes are incurred by PFL with respect
to the mutual fund account, PFL may make a charge to that account.
INVESTMENT EXPERIENCE
A "net investment factor" is used to determine the value of accumulation units
and annuity units, and to determine annuity payment rates.
Accumulation Units
Allocations of a premium payment directed to a mutual fund subaccount are
credited in the form of accumulation units. Each subaccount has a distinct
accumulation unit value. The number of units credited is determined by dividing
the premium payment or amount transferred to the mutual fund subaccount by the
accumulation unit value of the mutual fund subaccount as of the end of the
valuation period during which the allocation is made. For each mutual fund
subaccount, the accumulation unit value for a given business day is based on the
net asset value of a share of the corresponding portfolio of the Endeavor Series
Trust less any applicable charges or fees.
Upon allocation to the selected mutual fund subaccount, premium payments are
converted into accumulation units of the subaccount. The number of accumulation
units to be credited is determined by dividing the dollar amount allocated to
each subaccount by the value of an accumulation unit for that subaccount as next
determined after the premium payment is received at the administrative and
service office or, in the case of the initial premium payment, when the
enrollment form is received, whichever is later. The value of an accumulation
unit was arbitrarily established at $1 at the inception of each subaccount.
Thereafter, the value of an accumulation unit is determined as of the close of
trading on each day the New York Stock Exchange is open for trading.
For the mutual fund account, an index (the "net investment factor") which
measures the investment performance of a subaccount during a valuation period is
used to determine the value of an accumulation unit for the next subsequent
valuation period. The net investment factor may be greater or less than or equal
to one; therefore, the value of an accumulation unit may increase, decrease or
remain the same from one valuation period to the next. You bear this investment
risk. The net investment performance of a subaccount and deduction of certain
charges affect the accumulation unit value.
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The net investment factor for any mutual fund subaccount for any valuation
period is determined by dividing (a) by (b) and subtracting (c) from the result,
where:
(a) is the net result of:
(1) the net asset value per share of the shares held in the
subaccount determined at the end of the current valuation period, plus
(2) the per share amount of any dividend or capital gain distribution
made with respect to the shares held in the subaccount if the
ex-dividend date occurs during the current valuation period, plus or
minus
(3) a per share credit or charge for any taxes determined by PFL to
have resulted during the valuation period from the investment
operations of the subaccount;
(b) is the net asset value per share of the shares held in the subaccount
determined as of the end of the immediately preceding valuation period.
(c) is the charge for mortality and expense risk during the valuation
period, equal on an annual basis to 1.35% (for the Annual Step-Up Death
Benefit) of the daily net asset value of the subaccount, plus the 0.40%
administrative charge.
Illustration of Mutual Fund Account Accumulation Unit Value Calculations
Formula and Illustration for Determining the Net Investment Factor
Net Investment Factor = (A + B - C) - E
---------
D
Where: A = The net asset value of an underlying fund share as of the end of
the current valuation period.
Assume.................................................A = $11.57
B = The per share amount of any dividend or capital gains
distribution since the end of the immediately preceding valuation
period.
Assume.................................................B = 0
C = The per share charge or credit for any taxes reserved for at the
end of the current valuation period.
Assume.................................................C = 0
D = The net asset value of an underlying fund share at the end of the
immediately preceding valuation period.
Assume.................................................D = $11.40
E = The daily deduction for the mortality and expense risk fee and
the administrative charge, which totals 1.75% on an annual basis.
On a daily basis, E equals .000047529.
Then, the net investment factor = (11.57 + 0 - 0) -.000047529 = Z = 1.014864752.
-------------
(11.40)
Formula and Illustration for Determining Accumulation Unit Value
Accumulation Unit Value = A * B
Where: A = The accumulation unit value for the immediately preceding
valuation period.
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Assume..................................................... = $ X
B = The net investment factor for the current valuation period.
Assume..................................................... = Y
Then, the accumulation unit value = $ X * Y = $ Z
Annuity Unit Value and Annuity Payment Rates
For the mutual fund account, the amount of variable annuity payments will vary
with annuity unit values. Annuity unit values rise if the net investment
performance of the subaccount exceeds the assumed interest rate of 5% annually.
Conversely, annuity unit values fall if the net investment performance of the
subaccount is less than the assumed rate. The value of a variable annuity unit
in each subaccount was established at $1.00 on the date operations began for
that subaccount. For the mutual fund account, the value of a variable annuity
unit on any subsequent business day is equal to (a) multiplied by (b) multiplied
by (c), where:
(a) is the variable annuity unit value on the immediately preceding
business day;
(b) is the net investment factor for the valuation period; and
(c) is the investment result adjustment factor for the valuation period.
The investment result adjustment factor for the valuation period is the product
of discount factors of .99986634 per day to recognize the 5% effective annual
assumed investment return. The valuation period is the period from the close of
the immediately preceding business day to the close of the current business day.
The dollar amount of subsequent variable annuity payments will depend upon
changes in applicable annuity unit values.
The annuity payment rates vary according to the annuity option elected and the
sex and adjusted age of the annuitant at the annuity commencement date. The
group contract and/or certificate also contains a table for determining the
adjusted age of the annuitant.
Illustration of Calculations for Annuity Unit Value
and Variable Annuity Payments
Formula and Illustration for Determining Annuity Unit Value
Annuity Unit Value = A * B * C
Where: A = annuity unit value for the immediately preceding valuation
period.
Assume..................................................... = $ X
B = Net investment factor for the valuation period for which the
annuity unit value is being calculated.
Assume..................................................... = Y
C = A factor to neutralize the assumed interest rate of 5% built into
the Annuity Tables used.
Assume..................................................... = Z
Then, the annuity unit value is:
$ X * Y * Z = $ Q
Formula and Illustration for Determining Amount of
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First Monthly Variable Annuity Payment
First monthly variable annuity payment = A * B
-----
$1,000
Where: A = The adjusted certificate value as of the annuity commencement
date.
Assume..................................................... = $ X
B = The Annuity purchase rate per $1,000 of adjusted certificate
value based upon the option selected, the sex and adjusted age of
the annuitant according to the tables contained in the group
contract and/or certificate.
Assume..................................................... = $ Y
Then, the first monthly variable annuity payment = $ X * $ Y = $ Z
---------
1,000
Formula and Illustration for Determining the Number of Annuity Units
Represented by Each Monthly Variable Annuity Payment
Number of annuity units = A
-
B
Where: A = The dollar amount of the first monthly variable annuity payment.
Assume..................................................... = $ X
B = The annuity unit value for the valuation date on which the first
monthly payment is due.
Assume..................................................... = $ Y
Then, the number of annuity units $ X = Z
---
$ Y
FAMILY INCOME PROTECTOR - HYPOTHETICAL ILLUSTRATION
The amounts shown below are hypothetical guaranteed minimum monthly payment
amounts under the "family income protector" for a $100,000 premium when annuity
payments do not begin until the rider anniversary indicated in the left-hand
column. These figures assume the following:
. there were no subsequent premium payments or withdrawals;
. there were no premium taxes;
. the $100,000 premium is subject to the family income protector;
. the annuitant is (or both annuitants are) 60 years old when the rider is
issued;
. the annual growth rate is 6.0% (once established an annual growth rate will
not change during the life of the family income protector rider); and
. there was no upgrade of the minimum annuitization value.
Six different annuity payment options are illustrated: a male annuitant, a
female annuitant and a joint and survivor annuity, each on a Life Only and a
Life with 10-Year Certain basis. The figures below, which are the amount of the
first monthly payment, are based on an assumed investment return of 3%.
Subsequent payments will never be less than the amount of the first payment
(although subsequent payments are calculated using a 5% assumed investment
return).
Illustrations of guaranteed minimum payments based on other assumptions will be
provided upon request.
<TABLE>
<S> <C>
Life Only = Life Annuity with No Period Certain Life 10 = Life Annuity with 10 Years Certain
</TABLE>
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================================================================================
Rider Anniversary at Male Female Joint & Survivor
Exercise Date
- --------------------------------------------------------------------------------
Life Only Life 10 Life Only Life 10 Life Only Life 10
- --------------------------------------------------------------------------------
10 (age 70) $ 1,135 $ 1,067 $ 976 $ 949 $ 854 $ 852
- --------------------------------------------------------------------------------
15 1,833 1,634 1,562 1,469 1,332 1,318
- --------------------------------------------------------------------------------
20 (age 80) 3,049 2,479 2,597 2,286 2,145 2,078
================================================================================
This hypothetical illustration should not be deemed representative of past or
future performance of any underlying variable investment option.
Withdrawals will affect the minimum annuitization value as follows: Each
certificate year, withdrawals up to the limit of the total free amount (the
minimum annuitization value on the last certificate anniversary multiplied by
the annual growth rate) reduce the minimum annuitization value on a
dollar-for-dollar basis. Withdrawals over this free amount will reduce the
minimum annuitization value on a pro rata basis by an amount equal to the
minimum annuitization value immediately prior to the excess withdrawal
multiplied by the percentage reduction in the certificate value resulting from
the excess withdrawal. The free amount will always be a relatively small
fraction of the minimum annuitization value.
The amount of the first payment provided by the family income protector will be
determined by multiplying each $1,000 of minimum annuitization value by the
applicable annuity factor shown on Schedule I of the family income protector
rider. The applicable annuity factor depends upon the annuitant's (and joint
annuitant's, if any) sex (or without regard to gender if required by law), age,
and the family income protector payment option selected and is based on a
guaranteed interest rate of 3% and the "1983 Table a" mortality table improved
to the year 2000 with projection Scale G. Subsequent payments will be calculated
as described in the family income protector rider using a 5% assumed investment
return. Subsequent payments may fluctuate annually in accordance with the
investment performance of the annuity subaccounts. However, subsequent payments
are guaranteed to never be less than the initial payment.
The stabilized payment on each subsequent certificate anniversary after
annuitization using the family income protector will equal the greater of the
initial payment or the payment supportable by the annuity units in the selected
subaccounts. The supportable payment is equal to the number of variable annuity
units in the selected subaccounts multiplied by the variable annuity unit values
in those subaccounts on the date the payment is made. The variable annuity unit
values used to calculate the supportable payment will assume a 5% assumed
investment return. If the supportable payment at any payment date during a
certificate year is greater than the stabilized payment for that certificate
year, the excess will be used to purchase additional annuity units. Conversely,
if the supportable payment at any payment date during a certificate year is less
than the stabilized payment for that certificate year, there will be a reduction
in the number of annuity units credited to the certificate to fund the
deficiency. In the case of a reduction, you will not participate as fully in the
future investment performance of the subaccounts you selected since fewer
annuity units are credited to your certificate. Purchases and reductions will be
allocated to each subaccount on a proportionate basis.
PFL bears the risk that it will need to make payments if all annuity units have
been used in an attempt to maintain the stabilized payment at the initial
payment level. In such an event, PFL will make all future payments equal to the
initial payment. Once all the annuity units have been used, the amount of your
payment will not increase or decrease and will not depend upon the performance
of any subaccounts. To compensate PFL for this risk, a guaranteed payment fee
will be deducted.
HISTORICAL PERFORMANCE DATA
Money Market Yields
PFL may from time to time disclose the current annualized yield of the Endeavor
Money Market Subaccount, which invests in the Endeavor Money Market Portfolio,
for a 7-day period in a manner which does not take into
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<PAGE>
consideration any realized or unrealized gains or losses on shares of the
Endeavor Money Market Portfolio or on its portfolio securities. This current
annualized yield is computed by determining the net change (exclusive of
realized gains and losses on the sale of securities and unrealized appreciation
and depreciation and income other than investment income) at the end of the 7-
day period in the value of a hypothetical account having a balance of 1 unit of
the Endeavor Money Market Subaccount at the beginning of the 7-day period,
dividing such net change in account value by the value of the account at the
beginning of the period to determine the base period return, and annualizing
this quotient on a 365-day basis. The net change in account value reflects (i)
net income from the portfolio attributable to the hypothetical account; and (ii)
charges and deductions imposed under a certificate that are attributable to the
hypothetical account. The charges and deductions include the per unit charges
for the hypothetical account for (i) the administrative charges; and (ii) the
mortality and expense risk fee. Current yield will be calculated according to
the following formula:
Current Yield = ((NCS - ES)/UV) * (365/7)
Where:
NCS = The net change in the value of the portfolio (exclusive of realized
gains and losses on the sale of securities and unrealized appreciation
and depreciation and income other than investment income) for the 7-
day period attributable to a hypothetical account having a balance of
1 subaccount unit.
ES = Per unit expenses of the subaccount for the 7-day period.
UV = The unit value on the first day of the 7-day period.
Because of the charges and deductions imposed under a certificate, the yield for
the Endeavor Money Market Subaccount will be lower than the yield for the
Endeavor Money Market Portfolio. The yield calculations do not reflect the
effect of any premium taxes that may be applicable to a particular certificate.
PFL may also disclose the effective yield of the Endeavor Money Market
Subaccount for the same 7-day period, determined on a compounded basis. The
effective yield is calculated by compounding the base period return according to
the following formula:
Effective Yield = (1 + ((NCS - ES)/UV))365/7 - 1
Where:
NCS = The net change in the value of the portfolio (exclusive of realized
gains and losses on the sale of securities and unrealized appreciation
and depreciation and income other than investment income) for the 7-
day period attributable to a hypothetical account having a balance of
1 subaccount unit.
ES = Per unit expenses of the subaccount for the 7-day period.
UV = The unit value on the first day of the 7-day period.
The yield on amounts held in the Endeavor Money Market Subaccount normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Endeavor Money Market Subaccount's actual yield is affected by
changes in interest rates on money market securities, average portfolio maturity
of the Endeavor Money Market Portfolio, the types and quality of portfolio
securities held by the Endeavor Money Market Portfolio and its operating
expenses. For the seven days ended December 31, 1998, the effective yield of the
Endeavor Money Market Subaccount was 3.083%. For the seven days ended December
31, 1998, the yield of the Endeavor Money Market Subaccount was 3.236%.
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<PAGE>
Other Subaccount Yields
PFL may from time to time advertise or disclose the current annualized yield of
one or more of the mutual fund subaccounts (except the Endeavor Money Market
Subaccount) for 30-day periods. The annualized yield of a subaccount refers to
income generated by the subaccount over a specific 30-day period. Because the
yield is annualized, the yield generated by a subaccount during the 30-day
period is assumed to be generated each 30-day period over a 12-month period. The
yield is computed by: (i) dividing the net investment income of the subaccount
less subaccount expenses for the period, by (ii) the maximum offering price per
unit on the last day of the period times the daily average number of units
outstanding for the period, (iii) compounding that yield for a 6-month period,
and (iv) multiplying that result by 2. Expenses attributable to the subaccount
include (i) the administrative charges; and (ii) the mortality and expense risk
fee. The 30-day yield is calculated according to the following formula:
Yield = 2 * ((((NI - ES)/(U - UV))+ 1)6 - 1)
Where:
NI = Net investment income of the subaccount for the 30-day period
attributable to the subaccount's unit.
ES = Expenses of the subaccount for the 30-day period.
U = The average number of units outstanding.
UV = The unit value at the close (highest) of the last day in the 30-day
period.
Because of the charges and deductions imposed by the mutual fund account, the
yield for a mutual fund subaccount will be lower than the yield for its
corresponding portfolio. The yield calculations do not reflect the effect of any
premium taxes that may be applicable to a particular certificate.
The yield on amounts held in the mutual fund subaccounts normally will fluctuate
over time. Therefore, the disclosed yield for any given past period is not an
indication or representation of future yields or rates of return. The types and
quality of its investments and its operating expenses affect a subaccount's
actual yield.
Total Returns
PFL may from time to time also advertise or disclose total returns for one or
more of the mutual fund subaccounts for various periods of time. One of the
periods of time will include the period measured from the date the subaccount
commenced operations. When a subaccount has been in operation for 1, 5 and 10
years, respectively, the total return for these periods will be provided. Total
returns for other periods of time may from time to time also be disclosed. Total
returns represent the average annual compounded rates of return that would
equate an initial investment of $1,000 to the redemption value of that
investment as of the last day of each of the periods. The ending date for each
period for which total return quotations are provided will be for the most
recent month end practicable, considering the type and media of the
communication and will be stated in the communication.
Total returns will be calculated using subaccount unit values which PFL
calculates on each business day based on the performance of the mutual fund
account's underlying portfolio, and the deductions for the mortality and expense
risk fee and the administrative charges. Total return calculations will reflect
the effect of surrender charges that may be applicable to a particular period.
The total return will then be calculated according to the following formula:
P (1 + T)N = ERV
Where:
T = The average annual total return net of subaccount recurring charges.
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<PAGE>
ERV = The ending redeemable value of the hypothetical account at the end of
the period.
P = A hypothetical initial payment of $1,000.
N = The number of years in the period.
Other Performance Data
PFL may from time to time also disclose average annual total returns in a non-
standard format in conjunction with the standard format described above. The
non-standard format will be identical to the standard format except that the
surrender charge percentage will be assumed to be 0%.
PFL may from time to time also disclose cumulative total returns in conjunction
with the standard format described above. The cumulative returns will be
calculated using the following formula.
CTR = (ERV / P) - 1
Where:
CTR = The cumulative total return net of subaccount recurring charges for
the period.
ERV = The ending redeemable value of the hypothetical investment at the end
of the period.
P = A hypothetical initial payment of $1,000.
All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required period, is
also disclosed.
Adjusted Historical Performance Data--The Mutual Fund Account
From time to time, sales literature or advertisements may quote average annual
total returns for periods prior to the date a particular mutual fund subaccount
commenced operations. Such performance information for the mutual fund
subaccounts will be calculated based on the performance of the various
portfolios and the assumption that the mutual fund subaccounts were in existence
for the same periods as those indicated for the portfolios, with the level of
certificate charges that are currently in effect.
PUBLISHED RATINGS
PFL may from time to time publish in advertisements, sales literature and
reports to owners, the ratings and other information assigned to it by one or
more independent rating organizations such as A.M. Best Company, Standard &
Poor's Insurance Ratings Services, Moody's Investors Service and Duff & Phelps
Credit Rating Co. The purpose of the ratings is to reflect the financial
strength and/or claims-paying ability of PFL. The ratings should not be
considered as bearing on the investment performance of assets held in the mutual
fund account or of the safety or riskiness of an investment in the mutual fund
account. Each year the A.M. Best Company reviews the financial status of
thousands of insurers, culminating in the assignment of Best's Ratings. These
ratings reflect their current opinion of the relative financial strength and
operating performance of an insurance company in comparison to the norms of the
life/health insurance industry. In addition, the claims-paying ability of PFL as
measured by Standard & Poor's Insurance Ratings Services, Moody's Investors
Service or Duff & Phelps Credit Rating Co. may be referred to in advertisements
or sales literature or in reports to owners. These ratings are opinions of an
operating insurance company's financial capacity to meet the obligations of its
insurance policies in accordance with their terms. Claims-paying ability ratings
do not refer to an insurer's ability to meet non-policy obligations (i.e.,
debt/commercial paper).
STATE REGULATION OF PFL
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<PAGE>
PFL is subject to the laws of Iowa governing insurance companies and to
regulation by the Iowa Division of Insurance. An annual statement in a
prescribed form is filed with the Division of Insurance each year covering the
operation of PFL for the preceding year and its financial condition as of the
end of such year. Regulation by the Division of Insurance includes periodic
examination to determine PFL's contract liabilities and reserves so that the
Division may determine the items are correct. PFL's books and accounts are
subject to review by the Division of Insurance at all times and a full
examination of its operations is conducted periodically by the National
Association of Insurance Commissioners. In addition, PFL is subject to
regulation under the insurance laws of other jurisdictions in which it may
operate.
ADMINISTRATION
PFL performs administrative services for the certificates. These services
include issuance of the certificates, maintenance of records concerning the
certificates, and certain valuation services.
RECORDS AND REPORTS
All records and accounts relating to the mutual fund account will be maintained
by PFL. As presently required by the Investment Company Act of 1940, as amended,
and regulations promulgated thereunder, PFL will mail to all certificate owners
at their last known address of record, at least annually, reports containing
such information as may be required under that Act or by any other applicable
law or regulation. Certificate Owners will also receive confirmation of each
financial transaction and any other reports required by law or regulation.
DISTRIBUTION OF THE ANNUITIES
The certificates are offered to the public through brokers licensed under the
federal securities laws and state insurance laws. The offering of the
certificates is continuous and PFL does not anticipate discontinuing the
offering of the certificates. However, PFL reserves the right to discontinue the
offering of the certificates.
AFSG Securities Corporation, an affiliate of PFL, is the principal underwriter
of the certificates and may enter into agreements with broker-dealers for the
distribution of the certificates. Distribution of the certificates had not begun
as of the date of this prospectus.
VOTING RIGHTS
The Mutual Fund Account
To the extent required by law, PFL will vote the underlying funds' shares held
by the mutual fund account at regular and special shareholder meetings of the
underlying funds in accordance with instructions received from persons having
voting interests in the portfolios, although the Endeavor Series Trust does not
hold regular annual shareholder meetings. If, however, the 1940 Act or any
regulation thereunder should be amended or if the present interpretation thereof
should change, and as a result PFL determines that it is permitted to vote the
Endeavor Series Trust shares in its own right, it may elect to do so.
Before the annuity commencement date, you hold the voting interest in the
selected portfolios. The number of votes that you have the right to instruct
will be calculated separately for each subaccount. The number of votes that you
have the right to instruct for a particular subaccount will be determined by
dividing your certificate value in the subaccount by the net asset value per
share of the corresponding portfolio in which the subaccount invests. Fractional
shares will be counted.
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<PAGE>
After the annuity commencement date, the person receiving annuity payments has
the voting interest, and the number of votes decreases as annuity payments are
made and as the reserves for the certificate decrease. The person's number of
votes will be determined by dividing the reserve for the certificate allocated
to the applicable Subaccount by the net asset value per share of the
corresponding portfolio. Fractional shares will be counted.
The number of votes that you or the person receiving income payments has the
right to instruct will be determined as of the date established by the
underlying fund for determining shareholders eligible to vote at the meeting of
the underlying fund. PFL will solicit voting instructions by sending you, or
other persons entitled to vote, written requests for instructions prior to that
meeting in accordance with procedures established by the underlying fund.
Portfolio shares as to which no timely instructions are received and shares held
by PFL in which you, or other persons entitled to vote, have no beneficial
interest will be voted in proportion to the voting instructions that are
received with respect to all certificates participating in the same subaccount.
Each person having a voting interest in a Subaccount will receive proxy
material, reports, and other materials relating to the appropriate Portfolio.
OTHER PRODUCTS
PFL makes other variable annuities available that may also be funded through the
mutual fund account. These variable annuities may have different features, such
as different investment options or charges.
CUSTODY OF ASSETS
The assets of each of the mutual fund subaccounts are held by PFL. The assets of
each of the subaccounts are segregated and held separate and apart from the
assets of the other subaccounts and from PFL's general account assets. PFL
maintains records of all purchases and redemptions of shares of the Endeavor
Series Trust held by each of the mutual fund subaccounts. Additional protection
for the assets of the mutual fund account is afforded by PFL's fidelity bond,
presently in the amount of $5,000,000, covering the acts of officers and
employees of PFL.
LEGAL MATTERS
Sutherland Asbill & Brennan LLP, of Washington D.C. has provided legal advice to
PFL relating to certain matters under the federal securities laws applicable to
the issue and sale of the certificates.
INDEPENDENT AUDITORS
The Financial Statements of PFL as of December 31, 1998 and 1997, and for each
of the three years in the period ended December 31, 1998, included in this
Statement of Additional Information have been audited by Ernst & Young LLP,
Independent Auditors, 801 Grand Avenue, Suite 3400, Des Moines, Iowa 50309. The
Financial Statements of certain subaccounts of PFL Life Variable Annuity
Account C (which comprises the Annuity) will be audited by Ernst & Young.
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<PAGE>
OTHER INFORMATION
A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
certificates discussed in this Statement of Additional Information. Not all of
the information set forth in the Registration Statement, amendments and exhibits
thereto has been included in the prospectus or this Statement of Additional
Information. Statements contained in the Prospectus and this Statement of
Additional Information concerning the content of the certificates and other
legal instruments are intended to be summaries. For a complete statement of the
terms of these documents, reference should be made to the instruments filed with
the Securities and Exchange Commission.
FINANCIAL STATEMENTS
The values of your interest in the mutual fund account will be affected solely
by the investment results of the selected subaccount(s). Financial Statements of
The PFL Life Variable Annuity Account C are contained herein. The financial
statements of PFL, which are included in this Statement of Additional
Information, should be considered only as bearing on the ability of PFL to meet
its obligations under the certificates. They should not be considered as bearing
on the investment performance of the assets held in the mutual fund account.
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<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
All required financial statements are included in Part B of this
Registration Statement.
(b) Exhibits:
(1) (a) Resolution of the Board of Directors of PFL Life
Insurance Company authorizing establishment of the
Mutual Fund Account. Note 1
(2) Not Applicable.
(3) (a) Principal Underwriting Agreement by and between PFL
Life Insurance Company, on its own behalf and on the
behalf of the Mutual Fund Account, and AFSG Securities
Corporation. Note 7
(b) Amendment to Exhibit A of Principal Underwriting
Agreement by and between PFL Life Insurance Company,
on its own behalf and on the behalf of the Mutual Fund
Account, and AFSG Securities Corporation. Note 9
(c) Form of Broker/Dealer Supervision and Sales Agreement
by and between AFSG Securities Corporation and the
Broker/Dealer. Note 7
(4) (a) Form of Group Master Policy and Optional Riders for the
Endeavor Generations Plus Variable Annuity. Note 9
(b) Form of Group Certificate for the Endeavor Generations
Plus Variable Annuity. Note 9
(c) Form of Individual Policy for the Endeavor Generations
Plus Variable Annuity. Note 9
(5) (a) Form of Group Master Application for the Endeavor
Generations Plus Variable Annuity. Note 9
(b) Form of Group Certificate Enrollment Application for
the Endeavor Generations Plus Variable Annuity. Note 9
(c) Form of Individual Application for the Endeavor
Generations Plus Variable Annuity. Note 9
(6) (a) Articles of Incorporation of PFL Life Insurance
Company. Note 2
(b) ByLaws of PFL Life Insurance Company. Note 2
(7) Not Applicable.
(8) (a) Participation Agreement by and between PFL Life
Insurance Company and Endeavor Series Trust. Note 2
(b) Amendment to Participation Agreement by and between PFL
Life Insurance Company and Endeavor Series Trust. Note
6
(c) Amendment to Participation Agreement by and between PFL
Life Insurance Company and Endeavor Series Trust. Note
9
<PAGE>
(9) Opinion and Consent of Counsel. Note 9
(10) (a) Consent of Independent Auditors. Note 10
(10) (b) Opinion and Consent of Actuary. Note 9
(11) Not applicable.
(12) Not applicable.
(13) Performance Data Calculations. Note 10
(14) Powers of Attorney. (P.S. Baird, W.L. Busler, D.C. Kolsrud,
R.J. Kontz) Note 3 (Craig D. Vermie) Note 4. (Brenda K.
Clancy) Note 5. (Larry N. Norman) Note 8.
Note 1. Incorporated herein by reference to the Initial filing of Registrants
Form N-4 Registration Statement (File No. 33-33085) on January 23,
1990.
Note 2. Incorporated herein by reference to the Registrants filing of Post-
Effective Amendment No. 2 to Form N-4 Registration Statement (File No.
33-33085) on April 1, 1991.
Note 3. Incorporated herein by reference to the Registrant's filing of Post-
Effective Amendment No. 6 to Form N-4 Registration Statement (File No.
33-33085) on January 28, 1994.
Note 4. Incorporated herein by reference to the Registrant's filing of Post-
Effective Amendment No. 11 to Form N-4 Registration Statement (File
No. 33-33085) on April 24, 1996.
Note 5. Incorporated herein by reference to the Registrant's filing of Post-
Effective Amendment No. 12 to Form N-4 Registration Statement (File
No. 33-33085) on February 28, 1997.
Note 6. Incorporated herein by reference to the Registrant's filing of Post-
Effective Amendment No. 13 to Form N-4 Registration Statement (File
No. 33-33085) on April 28, 1997.
Note 7. Incorporated herein by reference to the Registrant's filing of Post-
Effective Amendment No. 14 to Form N-4 Registration Statement (File
No. 33-33085) on February 27, 1998.
Note 8. Incorporated herein by reference to the Registrant's filing of Post-
Effective Amendment No. 16 to Form N-4 Registration Statement (File
No. 33-33085) on September 28, 1998.
Note 9. Filed herewith.
Note 10. To be filed by amendment.
<PAGE>
Item 25. Directors and Officers of the Depositor (PFL Life Insurance
Company)
<TABLE>
<CAPTION>
Name and Business Address Principal Positions and Offices with Depositor
------------------------- ---------------------------------------------
<S> <C>
William L. Busler Director, Chairman of the Board and President
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
Patrick S. Baird Director, Senior Vice President and Chief Operating
4333 Edgewood Road, N.E. Officer
Cedar Rapids, Iowa 52499-0001
Craig D. Vermie Director, Vice President, Secretary and General Counsel
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
Douglas C. Kolsrud Director, Senior Vice President, Chief Investment
4333 Edgewood Road, N.E. Officer and Corporate Actuary
Cedar Rapids, Iowa 52499-0001
Larry N. Norman Director and Executive Vice President
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
Robert J. Kontz Vice President and Corporate Controller
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
Brenda K. Clancy Vice President, Treasurer and Chief Financial Officer
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the Depositor
or Registrant
<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Incorporation Securities Owned Business
- ---- ------------- ---------------- --------
<S> <C> <C> <C>
AEGON N.V. Netherlands 53.63% of Vereniging Holding company
Corporation AEGON Netherlands
Membership Association
Groninger Financieringen B.V. Netherlands 100% of AEGON N.V. Holding company
Corporation Netherlands Corporation
AEGON Netherland N.V. Netherlands 100% of AEGON N.V. Holding company
Corporation Netherlands Corporation
AEGON Nevak Holding B.V. Netherlands 100% of AEGON N.V. Holding company
Corporation Netherlands Corporation
AEGON International N.V. Netherlands 100% of AEGON N.V. Holding company
Corporation Netherlands Corporation
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Voting Trust Delaware Voting Trust
Trustees:
K.J. Storm
Donald J. Shepard
H.B. Van Wijk
Dennis Hersch
AEGON U.S. Holding Delaware 100% of Voting Trust Holding company
Corporation
Short Hills Management New Jersey 100% of AEGON U.S. Holding company
Company Holding Corporation
CORPA Reinsurance New York 100% of AEGON U.S. Holding company
Company Holding Corporation
AEGON Management Indiana 100% of AEGON U.S. Holding company
Company Holding Corporation
RCC North America Inc. Delaware 100% of AEGON U.S. Holding company
Holding Corporation
AEGON USA, Inc. Iowa 100% AEGON U.S. Holding company
Holding Corporation
AUSA Holding Company Maryland 100% AEGON USA, Inc. Holding company
Monumental General Insurance Maryland 100% AUSA Holding Co. Holding company
Group, Inc.
Trip Mate Insurance Agency, Inc. Kansas 100% Monumental General Sale/admin. of travel
Insurance Group, Inc. insurance
Monumental General Maryland 100% Monumental General Provides management
Administrators, Inc. Insurance Group, Inc. srvcs. to unaffiliated
third party
administrator
Executive Management and Maryland 100% Monumental General Provides actuarial
Consultant Services, Inc. Administrators, Inc. consulting services
Monumental General Mass Maryland 100% Monumental General Marketing arm for
Marketing, Inc. Insurance Group, Inc. sale of mass marketed
insurance coverages
Diversified Investment Delaware 100% AUSA Holding Co. Registered investment
Advisors, Inc. advisor
Diversified Investors Securities Delaware 100% Diversified Investment Broker-Dealer
Corp. Advisors, Inc.
AEGON USA Securities, Inc. Iowa 100% AUSA Holding Co. Broker-Dealer
Supplemental Ins. Division, Inc. Tennessee 100% AUSA Holding Co. Insurance
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Creditor Resources, Inc. Michigan 100% AUSA Holding Co. Credit insurance
CRC Creditor Resources Canada 100% Creditor Resources, Inc. Insurance agency
Canadian Dealer Network Inc.
AEGON USA Investment Iowa 100% AUSA Holding Co. Investment advisor
Management, Inc.
AEGON USA Realty Iowa 100% AUSA Holding Co. Provides real estate
Advisors, Inc. administrative and real
estate investment services
Quantra Corporation Delaware 100% AEGON USA Realty Real estate and financial
Advisors, Inc. software production and
sales
Quantra Software Corporation Delaware 100% Quantra Corporation Manufacture and sell
mortgage loan and security
management software
Landauer Realty Advisors, Inc. Iowa 100% AEGON USA Realty Real estate counseling
Advisors, Inc.
Landauer Associates, Inc. Delaware 100% AEGON USA Realty Real estate counseling
Advisors, Inc.
Realty Information Systems, Inc. Iowa 100% AEGON USA Realty Information Systems for
Advisors, Inc. real estate investment
management
AEGON USA Realty Iowa 100% AEGON USA Real estate management
Management, Inc Realty Advisors, Inc.
USP Real Estate Investment Trust Iowa 21.89% First AUSA Life Real estate investment
Ins. Co , 13.11% PFL Life trust
Ins. Co. 4.86% Bankers
United Life Assurance Co.
RCC Properties Limited Iowa AEGON USA Realty Limited Partnership
Partnership Advisors Inc. is General
Partner and 5% owner.
AUSA Financial Markets, Inc. Iowa 100% AUSA Holding Co. Marketing
Endeavor Investment Advisors California 49.9% AUSA Financial General Partnership
Markets, Inc.
Universal Benefits Corporation Iowa 100% AUSA Holding Co. Third party administrator
Investors Warranty of Iowa 100% AUSA Holding Co. Provider of automobile
America, Inc. extended maintenance
contracts
Massachusetts Fidelity Trust Co. Iowa 100% AUSA Holding Co. Trust company
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Money Services, Inc. Delaware 100% AUSA Holding Co. Provides financial
counseling for employees
and agents of affiliated
companies
Zahorik Company, Inc. California 100% AUSA Holding Co. Broker-Dealer
ZCI, Inc. Alabama 100% Zahorik Company, Inc. Insurance agency
AEGON Asset Management Delaware 100% AUSA Holding Co. Registered investment Services, Inc.
advisor
Intersecurities, Inc. Delaware 100% AUSA Holding Co. Broker-Dealer
Associated Mariner Financial Michigan 100% Intersecurities, Inc. Holding co./management
Group, Inc. services
Mariner Financial Services, Inc. Michigan 100% Associated Mariner Broker/Dealer
Financial Group, Inc.
Mariner Planning Corporation Michigan 100% Mariner Financial Financial planning
Services, Inc.
Associated Mariner Agency, Inc. Michigan 100% Associated Mariner Insurance agency
Financial Group, Inc.
Associated Mariner Agency Hawaii 100% Associated Mariner Insurance agency
of Hawaii, Inc. Agency, Inc.
Associated Mariner Ins. Agency Massachusetts 100% Associated Mariner Insurance agency
of Massachusetts, Inc. Agency, Inc.
Associated Mariner Agency Ohio 100% Associated Mariner Insurance agency
Ohio, Inc. Agency, Inc.
Associated Mariner Agency Texas 100% Associated Mariner Insurance agency
Texas, Inc. Agency, Inc.
Associated Mariner Agency New Mexico 100% Associated Mariner Insurance agency
New Mexico, Inc. Agency, Inc.
Mariner Mortgage Corp. Michigan 100% Associated Mariner Mortgage origination
Financial Group, Inc.
Idex Investor Services, Inc. Florida 100% AUSA Holding Co. Shareholder services
Idex Management, Inc. Delaware 50% AUSA Holding Co. Investment advisor
50% Janus Capital Corp.
IDEX Series Fund Massachusetts Various Mutual fund
First AUSA Life Insurance Maryland 100% AEGON USA, Inc. Insurance holding Company
company
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
AUSA Life Insurance New York 100% First AUSA Life Insurance
Company, Inc. Insurance Company
Life Investors Insurance Iowa 100% First AUSA Life Insurance
Company of America Ins. Co.
Life Investors Alliance, LLC Delaware 100% LIICA Purchases, own, and hold
the equity interest of other
entities
Bankers United Life Iowa 100% Life Investors Ins. Insurance
Assurance Company Company of America
Life Investors Agency Iowa 100% Life Investors Ins. Marketing
Group, Inc. Company of America
PFL Life Insurance Company Iowa 100% First AUSA Life Insurance
Ins. Co.
AEGON Financial Services Minnesota 100% PFL Life Insurance Co. Marketing
Group, Inc.
AEGON Assignment Corporation Kentucky 100% AEGON Financial Administrator of structured
of Kentucky Services Group, Inc. settlements
AEGON Assignment Corporation Illinois 100% AEGON Financial Administrator of structured
Services Group settlements
Southwest Equity Life Ins. Co. Arizona 100% of Common Voting Insurance
Stock
First AUSA Life Ins. Co.
Iowa Fidelity Life Insurance Co. Arizona 100% of Common Voting Insurance
Stock
First AUSA Life Ins. Co.
Western Reserve Life Assurance Ohio 100% First AUSA Life Insurance
Co. of Ohio Ins. Co.
WRL Series Fund, Inc. Maryland Various Mutual fund
WRL Investment Services, Inc. Florida 100% Western Reserve Life Provides administration for
Assurance Co. of Ohio affiliated mutual fund
WRL Investment Florida 100% Western Reserve Life Registered investment Management, Inc.
Assurance Co. of Ohio advisor
AEGON Equity Group, Inc. Florida 100% Western Reserve Life Insurance agency
Assurance Co. of Ohio
ISI Insurance Agency, Inc. California 100% Western Reserve Life Insurance agency
Assurance Co. of Ohio
ISI Insurance Agency Ohio 100% ISI Insurance Insurance agency
of Ohio, Inc. Agency Inc.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
ISI Insurance Agency Texas 100% ISI Insurance Insurance agency
of Texas, Inc. Agency Inc.
ISI Insurance Agency Massachusetts 100% ISI Insurance Insurance Agency
of Massachusetts, Inc. Agency Inc.
Monumental Life Insurance Co. Maryland 100% First AUSA Life Insurance
Ins. Co.
AEGON Special Markets Maryland 100% Monumental Life Marketing
Group, Inc. Ins. Co.
Monumental General Casualty Co. Maryland 100% First AUSA Life Insurance
Ins. Co.
United Financial Services, Inc. Maryland 100% First AUSA Life General agency
Ins. Co.
Bankers Financial Life Ins. Co. Arizona 100% First AUSA Life Insurance
Ins. Co.
The Whitestone Corporation Maryland 100% First AUSA Life Insurance agency
Ins. Co.
Cadet Holding Corp. Iowa 100% First AUSA Life Holding company
Ins. Co.
Commonwealth General Delaware 100% AEGON USA, Inc. Holding company
Corporation ("CGC")
PB Series Trust Massachusetts N/A Mutual fund
Monumental Agency Group, Inc. Kentucky 100% CGC Provider of srvcs. to ins.
cos.
Benefit Plans, Inc. Delaware 100% CGC TPA for Peoples Security
Life Insurance Company
Durco Agency, Inc. Virginia 100% Benefit Plans, Inc. General agent
Commonwealth General. Kentucky 100% CGC Administrator of structured
Assignment Corporation settlements
AFSG Securities Corporation Pennsylvania 100% CGC Broker-Dealer
PB Investment Advisors, Inc. Delaware 100% CGC Registered investment
advisor
Diversified Financial Products Inc. Delaware 100% CGC Provider of investment,
marketing and admin.
services to ins. cos.
AEGON USA Real Estate Delaware 100% Diversified Financial Real estate and mortgage
Services, Inc. Products Inc.. holding company
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Capital Real Estate Delaware 100% CGC Furniture and equipment
Development Corporation lessor
Capital General Development Delaware 100% CGC Holding company
Corporation
Ammest Realty Corporation Texas 100% Peoples Security Life Special purpose subsidiary
Insurance Company
JMH Operating Company, Inc. Mississippi 100% Peoples Security Life Real estate holdings
Insurance Company
Independence Automobile Florida 100% Capital Security Automobile Club
Association, Inc. Life Insurance Company
Independence Automobile Georgia 100% Capital Security Automobile Club
Club, Inc. Life Insurance Company
Capital 200 Block Corporation Delaware 100% CGC Real estate holdings
Capital Broadway Corporation Kentucky 100% CGC Real estate holdings
Southlife, Inc. Tennessee 100% CGC Investment subsidiary
Ampac Insurance Agency, Inc. Pennsylvania 100% CGC Provider of management
(EIN 23-1720755) support services
National Home Life Corporation Pennsylvania 100% Ampac Insurance Special-purpose subsidiary
Agency, Inc.
Compass Rose Development Pennsylvania 100% Ampac Insurance Special-purpose subsidiary
Corporation Agency, Inc.
Frazer Association Consultants, Illinois 100% Ampac Insurance TPA license-holder
Inc. Agency, Inc.
Valley Forge Associates, Inc. Pennsylvania 100% Ampac Insurance Furniture & equipment
Agency, Inc. lessor
Veterans Benefits Plans, Inc. Pennsylvania 100% Ampac Insurance Administrator of group
Agency, Inc. insurance programs
Veterans Insurance Services, Inc. Delaware 100% Ampac Insurance Special-purpose subsidiary
Agency, Inc.
Academy Insurance Group, Inc. Delaware 100% CGC Holding company
Academy Life Insurance Co. Missouri 100% Academy Insurance Insurance company
Group, Inc.
Pension Life Insurance New Jersey 100% Academy Insurance Insurance company
Company of America Group, Inc.
Academy Services, Inc. Delaware 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Ammest Development Corp. Inc. Kansas 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Ammest Insurance Agency, Inc. California 100% Academy Insurance General agent
Group, Inc.
Ammest Massachusetts Massachusetts 100% Academy Insurance Special-purpose subsidiary
Insurance Agency, Inc. Group, Inc.
Ammest Realty, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Ampac, Inc. Texas 100% Academy Insurance Managing general agent
Group, Inc.
Ampac Insurance Agency, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
(EIN 23-2364438) Group, Inc.
Data/Mark Services, Inc. Delaware 100% Academy Insurance Provider of mgmt. services
Group, Inc.
Force Financial Group, Inc. Delaware 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Force Financial Services, Inc. Massachusetts 100% Force Fin. Group, Inc. Special-purpose subsidiary
Military Associates, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
NCOA Motor Club, Inc. Georgia 100% Academy Insurance Automobile club
Group, Inc.
NCOAA Management Company Texas 100% Academy Insurance Special-purpose subsidiary
Group, Inc.
Unicom Administrative Pennsylvania 100% Academy Insurance Provider of admin.
Services, Inc. Group, Inc. services
Unicom Administrative Germany 100%Unicom Administrative Provider of admin.
Services, GmbH Services, Inc. services
Capital Liberty, L.P. Delaware 79.2% Commonwealth Life Holding Company
Insurance Company
19.8% Peoples Security Life
Insurance Company
1% CGC
Commonwealth General LLC Turks & 100% CGC Special-purpose subsidiary
Caicos Islands
Peoples Benefit Life Missouri 3.7% CGC Insurance company
Insurance Company 20% Capital Liberty, L.P.
76.3% Monumental Life
Insurance Co.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Veterans Life Insurance Co. Illinois 100% Peoples Benefit Insurance company
Life Insurance Company
Peoples Benefit Services, Inc. Pennsylvania 100% Veterans Life Ins. Co. Special-purpose subsidiary
</TABLE>
Item 27. Number of Contract Owners
As of December 31, 1998, there were no Contract owners.
Item 28. Indemnification
The Iowa Code (Sections 490.850 et. seq.) provides for permissive
-------
indemnification in certain situations, mandatory indemnification in other
situations, and prohibits indemnification in certain situations. The Code
also specifies producers for determining when indemnification payments can
be made.
Insofar as indemnification for liabilities arising under the Securities Act
of 933 may be permitted to directors, officers and controlling persons of
the Depositor pursuant to the foregoing provisions, or otherwise, the
Depositor has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Depositor of expenses incurred or paid by a director, officer or
controlling person in connection with the securities being registered), the
Depositor will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 29. Principal Underwriters
AFSG Securities Corporation
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-0001
The directors and officers of AFSG Securities Corporation are as follows:
<TABLE>
<S> <C>
Larry N. Norman Sarah J. Strange
Director and President Director and Vice President
Frank A. Camp Bob Warner
Director and Secretary Assistant Compliance Officer
Lisa Wachendorf Linda Gilmer
Vice President and Treasurer/Controller
Chief Compliance Officer
Debra C. Cubero Priscilla Hechler
Vice President Assistant Vice President and Assistant Secretary
Emily Bates Thomas Pierpan
Assistant Treasurer Assistant Vice President and Assistant Secretary
Clifton Flenniken Darin D. Smith
Assistant Treasurer Assistant Vice President and Assistant Secretary
</TABLE>
The principal business address of each person listed is AFSG Securities
Corporation, 4333 Edgewood Road, N.E., Cedar Rapids, IA 52499-0001.
<PAGE>
Commissions and Other Compensation Received by Principal Underwriter.
- --------------------------------------------------------------------
AFSG Securities Corporation, the broker/dealer, received $0 from the Registrant
for the year ending December 31, 1998, for its services in distributing the
Policies. No other commission or compensation was received by the principal
underwriter, directly or indirectly, from the Registrant during the fiscal year.
AFSG Securities Corporation serves as the principal underwriter for the PFL
Endeavor VA Separate Account, the PFL Retirement Builder Variable Annuity
Account, the PFL Life Variable Annuity Account A, the PFL Wright Variable
Annuity Account and the AUSA Endeavor Variable Annuity Account. These accounts
are separate accounts of PFL Life Insurance Company or AUSA Life Insurance
Company, Inc. AFSG Securities Corporation also serves as principal underwriter
for Separate Account I, Separate Account II, Separate Account IV and Separate
Account V of Peoples Benefit Life Insurance Company, and for Separate Account B
and Separate Account C of AUSA Life Insurance Company, Inc.
Item 30. Location of Accounts and Records
The records required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder, are maintained by
PFL Life Insurance Company at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa
52499-0001.
Item 31. Management Services.
All management Contracts are discussed in Part A or Part B.
Item 32. Undertakings
(a) Registrant undertakes that it will file a post-effective amendment to
this registration statement as frequently as necessary to ensure that
the audited financial statements in the registration statement are
never more than 16 months old for so long as Premiums under the
Contract may be accepted.
(b) Registrant undertakes that it will include either (i) a postcard or
similar written communication affixed to or included in the Prospectus
that the applicant can remove to send for a Statement of Additional
Information or (ii) a space in the Policy application that an applicant
can check to request a Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request to PFL at the
address or phone number listed in the Prospectus.
(d) PFL Life Insurance Company hereby represents that the fees and charges
deducted under the contracts, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by PFL Life Insurance Company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on its
behalf, in the City of Cedar Rapids and State of Iowa, on this 19th day of July,
1999.
PFL LIFE VARIABLE
ANNUITY ACCOUNT C
PFL LIFE INSURANCE COMPANY
Depositor
*
_________________________
William L. Busler
President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the duties indicated.
Signatures Title Date
- ---------- ----- ----
* Director July , 1999
- ----------------------
Patrick S. Baird
/s/ Craig D. Vermie Director July 19, 1999
- ----------------------
Craig D. Vermie
______________________ * Director July ____, 1999
William L. Busler (Principal Executive Officer)
______________________ * Director July ____, 1999
Larry N. Norman
______________________ * Director July ____, 1999
Douglas C. Kolsrud
______________________ * Vice President and July ____, 1999
Robert J. Kontz Corporate Controller
______________________ * Treasurer July ____, 1999
Brenda K. Clancy
* By Craig D. Vermie, attorney in-fact.
<PAGE>
Registration No.
333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
EXHIBITS
TO
FORM N-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FOR
THE ENDEAVOR GENERATIONS PLUS VARIABLE ANNUITY
_______________
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description of Exhibit Page No.*
- ----------- ---------------------- ---------
(1)(a) Resolution
(3)(b) Amendment to Underwriting Agreement
(4)(a) Form of Group Master Policy and Optional Riders
(4)(b) Form of Group Certificate
(4)(c) Form of Individual Policy
(5)(a) Form of Group Master Application
(5)(b) Form of Group Certificate Enrollment Application
(5)(c) Form of Individual Application
(8)(c) Amendment to Participation Agreement
(9) Opinion and Consent of Counsel
(10) (b) Opinion and Consent of Actuary
___________
* Page numbers included only in manually executed original.
<PAGE>
EXHIBIT (1)(a)
--------------
RESOLUTION
<PAGE>
CERTIFICATION
-------------
I, Craig D. Vermie, being the duly constituted Secretary of PFL Life Insurance
Company, an Iowa corporation with its principal place of business located at
4333 Edgewood Road N.E., Cedar Rapids, Iowa, hereby certify that the following
is a true and correct copy of a resolution adopted by the Board of Directors of
said corporation by written consent dated as of February 20, 1997, and that said
resolution is still in full force and effect:
RESOLVED, that the officers of the Company be and they hereby are
authorized to establish the " PFL Life Variable Annuity Account C," a
separate account for the purpose of selling approved variable insurance
contracts;
BE IT FURTHER RESOLVED, that the officers of this company be and they
hereby are authorized and instructed to take any and all actions necessary
in order to carry out the powers hereby conferred, including but not
limited to, the filing of any statement and amendments thereto with the
Securities and Exchange Commission, execution of any and all required
underwriting agreements, state regulatory filings, Blue Sky filings, policy
filings, and to execute any and all other documents that may be required by
any Federal, state or local regulatory agency in order to operate the
separate account.
Dated at Cedar Rapids, Iowa, this 26th day of February, 1997.
(SEAL)
By: /s/ Craig D. Vermie
-------------------
Craig D. Vermie
<PAGE>
EXHIBIT (3)(b)
--------------
AMENDMENT TO PRINCIPAL UNDERWRITING AGREEMENT
<PAGE>
AMENDMENT TO PRINCIPAL UNDERWRITING AGREEMENT
EXHIBIT A
DATED JULY 27, 1999
1. PFL Life Variable Annuity Account A
2. PFL Endeavor VA Separate Account
3. PFL Wright Variable Annuity Account
4. PFL Retirement Builder Variable Annuity Account
5. PFL Endeavor Target Account
6. PFL Endeavor Variable Life Account
7. Legacy Builder Variable Life Separate Account
8. PFL Life Variable Annuity Account C
AFSG SECURITIES CORPORATION PFL LIFE INSURANCE COMPANY
By: /s/ Larry N. Norman By: /s/ William L. Busler
------------------- ---------------------
Larry N. Norman William L. Busler
Title: President Title: President
---------------- ------------------
<PAGE>
EXHIBIT (4)(A)
--------------
GROUP MASTER POLICY
AND OPTIONAL RIDERS
<PAGE>
[LOGO OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
GROUP CONTRACT OWNER: SECURITIES CUSTOMERS DLR INSURANCE TRUST II
GROUP CONTRACT NUMBER: 12345
GROUP CONTRACT DATE: APRIL 1, 1999
WE AGREE
. To provide annuity payments as These agreements are subject to
set forth in Section 10 of this the provisions of this Contract.
Contract, This Contract is issued in
consideration of the
. Or to pay withdrawal benefits in application, if any, and payment
accordance with Section 5 of of the premiums as provided.
this Contract.
This Contract may be applied for
. Or to pay death proceeds in an issued to qualify as a tax-
accordance with Section 9 of qualified annuity under the
this Contract. applicable sections of the
Internal Revenue Code.
Signed for us at our home office.
/S/ Craig D. Vermie /S/ William L. Busler
SECRETARY PRESIDENT
This Contract is a legal contract between the Contract Owner and the Company.
READ YOUR CONTRACT CAREFULLY
Group Flexible Premium Variable Annuity Contract
Income Payable At Annuity Commencement Date
Benefits Based On The Performance Of The Separate Account
Are Variable And Are Not Guaranteed As To Dollar Amount (See Sections 6 and 10C)
AV432 101 114 199 Non-Participating
<PAGE>
SECTION 1
DEFINITIONS
ADJUSTED POLICY VALUE GROUP CONTRACT OWNER
The Policy Value increased or The entity, as shown on the
decreased by any Excess Interest Contract Data Page, which applies
Adjustment for the Group Contract
ANNUITANT INVESTMENT OPTIONS
The Participant to whom annuity Any of the Guaranteed Period
payments will be made, unless Options of the Fixed Account, the
another payee is named. Dollar Cost Averaging Fixed Account
Option, and any of the Subaccounts
ANNUITY COMMENCEMENT DATE of the Separate Account(s).
Date the Annuitant will begin PARTICIPANT
receiving payments from this
annuity, which may not be later A person who makes premium payments
than the last day of the or for whom premium payments are
Certificate month starting after made under the Group Contract
the Annuitant attains age 85,
except as expressly allowed by us, PAYEE
but in no event later than the last
day of the month following the The person to whom annuity payments
month in which the Annuitant will be made.
attains age 95.
PAYMENT OPTIONS
CASH VALUE
Options through which the
Amount defined in Section 5, that distribution of the Adjusted Policy
can be withdrawn if the annuity Value can be directed.
Certificate is surrendered.
POLICY VALUE
CERTIFICATE
The amount (defined in Section 4)
The document issued under the Group applicable under the Certificate
Contract to the eligible that can be used to fund one of the
Participants who apply for Payment Options.
coverage. The Certificate is not a
part of the Group Contract SEPARATE ACCOUNT
CERTIFICATE ANNIVERSARY The separate investment account(s)
established by us, as described in
The anniversary of the Certificate Section 6.
Date for each year this Certificate
remains in force. SUBACCOUNT
CERTIFICATE DATE A division of a Separate Account,
as described in Section 6.
The date shown on page 3 of the
Certificate and the date on which SURRENDER
the Certificate becomes effective.
A partial or full withdrawal of
CERTIFICATE OWNER funds from the Policy Value or Cash
Value.
The owner of the annuity
Certificate. Unless otherwise WITHDRAWAL
specified on the Certificate Data
page, the Annuitant and the A distribution of funds from the
Certificate Owner shall be one and Policy Value or Cash Value.
the same person.
YIELD
CERTIFICATE YEAR
The effective annual interest rate
The 12 month periods following the applicable to the Fixed Account
Certificate Date shown on the
Certificate Data page. The first YOU, YOUR
Certificate Year starts on the
Certificate Date. Each subsequent The owner of this Certificate.
year starts on the anniversary of Unless otherwise specified on the
the Certificate Date. Certificate Data Page, the
Annuitant and the Certificate Owner
DISTRIBUTION shall be one and the same person.
A withdrawal or disbursement of
funds from the Policy Value or Cash
Value.
GROUP CONTRACT
The Contract issued to the Group
Contract Owner, under which
Certificates are issued to eligible
Participants.
AVB432CT
PAGE 2
<PAGE>
SECTION 2 - CONTRACT DATA
GROUP CONTRACT NUMBER: [12345]
GROUP CONTRACT DATE: [April 15, 1999]
GROUP CONTRACT OWNER: [Securities Customers DRL Insurance Trust II]
SEPARATE ACCOUNT: [PFL Endeavor Variable Annuity Account]
DCA SUBACCOUNT(S): [Money Market Portfolio,
U.S. Government Securities Portfolio]
PREMIUM PAYMENT MINIMUMS (PER CERTIFICATE)
Initial Premium Payment, Nonqualified: [$5,000.00]
Initial Premium Payment, Qualified*: [$2,000.00]
*Waived for 403(b) annuities
Subsequent Premium Payments: [$50.00]
SERVICE CHARGE: [$40]
Before the Annually Commencement Date:
[5%] Annually Compounding Death Benefit
Mortality and Expense Risk Fee and Administrative Charge: [1.75%]
Step-Up to age 75 Death Benefit
Mortality and Expense Risk Fee and Administrative Charge: [1.75%]
Return of Premium Death Benefit
Mortality and Expense Risk Fee and Administrative Charge: [1.55%]
Distribution Financing Charge [.00%]
After the Annuity Commencement Date: Mortality and Expense Risk Fee and
Administrative Charge: [1.55%]
FIXED ACCOUNT MINIMUM ANNUAL INTEREST RATE: 3%
SURRENDER CHARGE:
Number of Years Since Percentage of
Premium
[Premium Payment Date] Withdrawn
[0 - 1 8%
1 - 2 8%
2 - 3 8%
3 - 4 7%
4 - 5 6%
5 - 6 5%
6 - 7 4%
7 - 8 3%
8 - 9 2%
9 and thereafter 0%]
AV 432 101 114 779 MSP
PAGE 3
<PAGE>
SECTION 2 - CONTRACT DATA - CONT
SCHEDULE OF ADDITIONAL BENEFITS:
FORM NO. ADDITIONAL BENEFIT(S)
AE 1051 199 LUMP SUM WITHDRAWAL OPTION
AE 1058 199 GUARANTEED MINIMUM DEATH BENEFIT
AE 1060 199 GUARANTEED MINIMUM DEATH BENEFIT
AE 1061 199 GUARANTEED MINIMUM DEATH BENEFIT
AE 1064 199 SYSTEMATIC PAYOUT OPTION
AE 1074 199 SERVICE CHARGE WAIVER
AE 1075 199 PREMIUM ENHANCEMENT]
AV 432 101 114 779 MSP
PAGE 3(A)
<PAGE>
SECTION 3 - PREMIUM PAYMENTS
PAYMENT OF PREMIUMS ALLOCATION OF PREMIUM PAYMENTS
Premium payments may be made any Premium payments may be applied to
time on or after the effective date the various Investment Options
of the Certificate and before the which we make available. The
Annuity Commencement Date. The Certificate Owner must tell us what
Certificate Owner may start or percent of each premium payment to
stop, increase or decrease, or skip allocate to the various Investment
any premium payments. Options. Each percent may be either
zero or any whole number; however,
MAXIMUM AND MINIMUM PREMIUM PAYMENT the allocation among all Investment
Options must total 100%.
The premium payments may not be
more than the amount permitted by CHANGE OF ALLOCATION
law if this is a tax-qualified
annuity. The minimum premium The Certificate Owner may change
payments we will accept are the allocation of premium payments
specified on page 3. The maximum to the various Investment Options.
total premium payments, per The Certificate Owner must tell us
Participant, which we will accept in a signed notice which gives us
without prior Company approval is the facts that we need. Premium
$1,000,000. payments received after the date on
which we receive the notice will be
PREMIUM PAYMENT DATE applied on the basis of the new
allocation.
The premium payment date is the
date on which the premium payment PREMIUM TAXES
is credited to the Certificate. The
initial premium payment less any A state may impose a premium tax.
premium taxes will be credited to It may be imposed when a premium
the Certificate within two business payment is made, or on the Annuity
days of receipt of such payment and Commencement Date, on the date of
the required information. death, or on the date of full
Subsequent additional premium surrender. When permitted by state
payments will be credited to the law, we will not deduct the tax
Certificate as of the business day until the Annuity Commencement
when the premium payment and Date, date of death, or date of
required information are received. full surrender.
A business day is any day on which
the New York Stock Exchange is open
for trading.
SECTION 4 - POLICY VALUE
POLICY VALUE The Adjusted Policy Value may be
used on the Annuity Commencement
On or before the Annuity Date to provide lifetime income or
Commencement Date, the Policy Value income for a period of no less than
of each Certificate is equal to 60 months under the Payment Options
the: in Section 10.
(a) premium payments; minus SERVICE CHARGE
(b) Gross Partial Withdrawals; plus On each Certificate Anniversary and
at the time of surrender during any
(c) interest credited to the Fixed Certificate Year before the Annuity
Account; plus Commencement Date, we reserve the
right to charge an amount up to the
(d) accumulated gains in the amount of the Service Charge shown
Separate Account; minus on page 3 for administration
expenses. It will be deducted from
(e) accumulated losses in the each Investment Option in
Separate Account; minus proportion to the portion of Policy
Value (prior to such charge) in
(f) service charges, premium taxes each Investment Option,
and transfer fees, if any. respectively, on that Certificate
Anniversary, or at the time of
ADJUSTED POLICY VALUE surrender. In no event will the
Service Charge exceed 2% of the
The Adjusted Policy Value is the Policy Value at the time it is
Policy Value increased or decreased deducted.
by any Excess Interest Adjustment
M1016
PAGE 4
<PAGE>
SECTION 5 - CASH VALUE AND PARTIAL WITHDRAWALS
CASH VALUE 4) The Excess Interest Adjustment
may affect the death proceeds
The Cash Value may be partially defined in Section 9;
withdrawn or will be paid in the
event of a full surrender of the 5) If interest rates have decreased
Certificate. We must receive from the time the affected
written withdrawal or surrender Guaranteed Period(s) started
request from the Certificate Owner until the time the transaction
at or before the commencement of occurs, the Excess Interest
annuity payments. Adjustment will result in
additional funds available to
Information on the current amount the Certificate Owner;
of a Certificate's Cash Value is
available upon request The Cash 6) If interest rates have increased
Value is equal to the Adjusted from the time the affected
Policy Value less any Surrender Guaranteed Period(s) started
Charges. There is-no Cash Value until the time the transaction
after annuity payments have occurs, the Excess Interest
commenced. Adjustment will result in a
decrease in the funds available
EXCESS INTEREST ADJUSTMENT to the Certificate Owner.
Full Surrenders, Partial 7) Certain amounts are not subject
Withdrawals, transfers, and amounts to the Excess Interest
applied to a Payment Option from Adjustment as provided in
the Fixed Account Guaranteed Period Sections 5, 7 and 8.
Options described in Section 7 will
be subject to an Excess Interest The formula for determining the
Adjustment except as provided for amount of the Excess Interest
in the Partial Withdrawals Adjustment is as follows:
provision below.
Excess Interest Adjustment = S x (G-
An Excess Interest Adjustment C) x (M/12)
applies in the following
situations: where: S is the gross (that is,
before surrender charges
1) When the Certificate Owner and premium taxes, if any)
withdraws all or any portion of amount being surrendered,
their Cash Value, partially withdrawn,
transferred, or applied to
2) When the Certificate Owner a Payment Option that is
exercises Annuity Payment subject to the Excess
Options, Interest Adjustment
3) When death proceeds are G is the guaranteed interest
calculated. However, death rate for the Guaranteed
proceeds will not be reduced if Period applicable to S.
the Excess Interest Adjustment
is negative. M is the number of months
remaining in the
The Excess Interest Adjustment is Guaranteed Period for S.
only applied to transactions rounded up to the next
affecting the Guaranteed Period higher whole number of
Options of the Fixed Account (see months.
Section 7) and is based on any
change in interest rates from the C is the current guaranteed
time the affected Guaranteed interest rate then being
Period(s) started until the time offered on new Premium
the Excess Interest Adjustment Payments for the next
occurs. The Excess Interest longer Guaranteed Period
Adjustment is applied as follows: than "M". If the
Certificate form or such a
1) The Excess Interest Adjustment Guaranteed Period Option
is only applied when the is no longer offered, "C"
transactions occur prior to the will be the U.S. Treasury
end of any Guaranteed Period rate for the next longer
Option; maturity (in whole years)
than "M" on the 25th day
2) Transfers to the Guaranteed of the previous calendar
Period Options of the Fixed month, plus up to 2%.
Account are considered Premium
Payments for purposes of Upon full surrender, the Excess
determining the Excess Interest Interest Adjustment (EIA) for each
Adjustment; Guaranteed Period Option will not
reduce the Adjusted Policy Value
3) The Excess Interest Adjustment for that Guaranteed Period Option
is distinct from, and is applied below the amount paid into, less
prior to, the Surrender Charge; any prior withdrawals and transfers
from, that Guaranteed Period
Option, plus interest at the 3%
guaranteed effective annual
interest rate.
U1016
PAGE 5
SECTION 5 - CONT
PARTIAL WITHDRAWALS If any Partial Withdrawal reduces
the Cash Value below $500, we
We will pay the Certificate Owner a reserve the right to pay the full
portion of the Cash Value as a Cash Value and terminate the
Partial Withdrawal provided we Certificate.
receive a written request while the
Certificate is in effect and before We may delay payment of the Cash
the Annuity Commencement Date. When Value from the Fixed Account for up
the Certificate Owner requests a to 6 months after we receive the
Partial Withdrawal they must tell request If the Certificate Owner
us how it is to be allocated from dies after we receive the request,
among the Investment Options. If but before ore the request is
the request for a Partial processed, the request will be
Withdrawal from any Investment processed before the death proceeds
Option is less than or equal to the are determined.
Cash Value in that option, or
Subaccount, we will pay the amount Each Partial Withdrawal consists of
of the request However, if the a portion that is subject to
request for a Partial Withdrawal Surrender Charge (that is, the
from any Investment Option is Excess Partial Withdrawal) and a
greater than the Cash Value in that remaining portion that is free from
option, we will pay the Cash Value Surrender Charge (that is, the
of that Investment Option. Surrender Charge-free amount).
Either portion may be zero (0)
The Gross Partial Withdrawal is the depending on the Partial Withdrawal
total amount which will be deducted requested and prior amounts
from the Certificate's Policy Value withdrawn.
as a result of each Partial
Withdrawal. The Gross Partial Partial Withdrawals may be made
Withdrawal may be more or less than free from Surrender Charges and
the requested Partial Withdrawal free from Excess Interest
amount, depending on whether Adjustments as follows:
Surrender Charges and/or Excess
Interest Adjustments apply at the MINIMUM REQUIRED DISTRIBUTION
time the Partial Withdrawal is
requested. For tax-qualified plans,
Partial Withdrawals taken to
The Excess Partial Withdrawal satisfy minimum distribution
amount is the portion of the requirements under Section
requested Partial Withdrawal that 401(a)(9) of the Internal
is subject to Surrender Charge Revenue Code (IRC) are
(that is, the portion which is in available with no Surrender
excess of the Surrender Charge-free Charges and no Excess Interest
portion). For example, if the Adjustments. The amount
requested withdrawal amount is $ available from each
1,000, and the Surrender Charge- Certificate with respect to
free amount is $200, then the the minimum distribution
Excess Partial Withdrawal would be requirement is based solely on
$800. Excess Partial Withdrawals this Certificate.
will reduce the Policy Value by an
amount equal to (X-Y+Z) where: The Certificate Owner must be
at least 70 1/2 years old in
X = Excess Partial Withdrawal the calendar year of
A = Amount of Partial withdrawal distribution, must submit a
subject Excess Interest Adjustment written request to us and must
Y = Excess Interest djustment = take the distribution before
(A) x (G-C) x (M/12) where G. year end. If the Certificate
C and M are defined in the Owner attains age 70 1/2 in
Excess Interest Adjustment the calendar year of
provision above, with "A" distribution, a written
substituted for "S" in the request which is postmarked no
definitions of G and M. later than the end of the
Z = Surrender Charge on X minus Y. current calendar year must be
submitted to us.
The formula for determining the
Gross Partial Withdrawal is as Systematic minimum
follows: distributions must be at least
$50 or a lump sum distribution
Gross Partial Withdrawal = R - E + SC is available if minimum
required distributions are
where: R is the requested Partial less than $50
Withdrawal;
Any amount requested in excess
E is the Excess Interest of the IRC minimum required
Adjustment; and distribution will have the
appropriate Surrender Charges
SC is the Surrender Charge on and Excess Interest
(EPW - E); where Adjustments applied, unless
the excess distribution
EPW is the Excess Partial qualifies as Surrender Charge-
Withdrawal amount. free or Excess Interest
Adjustment-free under any
additional options provided.
M1017
PAGE 5(A)
SECTION 5 - CONT
NURSING CARE AND TERMINAL CONDITION Annuitant's, Annuitant's
spouse's, Certificate Owner's,
WITHDRAWAL OPTION or Certificate Owner's
spouse's physician. Proof of
Beginning in the first confinement may be a
Certificate Year, if the physician's statement or a
Certificate Owner or statement from a hospital or
Certificate Owner's spouse nursing facility
(annuitant or annuitant's administrator.
spouse if the Certificate
Owner is not a natural person) UNEMPLOYMENT WAIVER
has been 1) confined in a
Hospital or Nursing Facility Beginning in the first
for 30 consecutive days or 2) Certificate Year, the
diagnosed as having a Terminal Certificate Owner may withdraw
Condition, the Certificate all or a portion of the Policy
Owner may elect to withdraw Value free of Surrender
all or a portion of the Policy Charges and free of any Excess
Value without Surrender Interest Adjustment if the
Charges and without Excess Certificate Owner or
Interest Adjustment. The Certificate Owner's spouse
minimum withdrawal under this (annuitant or annuitant's
option is $ 1000. spouse, if the Certificate
Owner is not a natural person)
For Nursing Care, we must becomes unemployed. In order
receive each withdrawal to qualify, the Certificate
request and proof of Owner 1) must have been
eligibility with each request employed full time for at
no later than 90 days least two years prior to
following the date that becoming unemployed, 2) must
confinement has ceased, unless have been employed full time
it can be shown that it was on the Certificate Date, 3)
not reasonably possible to must have been unemployed for
provide the notice and proof at least 60 consecutive days
within the above time period at the time of withdrawal and
and that the notice and proof consist of providing us with a
were given as soon as determination letter from the
reasonably possible. However, applicable State's Department
in no event, except the of Labor which verifies that
absence of legal capacity, the Certificate Owner
shall the notice and proof be qualifies for and is receiving
provided later than one year unemployment benefits at the
following the date that time of withdrawal. The
confinement has ceased. For a determination letter must be
Terminal Condition, we must received by us no later than
receive each withdrawal 15 days following the date of
request and the applicable the withdrawal request.
proof of eligibility no later
than one year following
diagnosis of the Terminal
Condition. Proof of a Terminal
Condition is required only
with the initial withdrawal
request and must be furnished
by the
U1017
PAGE 5(B)
<PAGE>
SECTION 5 - CONT
SURRENDER CHARGES purposes, premium payments are
deemed to be withdrawn before
Amounts withdrawn in excess of any earnings.
Surrender Charge-free Partial
Withdrawals are subject to a After all premium payments are
Surrender Charge. If applicable, considered to be withdrawn, the
this charge will either apply for a remaining Adjusted Policy Value may
number of years following each be withdrawn free from any
premium payment date or for a Surrender Charge.
number of years following the
Certificate Date as shown on page GUARANTEED RETURN OF FIXED ACCOUNT
3. The amount of this charge, if PREMIUM PAYMENTS
any, will be a percentage, (as
shown on page 3 of each Upon full surrender of the
Certificate) of the amount of Certificate, the Certificate Owner
premium withdrawn. will always receive at least the
premium payments made to, less
For Surrender Charge purposes, the prior withdrawals and transfers
oldest premium payment is from, the Fixed Account
considered to be withdrawn first If
the amount withdrawn exceeds this, MINIMUM VALUES
the next oldest premium payment is
considered to be withdrawn, and so Benefits available under the
on until the most recent premium Certificate are not less than those
payment is considered to be required by any statute of the
withdrawn. For Surrender Charge state in which the Certificate is
delivered.
SECTION 6 - SEPARATE ACCOUNT
SEPARATE ACCOUNT of the Separate Account in
accordance with a method of
We have established and will valuation which we establish in
maintain one or more Separate good faith. Valuation Period means
Account(s), indicated on the the period of time from one
Certificate Data Page, under the determination of the value of each
laws of the state of Iowa. Any Subaccount to the next. Such
realized or unrealized income, net determinations are made when the
gains and losses from the assets of value of the assets and liabilities
the Separate Account are credited of each Subaccount is calculated.
to or charged against it without This is generally the close of
regard to our other income, gains business on each day on which the
or losses. Assets are put in the New York Stock Exchange is open.
Separate Account for the
Certificates, as well as for other We also reserve the right to
variable annuity policies and transfer assets of the Separate
Certificates. Any Separate Account Account, which we determine to be
may invest assets in shares of one associated with the class of
or more mutual fund portfolios, or Certificates to which the
in the case of a managed Separate Certificate belongs, to another
Account, direct investments in separate account. If this type of
stocks or other securities as transfer is made, the term
permitted by law. Fund Shares refer "Separate Account", as used in this
to shares of underlying mutual contract and in the Certificate,
funds or prorata ownership of the shall then mean the separate
assets held in a Subaccount of a account to which the assets were
managed Separate Account. Fund transferred.
shares are purchased, redeemed and
valued on behalf of the Separate We also reserve the right to:
Account. (a) deregister the Separate Account
under the Investment Company Act o
The Separate Account is divided 1940;
into Subaccounts. Each Subaccount
invests exclusively in shares of (b) manage the Separate Account
one of the portfolios of an under the direction of a
underlying mutual fund. We reserve committee at any time;
the right to add or remove any
Subaccount of the Separate Account. (c) restrict or eliminate any
voting rights of Certificate
The assets of the Separate Account Owners or other persons who
are our property. These assets will have voting rights as to the
equal or exceed the reserves and Separate Account; and
other contract liabilities of the
Separate Account. These assets will (d) combine the Separate Account
not be chargeable with liabilities with one or more other separate
arising out of any other business accounts;
we conduct. We reserve the right,
subject to regulations governing (e) create new Separate Accounts;
the Separate Account, to transfer
assets of a Subaccount, in excess (f) add new Subaccounts to or
of the reserves and other contract remove existing Subaccounts
liabilities with respect to that from the Separate Account, or
Subaccount, to another Subaccount combine Subaccounts;
or to our General Account.
(g) add new underlying mutual
We will determine the fair market funds, remove existing mutual
value of the assets funds, or substitute a new fund
for an existing fund.
P1037
PAGE 6
<PAGE>
SECTION 6 - SEPARATE ACCOUNT - CONT
The Net Asset Value of a fund share provide accumulation units in those
is the per-share value calculated Subaccounts. The number of
by the mutual fund or, in the case accumulation units purchased in a
of a managed Separate Account, by Subaccount will be determined by
the Company. The Net Asset Value is dividing the premium payment
computed by adding the value of the allocated to or any amount
Subaccount's investments, cash and transferred to that Subaccount, by
other assets, subtracting its the value of an accumulation unit
liabilities, and then dividing by for that Subaccount on the premium
the number of shares outstanding. payment or transfer date.
Net Asset Values of fund shares
reflect investment advisory fees The number of accumulation units
and other expenses incurred in withdrawn or transferred from the
managing a mutual fund or a managed Subaccounts will be determined by
Separate Account dividing the amount withdrawn or
transferred by the value of an
CHANGE IN INVESTMENT OBJECTIVE OR accumulation unit for that
POLICY OF A MUTUAL FUND Subaccount on the withdrawal or
transfer date.
If required by law or regulation,
an investment policy of the The value of an accumulation unit
Separate Account will only be on any business day is determined
changed if approved by the by multiplying the value of that
appropriate insurance official of unit at the end of the immediately
the state of Iowa or deemed preceding valuation period by the
approved in accordance with such net investment factor for the
law or regulation. If so required, valuation period.
the process for obtaining such
approval is f fled with the The net investment factor used to
insurance official of the state or calculate the value of an
district in which this contract is accumulation unit in each
delivered. Subaccount for the Valuation Period
is determined by dividing (a) by
CHARGES AND DEDUCTIONS (b) and subtracting (c) from the
result, where:
The Mortality and Expense Risk Fee
and the Administrative Charge are (a) is the result of:
each deducted both before and after (1) the net asset value of a
the Annuity Commencement Date to fund share held in that
compensate for changes in mortality Subaccount determined as of
and expenses not anticipated by the the end of the current
mortality and administration valuation period; plus
charges guaranteed in the contract.
(2) the per share amount of any
Any applicable Service Charge is dividend or capital gain
deducted prior to the Annuity distributions made by the
Commencement Date only. fund for shares held in
that Subaccount if the ex-
Any applicable Distribution dividend date occurs during
Financing Charge is deducted prior the valuation period; plus
to the Annuity Commencement Date or minus
only, to compensate f or costs of
distributing the policy. (3) a per share credit or
charge for any taxes
If the Mortality and Expense Risk reserved for, which we
Fee(s) and/or Distribution determine to have resulted
Financing Charges are more than from the investment
sufficient, the Company will retain operations of that
the balance as profit or reduce Subaccount.
these fees and charges in the
future. (b) is the net asset value of a
fund share held in that
ACCUMULATION UNITS Subaccount determined as of the
end of the immediately
The Policy Value in the Separate preceding valuation period.
Account before the Annuity
Commencement Date is represented by (c) is a factor representing the
accumulation units. The dollar Mortality and Expense Risk Fee
value of accumulation units for and Administrative Charge
each Subaccount will change from before the Annuity Commencement
day to day reflecting the Date, plus any applicable
investment experience of the Distribution Financing Charge.
Subaccount. This factor is less than or
equal to, on an annual basis,
Premium payments allocated to and the sum of the applicable
any amounts transferred to the percentages shown on page 3 of
Subaccounts will be applied to the daily net asset value of a
fund share held in that
Subaccount.
Since the net investment factor may
be greater or less than one, the
accumulation unit value may
increase or decrease.
PB1037
PAGE 7
<PAGE>
SECTION 7 - FIXED ACCOUNT
FIXED ACCOUNT We reserve the right f or new
premium payments, transfers, or
Premium payments applied to and any rollovers to offer or not to offer
amounts transferred to the Fixed any GPO, except that we will always
Account will reflect a fixed offer at least a one year GPO.
interest rate. The interest rates
we set will be credited for For purposes of crediting interest
increments of at least one year when funds are withdrawn from or
measured from each premium payment transferred into a GPO, the amount
or transfer date. These rates will of the oldest premium payment or
never be less than an effective rollover into that GPO is
annual interest rate of 3%. considered to be withdrawn first If
the amount withdrawn exceeds this
GUARANTEED PERIODS amount, the next oldest premium
payment or rollover is considered
We may offer optional Guaranteed to be withdrawn next, and so on
Period Options, into which premium until the most recent premium
payments may be paid or amounts payment or rollover is considered
transferred. The current interest to be withdrawn (this is a "First-
rate we set for funds entering each In, First-Out" or FIFO procedure).
Guaranteed Period Option (GPO) is Premium payment(s) or rollover(s)
guaranteed until the end of that are deemed to be withdrawn first,
option's Guaranteed Period. At that then credited interest.
time, the premium payment made or
amount transferred into the GPO, Partial withdrawals, Surrenders,
less any withdrawals or transfers transfers, and amounts applied to a
from that GPO, plus accrued Payment Option from the Guarantee
interest, will be rolled into a new Period Option(s) are subject to an
GPO or may be transferred to any Excess Interest Adjustment as
Subaccount(s) within the Separate described in Section 5.
Account(s).
DOLLAR COST AVERAGING FIXED ACCOUNT
The Certificate Owner may choose OPTION
the investment Option(s) they want
the funds rolled into by giving us We may offer a Dollar Cost
a written notice within 30 days Averaging (DCA) Fixed Account
before the end of the expiring Option separate from the Guaranteed
option's Guaranteed Period. Period Options. This option will
However, any Guaranteed Period have a one year interest rate
elected may not extend beyond the guarantee. The current interest
maximum Annuity Commencement Date rate we set for the DCA Fixed
defined in Section 11. In the Account may differ from the rates
absence of such election, the funds credited on the one year GPO in the
will be rolled into a new GPO which Fixed Account In addition, the
is the same as the expiring GPO current interest rate we credit may
unless that GPO is no longer vary on different portions of the
offered, in which case, the next DCA Fixed Account The credited
shorter GPO offered will be used. interest rate will never be less
The Certif icate Owner will be than the minimum effective annual
mailed a notice of completion of interest rate of 3%. The DCA Fixed
the rollover with the new interest Account Option will only be
rate applicable. The new GPO will available under a Dollar Cost
be deemed as accepted if we do not Averaging program as described in
receive a written rejection within Section 8.
30 days from the postmark date of
the completion notice.
SECTION 8 - TRANSFERS
A. TRANSFERS BEFORE THE ANNUITY apply to Policy Value transfers at
COMMENCEMENT DATE the end of a Guaranteed Period.
Prior to the Annuity Commencement Transfers of interest credited in
Date, the Certificate Owner may the GPOs to other Investment
transfer the value of the Options are allowed on a "First-In,
accumulation units from one First-Out" basis. Such transfers
Investment Option to another. The may be made monthly, quarterly,
Certificate Owner must sign a semi-annually, or annually. Each
notice to transfer which gives us such transfer must be at least $50
the facts that we need. and will not be subject to an
Excess Interest Adjustment.
Transfers of Policy Value from the
Guaranteed Period Options (GPO) of Transfers of Policy Value from the
the Fixed Account prior to the end Separate Account are subject to a
of that GPO are subject to an minimum of $500, or the entire
Excess Interest Adjustment If the Subaccount Policy Value, if less.
Excess Interest Adjustment at the However, if the remaining
time of such Policy Value transfer Subaccount Policy Value is less
is a negative adjustment, then the than $500, we reserve the right to
maximum Policy Value transfer is include that amount as part of the
25% of that GPO's Policy Value, transfer.
less Policy Values previously
transferred out of that GPO during The Certificate Owner may choose
the current certificate year. If which GPO to transfer to or from,
the Excess Interest Adjustment at however, any GPO elected may not
the time of such Policy Value extend beyond the maximum Annuity
transfer is a positive adjustment, Commencement Date defined in
no maximum will apply to such Section 11.
Policy Values transferred from the
GPO. No Excess Interest Adjustment
will
V1050
PAGE 8
<PAGE>
SECTION 8 - CONT
No transfers will be allowed out of guarantee that the Dollar Cost
the Dollar Cost Averaging Fixed Averaging program will result in
Account Option except through the higher Policy Values or will
Dollar Cost Averaging Option. otherwise be successful.
We reserve the right to limit The Dollar Cost Averaging may be
transfers to no more than 12 in any discontinued after satisfying the
one Certificate Year. Any transfers minimum number of required
in excess of 12 per Certificate transfers by sending written notice
Year may be charged a $10 per to us. While Dollar Cost Averaging
transfer fee. Transfers among is in effect, Asset Rebalancing is
multiple Investment Options will be not available.
treated as one transfer in
determining the number of transfers ASSET REBALANCING
that have occurred. We also reserve
the right to prohibit transfer d to Prior to the Annuity Commencement
the Fixed Account if we are Date, the Certificate Owner may
crediting an effective annual instruct us to automatically
interest rate of 3%. transfer amounts among the
Subaccounts of the Separate Account
DOLLAR COST AVERAGING OPTION on a regular basis to maintain a
desired allocation of the Policy
Prior to the Annuity Commencement Value among the various Subaccounts
Date, the Certificate Owner may offered. Rebalancing will occur on
instruct us to automatically a monthly, quarterly, semi-annual
transfer a specified amount from or annual basis, beginning on a
the Dollar Cost Averaging (DCA) date selected. The Certif icate
Fixed Account Option or f from the Owner must select the percentage of
Dollar Cost Averaging the Policy Value desired in each of
Subaccount(s), if any, shown on the various Subaccounts offered
page 3 to any Subaccount(s) of the (totaling 100%). Any amounts in the
Separate Account The automatic Fixed Account are ignored for the
transfers can occur monthly or purposes of asset rebalancing.
quarterly. If the Dollar Cost Rebalancing can be started, stopped
Averaging request is received prior or changed at any time. Asset
to the 28th day of any month, the Rebalancing is not available while
first transfer will occur on the Dollar Cost Averaging is in effect
28th day of that month. If the Rebalancing will cease as soon as
Dollar Cost Averaging request is we receive a request for any other
received on or after the 28th day transfer.
of any month, the first transfer
will occur on the 28th day of the B. TRANSFERS AFTER THE ANNUITY
following month. COMMENCEMENT DATE
Prior to the Annuity Commencement After the Annuity Commencement
Date, no transfers, (except through Date, the Certificate Owner may
Dollar Cost Averaging) will be transfer the value of the variable
allowed from a DCA Fixed Account annuity units from one Subaccount
Transfers will continue until the to another within the Separate
elected Subaccount or DCA Fixed Account or to the Fixed Account. If
Account value is depleted. The the Certificate Owner wants to
amount transferred each time must transfer the value of the variable
be at least $500, All transfers annuity units, the Certificate
from the DCA account will be the Owner must tell us in a signed
same amount as the initial notice which gives us the facts
transfer. Changes to the amount that we need. We reserve the right
transferred will only be allowed to limit transfers between the
when additional premium is Subaccounts or to the Fixed
allocated or a new amount is Accounts to once per Certificate
transferred into the DCA Account Year.
Changes to the Subaccounts to which
these transfers are allocated are The minimum amount which may be
not restricted. Transfers must be transferred is the lesser of $10
scheduled for at least 6 but not monthly income or the entire
more than 24 months or for at least monthly income of the variable
4 but not more than 8 quarters each annuity units in the Subaccount
time the Dollar Cost Averaging from which the transfer is being
program is started or restarted made. If the monthly income of the
following termination of the remaining units in a Subaccount is
program for any reason. less than $10, we have the right to
include the value of those variable
Dollar Cost Averaging results in annuity units as part of the
the purchase of more accumulation transfer.
units when the value of the
accumulation unit is low, and fewer After the Annuity Commencement
accumulation units when the value Date, no transfers may be made from
of the accumulation unit is high. the Fixed Account to any other
However, there is no Investment Options.
VB1050
PAGE 9
<PAGE>
SECTION 9 - DEATH PROCEEDS
A. DEATH PROCEEDS PRIOR TO ANNUITY II. Annuitant and Certificate
COMMENCEMENT DATE Owner are different and the
Annuitant dies.
The amount of death proceeds will
be the greater of the Cash Value, When we have due proof that
the Policy Value, or any guaranteed the Annuitant died prior to
minimum death benefit. the Annuity Commencement Date,
the Certificate Owner will
If no payment option is selected by become the new Annuitant and
the date of death, the beneficiary no death proceeds are payable.
may make such election within one If the Certificate Owner is
year of the date we receive due also the deceased Annuitant's
proof of death. The beneficiary may surviving spouse, an amount
elect to receive the death proceeds equal to the excess, if any,
as a lump sum payment or may use of any guaranteed minimum
the death proceeds to provide any death benefit over the Policy
of the annuity payment options Value will then be added to
described in Section 10. Interest the Policy Value. This amount
on death proceeds will be paid as will be added only once at the
required by law. time of such election.
Furthermore, all future
B. DEATH PRIOR TO ANNUITY Surrender Charges will be
COMMENCEMENT DATE waived.
Death proceeds are payable However, in lieu of becoming
contingent upon the relationships the new Annuitant, the
between the Certificate Owner, Certificate Owner may elect to
Annuitant, successor Certificate have the death proceeds
Owner and beneficiary as outlined distributed to the beneficiary
below. The Certificate must be on the death of the Annuitant
surrendered upon settlement and This election must be in
will be terminated upon receiving writing and must be received
proof of death. by us prior to the Annuitant's
death. In such case, when we
I. Certificate Owner is also the have due proof that the
Annuitant When we have due Annuitant died prior to the
proof that the Certificate Annuity Commencement Date, we
Owner died before the Annuity will provide the death
Commencement Date, we will proceeds to the beneficiary.
provide the death proceeds to
the beneficiary. a) If the Certificate Owner
has elected to have the
a) Beneficiary is the deceased death proceeds paid as a
Certificate Owner's lump sum, the beneficiary
surviving spouse. The must, within 60 days of our
beneficiary may elect to receipt of due proof of the
continue the Certificate Annuitant's death, either:
rather than receiving the
death proceeds. If the 1) receive the lump sum proceed;
Certificate is continued, or
an amount equal to the 2) elect to receive annuity
excess, if any, of any payments. Such payments
guaranteed minimum death must begin within one
benefit over the Policy year of our receipt of
Value will then be added to due proof of the
the Policy Value. This Annuitant's death and
amount will be added only must be made for a
once, at the time of such period certain or for
election. Furthermore, all this beneficiary's
future Surrender Charges lifetime, so long as any
will be waived. period certain does not
exceed this
If this beneficiary elects beneficiary's life
to have the death proceeds expectancy.
paid, the death proceeds
must be distributed: b) Death proceeds which are
not paid to or for the
(1) by the end of 5 years benefit of a natural person
after the date of the must be distributed by the
deceased Certificate end of 5 years after the
Owner's death, or date of the Annuitant's
death.
(2) payments must begin no
later than one year after III. Annuitant and Certificate
the deceased Certificate Owner are different and the
Owner's death and must be Certificate Owner dies.
made for a period certain
or for this beneficiary's If the Certificate Owner dies
lifetime, so long as any prior to the Annuity
period certain does not Commencement Date and before
exceed this beneficiary's the entire interest in the
life expectancy. Certificate is distributed,
the successor Certificate
b) Beneficiary is not the Owner will become the new
deceased Certificate Certificate Owner. The
Owner's surviving spouse. remaining portion of any
The death proceeds must be interest in the policy must be
distributed as provided in distributed to the extent
l.a)(1) or l.a)(2) above. provided below in III.a),
III.b), III.c), or III.d).
c) Death proceeds which are
not paid to or for the a) Successor Certificate Owner
benefit of a natural person is the deceased Certificate
must be distributed by the Owner's surviving spouse.
end of 5 years after the The successor Certificate
date of the deceased Owner may elect to continue
Certificate Owner's death. this Certificate rather
than receive the Adjusted
Policy Value. If the
Certificate is continued,
all future Surrender
Charges will be waived. If
the successor Certificate
Owner elects to receive the
Adjusted Policy Value, the
Adjusted Policy Value must
be distributed:
S961
PAGE 10
<PAGE>
SECTION 9 - CONT
(1) by the end of 5 years IV. More than one Certificate
after the date of the Owner. If there is more than
deceased Certificate one Certificate Owner, then
Owner's death, or the death of any Certificate
Owner will be treated the same
(2) payments must begin no as the death of the
later than one year after Certificate Owner.
the deceased Certificate
Owner's death and must be D. DEATH ON OR AFTER THE ANNUITY
made for a period certain COMMENCEMENT DATE
or for the successor
Certificate Owner's The death proceeds on or after the
lifetime, so long as any Annuity Commencement Date depend on
period certain does not the payment option selected. If any
exceed the successor Certificate Owner dies on or after
Certificate Owner's life the Annuity Commencement Date, but
expectancy. before the entire interest in the
Certificate is distributed, the
b) Successor Certificate remaining portion of such interest
Owner is not the deceased in the Certificate will be
Certificate Owner's distributed at least as rapidly as
surviving spouse. The under the method of distribution
Adjusted Policy Value must being used as of the date of that
be distributed as provided Certificate Owner's death.
in III.a)(1) or III.a)(2)
above. E. AN OWNER IS NOT AN INDIVIDUAL
c) Successor Certificate In the case of a non tax-qualified
Owner is not a natural annuity, if any Certificate Owner
person. The Adjusted or beneficial Certificate Owner is
Policy Value must be not an individual, then for
distributed as provided in purposes of the federal income tax
III.a)(1) above. mandatory distribution provisions
in subsection C or D above, (1) the
d) No successor Certificate Annuitant will be treated as the
Owner survives the Certificate Owner of the
deceased Certificate Certificate, and (2) if there is
Owner. The deceased any change in the Annuitant, such a
Certificate Owner's estate change will be treated as the death
will become the new of the Certificate Owner.
Certificate Owner (or the
estate may name a new
Certificate Owner). The
executor or Administrator
must be named in a form
acceptable to us. The
Adjusted Policy Value must
be distributed by the end
of 5 years after the date
of the deceased
Certificate Owner's death.
SECTION 10 - ANNUITY PAYMENTS
A. GENERAL PAYMENT PROVISIONS the adjusted age of the Annuitant.
The adjusted age is the Annuitant's
Payment actual age on the Annuitant's
nearest birthday, at the Annuity
If the Certificate is in force on Commencement Date, adjusted as
the Annuity Commencement Date, we follows:
will use the Fixed Account portion
and/or the Separate Account portion Annuity
of the Adjusted Policy Value to Commencement Date Adjusted Age
make annuity payments to the Payee ----------------- ------------
under Option 3 and/or 3-V, Before 2001 Actual Age minus
respectively, with 10 years 2010 - 2001 Actual Age minus 1
certain, or if elected, under one 2020 - 2011 Actual Age minus 2
or more of the other options 2030 - 2021 Actual Age minus 3
described in this section. However, 2040 - 2031 Actual Age minus 4
the option(s) elected must provide After 2040 Actual Age minus 5
for lifetime income or income for a
period of at least 60 months. The Election of Optional Method of Payment
Certificate Owner will become the
Annuitant at the Annuity Before the Annuity Commencement
Commencement Date. Payments will be Date the Certificate Owner can
made at 1, 3, 6 or 12 month elect or change a payment option.
intervals. We reserve the right to The Certificate Owner may elect, in
change the frequency of payments to a signed notice which gives us the
avoid making payments of less than facts that we need, annuity
$50 payments that may be either
variable, fixed, or a combination
Before the Annuity Commencement of both. If a combination is
Date, if the death proceeds become elected, they must also tell us
payable or if the Certificate is what part of the proceeds on the
surrendered, we will pay any Annuity Commencement Date are to be
proceeds in one sum, or if elected, applied to provide each type of
all or part of these proceeds may payment (It must also specify which
be placed under one or more of the Subaccounts.} The amount of a
options described in this section. combined payment will be the sum of
If we agree, the proceeds may be the variable and fixed payments.
placed under some other method of Payments under a variable payment
payment instead. option will ref lect the investment
performance of the selected
Adjusted Age Subaccount of the Separate Account.
Payments under Options 3 and 5, and
the first payment under Options 3-V
and 5-V are determined based on
SB961
Page 11
<PAGE>
SECTION 10 - ANNUITY PAYMENTS - CONT
Payee when the Certificate Owner elects
this option. The interest rate we
Unless specified otherwise, the declare for this option may be
Payee shall be the Annuitant, or different than the interest rate(s)
the beneficiary as specified in the credited prior to the Annuity
Beneficiary provision. Commencement Date.
Proof of Age Option 2 - Income for a Specified Period
We may require proof of the age of We will make level payments only
any person who has an annuity for the fixed period the
purchased under Options 3, 3-V, 5 Certificate Owner chooses. In the
and 5-V of this section before we event of the death of the person
make the first payment. receiving payments prior to the end
of the fixed period elected,
Minimum Proceeds payments will be continued to that
person's beneficiary or their
If the proceeds are less than present value may be paid in a
$2,000, we reserve the right to pay single sum. No funds will remain at
them out as a lump sum instead of the end.
applying them to a payment option.
Option 3 - Life Income - The
Premium Tax Certificate Owner may choose
between:
We may be required by law to pay
premium tax on the amount applied 1. No Period Certain - We will
to a payment option. If the make level payments only
requirement is applicable to the during the Annuitant's
issue state, we will deduct the lifetime.
premium tax before applying the 2. 10 Years Certain - We will make
proceeds. level payments for the longer
of the Annuitant's lifetime or
B. FIXED ACCOUNT PAYMENTS ten years.
3. Guaranteed Return of Policy
Guaranteed Payment Options Proceeds - We will make level
payments for the longer of the
The fixed account payment is Annuitant's lifetime or until
determined by multiplying each the total dollar amount of
$1,000 of proceeds allocated to a payments we made to the Payee
fixed Payment Option by the amounts equals the amount applied to
shown on page 12 for the option this option.
selected. Options 1, 2 and 4 are
based on a guaranteed interest rate Option 4 - Income of a Specified Amount
of 3%.
Options 3 and 5 are based on a Payments are made for any specified
guaranteed interest rate of 3% and amount until the amount applied to
the "1983 Table a" (male, female, this option, with interest, are
and unisex if required by law) exhausted. This will be a series of
mortality table improved to the level payments followed by a
year 2000 with projection scale G. smaller final payment In the event
(The "1983 Table a" mortality rates of the death of the person
are adjusted based on improvements receiving payments prior to the
in mortality since 1983 to more time proceeds with interest are
appropriately reflect increased exhausted, payments will be
longevity. This is accomplished continued to that person's
using a set of improvement factors beneficiary or their present value
referred to as projection scale G.) may be paid in a single sum.
Option 1 - Interest Payments Option 5 - Joint and Survivor Annuity
We will pay the interest on the Payments are made during the joint
amount we use to provide annuity lifetime of the Payee and a joint
payments in equal payments or this Payee of the Certificate Owner's
amount may be left to accumulate selection. Payments will be made as
for a period of time we and the long as either person is living.
Certificate Owner agree to. We and
the Certificate Owner will agree on Current Payment Options
withdrawal rights
The amounts shown in the tables on
page 12 are the guaranteed amounts.
Current amounts offered to
individuals of the same class may
be obtained from us.
S962
Page 11(A)
SECTION 10 - CONT
C. VARIABLE ACCOUNT PAYMENT OPTIONS the percentage shown on page 3
of the daily net asset value of
Variable Annuity Units a fund share held in the
Separate Account for that
The proceeds chosen by the Subaccount.
Certificate Owner to apply to a
variable payment option will be Determination of the First Variable
used to purchase variable annuity Payment
units in Subaccounts chosen by the
Certificate Owner. The dollar value The amount of the first variable
of variable annuity units in the payment is determined by
chosen Subaccounts will increase or multiplying each $ 1,000 of
decrease reflecting the investment proceeds allocated to a variable
experience of the chosen payment option by the amounts shown
Subaccounts. The value of a on page 13 for the variable option
variable annuity unit in a the Certificate Owner selects. the
particular Subaccount on any tables are based on a 5% effective
business day is equal to (a) annual Assumed Investment Return
multiplied by (b) multiplied by and the "1983 Table a" (male,
(c), where: female, and unisex if required by
law) mortality table improved to
(a) is the variable annuity unit the year 2000 with projection scale
value for that Subaccount on G. (The "1983 Table a" mortality
the immediately preceding rates are adjusted based on
business day; improvements in mortality since
1983 to more appropriately reflect
(b) is the net investment factor increased longevity. This is
for that Subaccount for the accomplished using a set of
Valuation Period; and improvement factors referred to as
projection scale G.)
(c) is the Assumed Investment
Return adjustment factor for Option 3V - Life Income
the Valuation Period.
The Certificate Owner may choose
The Assumed Investment Return between:
adjustment factor for the valuation
period is the product of discount 1. "No Period Certain" - Payments
factors of .99986634 per day to will be made only during the
recognize the 5.0% effective annual lifetime of the Annuitant.
Assumed Investment Return.
2. "10 Years Certain" - Payments
The net investment factor used to will be made for the longer of
calculate the value of a variable the Annuitant's lifetime or ten
annuity unit in each Subaccount for years. In the event of the death
the Valuation Period is determined of the person receiving payments
by dividing (a) by (b) and prior to the end of the period
subtracting (c) from the result, for which the election was made,
where: payments will be continued to
that person's beneficiary or
(a) is the net result of: their present value may be paid
in a single sum.
(1) the net asset value of a
fund share held in that Option 5V - Joint and Survivor Annuity
Subaccount determined as of
the end of the current Payments are made as long as either
valuation period; plus the Payee or the joint Payee is
(2) the per share amount of any living.
dividend or capital gain
distributions made by the Determination of Subsequent Variable
fund for shares held in Payments
that Subaccount if the ex-
dividend date occurs during The amount of each variable annuity
the Valuation Period; plus payment after the first will
or minus increase or decrease according to
(3) a per share credit or the value of the variable annuity
charge for any taxes units which reflect the investment
reserved for, which we experience of the selected
determine to have resulted Subaccounts. Each variable annuity
from the investment payment after the first will be
operations of the equal to the number of variable
Subaccount. annuity units in the selected
Subaccounts multiplied by the
(b) is the net asset value of a variable annuity unit value on the
fund share held in that date the payment is made. The
Subaccount determined as of the number of variable annuity units in
end of the immediately each selected Subaccount is
preceding Valuation Period. determined by dividing the first
variable annuity payment allocated
(c) is a factor representing the to the Subaccount by the variable
Mortality and Expense Risk Fee annuity unit value of that
and Administrative Charge Subaccount on the Annuity
applicable after the Annuity Commencement Date.
Commencement Date. This factor
is less than or equal to, on an
annual basis,
SB962
PAGE 11(B)
<PAGE>
GUARANTEED FIXED ACCOUNT PAYMENT OPTIONS
The amounts shown in these tables are the guaranteed amounts for each $1,000 of
the proceeds. Higher current amounts may be available at the time of settlement.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Option 2, Table I Option 3, Table II Option 3, Table III Option 3, Table IV
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
Number Amount of Monthly Installment for life Monthly Installment for life Monthly Installment for Life
Of Years Monthly No Period Certain 10 Years Certain Guaranteed Return of
Payable Installment Proceeds
------------------------------------------------------------------------------------------------
Age* Male Female Unisex Male Female Unisex Male Female Unisex
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $3.87 $3.55 $3.71 $3.84 $3.54 $3.70 $3.73 $3.49 $3.61
51 3.93 3.60 3.77 3.90 3.59 3.75 3.79 3.53 3.66
52 4.00 3.65 3.83 3.97 3.64 3.81 3.84 3.58 3.71
53 4.07 3.71 3.90 4.04 3.70 3.87 3.90 3.63 3.76
5 $17.91 54 4.15 3.77 3.97 4.11 3.75 3.94 3.96 3.68 3.82
6 15.14 55 4.23 3.83 4.04 4.19 3.82 4.01 4.03 3.73 3.88
7 13.16 56 4.32 3.90 4.11 4.27 3.88 4.08 4.10 3.79 3.94
8 11.68 57 4.41 3.97 4.19 4.35 3.95 4.15 4.17 3.85 4.00
9 10.53 58 4.50 4.05 4.28 4.44 4.02 4.24 4.24 3.91 4.07
10 9.61 59 4.61 4.13 4.37 4.53 4.10 4.32 4.32 3.97 4.14
11 8.86 60 4.72 4.21 4.47 4.63 4.18 4.41 4.40 4.04 4.22
12 8.24 61 4.84 4.30 4.57 4.74 4.26 4.51 4.49 4.12 4.30
13 7.71 62 4.96 4.40 4.68 4.85 4.35 4.61 4.58 4.19 4.38
14 7.26 63 5.10 4.50 4.80 4.97 4.45 4.71 4.68 4.28 4.47
15 6.87 64 5.24 4.61 4.93 5.09 4.55 4.83 4.78 4.36 4.56
16 6.53 65 5.40 4.73 5.06 5.22 4.66 4.95 4.88 4.45 4.66
17 6.23 66 5.56 4.85 5.21 5.36 4.77 5.07 4.99 4.55 4.76
18 5.96 67 5.74 4.99 5.36 5.50 4.89 5.20 5.11 4.65 4.87
19 5.73 68 5.93 5.13 5.53 5.65 5.02 5.34 5.24 4.76 4.98
20 5.51 69 6.13 5.29 5.71 5.80 5.15 5.49 5.37 4.87 5.10
70 6.34 5.45 5.90 5.96 5.30 5.64 5.51 4.99 5.23
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Option 5, Table V
- --------------------------------------------------------------------------------------------------------------------------------
Monthly Installment For Joint and Full Survivor
- --------------------------------------------------------------------------------------------------------------------------------
Age of Age of Female Annuitant*
Male
Annuitant* ---------------------------------------------------------------------------------------------------------
15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less Than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50 $2.99 $3.05 $3.11 $3.18 $3.25 $3.32 $3.39
55 3.11 3.19 3.27 3.35 3.44 3.53 3.63
60 3.27 3.37 3.47 3.58 3.70 3.82 3.95
65 3.47 3.60 3.74 3.89 4.05 4.22 4.39
70 3.74 3.91 4.10 4.31 4.53 4.77 5.02
- --------------------------------------------------------------------------------------------------------------------------------
Monthly Installment For Unisex Joint and Full Survivor
- --------------------------------------------------------------------------------------------------------------------------------
Age of Age of Joint Annuitant*
First
Annuitant* ---------------------------------------------------------------------------------------------------------
15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less Than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- --------------------------------------------------------------------------------------------------------------------------------
50 $3.04 $3.09 $3.15 $3.21 $3.27 $3.33 $3.39
55 3.17 3.24 3.32 3.40 3.48 3.56 3.63
60 3.34 3.44 3.54 3.64 3.75 3.85 3.95
65 3.57 3.70 3.83 3.97 4.11 4.26 4.39
70 3.87 4.04 4.22 4.42 4.62 4.82 5.01
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Adjusted Age as defined in Section 10.A.
- --------------------------------------------------------------------------------
The annual, semi-annual or quarterly installments under Option 2 shall be the
monthly installment shown multiplied by 11.84, 5.96 or 2.99 respectively, and
for Options 3 and 5 the monthly installment shown multiplied by 11.80, 5.95 or
2.99 respectively.
- --------------------------------------------------------------------------------
Dollar amounts of monthly installments not shown in the above tables will be
calculated on the same basis as those shown and may be obtained from the
Company.
T828
PAGE 12
<PAGE>
VARIABLE PAYMENT OPTIONS
BASED ON ASSUMED INVESTMENT RETURN
The amounts shown in these tables are the initial payment amounts based on a
5.0% Assumed Investment Return for each $1,000 of the proceeds.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Option 3 - V, Table II Option 3 - V, Table III
- --------------------------- -------------------------------------------------------------------------------------------
Monthly Installment for Life Monthly Installment for Life
No Period Certain 10 Years Certain
Age* Male Female Unisex Male Female Unisex
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $5.11 $4.81 $4.96 $5.07 $4.79 $4.94
51 5.17 4.85 5.02 5.13 4.83 4.99
52 5.24 4.90 5.07 5.19 4.88 5.04
53 5.31 4.95 5.13 5.25 4.93 5.10
54 5.38 5.01 5.20 5.32 4.98 5.16
55 5.46 5.06 5.26 5.39 5.04 5.22
56 5.54 5.12 5.34 5.47 5.09 5.28
57 5.63 5.19 5.41 5.54 5.16 5.36
58 5.72 5.26 5.49 5.63 5.22 5.43
59 5.82 5.34 5.58 5.72 5.29 5.51
60 5.93 5.42 5.68 5.81 5.37 5.60
61 6.04 5.50 5.78 5.91 5.44 5.69
62 6.17 5.60 5.89 6.02 5.53 5.78
63 6.30 5.69 6.00 6.13 5.62 5.88
64 6.44 5.80 6.13 6.25 5.71 5.99
65 6.60 5.91 6.26 6.37 5.82 6.10
66 6.76 6.04 6.40 6.50 5.92 6.22
67 6.94 6.17 6.56 6.63 6.04 6.35
68 7.13 6.31 6.72 6.77 6.16 6.48
69 7.33 6.46 6.90 6.92 6.29 6.62
70 7.55 6.63 7.09 7.07 6.43 6.76
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Option 5V, Table V
- ------------------------------------------------------------------------------------------------------------------------------------
Monthly Installment For Joint and Full Survivor
Age of Age of Female Annuitant*
Male ------------------------------------------------------------------------------------------------------------
Annuitant*
15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $4.32 $4.36 $4.41 $4.46 $4.51 $4.57 $4.62
55 4.42 4.47 4.53 4.60 4.67 4.75 4.83
60 4.54 4.62 4.70 4.80 4.90 5.01 5.12
65 4.71 4.82 4.94 5.07 5.22 5.37 5.53
70 4.95 5.10 5.27 5.46 5.67 5.89 6.13
- -----------------------------------------------------------------------------------------------------------------------------------
Monthly Installment For Unisex Joint and Full Survivor
- -----------------------------------------------------------------------------------------------------------------------------------
Age of Age of Joint Annuitant*
First -----------------------------------------------------------------------------------------------------------
Annuitant*
15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- -----------------------------------------------------------------------------------------------------------------------------------
50 $4.40 $4.45 $4.50 $4.55 $4.61 $4.67 $4.72
55 4.52 4.59 4.66 4.73 4.81 4.89 4.96
60 4.69 4.78 4.87 4.97 5.08 5.19 5.29
65 4.91 5.04 5.17 5.31 5.46 5.62 5.77
70 5.22 5.40 5.59 5.79 6.02 6.24 6.47
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Adjusted Age as defined in Section 10.A.
- --------------------------------------------------------------------------------
The annual, semi-annual or quarterly installments shall be the monthly
installment shown for Options 3-V and 5-V multiplied by 11.70, 5.93 or 2.99
respectively.
- --------------------------------------------------------------------------------
Dollar amounts of monthly installments not shown in the above tables will be
calculated on the same basis as those shown and may be obtained from the
Company.
TB828
PAGE 13
<PAGE>
SECTION 11 - GENERAL PROVISIONS
THE CONTRACT Date.
The entire contract consists of EVIDENCE OF SURVIVAL
this contract, riders, and the
attached application. All We have the right to require
statements in the application or in satisfactory evidence that a person
the enrollment form for a was alive if a payment is based on
Participant Certificate are that person being alive. No payment
representations and not warranties. will be made until we receive the
No statement will cause this evidence.
contract to be void or be used in
defense of a claim unless contained SETTLEMENT
in the application.
Any payment by us under the
PARTICIPANT CERTIFICATES Certificate is payable at our Home
Office.
We will issue a Certificate to each
Participant Such Certificates are RIGHTS OF CERTIFICATE OWNER
not a part of this contract
The Certificate Owner may, while
MODIFICATION OF CONTRACT the Annuitant is living:
No change in this Contract or the 1. Assign the Certificate.
Group Certificate is valid unless 2. Surrender the Certificate to us.
made in writing by us and approved 3. Amend or modify the Certificate
by one of our officers. No with our consent.
registered representative has 4. Receive annuity payments or name
authority to change or waive any a Payee to receive the payments.
provision of the Group Certificate 5. Exercise, receive and enjoy
or this Contract every other right and benefit
contained in the Certificate.
TAX QUALIFICATION
The use of these rights may be
This Contract is intended to subject to the consent of any
qualify as an annuity contract for assignee or irrevocable
federal income tax purposes. The beneficiary; and of the spouse in a
provisions of this Contract are to community or marital property
be interpreted to maintain such state.
qualification. To maintain such tax
qualification, we reserve the right Unless we have been notified of a
to amend this Contract to reflect community or marital property
any clarifications that may be interest in the Certificate, we
needed or are appropriate to will rely on our good faith belief
maintain such tax qualification or that no such interest exists and
to conform this Contract to any will assume no responsibility for
applicable changes in the tax inquiry.
qualification requirements. We will
send the Certificate Owner a copy SUCCESSOR CERTIFICATE OWNER
in the event of any such amendment
If such an amendment is refused, it A successor Certificate Owner can
must be by giving us written be named in any enrollment form, or
notice, and refusal may result in in a notice the Certificate Owner
adverse tax consequences. signs which gives us the facts that
we need. The successor Certificate
NON -PARTICIPATING Owner will become the new
Certificate Owner when the
The Group Contract and Group Certificate Owner dies, if the
Certificates will not share in our Certificate Owner dies before the
surplus earnings. Annuitant If no successor
Certificate Owner survives the
AGE OR SEX CORRECTIONS Certificate Owner and the
Certificate Owner dies before the
If the age or sex of the Annuitant Annuitant, the Certificate Owner's
has been misstated, the benefits estate will become the new
will be those which the premiums Certificate Owner.
paid would have purchased for the
correct age and sex. If required by ANNUITY COMMENCEMENT DATE
law to ignore differences in the
sex of the Annuitant, the payment The Annuity Commencement Date is
options will be determined using the date annuity payments begin.
the unisex factors in Section 10. This date may not be later than the
last day of the Certificate month
Any underpayment made by us will be starting after the Annuitant
paid with the next payment Any attains age 85, except as expressly
overpayment made by us will be allowed by us, but in no event
deducted from future payments. Any later than the last day of the
underpayment or overpayment, will Certificate month following the
include interest at 5% per year, month in which the Annuitant
from the date of the wrong payment attains age 95. The Certificate
to the date of the adjustment Owner may change the Annuity
Commencement Date at any time
INCONTESTABILITY before the Annuity Commencement
Date by giving us 30 days' written
This Contract shall be notice.
incontestable from the Contract
H719
PAGE 14
<PAGE>
SECTION 11 - CONT
ASSIGNMENT at the time the death proceeds
become payable. If there is more
(a) In the case of a non-tax than one beneficiary and the
qualified annuity, the Certificate Owner failed to specify
Certificate may be assigned. their interest, they will share
The assignment must be in equally. Payment will be made to
writing and filed with us. the named contingent
beneficiary(ies) only if all
(b) We assume no responsibility for primary beneficiaries have died
the validity of any assignment before the death proceeds become
Any claim made under an payable. If any primary beneficiary
assignment shall be subject to is alive at the time the death
proof of interest and the proceeds become payable, but dies
extent of the assignment. before receiving their payment,
their share will be paid to their
(c) The Certificate may be applied estate.
for and issued to qualify as a
tax-qualified annuity under In cases where the annuitant dies
certain sections of the and the Certificate Owner (who is
Internal Revenue Code. This not the annuitant) elected to
will be specified in the receive the death proceeds in
enrollment form, or information accordance with Section 9, if the
provided in lieu thereof. annuitant's estate has been named
Ownership of the Certificate as beneficiary, then payment will
then is restricted so that it be made to the Certificate Owner.
will comply with provisions of
the Internal Revenue Code. PROTECTION OF PROCEEDS
Assignment of the Certificate may Unless the Certificate Owner so
result in adverse tax consequences. directs by filing written notice
with us, no beneficiary may assign
BENEFICIARY any payments under the Certificate
Death proceeds, when payable in before the same are due. To the
accordance with Section 9, are extent permitted by law, no
payable to the designated payments under the Certificate will
beneficiary or beneficiaries. Such be subject to the claims of
beneficiary(ies) must be named in creditors of the Certificate Owner
the enrollment form, or information or any beneficiary.
provided in lieu thereof, and may
be changed without consent (unless DEFERMENT
irrevocably designated or required
by law) by notifying us in writing We will pay any Partial Withdrawals
on a form acceptable to us. The or surrender proceeds from the
change will take effect upon the Separate Account(s) within 7 days
date signed, whether or not you are after we receive all requirements
living when we receive it The that we need. However, it may
notice must have been postmarked happen that the New York Stock
(or show other evidence of delivery Exchange is closed for trading
that is acceptable to us) on or (other than the usual weekend or
before the date of death. The most holiday closings), or the
recent change of beneficiary notice Securities and Exchange Commission
will replace any prior beneficiary restricts trading or determines
designations. No change will apply that an emergency exists. If so, it
to any payment we made before the may not be practical for us to
written notice was received. If an determine the investment experience
irrevocable beneficiary dies, the of the Separate Account In that
Certificate Owner may designate a case, we may defer transfers among
new beneficiary. the Subaccounts and to the Fixed
Account, and determination or
The Certificate Owner may direct payment of Partial Withdrawals or
that the beneficiary shall not have surrender proceeds.
the right to withdraw, assign or
commute any sum payable under an When permitted by law, we may defer
option. In the absence of such paying any Partial Withdrawals or
election or direction, the surrender proceeds from the Fixed
beneficiary may change the manner Account for up to 6 months from the
of payment or make an election of date we receive the request If the
any option. Certificate Owner dies after the
request is received, but before the
If any primary or contingent request is processed, the request
beneficiary dies before the will be processed before the death
Annuitant* that beneficiary's proceeds are determined. Interest
interest in the Certificate ends will be paid on any amount deferred
with that beneficiary's death. Only for 30 days or more. This rate will
those beneficiaries living at the be computed at the rate of interest
time of the Annuitant's death will currently paid on proceeds left
be eligible to receive their share under the Interest Payments
of the Death Proceeds. In the event Settlement Option.
no contingent beneficiaries have
been named and all primary REPORTS TO OWNER
beneficiaries have died before the
death proceeds become payable, the We will give the Certificate Owner
Certificate Owner(s) will become an annual report at least once each
the beneficiary(ies) unless elected Certificate Year. This report will
otherwise in accordance with show the number and value of the
Section 9. If both primary and accumulation units held in each of
contingent beneficiaries have been the Subaccounts as well as the
named, payment will be made to the value of the Fixed Account. it will
named primary beneficiaries living also give the Death Benefit, Cash
Value, and any other facts required
by law or regulation.
J719
PAGE 15
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
LUMP SUM PARTIAL WITHDRAWAL OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [2nd] Certificate Year, amounts $500, minimum)
up to [10%] of the Policy Value immediately prior to the
Partial Withdrawal are available as a Lump Sum Distribution once
per Certificate Year with no Surrender Charges and no Excess
Interest Adjustment.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1051 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
GUARANTEED MINIMUM DEATH BENEFIT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
The Death Proceeds Prior to Annuity Commencement Date Provision in Section 9,
Death Proceeds, is replaced with the following language:
The amount of the death proceeds will be the greatest of (a), (b), or (c),
where:
(a) is the Policy Value on the date we receive due proof of
death and an election of a method of settlement;
(b) is the Cash Value on the date we receive due proof of death
and an election of a method of settlement, and;
(c) is the Guaranteed Minimum Death Benefit (GMDB), plus any
additional premium payments received, less any Gross Partial
Withdrawals from the date of death to the date of payment of
death proceeds.
If no payment option is selected by the date of death, the
beneficiary may make such election within 60 days of the date we
receive due proof of death. The beneficiary may elect to receive
the death proceeds as a lump sum payment or may use the death
proceeds to provide any of the annuity payment options described
in Section 10. Interest on death proceeds will be paid as
required by law.
The Guaranteed Minimum Death Benefit is the [5%] Annually
Compounding Death Benefit The GMDB is equal to the total premiums
paid for the Certificate, less any Adjusted Partial Withdrawals,
accumulated at [5%] interest per annum from the payment or
withdrawal date to the date of death.
The Adjusted Partial Withdrawal is the total amount deducted from
the GMDB as a result of a Partial Withdrawal as used in the GMDB
provision. It is equal to the Gross Partial Withdrawal described
in Section 5, multiplied by an Adjustment Factor. The Adjustment
Factor is equal to the amount of the death proceeds prior to the
Partial Withdrawal divided by the Policy Value prior to the
Partial Withdrawal.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1058 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
GUARANTEED MINIMUM DEATH BENEFIT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
The Death Proceeds Prior to Annuity Commencement Date provision in Section 9,
Death Proceeds, is replaced with the following language:
The amount of the death proceeds will be the greatest of (a),
(b), or (c) where:
(a) is the Policy Value on the date we receive due proof of
death and an election of a method of settlement;
(b) is the Cash Value on the date we receive due proof of death
and an election of a method of settlement, and;
(c) is the Guaranteed Minimum Death Benefit (GMDB), plus any
additional premium payments received, less any Gross Partial
Withdrawals from the date of death to the date of payment of
death proceeds.
If no payment option is selected by the date of death, the
beneficiary may make such election within 60 days of the date we
receive due proof of death. The beneficiary may elect to receive
the death proceeds as a lump sum payment or may use the death
proceeds to provide any of the annuity payment options described
in Section 10. Interest on death proceeds will be paid as
required by law.
The Guaranteed Minimum Death Benefit is the Double Enhanced Death
Benefit The GMDB is the greater of (1) and (2) where:
(1) is a [5%] Annually Compounding Death Benefit, equal to:
a) the total premiums paid for the Certificate; minus
b) Adjusted Partial Withdrawals (as described below);
plus
c) interest accumulated at [5%] per annum from the
payment or withdrawal date to the earlier of the
date of death or the Certificate Owner's [81st]
birthday.
(2) is a Step-Up Death Benefit, equal to:
a) the largest Policy Value on the Certificate Date
or [any] Certificate [Anniversary] prior to the
earlier of the date of death or the Certificate
Owner's [81st] birthday; plus
b) any Premium Payments made since then, minus any
Adjusted Partial Withdrawals made since then.
If the Certificate Owner is a nonnatural person, or if the
Certificate Owner has elected to have the death proceeds paid
upon the death of the annuitant, the Guaranteed Minimum Death
Benefit will be based upon the annuitant's age.
The Adjusted Partial Withdrawal is the total amount deducted
from the GMDB as a result of a Partial Withdrawal as used in
the GMDB provision. It is equal to the Gross Partial Withdrawal
described in Section 5, multiplied by an Adjustment Factor. The
Adjustment Factor is equal to the amount of the death proceeds
prior to the Partial Withdrawal divided by the Policy Value
prior to the Partial Withdrawal.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1060 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
GUARANTEED MINIMUM DEATH BENEFIT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
The Death Proceeds Prior to Annuity Commencement Date Provision in Section 9,
Death Proceeds, is replaced with the following language:
The amount of the death proceeds will be the greatest of (a),
(b), or (c), where:
(a) is the Policy Value on the date we receive due proof of death
and an election of a method of settlement;
(b) is the Cash Value on the date we receive due proof of death
and an election of a method of settlement, and;
(c) is the Guaranteed Minimum Death Benefit (GMDB), plus any
additional premium payments received, less any Gross Partial
Withdrawals from the date of death to the date of payment of
death proceeds.
If no payment option is selected by the date of death, the
beneficiary may make such election within 60 days of the date we
receive due proof of death. The beneficiary may elect to receive
the death proceeds as a lump sum payment or may use the death
proceeds to provide any of the annuity payment options described
in Section 10. Interest on death proceeds will be paid as
required by law.
The Guaranteed Minimum Death Benefit is the Return of Premium
Death Benefit The GMDB is equal to the total premiums paid for
the Certificate, less any Partial Withdrawals, as of the date of
death.
The Adjusted Partial Withdrawal is the total amount deducted from
the GMDB as a result of a Partial Withdrawal as used in the GMDB
provision. It is equal to the Gross Partial Withdrawal described
in Section 5, multiplied by an Adjustment Factor. The Adjustment
Factor is equal to the amount of the death proceeds prior to the
Partial Withdrawal divided by the Policy Value prior to the
Partial Withdrawal.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1061 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
SYSTEMATIC PAYOUT OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [1st] Certificate Year, a Systematic Payout
Option (SPO) is available on a monthly, quarterly, semi-annual or
annual basis. SPO payouts must be at least $50 and may not exceed
10% of the Policy Value at the time a SPO payout is made divided
by the number of payouts made per year (e.g. 12 for monthly). No
Surrender Charges or Excess Interest Adjustment will apply to the
SPO payout Monthly and quarterly payouts must be sent through
electronic funds transfer directly to your checking or savings
account The Certificate Owner may start or stop SPO payouts at
any time; however, 30 days written notice is required to stop SPO
payouts. Once stopped, the Certificate Owner must wait until the
first day of the next Certificate Year to begin a new SPO.
Once the Certificate Owner has elected a SPO, the Certificate
Owner must wait a minimum time before the first SPO payment: one
month for a monthly SPO, three months for quarterly, six months
for semi-annual, or twelve months for annual.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1064 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
SERVICE CHARGE WAIVER
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Service Charge provision in Section 4, Policy Value, is amended to include
the following language:
The Service Charge will not be deducted on a Certificate
Anniversary or at the time of surrender if, at such time, either
(1) the sum of all premium payments made less the sum of all
withdrawals taken equals or exceeds [$50,000] or (2) the Policy
Value equals or exceeds [$50,000]
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1074 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
PREMIUM ENHANCEMENT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
Section 3, Premium Payments, is amended to include the following language:
PREMIUM ENHANCEMENT
When a Premium Payment is paid, a Premium Enhancement Percentage
of [.25%] to [5%] be applied to that Premium Payment and the
resulting amount will be added to t Policy Value. The amount of
the Premium Enhancement is not considered a Premium Payment The
Premium Enhancement Percentage may vary from premium to premium
on subsequent Premium Payments, but will never be less than 0.25%
more than [5%.] The Premium Enhancement Percentage applicable to
the Initial Premium is set forth on the Certificate Data Page. We
will advise You of the amount of the Premium Enhancement
applicable to each subsequent Premium Payment in a confirmation
that We will send to You. No Premium Enhancement will apply if
the Certificate is cancelled pursuant to the Right to Cancel
provision.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1075 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
GUARANTEED MINIMUM INCOME BENEFIT RIDER
This rider provides a Minimum Annuitization Value which can only be used with
the Annuity Factors shown in Schedule I of this rider. This Minimum
Annuitization value is guaranteed by us, regardless of the performance of the
variable annuity's investments.
This rider is attached to and made part of the Contract as of the Contract Date.
This rider may only be terminated as provided herein. This rider is subject to
all of the provisions in the Contract that do not conflict with the provisions
of this rider. The Rider Payment Options provide for variable annuity payments.
Subsequent payments may fluctuate with the investment performance of the
Subaccounts, but will never be less than the initial payment.
DEFINITIONS Election Date
The following definitions used in A date that the Certificate Owner
this Rider are for reference only. elects to begin Guaranteed Minimum
Income Benefit payments. The
Annuitant Election Date must be within 30
days following a Certificate
The Annuitant is designated on the Anniversary. The first and last
Certificate Data Page. The variable dates to elect a Rider Payment
annuity payments are paid to the Option are shown on page one of the
Annuitant (or surviving Joint rider attached to the Certificate.
Annuitant).
Minimum Annuitization Value
Annuity Factor
The amount we will use to determine
A factor for the applicable the Guaranteed Minimum Income
Annuitant age, sex and Rider Benefit payments.
Payment Option is shown in schedule
I or Schedule II of this rider. For Rider Date
the Rider Payment Option chosen,
the Annuity Factor from Schedule I The date that the rider is added to
and the Minimum Annuitization Value the Certificate. This date may only
will be used to determine the be the issue date of the
applicable annuity payments. For Certificate or a Certificate
Annuitants age 85 or older at the Anniversary date. This is also the
time of annuitization, the age 85 Certificate Anniversary that the
Annuity Factor will be used for Certificate Owner most recently
Schedule I. Factors not shown are elected to upgrade the Minimum
available from us upon request Annuitization Value, if applicable.
Schedule I and Schedule II are
based on the "1983 Table a" Supportable Payment
mortality table, improved to the
year 2000 with projection scale G. The Supportable Payment is equal to
the number of variable annuity
units in the selected Subaccounts
multiplied by the variable annuity
unit values in those Subaccounts on
the date the payment is made.
RGMI 4 499
1
<PAGE>
GUARANTEED MINIMUM INCOME BENEFIT (C) is the Minimum Annuitization
Value after the current
On the Election Date, the Certificate Year maximum
Certificate Owner may use the annual free amount has been
Minimum Annuitization Value and the withdrawn, but prior to
applicable Annuity Factor to withdrawal of the excess
provide variable payments to the portion.
Annuitant The first variable
payment is determined by For each Certificate Year, the
multiplying each $ 1,000 of Minimum maximum annual free amount is equal
Annuitization Value by the Annuity to the Minimum Annuitization Value,
Factor on Schedule 1. Each as of the beginning of the
subsequent payment will be Certificate Year, multiplied by the
calculated as described in the effective Annual Growth Rate as
Contract, using a 5% Assumed shown on page one of the rider
Investment Return. attached to the Certificate.
Withdrawals during a Certificate
For subsequent payments, an annual Year will reduce the available
Mortality and Expense Risk Fee and maximum annual free amount by the
Administrative Charge (which amount of the Withdrawal.
includes an investment risk fee)
will be charged. This total fee may RIDER FEE
be different than the Mortality and
Expense Risk Fee and Administrative We will deduct a fee from the value
Charge in effect prior to the of the Certificate on each
Election Date. It may also be Certificate Anniversary and on the
different than the Mortality and termination date of this rider. The
Expense Risk Fee and Administrative Rider Fee is the Minimum
Charge for the settlement options Annuitization Value at the time the
shown in the Certificate. fee is deducted, multiplied by the
Rider Fee Percentage shown on the
The subsequent payments may first page of the rider attached to
fluctuate in accordance with the the Certificate. The fee will be
investment performance of the deducted from each Subaccount in
annuity Subaccounts. However, such proportion to the amount of value
payments will never be less than of the Certificate in each
the initial payment. Subaccount. This fee will not be
deducted after the Election Date or
MINIMUM ANNUITIZATION VALUE if the Certificate terminates due
to the death of the Certificate
The Minimum Annuitization Value is Owner.
used to determine the Guaranteed
Minimum Income Benefit payments. WAIVER OF RIDER FEE
On the Rider Date, the Minimum If the value of the Certificate, on
Annuitization Value is the value of a particular Certificate
the Certificate. Thereafter, based Anniversary, exceeds an amount
upon the effective Annual Growth equal to the Rider Fee Waiver
Rate (shown on page one of the Threshold (shown on page one of the
rider attached to the Certificate), rider attached to the Certificate)
it will be the value of the multiplied by the Minimum
Certificate on the Rider Date, plus Annuitization Value, the Rider Fee
any additional payments made after will be waived for that Certificate
the Rider Date, minus policy Anniversary.
Withdrawals (adjusted as described
below), minus any premium taxes. MINIMUM ANNUITIZATION VALUE UPGRADE
Withdrawals The Certificate Owner may elect, in
writing, to upgrade the Minimum
In any Certificate Year, the Annuitization Value to the value of
Minimum Annuitization Value will the Certificate on a Certificate
only be reduced by the actual Anniversary. This may be done
amount of a withdrawal as long as within 30 days immediately
the withdrawal does not exceed a following any Certificate
maximum annual free amount Anniversary, and prior to the Last
Withdrawals in excess of the Date to Upgrade shown on page one
maximum annual free amount will of the rider attached to the
reduce the Minimum Annuitization Certificate.
Value by an amount equal to (A)
divided by (B) multiplied by (C) If an upgrade is elected, the rider
where: attached to the Certificate will
terminate and a new rider will be
(A) is the amount of the excess issued with a new Rider Date,
withdrawal; Election Date and its own
guaranteed benefits. The new annual
(B) is the value of the Rider Fee Percentage may be
Certificate after the different than this rider's, but it
current Certificate Year will never be greater than 0.50%.
maximum annual free amount
has been withdrawn, but
prior to the withdrawal of
the excess portion; and
RGMI 4 499
2
<PAGE>
RIDER PAYMENT OPTIONS units as described below. If the
Supportable Payment (at any payment
The Minimum Annuitization Value and date) is less than the stabilized
applicable Annuity Factors from payment for that year, annuity
Schedule I may be applied to the units will be redeemed as described
following payment options: below to fund the deficiency.
Life Income - An election may be Purchase/Redemption of Annuity
made for "No Period Certain" or " Units:
10 Years Certain". In the event
of the death of the person The number of annuity units
receiving payments prior to the purchased or redeemed is equal to
end of the chosen period certain, the annuity income purchased or
the remaining period certain redeemed, respectively, divided
payments will be continued to the by the annuity unit value for
beneficiary. each respective Subaccount
Purchases and redemptions of
Joint and Full Survivor - An annuity income will be allocated
election may be made f or "No to each Subaccount on a
Period Certain" or " 1 0 Years proportionate basis. The amount
Certain". Payments will be made of annuity income purchased or
as long as either the Annuitant redeemed is the difference
or Joint Annuitant is living. In between the Supportable Payment
the event of the death of both and the stabilized payment, times
the Annuitant and the Joint the attained age nearest birthday
Annuitant prior to the end of the Annuity Factors shown in Schedule
chosen period certain, the 11, divided by $ 1,000. These
remaining period certain payments factors will reflect the
will be continued to the remaining certain period, if any,
beneficiary. but will be calculated on the
same basis as the Schedule 11
GUARANTEED MINIMUM PAYMENT factors.
On the Election Date, the The Company bears the risk that it
Certificate Owner will receive will need to make payments if all
guaranteed minimum payments. The annuity units have been redeemed in
annual Mortality and Expense Risk an attempt to maintain the
Fee and Administrative Charge for stabilized payment at the initial
these payments is shown on page one payment level. In such an event,
of the rider attached to the the Company will make all future
Certificate. The percentage shown payments equal to the initial
on page one of the rider attached payment.
to the Certificate also includes a
fee to cover investment risk ASSIGNMENT
associated with guaranteeing a
minimum payment. Payments made under this rider may
not be pledged or assigned.
The first payment is based on the Payments will only be made to the
Annuity Factors in Schedule 1. We Annuitant or Joint Annuitant named
guarantee that each subsequent in the policy.
payment will be equal to or greater
than the initial payment. TERMINATION
During the first Certificate Year This rider will be terminated, with
following annuitization, each respect to each Certificate, upon
payment will be stabilized to equal the earliest of:
the initial payment On each
Certificate Anniversary following a. the Election Date;
annuitization, the stabilized
payment will be increased or b. 30 days after the Last Date to
decreased (but never below the Elect Benefit shown on the
initial payment) and held level for first page of the rider
that Certificate Year. On each attached to the Certificate.
Certificate Anniversary following
annuitization, the stabilized c. the date the Certificate
payment will equal the greater of terminates;
the initial payment or the
Supportable Payment at that time. d. the date the Certificate Owner
elects to apply the value of
If the Supportable Payment (at any the Certificate to annuitize
payment date) is greater than the the Certificate; and
stabilized payment for that year,
the excess will be used to purchase e. the date the Certificate Owner
additional annuity elects to upgrade their Minimum
Annuitization Value.
This rider cannot be terminated
prior to the earliest of the above
dates.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
RGMI 4 499
3
<PAGE>
SCHEDULE I - ANNUITY FACTORS
The amounts shown in these tables are the Annuity Factors for each $1,000 of the
Minimum Annuitization Value and assume a 3% Assumed Investment Return.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
- --------------------------- ---------------------------------------------------------------------------------
Monthly Annuity Factor For Monthly Annuity Factor For
Life With No Period Life With 10 Years
Certain Certain
--------------------------------------------------------------------------------------------
Age* Male Female Unisex Male Female Unisex
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $3.87 $3.55 $3.71 $3.84 $3.54 $3.70
51 3.93 3.60 3.77 3.90 3.59 3.75
52 4.00 3.65 3.83 3.97 3.64 3.81
53 4.07 3.71 3.90 4.04 3.70 3.87
54 4.15 3.77 3.97 4.11 3.75 3.94
55 4.23 3.83 4.04 4.19 3.82 4.01
56 4.32 3.90 4.11 4.27 3.88 4.08
57 4.41 3.97 4.19 4.35 3.95 4.15
58 4.50 4.05 4.28 4.44 4.02 4.24
59 4.61 4.13 4.37 4.53 4.10 4.32
60 4.72 4.21 4.47 4.63 4.18 4.41
61 4.84 4.30 4.57 4.74 4.26 4.51
62 4.96 4.40 4.68 4.85 4.35 4.61
63 5.10 4.50 4.80 4.97 4.45 4.71
64 5.24 4.61 4.93 5.09 4.55 4.83
65 5.40 4.73 5.06 5.22 4.66 4.95
66 5.56 4.85 5.21 5.36 4.77 5.07
67 5.74 4.99 5.36 5.50 4.89 5.20
68 5.93 5.13 5.53 5.65 5.02 5.34
69 6.13 5.29 5.71 5.80 5.15 5.49
70 6.34 5.45 5.90 5.96 5.30 5.64
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Monthly Annuity Factor For Joint and Full Survivor
- ----------------------------------------------------------------------------------------------------------------------
Age of Age of Female Annuitant*
Male
Annuitant*
- ----------------------------------------------------------------------------------------------------------------------
15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $2.99 $3.05 $3.11 $3.18 $3.25 $3.32 $3.39
55 3.11 3.19 3.27 3.35 3.44 3.53 3.63
60 3.27 3.37 3.47 3.58 3.70 3.82 3.95
65 3.47 3.60 3.74 3.89 4.05 4.22 4.39
70 3.74 3.91 4.10 4.31 4.53 4.77 5.02
- ----------------------------------------------------------------------------------------------------------------------
Monthly Annuity Factor For Joint and Full Survivor with 10 Year Period Certain
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Age of Age of Female Annuitant*
Male
Annuitant*
- ----------------------------------------------------------------------------------------------------------------------
15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
50 $2.99 $3.05 $3.11 $3.18 $3.24 $3.31 $3.38
55 3.11 3.19 3.27 3.35 3.44 3.53 3.63
60 3.27 3.37 3.47 3.58 3.70 3.82 3.95
65 3.47 3.60 3.74 3.89 4.05 4.22 4.39
70 3.74 3.91 4.10 4.30 4.52 4.76 4.99
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
*Age nearest birthday
- ----------------------------------------------------------------------------
The annual, semi-annual or quarterly Annuity Factor shall be the monthly
Annuity Factor shown multiplied by 11.80, 5.95 or 2.99 respectively.
- ----------------------------------------------------------------------------
Annuity Factors not shown in the above tables will be calculated on the same
basis as those shown and may be obtained from the Company.
RGMI 4 499
<PAGE>
SCHEDULE II - ANNUITY FACTORS
The amounts shown in these tables are the Annuity Factors for each $1,000 of the
Minimum Annuitization Value and assume a 5% Assumed Investment Return.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
- --------------------------- ---------------------------------------------------------------------------------
Monthly Annuity Factor Monthly Annuity Factor For
Life With No Period Certain Life With 10 Years Certain
- --------------------------- ------------------------------------------------------------------------------------------
Age* Male Female Unisex Male Female Unisex
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $5.14 $4.83 $4.99 $5.09 $4.80 $4.95
51 5.20 4.87 5.04 5.15 4.85 5.00
52 5.27 4.92 5.10 5.21 4.89 5.05
53 5.34 4.98 5.16 5.27 4.94 5.11
54 5.41 5.03 5.22 5.34 4.99 5.17
55 5.49 5.09 5.29 5.41 5.05 5.23
56 5.57 5.15 5.36 5.48 5.11 5.30
57 5.66 5.22 5.44 5.56 5.17 5.37
58 5.75 5.29 5.52 5.65 5.24 5.45
59 5.85 5.37 5.61 5.74 5.31 5.53
60 5.96 5.45 5.71 5.83 5.38 5.61
61 6.08 5.53 5.81 5.93 5.46 5.70
62 6.20 5.63 5.92 6.04 5.55 5.80
63 6.34 5.73 6.04 6.15 5.64 5.90
64 6.48 5.83 6.16 6.27 5.73 6.01
65 6.64 5.95 6.30 6.39 5.84 6.12
66 6.81 6.07 6.44 6.52 5.94 6.24
67 6.99 6.21 6.60 6.66 6.06 6.37
68 7.18 6.35 6.77 6.80 6.18 6.50
69 7.39 6.51 6.95 6.94 6.31 6.64
70 7.61 6.68 7.14 7.09 6.45 6.78
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Monthly Annuity Factor For Joint and Full Survivor
- ----------------------------------------------------------------------------------------------------------------------
Age of Age of Female Annuitant*
Male
Annuitant*
- --------------------- ------------------------------------------------------------------------------------------------
15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $4.34 $4.38 $4.43 $4.48 $4.53 $4.59 $4.65
55 4.43 4.49 4.55 4.62 4.70 4.77 4.85
60 4.56 4.64 4.73 4.82 4.92 5.03 5.15
65 4.74 4.84 4.96 5.10 5.24 5.40 5.56
70 4.98 5.13 5.30 5.49 5.70 5.93 6.17
- ----------------------------------------------------------------------------------------------------------------------
Monthly Annuity Factor For Joint and Full Survivor with 10 Year Period Certain
- ----------------------------------------------------------------------------------------------------------------------
Age of Age of Female Annuitant*
Male
Annuitant*
- ----------------------------------------------------------------------------------------------------------------------
15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
50 $4.34 $4.38 $4.43 $4.48 $4.53 $4.59 $4.65
55 4.43 4.49 4.55 4.62 4.70 4.77 4.85
60 4.56 4.64 4.72 4.82 4.92 5.03 5.14
65 4.73 4.84 4.96 5.09 5.24 5.39 5.55
70 4.97 5.12 5.29 5.48 5.69 5.91 6.14
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
*Age nearest birthday
- --------------------------------------------------------------------------------
The annual, semi-annual or quarterly Annuity Factor shall be the monthly
Annuity Factor shown multiplied by 11.70, 5.93 or 2.99 respectively.
- --------------------------------------------------------------------------------
Annuity Factors not shown in the above tables will be calculated on the same
basis as those shown and may be obtained from the Company.
RGMI 4 499
<PAGE>
PFL Life Insurance Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
[LOGO OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
Group Flexible Premium Variable Annuity Contract
Income Payable At Annuity Commencement Date
Benefits Based On The Performance Of The Separate Account
Are Variable And Are Not Guaranteed As To Dollar Amount (See Sections 6 and
10C.)
Non -Participating
INDEX
<TABLE>
<CAPTION>
Page Page
<S> <C> <C> <C>
Accumulation Units............................. 7 Guaranteed Period.............................. 8
Adjusted Age (Settlement Options).............. 7 Incontestability............................... 14
Age or Sex Corrections......................... 14 Modification of Contract....................... 14
Annuity Commencement Date...................... 14 Nonparticipation............................... 14
Annuity Payments............................... 11, 11(A) Nursing Care and Terminal Condition
Assignment..................................... 15 Withdrawal Option.............................. 5(B)
Beneficiary.................................... 15 Partial Withdrawals............................ 5, 6
Cash Value..................................... 5, 6 Payee.......................................... 11(A)
Certificate Data Page.......................... 3 Payment Option Tables.......................... 12, 13
Death Proceeds................................. 10, 11 Policy Value................................... 4
Definitions.................................... 2 Premium Payments............................... 4
Dollar Cost Averaging.......................... 9 Proof of Age................................... 11(A)
Excess Interest Adjustment..................... 5 Protection of Proceeds......................... 15
Evidence of Survival........................... 14 Right to Cancel................................ 1
Fixed Account.................................. 8 Separate Account............................... 6, 7
Guaranteed Return of Fixed Account Service Charge................................. 4
Premium Payments............................... 6 Settlement..................................... 14
Surrender Charges.............................. 6
Transfers...................................... 9
Unemployment Waive............................. 5(B)
</TABLE>
Y576
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
LUMP SUM PARTIAL WITHDRAWAL OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the
following language:
Beginning in the [ xth ] Certificate Year, the Certificate Owner may
withdraw, free from Surrender Charges, and free from Excess Interest
Adjustment, an amount equal to the Cumulative Earnings, if any, in the Policy
Value. The Cumulative Earnings is an amount equal to the Policy Value at the
time a Lump Sum payout is made, minus the sum of all premium payments reduced
by all prior Partial Withdrawals, if any. The minimum Partial Withdrawal
under this option is $500. This Partial Withdrawal option is available once
per Certificate Year.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1052 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
LUMP SUM PARTIAL WITHDRAWAL OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on
the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year, the Certificate Owner may
withdraw an amount ($500 minimum) free from Surrender Charges and free from
Excess Interest Adjustment up to the Cumulative Free Percentage (CFP) times
the Policy Value immediately prior to the Partial Withdrawal. On the
Certificate Date the CFP is [ 10% ]. Thereafter, [ 10% ] will be added to
the CFP on each Certificate Anniversary. The unused portion of the CFP in
any Certificate Year will be carried forward at each successive Certificate
Anniversary. Any portion of the CFP previously taken will reduce the CFP
currently available. Any Partial Withdrawals will reduce the CFP by the
ratio of the requested Partial Withdrawal amount to the Policy Value
immediately prior to the Partial Withdrawal. The maximum CFP will be [ 100%
] beginning in the [ yth ] Certificate Year, and will never be less than
zero.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1053 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
MORTALITY AND EXPENSE RISK FEE AND ADMINISTRATIVE CHARGE REDUCTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
Section 6, Separate Account - Charges and Deductions, is amended to include the
following language:
MORTALITY AND EXPENSE RISK FEE AND ADMINISTRATIVE CHARGE REDUCTION
The Mortality and Expense Risk Fee and Administrative Charge (before the
Annuity Commencement Date) as shown on the Certificate Data Page will be
reduced to [ x ] % if, at the time such fees are deducted, either
(1) the sum of all premium payments less the sum of all partial
withdrawals is at least $ [ y ]
or
(2) the Policy Value is at least $ [ y ].
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1054 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
LUMP SUM PARTIAL WITHDRAWAL OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year, the Certificate Owner may
withdraw, free from Surrender Charges, and free from Excess Interest
Adjustment, an amount equal to the accumulated interest in the Fixed Account,
during the prior [ 12 ] months, or since the last Partial Withdrawal, if
later. The minimum Partial Withdrawal under this option is $500. This Partial
Withdrawal option is available once per Certificate Year.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to ail the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1056 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
LUMP SUM PARTIAL WITHDRAWAL OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year, the Certificate Owner may withdraw
an amount ($500 minimum) free from Surrender Charges, and free from Excess
Interest Adjustment up to the Cumulative Free Percentage (CFP) times the
cumulative premium payments immediately prior to the Partial Withdrawal. On
the Certificate Date the CFP is [ 10% ] . Thereafter, [ 10% ] will be added
to the CFP on each Certificate Anniversary. The unused portion of the CFP in
any Certificate Year will be carried forward at each successive Certificate
Anniversary. Any portion of the CFP previously taken will reduce the CFP
currently available. Any Partial Withdrawals will reduce the CFP by the ratio
of the requested Partial Withdrawal amount to the cumulative premium payments
immediately but prior to, the Partial Withdrawal. The maximum CFP will be
[100%] beginning in the [ yth ] Certificate Year and will never be less than
zero.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1057 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
LUMP SUM PARTIAL WITHDRAWAL OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year, the Certificate Owner may
withdraw, free from Surrender Charges, and free from Excess Interest
Adjustment, an amount equal to the earnings, if any, in the Policy Value,
during the prior [ 12 ] months, or since the last Partial Withdrawal, if
later. The amount of earnings is equal to the Policy Value at the time a Lump
Sum payout is made, minus the Policy Value at the later of the date of the
last Partial Withdrawal or the date [ 12 ] months prior to the Lump Sum
payout, minus the premiums paid during the corresponding time period. The
minimum Partial Withdrawal under this option is $500. This Partial Withdrawal
option is available once per Certificate Year.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1059 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
GUARANTEED MINIMUM DEATH BENEFIT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
The Death Proceeds Prior to Annuity Commencement Date Provision in Section 9,
Death Proceeds is replaced with the following language:
The amount of the death proceeds will be the greatest of (a), (b), or (c),
where:
(a) is the Policy Value on the date we receive due proof of death and an
election of a method of settlement;
(b) is the Cash Value on the date we receive due proof of death and an
election of a method of settlement, and;
(c) is the Guaranteed Minimum Death Benefit (GMDB), plus any additional
premium payments received, less any Gross Partial Withdrawals from the date
of death to the date of payment of death proceeds.
If no payment option is selected by the date of death, the beneficiary may
make such election within 60 days of the date we receive due proof of death.
The beneficiary may elect to receive the death proceeds as a lump sum payment
or may use the death proceeds to provide any of the annuity payment options
described in Section 10. Interest on death proceeds will be paid as required
by law.
The Guaranteed Minimum Death Benefit is the Step-Up Death Benefit. The GMDB
is equal to the largest Policy Value on the Certificate Date or on [
any/every ] [ xth ] Certificate [ Anniversary/Monthiversary ] prior to the
earlier of the date of death or the Certificate Owner's [ yth ] birthday,
plus any Premium Payments made since then, minus any Adjusted Partial
withdrawals made since then.
If the Certificate Owner is a nonnatural person, or if the Certificate Owner
has elected to have the death proceeds paid upon the death of the annuitant,
the Guaranteed Minimum Death Benefit will be based upon the annuitant's age.
The Adjusted Partial Withdrawal is the total amount deducted from the GMDB as
a result of a Partial Withdrawal as used in the GMDB provision. It is equal
to the Gross Partial Withdrawal described in Section 5, multiplied by an
Adjustment Factor. The Adjustment Factor is equal to the amount of the death
proceeds prior to the Partial Withdrawal divided by the Policy Value prior to
the Partial Withdrawal.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1062 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
GUARANTEED MINIMUM DEATH BENEFIT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
The Death Proceeds Prior to Annuity Commencement Date Provision in Section 9,
Death Proceeds, is replaced with the following language:
The amount of the death proceeds will be the greatest of (a), (b), or (c),
where:
(a) is the Policy Value on the date we receive due proof of death and an
election of a method of settlement;
(b) is the Cash Value on the date we receive due proof of death and an
election of a method of settlement, and;
(c) is the Guaranteed Minimum Death Benefit (GMDB), plus any additional
premium payments received, less any Gross Partial Withdrawals from the date
of death to the date of payment of death proceeds.
If no payment option is selected by the date of death, the beneficiary may
make such election within 60 days of the date we receive due proof of death.
The beneficiary may elect to receive the death proceeds as a lump sum payment
or may use the death proceeds to provide any of the annuity payment options
described in Section 10. Interest on death proceeds will be paid as required
by law.
The Guaranteed Minimum Death Benefit is [ x ] % Annually Compounding Death
Benefit The GMDB is equal to the total premiums paid for the Certificate,
less any Adjusted Partial Withdrawals, accumulated at [ x ] % interest per
annum from he payment or withdrawal date to the earlier of the date of death
or the Certificate Owner's [ yth ] birthday.
If the Certificate Owner is a nonnatural person, or if the Certificate Owner
has elected to have the death proceeds paid upon the death of the annuitant,
the Guaranteed Minimum Death Benefit will be based upon the annuitant's age.
The Adjusted Partial Withdrawal is the total amount deducted from the GMDB as
a result of a Partial Withdrawal as used in the GMDB provision. It is equal
to the Gross Partial Withdrawal described in Section 5, multiplied by an
Adjustment Factor. The Adjustment Factor is equal to the amount of the death
proceeds prior to the Partial Withdrawal divided by the Policy Value prior to
the Partial Withdrawal.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1063 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
SYSTEMATIC PAYOUT OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year, a Systematic Payout Option (SPO)
is available on a monthly, quarterly, semi-annual or annual basis. At the
time a SPO payout is made, such payout must be at least $50 and may not
exceed [ 10% ] of the cumulative premium payments immediately prior to the
Partial Withdrawal, divided by the number of payouts made per year (e.g. 12
for monthly). No Surrender Charges or Excess Interest Adjustment will apply
to the SPO payout. Monthly and quarterly payouts must be sent through
electronic funds transfer directly to a checking or savings account. The
Certificate Owner may start or stop SPO payouts at any time; however, 30 days
written notice is required to stop SPO payouts. Once stopped, the Certificate
Owner must wait until the first day of the next Certificate Year to begin a
new SPO.
Once the Certificate Owner has elected a SPO, the Certificate Owner must wait
a minimum time before the first SPO payment: one month for a monthly SPO,
three months for quarterly, six months for semi-annual, or twelve months for
annual.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1065 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
SYSTEMATIC PAYOUT OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year, a Systematic Payout Option (SPO)
is available on a monthly, quarterly, semiannual or annual basis. At the time
a SPO payout is made, such payout must be at least $50 and may not exceed the
Cumulative Earnings, if any, in the Policy Value, divided by the number of
payouts made per year (eg. 12 for monthly). The Cumulative Earnings is an
amount equal to the Policy Value at the time a SPO payout is made, minus the
sum of all premium payments reduced by all prior Partial Withdrawals, if any.
No Surrender Charges or Excess Interest Adjustment will apply to the SPO
payout. Monthly and quarterly payouts must be sent through electronic funds
transfer directly to a checking or savings account. The Certificate Owner may
start or stop SPO payouts at any time; however, 30 days written notice is
required to stop SPO payouts. Once stopped, the Certificate Owner must wait
until the first day of the next Certificate Year to begin a new SPO.
Once the Certificate Owner has elected a SPO, the Certificate Owner must wait
a minimum time before the first SPO payment: one month for a monthly SPO,
three months for quarterly, six months for semi-annual, or twelve months for
annual.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1066 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
SYSTEMATIC PAYOUT OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year, a Systematic Payout Option (SPO) is
available on a monthly, quarterly, semi-annual or annual basis. At the time a
SPO payout is made, such payout must be at least $50 and may not exceed the
earnings, if any, in the Policy Value during the prior [ 12 ] months or since
the last Partial Withdrawal, if later, divided by the number of payouts made
per year (e.g. 12 for monthly). The amount of earnings is equal to the Policy
Value at the time a SPO payout is made, minus the Policy Value at the later of
the date of the last Partial Withdrawal or the date [ 12 ] months prior to the
SPO payout, minus the premiums paid during the corresponding time period. No
Surrender Charges or Excess Interest Adjustment will apply to the SPO payout.
Monthly and quarterly payouts must be sent through electronic funds transfer
directly to a checking or savings account. The Certificate Owner may start or
stop SPO payouts at any time; however, 30 days written notice is required to
stop SPO payouts. Once stopped, the Certificate Owner must wait until the
first day of the next Certificate Year to begin a new SPO.
Once the Certificate Owner has elected a SPO, the Certificate Owner must wait
a minimum time before the first SPO payment: one month for a monthly SPO,
three months for quarterly, six months for semi-annual, or twelve months for
annual.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1067 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
SYSTEMATIC PAYOUT OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value-and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year, a Systematic Payout Option (SPO)
is available on a monthly, quarterly, semi-annual or annual basis. At the
time a SPO payout is made, such payout must be at least $50 and may not
exceed the accumulated interest in the Fixed Account during the prior [ 12 ]
months, or since the last Partial Withdrawal, if later, divided by the number
of payouts made per year (e.g. 12 for monthly). No Surrender Charges or
Excess Interest Adjustment will apply to the SPO payout. Monthly and
quarterly payouts must be sent through electronic funds transfer directly to
a checking or savings account. The Certificate Owner may start or stop SPO
payouts at any time; however, 30 days written notice is required to stop SPO
payouts. Once stopped, the Certificate Owner must wait until the first day of
the next Certificate Year to begin a new SPO.
Once the Certificate Owner has elected a SPO, the Certificate Owner must wait
a minimum time before the first SPO payment: one month for a monthly SPO,
three months for quarterly, six months for semi-annual, or twelve months for
annual.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1068 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
LUMP SUM PARTIAL WITHDRAWAL OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [ xth ] Certificate Year amounts ($500 minimum) up to
[ 10% ] of the Cumulative Premium Payments immediately prior to the Partial
Withdrawal are available as a Lump Sum distribution once per Certificate Year
with no Surrender Charges and no Excess Interest Adjustment
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1069 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
PREMIUM ENHANCEMENT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
Section 3, Premium Payments, is amended to include the following language:
PREMIUM ENHANCEMENT
If the Cumulative Premium Payments less partial withdrawals are less than
$ [ x ] when a Premium Payment is paid, then a Premium Enhancement Percentage
of [ a to b ] % will be applied to that Premium Payment and the resulting
amount will be added to the Policy Value. If the Cumulative Premium Payments
less partial withdrawals are greater than or equal to $ [ x ] when a Premium
Payment is paid, then a Premium Enhancement Percentage of [ a to b ] % will
be applied to that Premium Payment and the resulting amount will be added to
the Policy Value. The amount of the Premium Enhancement is not considered a
Premium Payment
The Premium Enhancement Percentage may vary from premium to premium on
subsequent Premium Payments, but will never be less than .25% nor more than
[ b ]%. The Premium Enhancement Percentage applicable to the Initial
Premium is set forth on the Certificate Data Page. We will advise You of the
amount of the Premium Enhancement applicable to each subsequent Premium
Payment in a confirmation that We will send to You. No Premium Enhancement
will apply if the Certificate is cancelled pursuant to the Right to Cancel
provision.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1073 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
PREMIUM ENHANCEMENT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
Section 3, Premium Payments, is amended to include the following language:
PREMIUM ENHANCEMENT
If the Cumulative Premium Payments less partial withdrawals are less than
$ [ x ] when a Premium Payment is paid, then a Premium Enhancement Percentage
of [ a to b ] % will be applied to that Premium Payment and the resulting
amount will be added to the Policy Value. If the Cumulative Premium Payments
less partial withdrawals are greater than or equal to $ [ x ] and less than
$ [ y ] when a Premium Payment is paid, then a Premium Enhancement Percentage
of [ a to b ] % will be applied to that Premium Payment and the resulting
amount will be added to the Policy Value. If the Cumulative Premium Payments
less partial withdrawals are greater than or equal to $ [ y ] when a Premium
Payment is paid, then a Premium Enhancement Percentage of [ a to b ] % will
be applied to that Premium Payment and the resulting amount will be added to
the Policy Value. The amount of the Premium Enhancement is not considered a
Premium Payment.
The Premium Enhancement Percentage may vary from premium to premium on
subsequent Premium Payments, but will never be less than .25% nor more than
[ b ] %. The Premium Enhancement Percentage applicable to the Initial Premium
is set forth on the Certificate Data Page. We will advise You of the amount
of the Premium Enhancement applicable to each subsequent Premium Payment in a
confirmation that We will send to You. No Premium Enhancement will apply if
the Certificate is cancelled pursuant to the Right to Cancel provision.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1076 199
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
GUARANTEED MINIMUM DEATH BENEFIT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
The Death Proceeds Prior to Annuity Commencement Date Provision in Section 9,
Death Proceeds, is replaced with the following language:
The amount of the death proceeds will be the greatest of (a), (b), or (c),
where:
(a) is the Policy Value on the date we receive due proof of death and an
election of a method of settlement;
(b) is the Cash Value on the date we receive due proof of death and an
election of a method of settlement, and;
(c) is the Guaranteed Minimum Death Benefit (GMDB), plus any additional
premium payments received, less any Gross Partial Withdrawals from the date
of death to the date of payment of death proceeds.
If no payment option is selected by the date of death, the beneficiary may
make such election within 60 days of the date we receive due proof of death.
The beneficiary may elect to receive the death proceeds as a lump sum payment
or may use the death proceeds to provide any of the annuity payment options
described in Section 10. Interest on death proceeds will be paid as required
by law.
The Guaranteed Minimum Death Benefit is the Return of Premium Death Benefit.
The GMDB is equal to the total premiums paid for the Certificate, less any
Adjusted Partial Withdrawals, as of the date of death.
The Adjusted Partial Withdrawal is the total amount deducted from the GMDB as
a result of a Partial Withdrawal as used in the GMDB provision. It is equal
to the Gross Partial Withdrawal described in Section 5, multiplied by an
Adjustment Factor. The Adjustment Factor is equal to the amount of the death
proceeds prior to the Partial Withdrawal divided by the Policy Value prior to
the Partial Withdrawal.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1127 799
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
PREMIUM ENHANCEMENT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
Section 3, Premium Payments, is amended to include the following language:
PREMIUM ENHANCEMENT
If the Cumulative Premium Payments less requested partial withdrawals amounts
are less than $ [ x ] when a Premium Payment is paid, then a Premium
Enhancement Percentage of [ a to b ] % will be applied to that Premium
Payment and the resulting amount will be added to the Policy Value. If the
Cumulative Premium Payments less requested partial withdrawals amounts are
greater than or equal to $ [ x ] when a Premium Payment is paid, then a
Premium Enhancement Percentage of [ a to b ] % will be applied to that
Premium Payment and the resulting amount will be added to the Policy Value.
The Premium Enhancement Percentage may also vary depending on Your attained
age at the time a Premium Payment is made. However, the Premium Enhancement
Percentage applicable to Premium Payments made at attained ages less than age
[ z ] will be at least as great as the corresponding percentage applicable at
attained ages [ z ] and above. The Premium Enhancement will be applied using
the same allocation as the corresponding Premium Payment. The amount of the
Premium Enhancement is not considered a Premium Payment.
The Premium Enhancement Percentage may vary from premium to premium on
subsequent Premium Payments, but will never be less than [ a ] % nor more
than [ b ] %. The Premium Enhancement Percentage applicable to the Initial
Premium Payment is set forth on the Certificate Data Page. We will advise
You of the amount of the Premium Enhancement applicable to each subsequent
Premium Payment in a confirmation that We will sent to You. No Premium
Enhancement will apply if the Certificate is cancelled pursuant to the Right
to Cancel provision.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1128 799
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
PREMIUM ENHANCEMENT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
Section 3, Premium Payments, is amended to include the following language:
PREMIUM ENHANCEMENT
When a Premium Payment is paid, a Premium Enhancement Percentage of
[ x to y ] % will be applied to that Premium Payment and the resulting amount
will be added to the Policy Value. The Premium Enhancement Percentage may
also vary depending on Your attained age at the time of a Premium Payment is
made. However, the Premium Enhancement Percentage applicable to Premium
Payments made at attained ages less than age [ z ] will be at least as great
as the corresponding percentage applicable at attained ages [ z ] and above.
The amount of the Premium Enhancement is not considered a Premium Payment.
The Premium Enhancement Percentage may vary from premium to premium on
subsequent Premium Payments, but will never be less than [ x ] % nor more
than [ y ] %. The Premium Enhancement Percentage applicable to the Initial
Premium Payment is set forth on the Certificate Data Page. We will advise You
of the amount of the Premium Enhancement applicable to each subsequent
Premium Payment in a confirmation that We will send to You. The Premium
Enhancement will be applied using the same allocation as the corresponding
Premium Payment. No Premium Enhancement will apply if the Certificate is
cancelled pursuant to the Right to Cancel provision.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1129 799
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
PREMIUM ENHANCEMENT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
Section 3, Premium Payments, is amended to include the following language:
PREMIUM ENHANCEMENT
If the Cumulative Premium Payments less requested partial withdrawals are
less than $ [ x ] when a Premium Payment is paid, then a Premium Enhancement
Percentage of [ a to b ] % will be applied to that Premium Payment and the
resulting amount will be added to the Policy Value. If the Cumulative Premium
Payments less requested partial withdrawals are greater than or equal to
$ [ x ] and less than $[y] when a Premium Payment is paid, then a Premium
Enhancement Percentage of [ a to b ] % will be applied to that Premium
Payment and the resulting amount will be added to the Policy Value. If the
Cumulative Premium Payments less requested partial withdrawal amounts are
greater than or equal to $ [ y ] when a Premium Payment is paid, then a
Premium Enhancement Percentage of [ a to b ] % will be applied to that
Premium Payment and the resulting amount will be added to the Policy Value.
The Premium Enhancement Percentage may also vary depending on Your attained
age at the time a Premium Payment is made. However, the Premium Enhancement
Percentage applicable to Premium Payments made at attained ages less than age
[ z ] will be at least as great as the corresponding percentage applicable at
attained ages [ z ] and above. The Premium Enhancement will be applied using
the same allocation as the corresponding Premium Payment. The amount of the
Premium Enhancement is not considered a Premium Payment
The Premium Enhancement Percentage may vary from premium to premium on
subsequent Premium Payments, but will never be less than .[ a ] % nor more
than [ b ] %. The Premium Enhancement Percentage applicable to the Initial
Premium is set forth on the Certificate Data Page. We will advise You of the
amount of the Premium Enhancement applicable to each subsequent Premium
Payment in a confirmation that We will send to You. No Premium Enhancement
will apply if the Certificate is cancelled pursuant to the Right to Cancel
provision.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1130 799
<PAGE>
EXHIBIT (4)(b)
--------------
GROUP CERTIFICATE
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E, Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
ANNUITANT: JOHN DOE
CERTIFICATE OWNER(S): JOHN DOE
CERTIFICATE NUMBER: IA - 123456
CERTIFICATE DATE: February 24, 1999
WE AGREE This Certificate may be applied for
and issued to qualify as a tax-
. To provide annuity payments as qualified annuity under the
set forth in Section 10 of applicable sections of the Internal
this Certificate, Revenue Code.
. Or to pay withdrawal benefits 20 DAY RIGHT TO CANCEL
in accordance with Section 5
of this Certificate, You may cancel this Certificate by
delivering or mailing a written
. Or to pay death proceeds in notice to us. You must return this
accordance with Section 9 of Certificate before midnight of the
this Certificate. 20th day after the day you receive
it Notice given by mail and return
Withdrawals, transfers and amounts of this Certificate by mail are
applied to a Payment Option may be effective on being postmarked,
subject to an Excess Interest properly addressed and postage
Adjustment in accordance with prepaid.
Sections 5, 8, and 10,
respectively, of this Certificate. We will pay you an amount equal to
the sum of:
These agreements are subject to the
provisions of this Certificate. . the premiums paid; and
This Certificate is issued in
consideration of the enrollment . the accumulated gains or
form, or information provided in losses, if any, in the
lieu thereof, and payment of the Separate Account(s) on the
premiums as provided date of cancellation;
unless otherwise required by law.
Signed for us at our home office
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
READ YOUR CERTIFICATE CAREFULLY
Group Flexible Premium Variable Annuity Certificate
Income Payable At Annuity Commencement Date
Benefits Based On The Performance Of The Separate Account
Are Variable And Are Not Guaranteed As To Dollar Amount (See Sections 6 and 10C)
Non -Participating
AV432 101 114 199 CRT
<PAGE>
SECTION 1
DEFINITIONS
ADJUSTED POLICY VALUE GROUP CONTRACT OWNER
The Policy Value increased or The entity, as shown on the
decreased by any Excess Interest Certificate Data Page, which
Adjustment. applies for the Group Contract.
ANNUITANT INVESTMENT OPTIONS
The Participant to whom annuity Any of the Guaranteed Period
payments will be made, unless Options of the Fixed Account, the
another payee is named. Dollar Cost Averaging Fixed Account
Option, and any of the Subaccounts
ANNUITY COMMENCEMENT DATE of the Separate Account (s).
Date the Annuitant will begin PARTICIPANT
receiving payments from this
annuity, which may not be later A person who makes premium payments
than the last day of the or for whom premium payments are
Certificate month starting after made under the Group Contract.
the Annuitant attains age 85,
except as expressly allowed by us, PAYEE
but in no event later than the last
day of the month following the The person to whom annuity payments
month in which the Annuitant will be made.
attains age 95.
PAYMENT OPTIONS
CASH VALUE
Options through which the
Amount defined in Section 5, that distribution of the Adjusted Policy
can be withdrawn if this annuity Value can be directed.
Certificate is surrendered.
POLICY VALUE
CERTIFICATE
the amount (defined in Section 4)
The document issued under the Group applicable under the Certificate
Contract to the eligible that can be used to fund one of the
Participants who apply for Payment Options.
coverage. The Certificate is not a
part of the Group Contract. SEPARATE ACCOUNT
CERTIFICATE ANNIVERSARY The separate investment account(s)
established by us, as described in
The anniversary of the Certificate Section 6.
Date for each year this Certificate
remains in force. SUBACCOUNT
CERTIFICATE DATE A division of a Separate Account,
as described in Section 6.
The date shown on page 3 of this
Certificate and the date on which SURRENDER
this Certificate becomes effective.
A partial or full withdrawal of
CERTIFICATE OWNER funds from the Policy Value or Cash
Value.
The owner of the annuity
Certificate. Unless otherwise WITHDRAWAL
specified on the Certificate Data
page, the Annuitant and the A distribution of funds from the
Certificate Owner shall be one and Policy Value or Cash Value.
the same person.
YIELD
CERTIFICATE YEAR
The effective annual interest rate
The 12 month periods following the applicable to the Fixed Account.
Certificate Date shown on the
Certificate Data page. The first YOU, YOUR
Certificate Year starts on the
Certificate Date. Each subsequent The owner of this Certificate.
year starts on the anniversary of Unless otherwise specified on the
the Certificate Date. Certificate Data Page, the
Annuitant and the Certificate Owner
DISTRIBUTION shall be one and the same person.
A withdrawal or disbursement of
funds from the Policy Value or Cash
Value.
GROUP CONTRACT
The Contract issued to the Group
Contract Owner, under which
Certificates are issued to eligible
Participants.
AVB432 CRT
PAGE 2
<PAGE>
SECTION 2 - CERTIFICATE DATA
GROUP CONTRACT NUMBER: [12345] GROUP CONTRACT OWNER: [SECURITIES CUSTOMERS]
[DRL INSURANCE TRUST II]
CERTIFICATE NUMBER: [01 - AG000 11] ANNUITANT: [JOHN DOE]
INITIAL PREMIUM
PAYMENT: [$5,000] ISSUE AGE/SEX: [35/MALE]
CERTIFICATE DATE: [May 1, 1999] CERTIFICATE Owner(s): [JOHN DOE]
ANNUITY
COMMENCEMENT
DATE [February 12, 2047]
Premium Enhancement Percentage on Initial Premium Payment [5%]
SEPARATE Account (s). [PFL Endeavor Variable Annuity Account]
DCA SUBACCOUNT(S): [Money Market Portfolio, U.S. Government Securities
Portfolio]
PREMIUM PAYMENT MINIMUMS
Initial Premium Payment, Nonqualified: [$5,000]
Initial Premium Payment*, Qualified:
*Waived for 403(b) annuities [$2,000]
Subsequent Premium Payments: [$50.00]
Before the Annuity Commencement Date: Mortality and Expense Risk Fee and
Administrative Charge: [1.75%]
Distribution Financing Charge: [.00%]
Number of Certificate years that the
charge is deducted: [0]
After the Annuity Commencement Date: Mortality and Expense Risk Fee and
Administrative Charge: [1.55%]
SERVICE CHARGE [$40]
FIXED ACCOUNT GUARANTEED MINIMUM EFFECTIVE ANNUAL INTEREST RATE: 3%
SURRENDER CHARGE: Number of Years Percentage of
[Since Premium Premium
Payment Date] Withdrawn
0-1 8%
1-2 8%
2-3 8%
3-4 7%
4-5 6%
5-6 5%
6-7 4%
7-8 3%
8-9 2%
9-and thereafter 0%
Page 3
AV432 101 114 799SP
<PAGE>
SECTION 2 - CERTIFICATE DATA - CONT
SCHEDULE OF ADDITIONAL BENEFITS:
Form No. Additional Benefit (s)
[AE 1051 199 Lump Sum Withdrawal Option ]
[AE 1060 199 Guaranteed Minimum Death Benefit ]
[AE 1064 199 Systematic Payout Option ]
[AE 1074 199 Service Charge Waiver ]
[AE 1075 199 Premium Enhancement ]
AV432 101 114 799 CRT
Page 3 (A)
<PAGE>
SECTION 3 - PREMIUM PAYMENTS
PAYMENT OF PREMIUMS ALLOCATION OF PREMIUM PAYMENTS
Premium payments may be made any Premium payments may be applied to
time while this Certificate is in the various Investment Options
force before the Annuity which we make available. You must
Commencement Date. You may start or tell us what percent of each
stop, increase or decrease, or skip premium payment to allocate to the
any premium payments. various Investment Options. Each
percent may be either zero or any
MAXIMUM AND MINIMUM PREMIUM PAYMENT whole number; however, the
allocation among all Investment
The premium payments may not be Options must total 100%.
more than the amount permitted by
law if this is a tax-qualified CHANGE OF ALLOCATION
annuity. The minimum premium
payments we will accept are You may change the allocation of
specified on page 3. The maximum premium payments to the various
total premium payments, per Investment Options. You must tell
Participant, which we will accept us in a signed notice which gives
without prior Company approval is $ us the facts that we need. Premium
1,000,000. payments received after the date on
which we receive the notice will be
PREMIUM PAYMENT DATE applied on the basis of the new
allocation.
The premium payment date is the
date on which the premium payment PREMIUM TAXES
is credited to the Certificate. The
initial premium payment less any A state may impose a premium tax.
premium taxes will be credited to It may be imposed when a premium
the Certificate within two business payment is made, on the Annuity
days of receipt of such payment and Commencement Date, on the date of
the required information. death, or on the date of full
Subsequent additional premium surrender. When permitted by state
payments will be credited to the law, we will not deduct the tax
Certificate as of the business day until the Annuity Commencement
when the premium payment and Date, date of death, or date of
required information are received. full surrender.
A business day is any day on which
the New York Stock Exchange is open
for trading.
SECTION 4 - POLICY VALUE
POLICY VALUE The Adjusted Policy Value may be
used on the Annuity Commencement
On or before the Annuity Date to provide lifetime income or
Commencement Date. the Policy Value income for a period of no less than
is equal to your: 60 months under the Payment Options
in Section 10.
(a) premium payments; minus
SERVICE CHARGE
(b) Gross Partial Withdrawals (as
defined in Section 5); plus On each Certificate Anniversary and
at the time of surrender during any
(c) interest credited to the Fixed Certificate Year before the Annuity
Account (see Section 7); plus Commencement Date, we reserve the
right to charge an amount up to the
(d) accumulated gains in the amount of the Service Charge shown
Separate Account(s) (see on page 3 for administrative
Section 6); minus expenses. It will be deducted from
each Investment Option in
(e) accumulated losses in the proportion to the portion of Policy
Separate Account(s) (see Value (prior to such charge) in
Section 6); minus each Investment Option,
respectively, on that Certificate
(f) service charges, premium taxes Anniversary or at the time of
and transfer fees, if any. surrender. In no event will the
Service Charge exceed 2% of the
ADJUSTED POLICY VALUE Policy Value at the time it is
deducted.
The Adjusted Policy Value is the
Policy Value increased or decreased
by any Excess Interest Adjustment.
M987
PAGE 4
<PAGE>
SECTION 5 - CASH VALUE AND PARTIAL WITHDRAWALS
CASH VALUE 4) The Excess Interest Adjustment
may affect the death proceeds
On or before the Annuity defined in Section 9;
Commencement Date, the Cash Value
is equal to the Adjusted Policy 5) If interest rates have
Value less any Surrender Charges. decreased from the time the
Information on the current amount affected Guaranteed Period(s)
of a Certificate's Cash Value is started until the time the
available upon request The Cash transaction occurs, the Excess
Value may be partially withdrawn or Interest Adjustment will
will be paid in the event of a full result in additional funds
surrender of the Certificate. We available to you;
must receive your written partial
withdrawal or surrender request 6) If interest rates have
before the Annuity Commencement increased from the time the
Date. affected Guaranteed Period(s)
started until the time the
There is no Cash Value once an transaction occurs, the Excess
Annuity Payment Option has been Interest Adjustment will
selected. result in a decrease in the
funds available to you.
EXCESS INTEREST ADJUSTMENT
7) Certain amounts are not
Full Surrenders, Partial subject to the Excess Interest
Withdrawals, transfers, and amounts Adjustment as provided in
applied to a Payment Option from Sections 5, 7 and 8.
the Fixed Account Guaranteed Period
Options described in Section 7 will The formula for determining the
be subject to an Excess Interest amount of the Excess Interest
Adjustment except as provided F or Adjustment is as follows:
in the Partial Withdrawals
provision below. Excess Interest Adjustment = S x (G-
C) x (M/12)
An Excess Interest Adjustment applies
in the following situations: where: S is the gross (that is,
before surrender charges
1) When you withdraw all or any and premium taxes, if any)
portion of your Cash Value, amount being surrendered,
partially withdrawn,
2) When you exercise Annuity transferred, or applied to
Payment Options, a Payment Option that is
subject to the Excess
3) When death proceeds are Interest Adjustment.
calculated. However, death
proceeds will not be reduced G is the guaranteed interest
if the Excess Interest rate for the Guaranteed
Adjustment is negative. Period applicable to S.
The Excess Interest Adjustment is M is the number of months
only applied to transactions remaining in the
affecting the Guaranteed Period Guaranteed Period for S.
Options of the Fixed Account (see rounded up to the next
Section 7) and is based on any higher whole number of
change in interest rates from the months.
time the affected Guaranteed
Period(s) started until the time C is the current guaranteed
the Excess Interest Adjustment interest rate then being
occurs. The Excess Interest offered on new Premium
Adjustment is applied as follows: Payments for the next
longer Guaranteed Period
1) The Excess Interest Adjustment than "M". If this
is only applied when the Certificate form or such a
transactions occur prior to Guaranteed Period Option
the end of any Guaranteed is no longer offered, "C"
Period Option; will be the U.S. Treasury
rate for the next longer
2) Transfers to the Guaranteed maturity (in whole years)
Period Options of the Fixed than "M" on the 25th day
Account are considered Premium of the previous calendar
Payments for purposes of month, plus up to 2%.
determining the Excess
Interest Adjustment;
Upon full surrender, the Excess
3) The Excess Interest Adjustment Interest Adjustment (EIA) for each
is distinct from, and is Guaranteed Period Option will not
applied prior to, the reduce the Adjusted Policy Value
Surrender Charge; for that Guaranteed Period Option
below the amount paid into, less
any prior withdrawals and transfers
from, that Guaranteed Period
Option, plus interest at the 3%
guaranteed effective annual
interest rate.
U987
PAGE 5
<PAGE>
SECTION 5 - CONT
PARTIAL WITHDRAWALS If any Partial Withdrawal reduces
the Cash Value below $500, we
We will pay you a portion of the reserve the right to pay the full
Cash Value as a Partial Withdrawal Cash Value and terminate the
provided we receive your written Certificate.
request while the Certificate is in
effect and before the Annuity We may delay payment of the Cash
Commencement Date. When you request Value from the Fixed Account for up
a Partial Withdrawal you must tell to 6 months after we receive the
us how it is to be allocated from request If the Certificate Owner
among the Investment Options. If dies after we receive the request,
your request for a Partial but bef ore the request is
Withdrawal from any Investment processed, the request wilt be
Option is less than or equal to the processed before the death proceeds
Cash Value in that option, we will are determined.
pay the amount of your request.
However, if your request for a Each Partial Withdrawal consists of
Partial Withdrawal from any a portion that is subject to
Investment Option is greater than Surrender Charge (that is, the
the Cash Value in that option, we Excess Partial Withdrawal) and a
will pay you the Cash Value of that remaining portion that is free from
investment Option. Surrender Charge (that is, the
Surrender Charge-free amount).
The Gross Partial Withdrawal is the Either portion may be zero (0)
total amount which will be deducted depending on the Partial Withdrawal
from your Policy Value as a result requested and prior amounts
of each Partial Withdrawal. The withdrawn.
Gross Partial Withdrawal may be
more or less than your requested Partial Withdrawals may be made
Partial Withdrawal amount, free from Surrender Charges and
depending on whether Surrender free from Excess Interest
Charges and/or Excess Interest Adjustments as follows:
Adjustments apply at the time you
request the Partial Withdrawal. MINIMUM REQUIRED DISTRIBUTION
The Excess Partial Withdrawal For tax-qualified plans,
amount is the portion of the Partial Withdrawals taken to
requested Partial Withdrawal that satisfy minimum distribution
is subject to Surrender Charge requirements under Section
(that is, the portion which is in 401(a)(9) of the Internal
excess of the Surrender Charge-free Revenue Code (IRC) are
portion). For example, if the available with no Surrender
requested withdrawal amount is Charges and no Excess Interest
$1,000, and the Surrender Charge- Adjustments. The amount
free amount is $200, then the available from each
Excess Partial Withdrawal would be Certificate with respect to
$800. Excess Partial Withdrawals the minimum distribution
will reduce the Policy Value by an requirement is based solely on
amount equal to (X-Y+Z) where: this Certificate.
X = Excess Partial Withdrawal The Certificate Owner must be
at least 70 1/2 years old in
A = Amount of Partial Withdrawal the calendar year of
subject to Excess Interest distribution, must submit a
Adjustment written request to us and must
take the distribution before
Y = Excess Interest Adjustment = year end. If the Certificate
(A) x (G-C) x (M/12) where G, C Owner attains age 70 1/2 in
and M are defined in the Excess the calendar year of
Interest Adjustment provision distribution, a written
above, with "A" substituted for request which is postmarked no
S in the definitions of G and later than the end of the
M. current calendar year must be
submitted to us.
Z = Surrender Charge on X minus Y.
Systematic minimum
The formula for determining the distributions must be at least
Gross Partial Withdrawal is as $50 or a lump sum distribution
follows: is available if minimum
required distributions are
Gross Partial Withdrawal = R - E + less than $50.
SC
Any amount requested in excess
where: R is the requested Partial of the IRC minimum required
Withdrawal; distribution will have the
appropriate Surrender Charges
E is the Excess Interest and Excess Interest
Adjustment; and Adjustments applied, unless
the excess distribution
SC is the Surrender Charge qualifies as Surrender Charge-
on (EPW - E); where free or Excess Interest
Adjustment-free under any
EPW is the Excess Partial additional options provided.
Withdrawal amount.
M1015
PAGE 5(A)
<PAGE>
SECTION 5 - CONT
NURSING CARE AND TERMINAL CONDITION withdrawal request and must be
WITHDRAWAL OPTION furnished by the Annuitant's,
Annuitant's spouse's,
Beginning in the first Certificate Owner's, or
Certificate Year, if the Certificate Owner's spouse's
Certificate Owner or Certificate physician. Proof of confinement
Owner's spouse (annuitant or may be a physician's statement
annuitant's spouse if the or a statement from a hospital
Certificate Owner is not a or nursing facility
natural person) has been 1) administrator.
confined in a Hospital or
Nursing Facility for 30 UNEMPLOYMENT WAIVER
consecutive days or 2) diagnosed
as having a Terminal Condition, Beginning in the first
you may elect to withdraw all or Certificate Year, you may
a portion of the Policy Value withdrawal all or a portion of
without Surrender Charges and the Policy Value free of
without Excess Interest Surrender Charges and free of
Adjustment The minimum any Excess Interest Adjustment
withdrawal under this option is if the Certificate Owner or
$1000. Certificate Owner's spouse
(annuitant or annuitant's
For Nursing Care, we must spouse, if the Certificate Owner
receive each withdrawal request is not a natural person) becomes
and proof of eligibility with unemployed. In order to qualify,
each request no later than 90 you 1) must` have been employed
days following the date that full time for at least two years
confinement has ceased, unless prior to your becoming
it can be shown that it was not unemployed, 2) must have been
reasonably possible to provide employed full time on your
the notice and proof within the Certificate Date, 3) must have
above time period and that the been unemployed for at least 60
notice and proof were given as consecutive days at the time of
soon as reasonably possible. withdrawal and 4) must have a
However, in no event, except the minimum Cash Value at the time
absence of legal capacity, shall of withdrawal of $5000. Proof of
the notice and proof be provided unemployment will consist of
later than one year following providing us with a
the date that confinement has determination letter from the
ceased. For a Terminal applicable State's Department of
Condition, we must receive each Labor which verifies that you
withdrawal request and the qualify for and are receiving
applicable proof of eligibility unemployment benefits at the
no later than one year following time of withdrawal. The
diagnosis of the Terminal determination letter must be
Condition. Proof of a Terminal received by us no later than 15
Condition is required only with days following the date of the
the initial withdrawal request.
U1015
PAGE 5(B)
<PAGE>
SECTION 5 - CONT
SURRENDER CHARGES considered to be withdrawn. For
Surrender Charge purposes, premium
Amounts withdrawn in excess of any payments are deemed to be withdrawn
Surrender Charge-free Partial before earnings.
Withdrawals are subject to a
Surrender Charge. If applicable, After all premium payments are
this charge will either apply for a considered to be withdrawn, the
number of years following each remaining Adjusted Policy Value may
premium payment date or F or a be withdrawn free from any
number of years following the Surrender Charge.
Certificate Date as shown on page
3. The amount of this charge, if GUARANTEED RETURN OF FIXED ACCOUNT
any, will be a percentage, (as PREMIUM PAYMENTS
shown on page 3 of each
Certificate) of the amount of Upon full surrender of the
premium withdrawn. Certificate, you will always
receive at least the premium
For Surrender Charge purposes, the payments made to, less prior
oldest premium payment is withdrawals and transfers from, the
considered to be withdrawn first If Fixed Account.
the amount withdrawn exceeds this,
the next oldest premium payment is MINIMUM VALUES
considered to be withdrawn, and so
on until the most recent premium Benefits available under this
payment is Certificate are not less than those
required by any statute of the
state in which the Certificate is
delivered.
SECTION 6 - SEPARATE ACCOUNT
SEPARATE ACCOUNT We will determine the fair market
value of the assets of the Separate
We have established and will Account in accordance with a method
maintain one or more Separate of valuation which we establish in
Account (s), indicated on the good faith. Valuation Period means
Certificate Data Page, under the the period of time from one
laws of the state of Iowa. Any determination of the value of each
realized or unrealized income, net Subaccount to the next Such
gains and losses from the assets of determinations are made when the
the Separate Account are credited value of the assets and liabilities
to or charged against it without of each Subaccount is calculated.
regard to our other income, gains This is generally the close of
or losses. Assets are put in the business on each day on which the
Separate Account for this New York Stock Exchange is open.
Certificate, as well as for other
variable annuity policies and We also reserve the right to
Certificates. Any Separate Account transfer assets of the Separate
may invest assets in shares of one Account, which we determine to be
or more mutual fund portfolios, or associated with the class of
in the case of a managed Separate Certificates to which this
Account, direct investments in Certificate belongs, to another
stocks or other securities as separate account. If this type of
permitted by law. Fund Shares refer transfer is made, the term
to shares of underlying mutual "Separate Account", as used in the
funds or prorata ownership of the contract and in the Certificate,
assets held in a Subaccount of a shall then mean the separate
managed Separate Account Fund account to which the assets were
shares are purchased, redeemed and transferred.
valued on behalf of the Separate
Account. We also reserve the right, when
permitted by law to:
The Separate Account is divided
into Subaccounts. Each Subaccount (a) deregister the Separate
invests exclusively in shares of Account under the Investment
one of the portfolios of an Company Act of 1940;
underlying mutual fund. We reserve
the right to add or remove any (b) manage the Separate Account
Subaccount of the Separate Account. under the direction of a
committee at any time;
The assets of the Separate Account
are our property. These assets will (c) restrict or eliminate any
equal or exceed the reserves and voting rights of Certificate
other contract liabilities of the Owners or other persons who
Separate Account. These assets will have voting rights as to the
not be chargeable with liabilities Separate Account; and
arising out of any other business
we conduct. We reserve the right, (d) combine the Separate Account
subject to regulations governing with one or more other
the Separate Account, to transfer separate accounts;
assets of a Subaccount, in excess
of the reserves and other contract (e) create new Separate Accounts;
liabilities with respect to that
Subaccount, to another Subaccount (f) add new Subaccounts to or
or to our General Account. remove existing Subaccounts
from the Separate Account, or
combine Subaccounts;
(g) add new underlying mutual
funds, remove existing mutual
funds, or substitute a new
fund for an existing fund.
P1032
PAGE 6
<PAGE>
SECTION 6 - SEPARATE ACCOUNT - CONT
The Net Asset Value of a fund share provide accumulation units in those
is the per-share value calculated Subaccounts. The number of
by the mutual fund or, in the case accumulation units purchased in a
of a managed Separate Account, by Subaccount will be determined by
the Company. The Net Asset Value is dividing the premium payment
computed by adding the value of the allocated to or any amount
Subaccount's investments, cash and transferred to that Subaccount, by
other assets, subtracting its the value of an accumulation unit
liabilities, and then dividing by for that Subaccount on the premium
the number of shares outstanding. payment or transfer date.
Net Asset Values of fund shares
reflect investment advisory fees The number of accumulation units
and other expenses number incurred withdrawn or transferred from the
in managing a mutual fund or a Subaccounts will be determined by
managed Separate Account. dividing the amount withdrawn or
transferred by the value of an
CHANGE IN INVESTMENT OBJECTIVE OR accumulation unit for that
POLICY OF A MUTUAL FUND Subaccount on the withdrawal or
transfer date.
If required by law or regulation,
an investment policy of the The value of an accumulation unit
Separate Account will only be on any business day is determined
changed if approved by the by multiplying the value of that
appropriate insurance official of unit at the end of the immediately
the state of Iowa or deemed preceding valuation period by the
approved in accordance with such net investment factor for the
law or regulation. If so required, valuation period.
the process for obtaining such
approval is F fled with the The net investment factor used to
insurance official of the state or calculate the value of an
district in which this contract is accumulation unit in each
delivered. Subaccount for the Valuation Period
is determined by dividing (a) by
CHARGES AND DEDUCTIONS (b) and subtracting (c) from the
result, where:
The Mortality and Expense Risk Fee
and the Administrative Charge are (a) is the result of:
each deducted both before and after
the Annuity Commencement Date to (1) the net asset value of a
compensate for changes in mortality fund share held in that
and expenses not anticipated by the Subaccount determined as
mortality and administration of the end of the current
charges guaranteed in the valuation period; plus
certificate.
(2) the per share amount of
Any applicable Service Charge is any dividend or capital
deducted prior to the Annuity gain distributions made
Commencement Date only. by the fund for shares
held in that Subaccount
Any applicable Distribution if the ax-dividend date
Financing Charge is deducted prior occurs during the
to the Annuity Commencement Date valuation period; plus or
only, to compensate F or costs of minus
distributing the policy.
(3) a per share credit or
If the Mortality and Expense Risk charge for any taxes
Fee(s) and/or Distribution reserved for, which we
Financing Charges are more than determine to have
sufficient, the Company will retain resulted from the
the balance as profit or reduce investment operations of
these fees and charges in the that Subaccount.
future.
(b) is the net asset value of a
ACCUMULATION UNITS fund share held in that
Subaccount determined as of
The Policy Value in the Separate the end of the immediately
Account before the Annuity preceding valuation period.
Commencement Date is represented by
accumulation units. The dollar (c) is a factor representing the
value of accumulation units for Mortality and Expense Risk Fee
each Subaccount will change from and Administrative Charge
day to day reflecting the before the Annuity
investment experience of the Commencement Date, plus any
Subaccount. applicable Distribution
Financing Charge. This factor
Premium payments allocated to and is less than or equal to, on
any amounts transferred to the an annual basis, the sum of
Subaccounts will be applied to the applicable percentages
shown on page 3 of the daily
net asset value of a fund
share held in that Subaccount.
Since the net investment factor may
be greater or less than one, the
accumulation unit value may
increase or decrease.
PB1032
PAGE 7
<PAGE>
SECTION 7 - FIXED ACCOUNT
FIXED ACCOUNT We reserve the right or new premium
payments, transfers, or rollovers
Premium payments applied to and any to offer or not to offer any GPO,
amounts transferred to the Fixed except that we will always offer at
Account will reflect a fixed least a one year GPO.
interest rate. The interest rates
we set will be credited for For purposes of crediting interest
increments of at least one year when funds are withdrawn from or
measured from each premium payment transferred into a GPO, the amount
or transfer date. These rates will of the oldest premium payment or
never be less than an effective rollover into that GPO is
annual interest rate of 3%. considered to be withdrawn first.
If the amount withdrawn exceeds
GUARANTEED PERIODS this amount, the next oldest
premium payment or rollover is
We may offer optional Guaranteed considered to be withdrawn next,
Period Options, into which premium and so on until the most recent
payments may be paid or amounts premium payment or rollover is
transferred. The current interest considered to be withdrawn (this is
rate we set for funds entering each a "First-In, First-Out" or FIFO
Guaranteed Period Option (GPO) is procedure). Premium payment(s) or
guaranteed until the end of that rollover(s) are deemed to be
option's Guaranteed Period. At that withdrawn first, then credited
time, the premium payment made or interest.
amount transferred into the GPO,
less any withdrawals or transfers Partial withdrawals, Surrenders,
from that GPO, plus accrued transfers, and amounts applied to a
interest, will be rolled into a new Payment Option from the Guarantee
GPO or may be transferred to any Period Option(s) are subject to an
Subaccount(s) within the Separate Excess Interest Adjustment as
Account (s). described in Section 5.
You may choose the Investment DOLLAR COST AVERAGING FIXED ACCOUNT
Option(s) you want the funds rolled OPTION
into by giving us a written notice
within 30 days before the end of We may offer a Dollar Cost
the expiring option's Guaranteed Averaging (DCA) Fixed Account
Period. However, any Guaranteed Option separate from the Guaranteed
Period elected may not extend Period Options. This option will
beyond the maximum Annuity have a one year interest rate
Commencement Date defined in guarantee. The current interest
Section 11. In the absence of such rate we set for the DCA Fixed
election, the funds will be rolled Account may differ from the rates
into a new GPO which is the same as credited on the one year GPO in the
the expiring GPO unless that GPO is Fixed Account In addition, the
no longer offered, in which case, current interest rate we credit may
the next shorter GPO offered will vary on different portions of the
be used. You will be mailed a DCA Fixed Account The credited
notice of completion of the interest rate will never be less
rollover with the new interest rate than the minimum effective annual
applicable. The new GPO will be interest rate of 3%. The DCA Fixed
deemed as accepted if we do not Account Option will only be
receive a written rejection within available under a Dollar Cost
30 days from the postmark date of Averaging program as described in
the completion notice. Section 8.
SECTION 8 TRANSFERS
A. TRANSFERS BEFORE THE ANNUITY apply to Policy Value transfers at
COMMENCEMENT DATE the end of a Guaranteed Period.
Prior to the Annuity Commencement Transfers of interest credited in
Date, you may transfer the value of the GPOs to other Investment
the accumulation units from one Options are allowed on a "First-In,
Investment Option to another. You First-Out" basis. Such transfers
must sign a notice to transfer may be made monthly, quarterly,
which gives us the facts that we semi-annually, or annually. Each
need. such transfer must be at least $50
and will not be subject to an
Transfers of Policy Value from the Excess Interest Adjustment.
Guaranteed Period Options (GPO) of
the Fixed Account prior to the end Transfers of Policy Value from the
of that GPO are subject to an Separate Account are subject to a
Excess Interest Adjustment. If the minimum of $500 or the entire
Excess Interest Adjustment at the Subaccount Policy Value, if less.
time of such Policy Value transfer However, if the remaining
is a negative adjustment, then the Subaccount Policy Value is less
maximum Policy Value transfer is than $500, we reserve the right to
25% of that GPO's Policy Value, include that amount as part of the
less Policy Values previously transfer.
transferred out of that GPO during
the current certificate year. If You may choose which GPO to
the Excess Interest Adjustment at transfer to or from, however, any
the time of such Policy Value GPO elected may not extend beyond
transfer is a positive adjustment, the maximum Annuity Commencement
no maximum will apply to such Date defined in Section 11.
Policy Values transferred from the
GPO. No Excess Interest Adjustment
will
V1021
PAGE 8
<PAGE>
SECTION 8 - CONT
No transfers will be allowed out of of the accumulation unit is high.
the Dollar Cost Averaging Fixed However, there is no guarantee that
Account Option except through the the Dollar Cost Averaging program
Dollar Cost Averaging Option. will result in higher Policy Values
or will otherwise be successful.
We reserve the right to limit
transfers to no more than 12 in any The Dollar Cost Averaging may be
one Certificate Year. Any transfers discontinued after satisfying the
in excess of 12 per Certificate minimum number of required
Year may be charged a $10 per transfers by sending written notice
transfer fee. Transfers among to us. While Dollar Cost Averaging
multiple Investment Options will be is in effect, Asset Rebalancing is
treated as one transfer in not available.
determining the number of transfers
that have occurred. We also reserve ASSET REBALANCING
the right to prohibit transfers to
the Fixed Account if we are Prior to the Annuity Commencement
crediting an effective annual Date, you may instruct us to
interest rate of 3%. automatically transfer amounts
among the Subaccounts of the
DOLLAR COST AVERAGING OPTION Separate Account on a regular basis
to maintain a desired allocation of
Prior to the Annuity Commencement the Policy Value among the various
Date, you may instruct us to Subaccounts offered. Rebalancing
automatically transfer a specified will occur on a monthly, quarterly,
amount from the Dollar Cost semi-annual or annual basis,
Averaging (DCA) Fixed Account beginning on a date selected. You
Option or from the Dollar Cost must select the percentage of the
Averaging Subaccount(s), if any, Policy Value desired in each of the
shown on page 3 to any various Subaccounts offered
Subaccount(s) of the Separate (totaling 100%). Any amounts in the
Account. The automatic transfers Fixed Account are ignored for the
can occur monthly or quarterly. If purposes of asset rebalancing.
the Dollar Cost Averaging request Rebalancing can be started, stopped
is received prior to the 28th day or changed at any time. Asset
of any month, the first transfer Rebalancing is not available while
will occur on the 28th day of that Dollar Cost Averaging is in effect.
month. If the Dollar Cost Averaging Rebalancing will cease as soon as
request is received on or after the we receive a request for any other
28th day of any month, the first transfer.
transfer will occur on the 28th day
of the following month. B. TRANSFERS AFTER THE ANNUITY
COMMENCEMENT DATE
Prior to the Annuity Commencement
Date, no transfers, (except through After the Annuity Commencement
Dollar Cost Averaging) will be Date, you may transfer the value of
allowed from a DCA Fixed Account the variable annuity units from one
Transfers will continue until the Subaccount to another within the
elected Subaccount or DCA Fixed Separate Account or to the Fixed
Account value is depleted. The Account If you want to transfer the
amount transferred each time must value of the variable annuity
be at least 5500. All transfers units, you must tell us in a signed
from the DCA account will be the notice which gives us the facts
same amount as the initial that we need. We reserve the right
transfer. Changes to the amount to limit transfers between the
transferred will only be allowed Subaccounts or to the Fixed
when additional premium is Accounts to once per Certificate
allocated or a new amount is Year.
transferred into the DCA Account
Changes to the Subaccounts to which The minimum amount which may be
these transfers are allocated are transferred is the lesser of $10O
not restricted. Transfers must be monthly income or the entire
scheduled for at least 6 but not monthly income of the variable
more than 24 months or for at least annuity units in the Subaccount
4 but not more than 8 quarters each from which the transfer is being
time the Dollar Cost Averaging made. If the monthly income of the
program is started or restarted remaining units in a Subaccount is
following termination of the less than $ 10, we have the right
program for any reason. to include the value of those
variable annuity units as part of
Dollar Cost Averaging results in the transfer.
the purchase of more accumulation
units when the value of the After the Annuity Commencement
accumulation unit is low, and fewer Date, no transfers may be made from
accumulation units when the value the Fixed Account to any other
Investment Options.
VB1021
PAGE 9
<PAGE>
SECTION 9 - DEATH PROCEEDS
A. DEATH PROCEEDS PRIOR TO II. Annuitant and Certificate
ANNUITY COMMENCEMENT DATE Owner are different and the
Annuitant dies.
The amount of death proceeds will
be the greater of the Cash Value, When we have due proof that
the Policy Value, or any guaranteed the Annuitant died prior to
minimum death benefit. the Annuity Commencement Date,
the Certificate Owner will
If no payment option is selected by become the new Annuitant and
the date of death, the beneficiary no death proceeds are payable.
may make such election within one If the Certificate Owner is
year of the date we receive due also the deceased Annuitant's
proof of death. The beneficiary may surviving spouse, an amount
elect to receive the death proceeds equal to the excess, if any,
as a lump sum payment or may use of any guaranteed minimum
the death proceeds to provide any death benefit over the Policy
of the annuity payment options Value will then be added to
described in Section 10. Interest the Policy Value. This amount
on death proceeds will be paid as will be added only once at the
required by law. time of such election.
Furthermore, all future
B. DEATH PRIOR TO ANNUITY Surrender Charges will be
COMMENCEMENT DATE waived.
Death proceeds are payable However, in lieu of becoming
contingent upon the relationships the new Annuitant, the
between the Certificate Owner, Certificate Owner may elect to
Annuitant, successor Certificate have the death proceeds
Owner and beneficiary as outlined distributed to the beneficiary
below. The Certificate must be on the death of the Annuitant
surrendered upon settlement and This election must be in
will be terminated upon receiving writing and must be received
proof of death. by us prior to the Annuitant's
death. In such case, when we
I. Certificate Owner is also the have due proof that the
Annuitant. Annuitant died prior to the
Annuity Commencement Date, we
When we have due proof that the will provide the death
Certificate Owner died before proceeds to the beneficiary.
the Annuity Commencement Date,
we will provide the death a) If the Certificate Owner
proceeds to the beneficiary. has elected to have the
death proceeds paid as a
a) Beneficiary is the deceased lump sum, the beneficiary
Certificate Owner's must, within 60 days of our
surviving spouse. The receipt of due proof of the
beneficiary may elect to Annuitant's death, either:
continue the Certificate
rather than receiving the 1) receive the lump sum
death proceeds. If the proceeds; or
Certificate is continued, an
amount equal to the excess, 2) elect to receive annuity
if any, of any guaranteed payments. Such payments
minimum death benefit over must begin within one year
the Policy Value will then of our receipt of due proof
be added to the Policy of the Annuitant's death
Value. This amount will be and must be made for a
added only once, at the time period certain or for this
of such election. beneficiary's lifetime, so
Furthermore, all future long as any period certain
Surrender Charges will be does not exceed this
waived. beneficiary's life
expectancy.
If this beneficiary elects
to have the death proceeds b) Death proceeds which are
paid, the death proceeds not paid to or for the
must be distributed: benefit of a natural person
must be distributed by the
(1) by the end of 5 years end of 5 years after the
after the date of the date of the Annuitant's
deceased Certificate Owner's death.
death, or
III. Annuitant and Certificate
(2) payments must begin no Owner are different and the
later than one year after Certificate Owner dies.
the deceased Certificate
Owner's death and must be If the Certificate Owner dies
made for a period certain or prior to the Annuity
for this beneficiary's Commencement Date and before
lifetime, so long as any the entire interest in the
period certain does not Certificate is distributed,
exceed this beneficiary's the successor Certificate
life expectancy. Owner will become the new
Certificate Owner. The
b) Beneficiary is not the remaining portion of any
deceased Certificate Owner's interest in the policy must be
surviving spouse. The death distributed to the extent
proceeds must be distributed provided below in III.a),
as provided in l.a)(1) or III.b), III.c), or III.d).
l.a)(2) above.
c) Death proceeds which are not a) Successor Certificate Owner
paid to or for the benefit is the deceased Certificate
of a natural person must be Owner's surviving spouse.
distributed by the end of 5 The successor Certificate
years after the date of the Owner may elect to continue
deceased Certificate Owner's this Certificate rather
death. than receive the Adjusted
Policy Value. If the
Certificate is continued,
all future Surrender
Charges will be waived if
the successor Certificate
Owner elects to receive the
Adjusted Policy Value, the
Adjusted Policy Value must
be distributed:
S956
PAGE 10
<PAGE>
SECTION 9 - CONT
(1) by the end of 5 years after IV. More than one Certificate Owner.
the date of the deceased
Certificate Owner's death,or If there is more than one
Certificate Owner, then the
(2) payments must begin no death of any Certificate Owner
later than one year after the will be treated the same as
deceased Certificate Owner's the death of the Certificate
death and must be made for a Owner.
period certain or for the
successor Certificate Owner's D. DEATH ON OR AFTER THE ANNUITY
lifetime, so long as any period COMMENCEMENT DATE
certain does not exceed the
successor Certificate Owner's The death proceeds on or after the
life expectancy. Annuity Commencement Date depend on
the payment option selected. If any
b) Successor Certificate Owner is Certificate Owner dies on or after
not the deceased Certificate the Annuity Commencement Date, but
Owner's surviving spouse. The before the entire interest in the
Adjusted Policy Value must be Certificate is distributed, the
distributed as provided in remaining portion of such interest
III.a)(1) or III.a)(2) above. in the Certificate will be
distributed at least as rapidly as
c) Successor Certificate Owner is under the method of distribution
not a natural person. The being used as of the date of that
Adjusted Policy Value must be Certificate Owner's death.
distributed as provided in
III.a)(1) above. E. AN OWNER IS NOT AN INDIVIDUAL
d) No successor Certificate Owner In the case of a non tax-qualified
survives the deceased annuity, if any Certificate Owner
Certificate Owner. The deceased or beneficial Certificate Owner is
Certificate Owner's estate will not an individual, then for
become the new Certificate Owner purposes of the federal income tax
(or the estate may name a new mandatory distribution provisions
Certificate Owner). The executor in subsection C or D above, (1) the
or Administrator must be named Annuitant will be treated as the
in a form acceptable to Certificate Owner of the
us. The Adjusted Policy Value Certificate, and (2) if there is
must be distributed by the any change in the Annuitant, such a
end of 5 years after the date change will be treated as the death
of the deceased Certificate of the Certificate Owner.
Owner's death.
SECTION 10 - ANNUITY PAYMENTS
A. GENERAL PAYMENT PROVISIONS the adjusted age of the Annuitant
The adjusted age is the Annuitant's
Payment actual age on the Annuitant's
nearest birthday, at the Annuity
If the Certificate is in force on Commencement Date, adjusted as
the Annuity Commencement Date, we follows:
will use the Fixed Account portion
and/or the Separate Account portion Annuity
of the Adjusted Policy Value to Commencement Adjusted Age
make annuity payments to the Payee Date
under Option 3 and/or 3-V, ------------ ------------
respectively, with 10 years Before 2001 Actual Age
certain, or if elected, under one 2001 - 2010 Actual Age minus 1
or more of the other options 2011 - 2020 Actual Age minus 2
described in this section. However, 2021 - 2030 Actual Age minus 3
the option(s) elected must provide 2031 - 2040 Actual Age minus 4
for lifetime income or income for a After 2040 Actual Age minus 5
period of at least 60 months. The
Certificate Owner will become the Election of Optional Method of
Annuitant at the Annuity Payment
Commencement Date. Payments will be
made at 1, 3,6 or 12 month Before the Annuity Commencement
intervals. We reserve the right to Date the Certificate Owner can
change the frequency of payments to elect or change a payment option.
avoid making payments of less than The Certificate Owner may elect, in
$50. a signed notice which gives us the
facts that we need, annuity
Before the Annuity Commencement payments that may be either
Date, if the death proceeds become variable, Fixed, or a combination
payable or if the Certificate is of both. If a combination is
surrendered, we will pay any elected, they must also tell us
proceeds in one sum, or if elected, what part of the proceeds on the
all or part of these proceeds may Annuity Commencement Date are to be
be placed under one or more of the applied to provide each type of
options described in this section. payment (It must also specify which
If we agree, the proceeds may be Subaccounts.) The amount of a
placed under some other method of combined payment will be the sum of
payment instead. the variable and fixed payments.
Payments under a variable payment
Adjusted Age option will refelect the investment
performance of the selected
Payments under Options 3 and 5, and Subaccount of the Separate Account.
the first payment under Options 3-V
and 5-V are determined based on
SB956
PAGE 11
<PAGE>
SECTION 10 - ANNUITY PAYMENTS - CONT
Payee Certificate Owner will agree on
withdrawal rights when you elect
Unless specified otherwise, the this option. The interest rate we
Payee shall be the Annuitant, or declare for this option may be
the beneficiary as specified in the different than the interest rate(s)
Beneficiary provision. credited prior to the Annuity
Commencement Date.
Proof of Age
Option 2 - Income for a Specified
We may require proof of the age of Period
any person who has an annuity
purchased under Options 3, 3-V, 5 We will make level payments only
and 5-V of this section before we for the fixed period you choose. In
make the first payment. the event of the death of the
person receiving payments prior to
Minimum Proceeds the end of the fixed period
elected, payments will be continued
If the proceeds are less than to that person's beneficiary or
$2,000, we reserve the right to pay their present value may be paid in
them out as a lump sum instead of a single sum. No funds will remain
applying them to a payment option. at the end.
Premium Tax Option 3 - Life Income - You may
choose between:
We may be required by law to pay
premium tax on the amount applied 1. No Period Certain - We will
to a payment option. If the make level payments only
requirement is applicable to the during the Annuitant's
issue state, we will deduct the lifetime.
premium tax before applying the
proceeds. 2. 10 Years Certain - We will
make level payments only
B. FIXED ACCOUNT PAYMENTS during the Annuitant's
lifetime or ten years.
Guaranteed Payment Options
3. Guaranteed a Return of Policy
The fixed account payment is Proceeds - We will make level
determined by multiplying each payments for the longer of the
$1,000 of proceeds allocated to a Annuitant's lifetime or until
fixed Payment Option by the amounts the total dollar amount of
shown on page 12 for the option payments we made to you equals
selected. Options 1, 2 and 4 are the amount applied to this
based on a guaranteed interest rate option.
of 3%.
Option 4 - Income of a Specified
Options 3 and 5 are based on a Amount
guaranteed interest rate of 3% and
the "1983 Table a" (male, female, Payments are made for any specified
and unisex if required by law) amount until the amount applied to
mortality table improved to the this option, with interest, are
year 2000 with projection scale G. exhausted. This will be a series of
(The "1983 Table a" mortality rates level payments followed by a
are adjusted based on improvements smaller final payment In the event
in mortality since 1983 to more of the death of the person
appropriately ref elect increased receiving payments prior to the
longevity. This is accomplished time proceeds with interest are
using a set of improvement factors exhausted, payments will be
referred to as projection scale G.) continued to that person's
beneficiary or their present value
Option 1 - Interest Payments may be paid in a single sum.
We will pay the interest on the Option 5 - Joint and Survivor
amount we use to provide annuity Annuity
payments in equal payments or this
amount may be left to accumulate Payments are made during the joint
for a period of time we and the lifetime of the Payee and a joint
Certificate Owner agree to. We and Payee of your selection. Payments
the will be made as long as either
person is living.
Current Payment Options
The amounts shown in the tables on
page 12 are the guaranteed amounts.
Current amounts offered to
individuals of the same class may
be obtained from us.
S960
PAGE 11 (A)
<PAGE>
SECTION 10 - CONT
C. VARIABLE ACCOUNT PAYMENT OPTIONS the percentage shown on page 3
of the daily net asset value
Variable Annuity Units of a fund share held in the
Separate Account for that
The proceeds chosen by the Subaccount.
Certificate Owner to apply to a
variable payment option will be Determination of the First Variable
used to purchase variable annuity Payment
units in Subaccounts chosen by the
Certificate Owner. The dollar value The amount of the first variable
of variable annuity units in the payment is determined by
chosen Subaccounts will increase or multiplying each $ 1,000 of
decrease reflecting the investment proceeds allocated to a variable
experience of the chosen payment option by the amounts shown
Subaccounts. The value of a on page 13 for the variable option
variable annuity unit in a you select The tables are based on
particular Subaccount on any a 5% effective annual Assumed
business day is equal to (a) Investment Return and the " 1983
multiplied by (b) multiplied by Table a" (male, female, and unisex
(c), where: if required by law) mortality table
improved to the year 2000 with
(a) is the variable annuity unit projection scale G. (The " 1983
value for that Subaccount on Table a" mortality rates are
the immediately preceding adjusted based on improvements in
business day; mortality since 1983 to more
appropriately ref elect increased
(b) is the net investment factor longevity. This is accomplished
for that Subaccount for the using a set of improvement factors
Valuation Period; and referred to as projection scale G.)
(c) is the Assumed Investment Option 3V- Life Income
Return adjustment factor for
the Valuation Period. You may choose between:
The Assumed Investment Return 1. "No Period Certain" - Payments
adjustment factor for the valuation will be made only during the
period is the product of discount lifetime of the Annuitant.
factors of .99986634 per day to
recognize the 5.0% effective annual 2. "10 Years Certain" - Payments
Assumed Investment Return. will be made for the longer of
the Annuitant's lifetime or
The net investment factor used to ten years. In the event of the
calculate the value of a variable death of the person receiving
annuity unit in each Subaccount for payments prior to the end of
the Valuation Period is determined the period for which the
by dividing (a) by (b) and election was made, payments
subtracting (c) from the result, will be continued to that
where: person's beneficiary or their
present value may be paid in a
(a) is the net result of: single sum.
(1) the net asset value of a Option 5V - Joint and Survivor
fund share held in that Annuity
Subaccount determined as
of the end of the current Payments are made as long as either
valuation period; plus the Payee or the joint Payee is
living.
(2) the per share amount of
any dividend or capital Determination of Subsequent
gain distributions made Variable Payments
by the fund for shares
held in that Subaccount The amount of each variable annuity
if the ex-dividend date payment after the first will
occurs during the increase or decrease according to
Valuation Period; plus or the value of the variable annuity
minus units which reflect the investment
(3) a per share credit or experience of the selected
charge for any taxes Subaccounts. Each variable annuity
reserved for, which we payment after the first will be
determine to have equal to the number of variable
resulted from the annuity units in the selected
investment operations of Subaccounts multiplied by the
the Subaccount. variable annuity unit value on the
date the payment is made. The
(b) is the net asset value of a number of variable annuity units in
fund share held in that each selected Subaccount is
Subaccount determined as of determined by dividing the first
the end of the immediately variable annuity payment allocated
preceding Valuation Period. to the Subaccount by the variable
annuity unit value of that
(c) is a factor representing the Subaccount on the Annuity
Mortality and Expense Risk Fee Commencement Date.
and Administrative Charge
applicable after the Annuity
Commencement Date. This factor
is less than or equal to, on
an annual basis,
SB960
PAGE 11 (B)
<PAGE>
GUARANTEED FIXED ACCOUNT PAYMENT OPTIONS
The amounts shown in these tables are the guaranteed amounts for each $1,000 of
the proceeds. Higher current amounts may be available at the time of settlement.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Option 2, Table I Option 3, Table II Option 3, Table III Option 3, Table IV
- --------------------------- ---------------------------------------------------------------------------------
Monthly Installment for
Number Amount of Monthly Installment For Monthly Installment for Guaranteed Return
Of Years Monthly Life No Period Certain Life 10 Years Certain of Proceeds
Payable Installment
------------------------------------------------------------------------------------------
Age* Male Female Unisex Male Female Unisex Male Female Unisex
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $3.87 $3.55 $3.71 $3.84 $3.54 $3.70 $3.73 $3.49 $3.61
51 3.93 3.60 3.77 3.90 3.59 3.75 3.79 3.53 3.66
52 4.00 3.65 3.83 3.97 3.64 3.81 3.84 3.58 3.71
53 4.07 3.71 3.90 4.04 3.70 3.87 3.90 3.63 3.76
5 $ 17.91 54 4.15 3.77 3.97 4.11 3.75 3.94 3.96 3.68 3.82
6 15.14 55 4.23 3.83 4.04 4.19 3.82 4.01 4.03 3.73 3.88
7 13.16 56 4.32 3.90 4.11 4.27 3.88 4.08 4.10 3.79 3.94
8 11.68 57 4.41 3.97 4.19 4.35 3.95 4.15 4.17 3.85 4.00
9 10.53 58 4.50 4.05 4.28 4.44 4.02 4.24 4.24 3.91 4.07
10 9.61 59 4.61 4.13 4.37 4.53 4.10 4.32 4.32 3.97 4.14
11 8.86 60 4.72 4.21 4.47 4.63 4.18 4.41 4.40 4.04 4.22
12 8.24 61 4.84 4.30 4.57 4.74 4.26 4.51 4.49 4.12 4.30
13 7.71 62 4.96 4.40 4.68 4.85 4.35 4.61 4.58 4.19 4.38
14 7.26 63 5.10 4.50 4.80 4.97 4.45 4.71 4.68 4.28 4.47
15 6.87 64 5.24 4.61 4.93 5.09 4.55 4.83 4.78 4.36 4.56
16 6.53 65 5.40 4.73 5.06 5.22 4.66 4.95 4.88 4.45 4.66
17 6.23 66 5.56 4.85 5.21 5.36 4.77 5.07 4.99 4.55 4.76
18 5.96 67 5.74 4.99 5.36 5.50 4.89 5.20 5.11 4.65 4.87
19 5.73 68 5.93 5.13 5.53 5.65 5.02 5.34 5.24 4.76 4.98
20 5.51 69 6.13 5.29 5.71 5.80 5.15 5.49 5.37 4.87 5.10
70 6.34 5.45 5.90 5.96 5.30 5.64 5.51 4.99 5.23
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Option 5, Table V
- ----------------------------------------------------------------------------------------------------------------------
Monthly Installment For Joint and Full Survivor
- ----------------------------------------------------------------------------------------------------------------------
Age of
Age of Female Annuitant*
Male
------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $2.99 $3.05 $3.11 $3.18 $3.25 $3.32 $3.39
55 3.11 3.19 3.27 3.35 3.44 3.53 3.63
60 3.27 3.37 3.47 3.58 3.70 3.82 3.95
65 3.47 3.60 3.74 3.89 4.05 4.22 4.39
70 3.74 3.91 4.10 4.31 4.53 4.77 5.02
- ----------------------------------------------------------------------------------------------------------------------
Monthly Installment For Unisex Joint and Full Survivor
- ----------------------------------------------------------------------------------------------------------------------
Age of
Age of Joint Annuitant*
First
------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
First First First First First First First
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $3.04 $3.09 $3.15 $3.21 $3.27 $3.33 $3.39
55 3.17 3.24 3.32 3.40 3.48 3.56 3.63
60 3.34 3.44 3.54 3.64 3.75 3.85 3.95
65 3.57 3.70 3.83 3.97 4.11 4.26 4.39
70 3.87 4.04 4.22 4.42 4.62 4.82 5.01
- ----------------------------------------------------------------------------------------------------------------------
*Adjusted Age as defined in Section 10.A.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The annual, semi-annual or quarterly installments under Option 2 shall be
monthly installment shown multiplied by 11.84, 5.96 or 2.99 respectively, and
for Options 3 and 5 the monthly installment shown multiplied by 11.80, 5.95 or
2.99 respectively.
- --------------------------------------------------------------------------------
Dollar amounts of monthly installments not shown in the above tables will be
calculated on the same basis as those shown and may be obtained from the
Company.
T825
PAGE 12
<PAGE>
VARIABLE PAYMENT OPTIONS
BASED ON ASSUMED INVESTMENT RETURN
The amounts shown in these tables are the initial payment amounts based on a
5.0% Assumed Investment Return for each $1,000 of the proceeds.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Option 3-V, Table II Option 3-V, Table III
- --------------------------- ---------------------------------------------------------------------------------
Monthly Installment For Monthly Installment for
Life No Period Certain Life 10 Years Certain
------------------------------------------------------------------------------------------
Age* Male Female Unisex Male Female Unisex
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
50 $5.11 $4.81 $4.96 $5.07 $4.79 $4.94
51 5.17 4.85 5.02 5.13 4.83 4.99
52 5.24 4.90 5.07 5.19 4.88 5.04
53 5.31 4.95 5.13 5.25 4.93 5.10
54 5.38 5.01 5.20 5.32 4.98 5.16
55 5.46 5.06 5.26 5.39 5.04 5.22
56 5.54 5.12 5.34 5.47 5.09 5.28
57 5.63 5.19 5.41 5.54 5.16 5.36
58 5.72 5.26 5.49 5.63 5.22 5.43
59 5.82 5.34 5.58 5.72 5.29 5.51
60 5.93 5.42 5.68 5.81 5.37 5.60
61 6.04 5.50 5.78 5.91 5.44 5.69
62 6.17 5.60 5.89 6.02 5.53 5.78
63 6.30 5.69 6.00 6.13 5.62 5.88
64 6.44 5.80 6.13 6.25 5.71 5.99
65 6.60 5.91 6.26 6.37 5.82 6.10
66 6.76 6.04 6.40 6.50 5.92 6.22
67 6.94 6.17 6.56 6.63 6.04 6.35
68 7.13 6.31 6.72 6.77 6.16 6.48
69 7.33 6.46 6.90 6.92 6.29 6.62
70 7.55 6.63 7.09 7.07 6.43 6.76
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Option 5V, Table V
- ----------------------------------------------------------------------------------------------------------------------
Monthly Installment For Joint and Full Survivor
- ----------------------------------------------------------------------------------------------------------------------
Age of
Age of Female Annuitant*
Male
------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $4.32 $4.36 $4.41 $4.46 $4.51 $4.57 $4.62
55 4.42 4.47 4.53 4.60 4.67 4.75 4.83
60 4.54 4.62 4.70 4.80 4.90 5.01 5.12
65 4.71 4.82 4.94 5.07 5.22 5.37 5.53
70 4.95 5.10 5.27 5.46 5.67 5.89 6.13
- ----------------------------------------------------------------------------------------------------------------------
Monthly Installment For Unisex Joint and Full Survivor
- ----------------------------------------------------------------------------------------------------------------------
Age of
Age of Joint Annuitant*
First
------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
First First First First First First First
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $4.40 $4.45 $4.50 $4.55 $4.61 $4.67 $4.72
55 4.52 4.59 4.66 4.73 4.81 4.89 4.96
60 4.69 4.78 4.87 4.97 5.08 5.19 5.29
65 4.91 5.04 5.17 5.31 5.46 5.62 5.77
70 5.22 5.40 5.59 5.79 6.02 6.24 6.47
- ----------------------------------------------------------------------------------------------------------------------
*Adjusted Age as defined in Section 10.A.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The annual, semi-annual or quarterly installments shall be the monthly
installment shown for Options 3-V and 5-V multiplied by 11.70, 5.93 or 2.99
respectively.
- --------------------------------------------------------------------------------
Dollar amounts of monthly installments not shown in the above tables will be
calculated on the same basis as those shown and may be obtained from the
Company.
TB828
PAGE 13
<PAGE>
SECTION 11 GENERAL PROVISIONS
PARTICIPANT CERTIFICATES 3. Amend or modify this
Certificate with our consent.
We will issue a Certificate to each 4. Receive annuity payments or
Participant. name a Payee to receive the
payments.
MODIFICATION OF CONTRACT 5. Exercise, receive and enjoy
every other right and benefit
No change in this Certificate or contained in this Certificate.
the Group Contract is valid unless
made in writing by us and approved The use of these rights may be
by one of our officers. No subject to the consent of any
registered representative has assignee or irrevocable
authority to change or waive any beneficiary; and of the spouse in a
provision of the Group Contract or community or marital property
this Certificate. state.
TAX QUALIFICATION Unless we have been notified of a
community or marital property
This Certificate is intended to interest in this Certificate, we
qualify as an annuity contract for will rely on our good faith belief
federal income tax purposes. The that no such interest exists and
provisions of this Certificate are will assume no responsibility for
to be interpreted to maintain such inquiry.
qualification. To maintain such tax
qualification, we reserve the right SUCCESSOR CERTIFICATE OWNER
to amend this Certificate to
reflect any clarifications that may A successor Certificate Owner can
be needed or are appropriate to be named in any enrollment form, or
maintain such tax qualification or in a notice you sign which gives us
to conform this Certificate to any the facts that we need. The
applicable changes in the tax successor Certificate Owner will
qualification requirements. We will become the new Certificate Owner
send the Certificate Owner a copy when you die, if you die before the
in the event of any such amendment Annuitant If no successor
If such an amendment is refused, it Certificate Owner survives you and
must be by giving us written you die before the Annuitant, your
notice, and refusal may result in estate will become the new
adverse tax consequences. Certificate Owner.
NON -PARTICIPATING CHANGE OF OWNERSHIP
The Group Contract and Group In the case of a non-tax qualified
Certificates will not share in our annuity, you can change the
surplus earnings. Certificate Owner of this
Certificate from yourself to a new
AGE OR SEX CORRECTIONS Certificate Owner, in a notice you
sign which gives us the facts that
If the age or sex of the Annuitant we need. When this change takes
has been misstated, the benefits effect, all rights of ownership in
will be those which the premiums this Certificate will pass to the
paid would have purchased for the new Certificate Owner.
correct age and sex. If required by
law to ignore differences in the A change of Certificate Owner or
sex of the Annuitant, the payment successor Certificate Owner will
options will be determined using not be effective until it is
the unisex factors in Section 10. recorded in our records. After it
has been so recorded, the change
Any underpayment made by us will be will take effect as of the date you
paid with the next payment Any signed the notice. However, if the
overpayment made by us will be Annuitant dies before the notice
deducted from future payments. Any has been so recorded, it will not
underpayment or overpayment, will be effective as to those proceeds
include interest at 5% per year, we have paid before the change was
from the date of the wrong payment recorded in our records. We may
to the date of the adjustment. require that the change be endorsed
in the Certificate. Changing the
INCONTESTABILITY Certificate Owner or naming a new
successor Certificate Owner cancels
This Certificate shall be any prior choice of successor
incontestable from the Certificate Certificate Owner, but does not
Date. change the beneficiary or the
Annuitant.
EVIDENCE OF SURVIVAL
ANNUITY COMMENCEMENT DATE
We have the right to require
satisfactory evidence that a person The Annuity Commencement Date is
was alive if a payment is based on the date annuity payments begin.
that person being alive. No payment This date may not be later than the
will be made until we receive the last day of the Certificate month
evidence. starting after the Annuitant
attains age 85, except as expressly
SETTLEMENT allowed by us, but in no event
later than the last day of the
Any payment by us under this Certificate month following the
Certificate is payable at our Home month in which the Annuitant
Office. attains age 95. You may change the
Annuity Commencement Date at any
RIGHTS OF CERTIFICATE OWNER time before the Annuity
Commencement Date by giving us 30
You may, while the Annuitant is days' written notice.
living:
1. Assign this Certificate.
2. Surrender this Certificate to
us.
H690
PAGE 14
<PAGE>
SECTION 11 - CONT
ASSIGNMENT at the time the death proceeds
become payable. If there is more
(a) In the case of a non-tax than one beneficiary and you failed
qualified annuity, this to specify their interest, they
Certificate may be assigned. will share equally. Payment will be
The assignment must be in made to the named contingent
writing and filed with us. beneficiary(ies) only if all
primary beneficiaries have died
(b) We assume no responsibility before the death proceeds become
for the validity of any payable. If any primary beneficiary
assignment Any claim made is alive at the time the death
under an assignment shall be proceeds become payable, but dies
subject to proof of interest before receiving their payment,
and the extent of the their share will be paid to their
assignment. estate.
(c) This Certificate may be In cases where the annuitant dies
applied for and issued to and the Certificate Owner (who is
qualify as a tax-qualified not the annuitant) elected to
annuity under certain sections receive the death proceeds in
of the Internal Revenue Code. accordance with Section 9, if the
This will be specified in the annuitant's estate has been named
enrollment form, or as beneficiary, then payment will
information provided in lieu be made to the Certificate Owner.
thereof. Ownership of this
Certificate then is restricted PROTECTION OF PROCEEDS
so that it will comply with
provisions of the Internal Unless you so direct by filing
Revenue Code. written notice with us, no
beneficiary may assign any payments
Assignment of this Certificate may under this Certificate before the
result in adverse tax consequences. same are due. To the extent
permitted by law, no payments under
BENEFICIARY this Certificate will be subject to
the claims of creditors of the
Death proceeds, when payable in Certificate Owner or any
accordance with Section 9, are beneficiary.
payable to the designated
beneficiary or beneficiaries. Such DEFERMENT
beneficiary(ies) must be named in
the enrollment form, or information We will pay any Partial Withdrawals
provided in lieu thereof, and may or surrender proceeds from the
be changed without consent (unless Separate Account(s) within 7 days
irrevocably designated or required after we receive all requirements
by law) by notifying us in writing that we need. However, it may
on a form acceptable to us. The happen that the New York Stock
change will take effect upon the Exchange is closed for trading
date signed, whether or not you are (other than the usual weekend or
living when we receive it The holiday closings), or the
notice must have been postmarked Securities and Exchange Commission
(or show other evidence of delivery restricts trading or determines
that is acceptable to us) on or that an emergency exists. If so, it
before the date of death. The most may not be practical for us to
recent change of beneficiary notice determine the investment experience
will replace any prior beneficiary of the Separate Account In that
designations. No change will apply case, we may defer transfers among
to any payment we made before the the Subaccounts and to the Fixed
written notice was received. If an Account, and determination or
irrevocable beneficiary dies, you payment of Partial Withdrawals or
may designate a new beneficiary. surrender proceeds.
You may direct that the beneficiary When permitted by law, we may defer
shall not have the right to paying any Partial Withdrawals or
withdraw, assign or commute any sum surrender proceeds from the Fixed
payable under an option. In the Account for up to 6 months from the
absence of such election or date we receive the request. If the
direction, the beneficiary may Certificate Owner dies after the
change the manner of payment or request is received, but before the
make an election of any option. request is processed, the request
will be processed before the death
If any primary or contingent proceeds are determined. Interest
beneficiary dies before the will be paid on any amount deferred
Annuitant, that beneficiary's for 30 days or more. This rate will
interest in this Certificate ends be computed at the rate of interest
with that beneficiary's death Only currently paid on proceeds left
those beneficiaries living at the under the Interest Payments
time of the Annuitant's death will Settlement Option.
be eligible to receive their share
of the Death Proceeds. In the event REPORTS TO OWNER
no contingent beneficiaries have
been- named and all primary We will give you an annual report
beneficiaries have died before the at least once each Certificate
death proceeds become payable, the Year. This report will show the
Certificate Owner(s) will become number and value of the
the beneficiary(ies) unless elected accumulation units held in each of
otherwise in accordance with the Subaccounts as well as the
Section 9. If both primary and value of the Fixed Account. It will
contingent beneficiaries have been also give you the Death Benefit,
named, payment will be made to the Cash Value, and any other facts
named primary beneficiaries living required by law or regulation.
J690
PAGE 15
<PAGE>
[LOGO PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E, Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
LUMP SUM PARTIAL WITHDRAWAL OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [2nd] Certificate Year, amounts ($500, minimum)
up to [10%] of the Policy Value immediately prior to the Partial
Withdrawal are available as a Lump Sum distribution once per
Certificate Year with no Surrender Charges and no Excess Interest
Adjustment.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to ail the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1051 199
<PAGE>
[LOGO PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E, Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
GUARANTEED MINIMUM DEATH BENEFIT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
The Death Proceeds Prior to Annuity Commencement Date provision in Section 9,
Death Proceeds, is replaced with the following language:
The amount of the death proceeds will be the greatest of (a), (b), or (c)
where:
(a) is the Policy Value on the date we receive due proof of death and an
election of a method of settlement;
(b) is the Cash Value on the date we receive due proof of death and an
election of a method of settlement, and;
(c) is the Guaranteed Minimum Death Benefit (GMDB), plus any additional
premium payments received, less any Gross Partial Withdrawals from the
date of death to the date of payment of death proceeds.
If no payment option is selected by the date of death, the beneficiary may
make such election within 60 days of the date we receive due proof of
death. The beneficiary may elect to receive the death proceeds as a lump
sum payment or may use the death proceeds to provide any of the annuity
payment options described in Section 10. Interest on death proceeds will be
paid as required by law.
The Guaranteed Minimum Death Benefit is the Double Enhanced Death Benefit
The GMDB is the greater of (1) and (2) where:
(1) is a [5%] Annually Compounding Death Benefit, equal to:
a) the total premiums paid for the Certificate; minus
b) Adjusted Partial Withdrawals (as described below); plus
c) interest accumulated a [5%] per annum from the payment or
withdrawal date to the earlier of the date of death or the
Certificate Owner's [81st] birthday.
(2) is a Step-Up Death Benefit, equal to:
a) the largest Policy Value on the Certificate Date or [any]
Certificate [Anniversary] prior to the earlier of the date
of death or the Certificate Owner's [81st] birthday; plus
b) any Premium Payments made since then, minus any Adjusted
Partial Withdrawals made since then.
If the Certificate Owner is a nonnatural person, or if the Certificate
Owner has elected to have the death proceeds paid upon the death of the
annuitant, the Guaranteed Minimum Death Benefit will be based upon the
annuitant's age.
The Adjusted Partial Withdrawal is the total amount deducted from the
GMDB as a result of a Partial Withdrawal as used in the GMDB provision.
It is equal to the Gross Partial Withdrawal described in Section 5,
multiplied by an Adjustment Factor. The Adjustment Factor is equal to the
amount of the death proceeds prior to the Partial Withdrawal divided by
the Policy Value prior to the Partial Withdrawal.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1060 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E, Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
SYSTEMATIC PAYOUT OPTION
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Partial Withdrawals provision in Section 5, Cash Value and Partial
Withdrawals, is amended to include the following language:
Beginning in the [1st] Certificate Year, a Systematic Payout
Option (SPO) is available on a monthly, quarterly, semi-annual
or annual basis. SPO payouts must be at least $50 and may not
exceed 10% of the Policy Value at the time a SPO payout is made
divided by the number of payouts made per year (e.g. 12 for
monthly). No Surrender Charges or Excess Interest Adjustment
will apply to the SPO payout Monthly and quarterly payouts must
be sent through electronic funds transfer directly to your
checking or savings account. The Certificate Owner may start or
stop SPO payouts at any time; however, 30 days written notice
is required to stop SPO payouts. Once stopped, the Certificate
Owner must wait until the first day of the next Certificate
Year to begin a new SPO.
Once the Certificate Owner has elected a SPO, the Certificate
Owner must wait a minimum time before the first SPO payment:
one month for a monthly SPO, three months for quarterly, six
months for semi-annual, or twelve months for annual.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1064 199
<PAGE>
[LOGO OF PFL APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E, Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
SERVICE CHARGE WAIVER
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate Data page.
The Service Charge provision in Section 4, Policy Value, is amended to include
the following language:
The Service Charge will not be deducted on a Certificate
Anniversary or at the time of surrender if, at such time,
either (1) the sum of all premium payments made less the sum of
all withdrawals taken equals or exceeds [$50,000] or (2) the
Policy Value equals or exceeds [$50,000]
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1074 199
<PAGE>
[LOGO OF PFL APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E, Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
PREMIUM ENHANCEMENT
This Rider is a part of the Contract/Certificate if it is shown in the Schedule
of Additional Benefits section on the Contract/Certificate page.
Section 3, Premium Payments, is amended to include the following language:
PREMIUM ENHANCEMENT
When a Premium Payment is paid, a Premium Enhancement
Percentage of [25%] to [5%] will be applied to that Premium
Payment and the resulting amount will be added to the Policy
Value. The amount of the Premium Enhancement is not considered
a Premium Payment The Premium Enhancement Percentage may vary
from premium to premium on subsequent Premium Payments, but
will never be less than 0.25% more than [5%]. The Premium
Enhancement Percentage applicable to the Initial Premium is set
forth on the Certificate Data Page. We will advise You of the
amount of the Premium Enhancement applicable to each subsequent
Premium Payment in a confirmation that We will send to You. No
Premium Enhancement will apply if the Certificate is cancelled
pursuant to the Right to Cancel provision.
This Rider takes effect and expires concurrently with the Contract/Certificate
to which it is attached and is subject to all the terms and conditions of the
Contract/Certificate not inconsistent herewith.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
AE 1075 199
<PAGE>
[LOGO OF PFL LIFE APPEARS HERE]
PFL Life Insurance Company
A Stock Company
Home Office located at 4333 Edgewood Road N.E, Cedar Rapids, Iowa 52499
(Hereafter called the Company, we, our or us) (319) 398-8511
GUARANTEED MINIMUM INCOME BENEFIT RIDER
This rider provides your variable annuity with a Minimum Annuitization Value
which can only be used with the Annuity Factors shown in Schedule l of this
rider. This Minimum Annuitization value is guaranteed by us, regardless of the
performance of the variable annuity's investments.
This rider is attached to and made part of your Certificate as of the Rider
Date. This rider may only be terminated as provided herein. This rider is
subject to all of the provisions in the Certificate that do not conflict with
the provisions of this rider. The Rider Payment Options provide for variable
annuity payments. Subsequent payments may fluctuate with the investment
performance of Your annuity Subaccounts, but will never be less than the initial
payment.
Certificate Number: [123456]
Rider Date: [05-01-1999] Last Date To Upgrade: [07-15-2038]
Annual Growth Rate: [3.00%] Guaranteed Minimum Income Benefit:
Rider Fee Percentage: [0.50%] First Date to Elect Benefit: [07-15-2009]
Rider Fee Waiver Last Date to Elect Benefit [12-31-2048]
Threshold: [250%]
Mortality and Expense Risk Fee and Administrative Charge after the Election
Date: [3.50%]
<TABLE>
<CAPTION>
Minimum Annuitization Guaranteed Minimum
Rider Date Age Value* Monthly Payment**
----------- -------- --------------------- ---------------------
<S> <C> <C> <C>
[ 07/15/ 1998 35 $100,000.00 N/A ]
Election
Date
[ 07/15/2008 45 $134,391.64 $479.78 ]
[ 07/15/2009 46 $138,423.39 $501.09 ]
[ 07/15/2010 47 $142,576.09 $523.25 ]
[ 07/15/2011 48 $146,853.37 $547.76 ]
[ 07/15/2012 49 $151,258.97 $571.76 ]
[ 07/15/2013 50 $155,796.74 $598.26 ]
[ 07/15/2014 51 $160,470.64 $625.84 ]
[ 07/15/2015 52 $165,284.76 $656.18 ]
[ 07/15/2016 53 $170,243.31 $687.78 ]
[ 07/15/2017 54 $175,350.61 $720.69 ]
</TABLE>
*Assumes no further payments, no premium tax, and no withdrawals. This amount
may only be used for annuitization with the Rider Payment Options provided in
this rider.
** Assumes the Minimum Annuitization Value shown is applied to a life with 10
year certain Rider Payment Option with monthly payments.
RGMI 4 499(CRT) 1
<PAGE>
DEFINITIONS Mortality and Expense Risk Fee and
Administrative Charge in effect
The following definitions used in prior to the Election Date. It may
this Rider are for reference only. also be different than the
Mortality and Expense Risk Fee and
Annuitant Administrative Charge for the
settlement options shown in the
The Annuitant is designated on the Certificate.
Certificate Data Page. The variable
annuity payments are paid to the The subsequent payments may
Annuitant (or surviving Joint fluctuate in accordance with the
Annuitant). investment performance of Your
annuity Subaccounts. However, such
Annuity Factor payments will never be less than
the initial payment.
A factor for the applicable
Annuitant age, sex and Rider MINIMUM ANNUITIZATION VALUE
Payment Option is shown in Schedule
I or Schedule II of this rider. For The Minimum Annuitization Value is
the Rider Payment Option chosen, used to determine Your Guaranteed
the Annuity Factor from Schedule I Minimum Income Benefit payments. On
and the Minimum Annuitization Value the Rider Date, the Minimum
will be used to determine the Annuitization Value is the value of
applicable annuity payments. For Your Certificate. thereafter, based
Annuitants age 85 or older at the upon the effective Annual Growth
time of annuitization, the age 85 Rate (shown on page one of this
Annuity Factor will be used for rider), it will be the value of
Schedule I. Factors not shown are Your Certificate on the Rider Date,
available from us upon request. plus any additional payments made
Schedule I and Schedule II are after the Rider Date, minus policy
based on the " 1983 Table a" withdrawals (adjusted as described
mortality table, improved to the below), minus any premium taxes.
year 2000 with projection scale G.
Withdrawals
Election Date
In any Certificate Year, the
A date that You elect to begin Minimum Annuitization Value will
Guaranteed Minimum Income Benefit only be reduced by the actual
payments. The Election Date must be amount of a withdrawal as long as
within 30 days following a the withdrawal does not exceed a
Certificate Anniversary. The first maximum annual free amount.
and last dates to elect a Rider Withdrawals in excess of the
Payment Option are shown on page maximum annual free amount will
one of this rider. reduce the Minimum Annuitization
Value by an amount equal to (A)
Minimum Annuitization Value divided by (B) multiplied by (C)
where:
The amount we will use to determine
the Guaranteed Minimum Income (A) is the amount of the
Benefit payments. excess withdrawal;
Rider Date (B) is the value of Your
Certificate after the current
The date that this rider is added Certificate Year maximum
to the Certificate. This date may annual free amount has been
only be the issue date of the withdrawn, but prior to the
Certificate or a Certificate withdrawal of the excess
Anniversary date. this is also the portion; and
Certificate Anniversary that You
most recently elected to upgrade (C) is the Minimum
the Minimum Annuitization Value, if Annuitization Value after the
applicable. current Certificate Year
maximum annual free amount has
Supportable Payment been withdrawn, but prior to
withdrawal of the excess
The Supportable Payment is equal to portion.
the number of variable annuity
units in the selected Subaccounts For each Certificate Year, the
multiplied by the variable annuity maximum annual free amount is equal
unit values in those Subaccounts on to the Minimum Annuitization Value,
the date the payment is made. as of the beginning of the
Certificate Year, multiplied by the
GUARANTEED MINIMUM INCOME BENEFIT effective Annual Growth Rate as
shown on page one of this rider.
On the Election Date, You may use Withdrawals during a Certificate
the Minimum Annuitization Value and Year will reduce the available
the applicable Annuity Factor to maximum annual free amount by the
provide variable payments to the amount of the withdrawal.
Annuitant. The first variable
payment is determined by RIDER FEE
multiplying each $1,000 of Minimum
Annuitization Value by the Annuity We will deduct a fee from the value
Factor on Schedule I. Each of the Certificate on each
subsequent payment will be Certificate Anniversary and on the
calculated as described in the termination date of this rider. The
Certificate, using a 5% Assumed Rider Fee is the Minimum
Investment Return. Annuitization Value at the time the
fee is deducted, multiplied by the
For subsequent payments, an annual Rider Fee Percentage shown on the
Mortality and Expense Risk Fee and first page of this rider. The fee
Administrative Charge (which will be deducted from each
includes an investment risk fee) Subaccount in proportion to the
will be charged. This fee may be amount of value of the Certificate
different than the in each Subaccount This fee will
not be deducted after the Election
Date or if the Certificate
terminates due to the death of the
Certificate Owner.
RGMI 4 499(CRT)
2
<PAGE>
WAIVER OF RIDER FEE annuitization, each payment will be
stabilized to equal the initial
If the value of the Certificate, on payment On each Certificate
a particular Certificate Anniversary following
Anniversary, exceeds an amount annuitization, the stabilized
equal to the Rider Fee Waiver payment will be increased or
Threshold (shown on page one of decreased (but never below the
this rider) multiplied by the initial payment) and held level for
Minimum Annuitization Value, the that Certificate Year. On each
Rider Fee will be waived for that Certificate Anniversary following
Certificate Anniversary. annuitization, the stabilized
payment will equal the greater of
MINIMUM ANNUITIZATION VALUE UPGRADE the initial payment or the
Supportable Payment at that time.
The Certificate Owner may elect, in
writing, to upgrade the Minimum If the Supportable Payment (at any
Annuitization Value to the value of payment date) is greater than the
the Certificate on a Certificate stabilized payment for that year,
Anniversary. This may be done the excess will be used to purchase
within 30 days immediately additional annuity units as
following any Certificate described below. If the Supportable
Anniversary, and prior to the Last Payment (at any payment date) is
Date to Upgrade shown on page one less than the stabilized payment
of this rider. for that year, annuity units will
be redeemed as described below to
If an upgrade is elected, this fund the deficiency.
rider will terminate and a new
rider will be issued with a new Purchase/Redemption of Annuity
Rider Date, Election Date and its Units:
own guaranteed benefits. The new
annual Rider Fee Percentage may be The number of annuity units
different than this rider's, but purchased or redeemed is equal
it will never be greater than to the annuity income
0.50%. purchased or redeemed,
respectively, divided by the
RIDER PAYMENT OPTIONS annuity unit value For each
respective
The Minimum Annuitization Value and Subaccount..Purchases and
applicable Annuity Factors from redemptions of annuity income
Schedule I may be applied to the will be allocated to each
following payment options: Subaccount on a proportionate
basis. The amount of annuity
Life Income - An election may income purchased or redeemed
be made for "No Period Certain" is the difference between the
or " 10 Years Certain". In the Supportable Payment and the
event of the death of the stabilized payment, times the
person receiving payments prior attained age nearest birthday
to the end of the chosen period Annuity Factors shown in
certain, the remaining period Schedule II, divided by
certain payments will be $1,000. These factors will
continued to the beneficiary. reflect the remaining certain
period, if any, but will be
Joint and Full Survivor - An calculated on the same basis
election may be made for "No as the Schedule II factors.
Period Certain" or " 10 Years
Certain". Payments will be made The Company bears the risk that it
as long as either the Annuitant will need to make payments if all
or Joint Annuitant is living. annuity units have been redeemed in
In the event of the death of an attempt to maintain the
both the Annuitant and the stabilized payment at the initial
Joint Annuitant prior to the payment level. In such an event,
end of the chosen period the Company will make all future
certain, the remaining period payments equal to the initial
certain payments will be payment.
continued to the beneficiary.
ASSIGNMENT
GUARANTEED MINIMUM PAYMENT
Payments made under this rider may
On the Election Date, the owner not be pledged or assigned.
will receive guaranteed minimum Payments will only be made to the
payments. The annual Mortality and Annuitant or Joint Annuitant named
Expense Risk Fee and Administration in the Certificate.
Charge for these payments is shown
on page one of this rider. The TERMINATION
percentage shown on page one also
includes a fee to cover investment This rider will be terminated upon
risk associated with guaranteeing a the earliest of:
minimum payment.
a. the Election Date;
The first payment is based on the b. 30 days after the Last Date to
Annuity Factors in Schedule I. We Elect Benefit shown on the
guarantee that each subsequent first page of this rider.
payment will be equal to or greater c. the date the Certificate
than your initial payment terminates;
d. the date you elect to apply
During the first Certificate Year the value of the Certificate
following to annuitize the Certificate;
and
e. the date you elect to upgrade
your Minimum Annuitization
Value.
This rider cannot be terminated
prior to the earliest of the above
dates.
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
RGMI 4 499(CRT)
3
<PAGE>
SCHEDULE I - ANNUITY FACTORS
The amounts shown in these tables are the Annuity Factors for each $1,000 of the
Minimum Annuitization Value and assume a 3% Assumed Investment Return.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
- --------------------------- -------------------------------------------------------------------------------
Monthly Annuity Factor For Monthly Annuity Factor For
Life With No Period Certain Life With 10 Years Certain
------------------------------------------------------------------------------------------
Age Male Female Unisex Male Female Unisex
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
50 $3.87 $3.55 $3.71 $3.84 $3.54 $3.70
51 3.93 3.60 3.77 3.90 3.59 3.75
52 4.00 3.65 3.83 3.97 3.64 3.81
53 4.07 3.71 3.90 4.04 3.70 3.87
54 4.15 3.77 3.97 4.11 3.75 3.94
55 4.23 3.83 4.04 4.19 3.82 4.01
56 4.32 3.90 4.11 4.27 3.88 4.08
57 4.41 3.97 4.19 4.35 3.95 4.15
58 4.50 4.05 4.28 4.44 4.02 4.24
59 4.61 4.13 4.37 4.53 4.10 4.32
60 4.72 4.21 4.47 4.63 4.18 4.41
61 4.84 4.30 4.57 4.74 4.26 4.51
62 4.96 4.40 4.68 4.85 4.35 4.61
63 5.10 4.50 4.80 4.97 4.45 4.71
64 5.24 4.61 4.93 5.09 4.55 4.83
65 5.40 4.73 5.06 5.22 4.66 4.95
66 5.56 4.85 5.21 5.36 4.77 5.07
67 5.74 4.99 5.36 5.50 4.89 5.20
68 5.93 5.13 5.53 5.65 5.02 5.34
69 6.13 5.29 5.71 5.80 5.15 5.49
70 6.34 5.45 5.90 5.96 5.30 5.64
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Monthly Annuity Factor For Joint and Full Survivor
- ----------------------------------------------------------------------------------------------------------------------
Age of
Age of Female Annuitant*
Male
------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $2.99 $3.05 $3.11 $3.18 $3.25 $3.32 $3.39
55 3.11 3.19 3.27 3.35 3.44 3.53 3.63
60 3.27 3.37 3.47 3.58 3.70 3.82 3.95
65 3.47 3.60 3.74 3.89 4.05 4.22 4.39
70 3.74 3.91 4.10 4.31 4.53 4.77 5.02
- ----------------------------------------------------------------------------------------------------------------------
Monthly Annuity Factor For Joint and Full Survivor with 10 Year Period Certain
- ----------------------------------------------------------------------------------------------------------------------
Age of
Age of Female Annuitant*
Male
------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $2.99 $3.05 $3.11 $3.18 $3.24 $3.31 $3.38
55 3.11 3.19 3.27 3.35 3.44 3.53 3.63
60 3.27 3.37 3.47 3.58 3.70 3.82 3.95
65 3.47 3.60 3.74 3.89 4.05 4.22 4.39
70 3.74 3.91 4.10 4.30 4.52 4.76 4.99
- ----------------------------------------------------------------------------------------------------------------------
*Age nearest birthday
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The annual, semi-annual or quarterly Annuity Factor shall be the monthly Annuity
Factor shown multiplied by 11.80, 5.95 or 2.99 respectively.
- --------------------------------------------------------------------------------
Annuity Factors not shown in the above tables will be calculated on the same
basis as those shown and may be obtained from the Company.
RGMI 4 499
<PAGE>
SCHEDULE II - ANNUITY FACTORS
The amounts shown in these tables are the Annuity Factors for each $1,000 of the
Minimum Annuitization Value and assume a 5% Assumed Investment Return.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
- --------------------------- -------------------------------------------------------------------------------
Monthly Annuity Factor For Monthly Annuity Factor For
Life With No Period Certain Life With 10 Years Certain
------------------------------------------------------------------------------------------
Age Male Female Unisex Male Female Unisex
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
50 $5.14 $4.83 $4.99 $5.09 $4.80 $4.95
51 5.20 4.87 5.04 5.15 4.85 5.00
52 5.27 4.92 5.10 5.21 4.89 5.05
53 5.34 4.98 5.16 5.27 4.94 5.11
54 5.41 5.03 5.22 5.34 4.99 5.17
55 5.49 5.09 5.29 5.41 5.05 5.23
56 5.57 5.15 5.36 5.48 5.11 5.30
57 5.66 5.22 5.44 5.56 5.17 5.37
58 5.75 5.29 5.52 5.65 5.24 5.45
59 5.85 5.37 5.61 5.74 5.31 5.53
60 5.96 5.45 5.71 5.83 5.38 5.61
61 6.08 5.53 5.81 5.93 5.46 5.70
62 6.20 5.63 5.92 6.04 5.55 5.80
63 6.34 5.73 6.04 6.15 5.64 5.90
64 6.48 5.83 6.16 6.27 5.73 6.01
65 6.64 5.95 6.30 6.39 5.84 6.12
66 6.81 6.07 6.44 6.52 5.94 6.24
67 6.99 6.21 6.60 6.66 6.06 6.37
68 7.18 6.35 6.77 6.80 6.18 6.50
69 7.39 6.51 6.95 6.94 6.31 6.64
70 7.61 6.68 7.14 7.09 6.45 6.78
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Monthly Annuity Factor For Joint and Full Survivor
- ----------------------------------------------------------------------------------------------------------------------
Age of
Age of Female Annuitant*
Male
------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
50 $4.34 $4.38 $4.43 $4.48 $4.53 $4.59 $4.65
55 4.43 4.49 4.55 4.62 4.70 4.77 4.85
60 4.56 4.64 4.73 4.82 4.92 5.03 5.15
65 4.74 4.84 4.96 5.10 5.24 5.40 5.56
70 4.98 5.13 5.30 5.49 5.70 5.93 6.17
- ----------------------------------------------------------------------------------------------------------------------
Monthly Annuity Factor For Joint and Full Survivor with 10 Year Period Certain
- ----------------------------------------------------------------------------------------------------------------------
Age of
Age of Female Annuitant*
Male
------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $4.34 $4.38 $4.43 $4.48 $4.53 $4.59 $4.65
55 4.43 4.49 4.55 4.62 4.70 4.77 4.85
60 4.56 4.64 4.72 4.82 4.92 5.03 5.14
65 4.73 4.84 4.96 5.09 5.24 5.39 5.55
70 4.97 5.12 5.29 5.48 5.69 5.91 6.14
- ----------------------------------------------------------------------------------------------------------------------
*Age nearest birthday
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The annual, semi-annual or quarterly Annuity Factor shall be the monthly Annuity
Factor shown multiplied by 11.70, 5.93 or 2.99 respectively.
- --------------------------------------------------------------------------------
Annuity Factors not shown in the above tables will be calculated on the same
basis as those shown and may be obtained from the Company.
RGMI 4 499
<PAGE>
PFL Life Insurance Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499
[LOGO OF PFL LIFE APPEARS HERE]
Group Flexible Premium Variable Annuity Certificate
Income Payable At Annuity Commencement Date
Benefits Based On The Performance Of The Separate Account
Are Variable And Are Not Guaranteed As To Dollar Amount (See Sections 6 and
10C.)
Non -Participating
INDEX
<TABLE>
<CAPTION>
Page Page
<S> <C> <C> <C>
Accumulation Units............................ 7 Guaranteed Period............................ 8
Adjusted Age (Settlement Options)............. 7 Incontestability............................. 14
Age or Sex Corrections........................ 14 Modification of Contract..................... 14
Annuity Commencement Date..................... 14 Nonparticipation............................. 14
Annuity Payments.............................. 11,11(A) Nursing Care and Terminal Condition
Assignment.................................... 15 Withdrawal Option............................ 5(B)
Beneficiary................................... 15 Partial Withdrawals.......................... 5, 6
Cash Value.................................... 5, 6 Payee........................................ 11(A)
Certificate Data Page......................... 3 Payment Option Tables........................ 12, 13
Death Proceeds................................ 10, 11 Policy Value................................. 4
Definitions................................... 2 Premium Payments............................. 4
Dollar Cost Averaging......................... 9 Proof of Age................................. 11(A)
Excess Interest Adjustment.................... 5 Protection of Proceeds....................... 15
Evidence of Survival.......................... 14 Right to Cancel.............................. 1
Fixed Account................................. 8 Separate Account............................. 6, 7
Guaranteed Return of Fixed Account Service Charge............................... 4
Premium Payments............................ 6 Settlement................................... 14
Surrender Charges............................ 6
Transfers.................................... 9
Unemployment Waiver.......................... 5(B)
</TABLE>
Y560
<PAGE>
EXHIBIT (4)(C)
--------------
INDIVIDUAL POLICY
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
ANNUITANT: JOHN DOE
OWNER(S): JOHN DOE
POLICY NUMBER: 07 - 0001234
POLICY DATE: May 1, 1999
<TABLE>
<S> <C>
WE AGREE This policy may be applied for and
issued to qualify as a tax-qualified
. To provide annuity payments as set annuity under the applicable sections
forth in Section 10 of this policy, of the Internal Revenue Code.
. Or to pay withdrawal benefits in
accordance with Section 5 of this
policy, 20 DAY RIGHT TO CANCEL
You may cancel this policy by delivering
. Or to pay death proceeds in or mailing a written notice or sending a
accordance with Section 9 of this telegram to us. You must return the
policy. policy before midnight of the twentieth
day after the day you receive it Notice
Withdrawals, transfers and amounts given by mail and return of the policy
applied to a Payment Option may be by mail are effective on being
subject to an Excess Interest Adjustment postmarked, properly addressed and
in accordance with Sections 5, 8, and postage prepaid.
10, respectively, of this policy.
We will pay you an amount equal to the sum of:
These agreements are subject to the
provisions of this policy. This policy
is issued in consideration of the . the premiums paid; and
application, or information provided in
lieu thereof, and payment of the initial . the accumulated gains or losses, if any, in the
premium. Separate Account on the date of cancellation;
unless otherwise required by law.
</TABLE>
Signed for us at our home office.
/s/ Craig D. Vermie /s/ William L. Busler
SECRETARY PRESIDENT
This policy is a legal contract between the policyowner and the company.
READ YOUR POLICY CAREFULLY
Flexible Premium Variable Annuity
Income Payable At Annuity Commencement Date
Benefits Based On The Performance Of The Separate Account
Are Variable And Are Not Guaranteed As To Dollar Amount (See Sections 6 and 10C)
Non-Participating
AV464 101 121 799
<PAGE>
SECTION 1
DEFINITIONS
<TABLE>
<S> <C>
ADJUSTED POLICY VALUE - The Policy Value retirement home, a rest home, a
increased or decreased by any Excess community living center or a place
Interest Adjustment. mainly for the treatment of alcoholism,
mental illness or drug abuse.
ANNUITANT - The person to whom annuity
payments will be made, unless another NURSING CARE - Nursing care prescribed
payee is named. by a physician and performed or
supervised by a registered graduate
ANNUITY COMMENCEMENT DATE - Date the nurse. Such care includes nursing and
Annuitant will begin receiving payments rehabilitation services available 24
from this policy, which may not be later hours a day.
than the last day of the policy month
starting after the Annuitant attains age PAYEE - The person to whom annuity
85, except as expressly allowed by us, payments will be made.
but in no event later than the last day
of the month following the month in PAYMENT OPTIONS - Options through which
which the Annuitant attains age 95. the distribution of the Adjusted Policy
Value can be directed.
CASH VALUE - Amount, defined in Section
5, that can be withdrawn if the annuity PHYSICIAN - Doctor of Medicine or Doctor
is surrendered. of Osteopathy who is licensed as such
and operating within the scope of the
CUSTODIAL CARE - Care designed license.
essentially to help a person with the
activities of daily living which does POLICY ANNIVERSARY - The anniversary of
not require the continuous attention of the Policy Date for each year the policy
trained medical or paramedical remains in force.
personnel.
POLICY DATE - The date shown on page 3
DISTRIBUTION - A withdrawal or of this policy and the date on which
disbursement of funds from the Policy this policy becomes effective.
Value or Cash Value.
POLICY YEAR - The 12 month periods
HOSPITAL - An institution which 1) is following the Policy Date shown on the
operated pursuant to the laws of the Policy Data page. The first Policy Year
jurisdiction in which it is located, 2) starts on the Policy Date. Each
operates primarily for the care and subsequent year starts on the
treatment of sick and injured persons on anniversary of the Policy Date.
an inpatient basis, 3) provides 24-hour
a day nursing service by or under the SEPARATE ACCOUNT - The separate
supervision of registered graduate investment account established by us, as
professional nurses, 4) is supervised by described in Section 6.
a staff of one or more licensed
physicians, and 5) has medical, surgical SUBACCOUNT - A division of the Separate
and diagnostic facilities or access to Account, as described in Section 6.
such facilities.
INVESTMENT OPTIONS SURRENDER - A partial or full withdrawal
of funds from the Policy Value or Cash
Any of the Guaranteed Period Options of Value.
the Fixed Account, the Dollar Cost
Averaging Fixed Account Option, and any TERMINAL CONDITION - A condition
of the Subaccounts of the Separate resulting from an accident or illness
Account. which, as determined by a physician, has
reduced life expectancy to not more than
NURSING FACILITY - A facility which 1) 12 months, despite appropriate medical
is operated pursuant to the laws of the care.
jurisdiction in which it is located, 2)
provides Nursing Care or Custodial Care, WITHDRAWAL - A distribution of funds
3) primarily provides nursing care under from the Policy Value or Cash Value.
the direction of a licensed physician,
registered graduate professional nurse, YOU, YOUR - The owner of this policy.
or licensed vocational nurse, except Unless otherwise specified on the Policy
when receiving custodial care, and 4), Data page, the Annuitant and the owner
is not other than incidentally a shall be one and the same person.
hospital, a home for the aged, a
</TABLE>
AVB464
PAGE 2
<PAGE>
SECTION 2 - POLICY DATA
POLICY NUMBER: 07 - 001234 ANNUITANT: JOHN DOE
INITIAL PREMIUM
PAYMENT: $ 5,000.00 ISSUE AGE/SEX: 35 / MALE
POLICY DATE May 1, 1999 OWNER(S): JOHN DOE
ANNUITY
COMMENCEMENT BENEFICIARY: JANE DOE
DATE: March 10, 2049
Premium Enhancement Percentage on Initial Premium Payment: 5%
Fixed Account Guaranteed Minimum Effective Annual Interest Rate: 3%
Before the Annuity Commencement Date:
Mortality and Expense Risk Fee and Administrative Charge: 1.75%
After the Annuity Commencement Date:
Mortality and Expense Risk Fee and Administrative Charge: 1.55%
AV464 101 121 799 SP
Page 3
<PAGE>
SECTION 3 - PREMIUM PAYMENTS
<TABLE>
<S> <C>
PAYMENT OF PREMIUMS
premium payments which we will accept
Premium payments may be made any time without prior Company approval is
while this policy is in force before the $1,000,000.
Annuity Commencement Date. You may start
or stop, increase or decrease, or skip PREMIUM PAYMENT DATE
any premium payments.
The premium payment date is the date on
PREMIUM ENHANCEMENT which the premium payment is credited to
the policy. The initial premium payment
When a Premium Payment is paid, a less any applicable premium taxes will
Premium Enhancement Percentage will be be credited to the policy within two
applied to that Premium Payment and the business days of receipt of the premium
resulting amount will be added to the payment and the information needed.
Policy Value. The amount of the Premium Subsequent additional premium payments
Enhancement is not considered a Premium will be credited to the policy as of the
Payment. The Premium Enhancement business day when the premium payment
Percentage may vary from premium to and required information are received. A
premium on subsequent Premium Payments business day is any day on which the New
and will vary based on Your attained age York Stock Exchange is open for trading.
at the time a Premium Payment is made,
but will never be less than 0.25% nor ALLOCATION OF PREMIUM PAYMENTS
more than 7%. The Premium Enhancement
Percentage applicable at attained ages Premium payments may be applied to
below age 70 will always be at least as various Investment Options which we make
great as the corresponding percentage available. You must indicate what
applicable at attained ages 70 and percent of each premium payment to
above. The Premium Enhancement allocate to various Investment Options.
Percentage applicable to the Initial Each percent may be either zero or any
Premium Payment is set forth on the whole number, however, the allocation
Policy Data page. We will advise You of among all accounts must total 100%.
the amount of the Premium Enhancement
applicable to each subsequent Premium CHANGE OF ALLOCATION
Payment in a confirmation that We will
send to You. Premium Enhancements will You may change the allocation of premium
be applied using the same allocation as payments to various Investment Options.
on the corresponding Premium Payment. No You must tell us in a notice you sign
Premium Enhancement will apply if the which gives us the facts that we need.
Policy is cancelled pursuant to the Premium payments received after the date
Right to Cancel provision. on which we receive your notice will be
applied on the basis of the new
MAXIMUM AND MINIMUM PREMIUM PAYMENT allocation.
The premium payments may not be more PREMIUM TAXES
than the amount permitted by law if this
is a tax-qualified annuity. The' minimum Your state may impose a premium tax. It
initial premium payment is $5,000. If may be imposed either when a premium
this policy is being used as a tax- payment is made, on the Annuity
qualified annuity, the minimum initial Commencement Date, on the date of death,
premium is $2,000, except that no or on the date of full surrender. When
minimum initial premium payment will be permitted by state law, we will not
required for 403(b) annuities. The deduct the tax until the Annuity
minimum subsequent premium payment we Commencement Date, date of death, or
will accept is $50. The maximum total date of full surrender.
</TABLE>
SECTION 4 - POLICY VALUE
<TABLE>
<S> <C>
POLICY VALUE
Commencement Date to provide
On or before the Annuity Commencement lifetime income or income for a period
Date, the Policy Value is equal to Your: of no less than 60 months under the
(a) premium payments; plus Payment Options in Section 10.
corresponding Premium Enhancements;
minus SERVICE CHARGE
(b) Gross Partial Withdrawals (as
defined in Section 5); plus On each Policy Anniversary and at the
(c) interest credited to the Fixed time of surrender during any Policy Year
Account (see Section 7); plus before the Annuity Commencement Date, we
(d) accumulated gains in the Separate reserve the right to charge up to $40
Account (see Section 6); minus for policy administration expenses. The
(e) accumulated losses in the Separate Service Charge will be deducted from
Account (see Section 6); minus each Investment Option in proportion to
(f) service charges, premium taxes and the portion of Policy Value (prior to
transfer fees, if any. such charge) in each Investment Option.
In no event will the Service Charge
ADJUSTED POLICY VALUE exceed 2% of the Policy Value on the
Policy Anniversary or at the time of
The Adjusted Policy Value is the Policy surrender.
Value increased or decreased by any
Excess Interest Adjustment. The Service Charge will not be deducted
on a Policy Anniversary or at the time
You may use the Adjusted Policy Value on of surrender if, at either of these
the Annuity times, (1) the sum of all premium
payments less the sum of all withdrawals
taken is at least $100,000; or (2) the
Policy Value equals or exceeds $
100,000.
</TABLE>
M1038
PAGE 4
<PAGE>
SECTION 5 - CASH VALUE AND PARTIAL WITHDRAWALS
<TABLE>
<S> <C>
CASH VALUE
6) If interest rates have increased
On or before the Annuity Commencement from the time the affected
Date, the Cash Value is equal to the Guaranteed Period(s) started until
Adjusted Policy Value less any Surrender the time the transaction occurs, the
Charges. Information on the current Excess Interest Adjustment will
amount of Your policy's Cash Value is result in a decrease in the funds
available upon request The Cash Value available to You
may be partially withdrawn or will be 7) Certain amounts are not subject to
paid in the event of a full surrender of the Excess Interest Adjustment as
the policy. We must receive your written provided in Sections 5, 7 and 8.
partial withdrawal or surrender request
before the Annuity Commencement Date. The formula for determining the amount
of the Excess Interest Adjustment is as
There is no Cash Value once an Annuity follows:
Payment Option has been selected.
Excess Interest Adjustment = S x (G-C) x
EXCESS INTEREST ADJUSTMENT (M/12)
Full Surrenders, Partial Withdrawals, Where: S is the gross (that is, before
transfers, and amounts applied to a surrender charges and premium
Payment Option from the Fixed Account taxes, if any) amount being
Guaranteed Period Options described in surrendered, partially
Section 7 will be subject to an Excess withdrawn, transferred, or
Interest Adjustment except as provided applied to a Payment Option
for in the Partial Withdrawals provision that is subject to the Excess
below. Interest Adjustment.
G is the guaranteed interest rate
An Excess Interest Adjustment applies in for the Guaranteed Period
the following situations: applicable to S.
1) When you withdraw all or any portion M is the number of months
of your Cash Value, remaining in the Guaranteed
2) When you exercise Annuity Payment Period for S. rounded up to the
Options, next higher whole number of
3) When death proceeds are calculated. months.
However, death proceeds will not be C is the current guaranteed
reduced if the Excess Interest interest rate then being
Adjustment is negative. offered on new Premium Payments
for the next longer Guaranteed
The Excess Interest Adjustment is only Period than "M". If this
applied to transactions affecting the Certificate form or such a
Guaranteed Period Options of the Fixed Guaranteed Period Option is no
Account (see Section 7) and is based on longer offered, "C" will be the
any change in interest rates from the U.S. Treasury rate for the next
time the affected Guaranteed Period(s) longer maturity (in whole
started until the time the Excess years) than "M" on the 25th day
Interest Adjustment occurs. The Excess of the previous calendar month,
Interest Adjustment is applied as plus up to 2%.
follows:
Upon full surrender, the Excess Interest
1) The Excess Interest Adjustment is Adjustment (EIA) for each Guaranteed
only applied when the transactions Period Option will not reduce the
occur prior to the end of any Adjusted Policy Value for that
Guaranteed Period Option; Guaranteed Period Option below the
2) Transfers to the Guaranteed Period amount paid into, less any prior
Options of the Fixed Account are withdrawals and transfers from, that
considered Premium Payments for Guaranteed Period Option, plus interest
purposes of determining the Excess at the 3% guaranteed effective annual
Interest Adjustment; interest rate.
3) The Excess Interest Adjustment is
distinct from, and is applied prior PARTIAL WITHDRAWALS
to, the Surrender Charge;
4) The Excess Interest Adjustment may We will pay you a portion of the Cash
affect the death proceeds defined in Value as a Partial Withdrawal provided
Section 9; we receive your written request while
5) If interest rates have decreased the policy is in effect and before the
from the time the affected Annuity Commencement Date. When you
Guaranteed Period(s) started until request a Partial Withdrawal you must
the time the transaction occurs, the tell us how it is to be allocated from
Excess Interest Adjustment will among the Investment Options. If your
result in additional funds available request for a Partial Withdrawal from
to You; any Investment Option is less than or
equal to the Cash Value in that option,
we will pay the amount of your request
However, if your request for a Partial
Withdrawal from any Investment Option is
greater than the Cash Value in that
option, we will pay you the Cash Value
of that Investment Option.
</TABLE>
U1038
PAGE 5
<PAGE>
SECTION 5 - CASH VALUES AND PARTIAL WITHDRAWALS - CONT
<TABLE>
<S> <C>
LUMP SUM
The Gross Partial Withdrawal is the
total amount which will be deducted from Beginning in the second Policy Year,
Your Policy Value as a result of each amounts ($500, minimum) up to 10% of
Partial Withdrawal. The Gross Partial the cumulative premium payments
Withdrawal may be more or less than Your immediately prior to the Partial
requested Partial Withdrawal amount, Withdrawal are available as Lump Sum
depending on whether Surrender Charges distributions in one or more
and/or Excess Interest Adjustments apply withdrawals during a Policy Year with
at the time You request the Partial no Surrender Charges and no Excess
Withdrawal. Interest Adjustment.
The Excess Partial Withdrawal amount is SYSTEMATIC PAYOUT OPTION
the portion of the requested Partial
Withdrawal that is subject to Surrender Beginning in the first Policy Year, a
Charge (that is, the portion which is in Systematic Payout Option (SPO) is
excess of the Surrender Charge-free available on a monthly, quarterly,
portion). For example, if the requested semi-annual or annual basis. SPO
withdrawal amount is $1,000, and the payouts must be at least $50 and may
Surrender Charge-free amount is $200, not exceed 10% of the cumulative
then the Excess Partial Withdrawal would premium payments at the time a SPO
be $800. Excess Partial Withdrawals will payout is made divided by the number
reduce the Policy Value by an amount of payouts made per year (e.g. 12 for
equal to (X-Y+Z} where: monthly). No Surrender Charges or
Excess Interest Adjustment will apply
X = Excess Partial Withdrawal to the SPO payout Monthly and
A = Amount of Partial Withdrawal subject quarterly payouts must be sent through
to Excess Interest Adjustment electronic funds transfer directly to
Y = Excess Interest Adjustment = (A) x Your checking or savings account You
(G-C) x (M/12) where G, C and M are may start or stop SPO payouts at any
defined in the Excess Interest time; however, 30 days written notice
Adjustment provision above, with "A" is required to stop SPO payouts. Once
substituted for "S" in the stopped, You must wait until the first
definitions of G and M. day of the next Policy Year to begin a
Z = Surrender Charge on X minus Y. new SPO.
The formula for determining the Gross Once You have elected a SPO, You must
Partial Withdrawal is as follows: wait a minimum time before the first
SPO payment one month for a monthly
Gross Partial Withdrawal = R - E + SC SPO, three months for quarterly, six
months for semi-annual, or twelve
where: R is the requested Partial months for annual.
Withdrawal;
E is the Excess Interest MINIMUM REQUIRED DISTRIBUTION
Adjustment; and
SC is the Surrender Charge on For tax-qualified plans, Partial
(EPW - E); where Withdrawals taken to satisfy minimum
EPW is the Excess Partial distribution requirements under
Withdrawal amount Section 401(a)(9) of the Internal
Revenue Code (IRC) are available with
If any Partial Withdrawal reduces the no Surrender Charges and no Excess
Cash Value below $500, we reserve the Interest Adjustments. The amount
right to pay the full Cash Value and available from this policy with
terminate the policy. respect to the minimum distribution
requirement is based solely on this
We may delay payment of the Cash Value policy.
from the Fixed Account for up to 6
months after we receive the request If The Owner must be at least 70 1/2
the Owner dies after we receive the years old in the calendar year of
request, but before the request is distribution, must submit a written
processed, the request will be processed request to us and must take the
before the death proceeds are distribution before year end. If the
determined. Owner attains age 70 1/2 in the
calendar year of distribution, a
Each Partial Withdrawal consists of a written request which is postmarked no
portion that is subject to Surrender later than the end of the current
Charge (that is, the Excess Partial calendar year must be submitted to us.
Withdrawal) and a remaining portion that
is free from Surrender Charge (that is, Systematic minimum distributions must
the Surrender Charge-free amount). be at least $50. or a lump sum
Either portion may be zero (0) depending distribution is available if minimum
on the Partial Withdrawal requested and required distributions are less than
prior amounts withdrawn. $50.
Partial Withdrawals may be made free Any amount requested in excess of the
from Surrender Charges and free from IRC minimum required distribution will
Excess Interest Adjustments as follows: have the appropriate Surrender Charges
and Excess Interest Adjustments
applied, unless the excess
distribution qualifies as Surrender
Charge- free or Excess Interest
Adjustment-free under any additional
options provided.
</TABLE>
P1038
PAGE 6
<PAGE>
SECTION 5 - CASH VALUE AND PARTIAL WITHDRAWALS - CONT
<TABLE>
<S> <C>
NURSING CARE AND TERMINAL CONDITION letter from the applicable State's
WITHDRAWAL OPTION Department of Labor which verifies that
You qualify for and are receiving
Beginning in the first Policy Year, if unemployment benefits at the time of
the Owner or Owner's spouse (annuitant withdrawal. The determination letter
or annuitant's spouse if the Owner is must be received by us no later than 15
not a natural person) has been 1) days following the date of the
confined in a Hospital or Nursing withdrawal request.
Facility for 30 consecutive days or 2)
diagnosed as having a Terminal SURRENDER CHARGES
Condition, you may elect to withdraw
all or a portion of the Policy Value Amounts withdrawn in excess of the
without Surrender Charges and without Surrender Charge free withdrawal
Excess Interest Adjustment The minimum provisions above are subject to a
withdrawal under this option is $1000. Surrender Charge. The amount of this
charge, if any, will be a percentage, as
For Nursing Care, we must receive each shown in the table below, of the amount
withdrawal request and proof of of premium withdrawn:
eligibility with each request no later
than 90 days following the date that Number of Years Percentage
confinement has ceased, unless it can Since Premium of Premium Withdrawn
be shown that it was not reasonably Payment Date
possible to provide the notice and
proof within the above time period and 0 - 1 8%
that the notice and proof were given as 1 - 2 8%
soon as reasonably possible. However, 2 - 3 8%
in no event, except the absence of 3 - 4 7%
legal capacity shall the notice and 4 - 5 6%
proof be provided later than one year 5 - 6 5%
following the date that confinement has 6 - 7 4%
ceased. For a Terminal Condition, we 7 - 8 3%
must receive each withdrawal request 8 - 9 2%
and the applicable proof of eligibility 9 and thereafter 0%
no later than one year following
diagnosis of the Terminal Condition.
Proof of a Terminal Condition is For Surrender Charge purposes, the
required only with the initial oldest premium payment is considered to
withdrawal request and must be be withdrawn first If the amount
furnished by the Annuitant's, withdrawn exceeds this, the next oldest
Annuitant's spouse's, Owner's, or premium payment is considered to be
Owner's spouse's physician. Proof of withdrawn, and so on until the most
confinement may be a physician's recent premium payment is considered to
statement or a statement from a be withdrawn. Premium payments are
hospital or nursing facility deemed to be withdrawn before earnings.
administrator.
After all premium payments are
UNEMPLOYMENT WAIVER considered to be withdrawn, the
remaining Adjusted Policy Value may be
Beginning in the first Policy Year, You withdrawn free of any Surrender Charge.
may withdraw all or a portion of the
Policy Value free of Surrender Charges GUARANTEED RETURN OF FIXED ACCOUNT
and free of any Excess Interest PREMIUM PAYMENTS
Adjustment if the Owner or Owner's
spouse (annuitant or annuitant's Upon full surrender of the policy, You
spouse, if the Owner is not a natural will always receive at least the premium
person) becomes unemployed. In order to payments made to, less prior withdrawals
qualify, You 1) must have been employed and transfers from, the Fixed Account.
full time for at least two years prior
to Your becoming unemployed, 2) must MINIMUM VALUES
have been employed full time on Your
Policy Date, 3) must have been Benefits available under this policy are
unemployed for at least 60 consecutive not less than those required by any
days at the time of withdrawal and 4) statute of the state in which the policy
must have a minimum Cash Value at the is delivered.
time of withdrawal of $5000. Proof of
unemployment will consist of providing
us with a determination
</TABLE>
PB1038
PAGE 7
<PAGE>
SECTION 6 - SEPARATE ACCOUNT
<TABLE>
<S> <C>
SEPARATE ACCOUNT
We will determine the fair market value
We have established and will maintain a of the assets of the Separate Account in
Separate Account, under the laws of the accordance with a method of valuation
state of Iowa Any realized or unrealized which we establish in good faith.
income, net gains and losses from the Valuation Period means the period of
assets of the Separate Account are time from one determination of the value
credited to or charged against it of each Subaccount to the next Such
without regard to our other income, determinations are made when the value
gains or losses. Assets are put in the of the assets and liabilities of each
Separate Account for this policy, as Subaccount is calculated. This is
well as for other variable annuity generally the close of business on each
policies. Any Separate Account may day on which the New York Stock Exchange
invest assets in shares of one or more is open.
mutual fund portfolios, or in the case
of a managed Separate Account, direct We also reserve the right to transfer
investments in stocks or other assets of the Separate Account, which we
securities as permitted by law. Fund determine to be associated with the
Shares refer to shares of underlying class of policies to which this policy
mutual funds or prorate ownership of the belongs, to another separate account If
assets held in a Subaccount of a managed this type of transfer is made, the term
Separate Account Fund shares are "Separate Account", as used in the
purchased, redeemed and valued on behalf policy, shall then mean the separate
of the Separate Account. account to which the assets were
transferred.
The Separate Account is divided into
Subaccounts. Each Subaccount invests We also reserve the right, when
exclusively in shares of one of the permitted by law to:
portfolios of an underlying mutual fund. (a) deregister the Separate Account
We reserve the right to add or remove under the Investment Company Act of
any Subaccount of the Separate Account. 1940;
(b) manage the Separate Account under
The assets of the Separate Account are the direction of a committee at any
our property. These assets will equal or time;
exceed the reserves and other contract (c) restrict or eliminate any voting
liabilities of the Separate Account rights of Policy Owners or other
These assets will not be chargeable with persons who have voting rights as
liabilities arising out of any other to the Separate Account; and
business we conduct We reserve the (d) combine the Separate Account with
right, subject to regulations governing one or more other separate
the Separate Account, to transfer assets accounts;
of a Subaccount, in excess of the (e) create new Separate Accounts;
reserves and other contract liabilities (f) add new Subaccounts to or remove
with respect to that Subaccount, to existing Subaccounts from the
another Subaccount or to our General Separate Account, or combine
Account. Subaccounts;
(g) add new underlying mutual funds,
remove existing mutual funds, or
substitute a new fund for an
existing fund.
</TABLE>
V1078
PAGE 8
<PAGE>
SECTION 6 - SEPARATE ACCOUNT - CONT
<TABLE>
<S> <C>
The Net Asset Value of a fund share is accumulation units purchased in a
the per-share value calculated by the Subaccount will be determined by
mutual fund or, in the case of a managed dividing the amount allocated to or
Separate Account, by the Company. The transferred to that Subaccount, by the
Net Asset Value is computed by adding value of an accumulation unit for that
the value of the Subaccount's Subaccount on the premium payment or
investments, cash and other assets, transfer date.
subtracting its liabilities, and then
dividing by the number of shares The number of accumulation units
outstanding. Net Asset Values of fund withdrawn or transferred from the
shares reflect investment advisory fees Subaccounts will be determined by
and other expenses incurred in managing dividing the amount withdrawn or
a mutual fund or a managed Separate transferred by the value of an
Account. accumulation unit for that Subaccount on
the withdrawal or transfer date.
CHANGE IN INVESTMENT OBJECTIVE OR POLICY
OF A MUTUAL FUND The value of an accumulation unit on any
business day is determined by
If required by law or regulation, an multiplying the value of that unit at
investment policy of the Separate the end of the immediately preceding
Account will only be changed if approved valuation period by the net investment
by the appropriate insurance official of factor for the valuation period.
the state of lowa or deemed approved in
accordance with such law or regulation. The net investment factor used to
If so required, the process for calculate the value of an accumulation
obtaining such approval is filed with unit in each Subaccount for the
the insurance official of the state or Valuation Period is determined by
district in which this policy is dividing (a) by (b) and subtracting (c)
delivered. from the result, where:
CHARGES AND DEDUCTIONS (a) is the result of:
(1) the net asset value of a fund
The Mortality and Expense Risk Fee and share held in that Subaccount
the Administrative Charge are each determined as of the end of the
deducted both before and after the current valuation period; plus
Annuity Commencement Date to compensate (2) the per share amount of any
for changes in mortality and expenses dividend or capital gain
not anticipated by the mortality and distributions made by the fund
administration charges guaranteed in the for shares held in that
policy. Subaccount if the ax-dividend
date occurs during the valuation
The Service Charge is deducted prior to period; plus or minus
the Annuity Commencement Date only. (3) a per share credit or charge for
any taxes reserved for, which we
If the Mortality and Expense Risk Fee is determine to have resulted from
more than sufficient, the Company will the investment operations of
retain the balance as profit or reduce that Subaccount.
this fee in the future. (b) is the net asset value of a fund
share held in that Subaccount
ACCUMULATION UNITS determined as of the end of the
immediately preceding valuation
The Policy Value in the Separate Account period.
before the Annuity Commencement Date is (c) is a factor representing the
represented by accumulation units. The Mortality and Expense Risk Fee and
dollar value of accumulation units for Administrative Charge before the
each Subaccount will change from day to Annuity Commencement Date. This
day reflecting the investment experience factor is less than or equal to, on
of the Subaccount. an annual basis, the percentage
shown on page 3 of the daily net
Premium payments and Premium asset value of a fund share held in
Enhancements allocated to and any that Subaccount.
amounts transferred to the Subaccounts
will be applied to provide accumulation Since the net investment factor may be
units in those Subaccounts. The number greater or less than one, the
of accumulation unit value may increase or
decrease.
</TABLE>
VB1078
PAGE 9
<PAGE>
SECTION 7 - FIXED ACCOUNT
<TABLE>
<S> <C>
FIXED ACCOUNT We reserve the right for new premium
payments, transfers, or rollovers to
Premium payments and Premium offer or not to offer any GPO, except
Enhancements applied to and any amounts that we will always offer at least a one
transferred to the Fixed Account will year GPO.
reflect a fixed interest rate. The
interest rates we set will be credited For purposes of crediting interest when
for increments of at least one year funds are withdrawn from or transferred
measured from each premium payment or into a GPO, the amount of the oldest
transfer date. These rates will never be premium payment or rollover into that
less than an effective annual interest GPO is considered to be withdrawn first
rate of 3%. If the amount withdrawn exceeds this
amount, the next oldest premium payment
GUARANTEED PERIODS or rollover is considered to be
withdrawn next, and so on until the most
We may offer optional Guaranteed Period recent premium payment or rollover is
Options, into which premium payments may considered to be withdrawn (this is a
be paid or amounts transferred The "First-In, First-Out" or FIFO
current interest rate we set for funds procedure). Premium payment(s) or
entering each Guaranteed Period Option rollover(s) are deemed to be withdrawn
(GPO) is guaranteed until the end of first, then credited interest.
that option's Guaranteed Period. At that
time, the premium payment made or amount Partial withdrawals, Surrenders,
transferred into the GPO, less any transfers, and amounts applied to a
withdrawals or transfers from that GPO, Payment Option from the Guarantee Period
plus Premium Enhancement, plus accrued Option(s) are subject to an Excess
interest, will be rolled into a new GPO Interest Adjustment as described in
or may be transferred to any Section 5.
Subaccount(s) within the Separate
Account(s). DOLLAR COST AVERAGING FIXED ACCOUNT
OPTION
You may choose the Investment Option(s)
You want the funds roiled into by giving We may offer a Dollar Cost Averaging
us a written notice within 30 days (DCA) Fixed Account Option separate from
before the end of the expiring option's the Guaranteed Period Options. This
Guaranteed Period. However, any option will have a one year interest
Guaranteed Period elected may not extend rate guarantee. The current interest
beyond the maximum Annuity Commencement rate we set for the DCA Fixed Account
Date defined in Section 11. In the may differ from the rates credited on
absence of such election, the funds will the one year GPO in the Fixed Account In
be rolled into a new GPO which is the addition, the current interest rate we
same as the expiring GPO unless that GPO credit may vary on different portions of
is no longer offered, in which case, the the DCA Fixed Account The credited
next shorter GPO offered will be used interest rate will never be less than
You will be mailed a notice of the minimum effective annual interest
completion of the rollover with the new rate of 3%. The DCA Fixed Account Option
interest rate applicable. The new GPO will only be available under a Dollar
will be deemed as accepted if we do not Cost Averaging program as described in
receive a written rejection within 30 Section 8.
days from the postmark date of the
completion notice.
</TABLE>
SECTION 8 - TRANSFERS
<TABLE>
<S> <C>
A. TRANSFERS BEFORE THE ANNUITY Policy Value transfers at the end of a
COMMENCEMENT DATE Guaranteed Period.
Prior to the Annuity Commencement Date, Transfers of interest credited in the
you may transfer the value of the GPOs to other Investment Options are
accumulation units from one Investment allowed on a "First-In, First-Out"
Option to another. You must sign a basis. Such transfers may be made
notice to transfer which gives us the monthly, quarterly, semi-annually, or
facts that we need. annually. Each such transfer must be at
least $50. and will not be subject to an
Transfers of Policy Value from the Excess Interest Adjustment.
Guaranteed Period Options (GPO) of the
Fixed Account prior to the end of that Transfers of Policy Value from the
GPO are subject to an Excess Interest Separate Account are subject to a
Adjustment. If the Excess Interest minimum of $500, or the entire
Adjustment at the time of such Policy Subaccount Policy Value, if less.
Value transfer is a negative adjustment, However, if the remaining Subaccount
then the maximum Policy Value transfer Policy Value is less than $500, we
is 25% of that GPO's Policy Value, less reserve the right to include that amount
Policy Values previously transferred out as part of the transfer.
of that GPO during the current Policy
Year. If the Excess Interest Adjustment You may choose which GPO to transfer to
at the time of such Policy Value or from, however, any GPO elected may
transfer is a positive adjustment, no not extend beyond the maximum Annuity
maximum will apply to such Policy Values Commencement Date defined in Section 11.
transferred from the GPO. No Excess
Interest Adjustment will apply to
</TABLE>
L916
PAGE 10
<PAGE>
SECTION 8 - TRANSFERS - CONT
<TABLE>
<S> <C>
No transfers will be allowed out of the result in higher Policy Values or will
Dollar Cost Averaging Fixed Account otherwise be successful.
Option except through the Dollar Cost
Averaging Option. The Dollar Cost Averaging may be
discontinued after satisfying the
We reserve the right to limit transfers minimum number of required transfers by
to no more than 12 in any one sending written notice to us. While
Certificate Year. Any transfers in Dollar Cost Averaging is in effect,
excess of 12 per Certificate Year may be Asset Rebalancing is not available.
charged a $10 per transfer fee.
Transfers among multiple Investment ASSET REBALANCING
Options will be treated as one transfer
in determining the number of transfers Prior to the Annuity Commencement Date,
that have occurred. We also reserve the you may instruct us to automatically
right to prohibit transfers to the Fixed transfer amounts among the Subaccounts
Account if we are crediting an effective of the Separate Account on a regular
annual interest rate of 3%. basis to maintain a desired allocation
of the Policy Value among the various
DOLLAR COST AVERAGING OPTION Subaccounts offered. Rebalancing will
occur on a monthly, quarterly, semi-
Prior to the Annuity Commencement Date, annual or annual basis, beginning on a
you may instruct us to automatically date selected. You must select the
transfer a specified amount from the percentage of the Policy Value desired
Money Market Subaccount, the Dollar Cost in each of the various Subaccounts
Averaging (DCA) Fixed Account Option, or offered (totaling 100%). Any amounts in
the U.S. Government Securities the Fixed Account are ignored for the
Subaccount to any other Subaccount(s) of purposes of asset rebalancing.
the Separate Account The automatic Rebalancing can be started, stopped or
transfers can occur monthly or changed at any time. Asset Rebalancing
quarterly. If the Dollar Cost Averaging is not available while Dollar Cost
request is received prior to the 28th Averaging is in effect Rebalancing will
day of any month, the first transfer cease as soon as we receive a request
will occur on the 28th day of that for any other transfer.
month. If the Dollar Cost Averaging
request is received on or after the 28th B. TRANSFERS AFTER THE ANNUITY
day of any month, the first transfer COMMENCEMENT DATE
will occur on the 28th day of the
following month. After the Annuity Commencement Date, you
may transfer the value of the variable
Prior to the Annuity Commencement Date, annuity units from one Subaccount to
no transfers, (except through Dollar another within the Separate Account or
Cost Averaging) will be allowed from a to the Fixed Account. If you want to
DCA Fixed Account Transfers will transfer the value of the variable
continue until the elected Subaccount or annuity units, you must tell us in a
DCA Fixed Account value is depleted. The signed notice which gives us the facts
amount transferred each time must be at that we need. We reserve the right to
least $500. All transfers from the DCA limit transfers between the Subaccounts
account will be the same amount as the or to the Fixed Accounts to once per
initial transfer. Changes to the amount Policy Year.
transferred will only be allowed when
additional premium is allocated or a new The minimum amount which may be
amount is transferred into the DCA transferred is the lesser of $10 monthly
Account Changes to the Subaccounts to income or the entire monthly income of
which these transfers are allocated are the variable annuity units in the
not restricted. Transfers must be Subaccount from which the transfer is
scheduled for at least 6 but not more being made. If the monthly income of the
than 24 months or for at least 4 but not remaining units in a Subaccount is less
more than 8 quarters each time the than $ 10, we have the right to include
Dollar Cost Averaging program is started the value of those variable annuity
or restarted following termination of units as part of the transfer.
the program for any reason.
After the Annuity Commencement Date, no
Dollar Cost Averaging results in the transfers may be made from the Fixed
purchase of more accumulation units when Account to any other Investment Options.
the value of the accumulation unit is
low, and fewer accumulation units when
the value of the accumulation unit is
high. However, there is no guarantee
that the Dollar Cost Averaging program
will
</TABLE>
LB916
PAGE 11
<PAGE>
SECTION 9 - DEATH PROCEEDS
<TABLE>
<S> <C>
A. DEATH PROCEEDS PRIOR TO ANNUITY Adjustment Factor. The Adjustment Factor
COMMENCEMENT DATE is equal to the amount of the death
proceeds prior to the Partial Withdrawal
The amount of death proceeds will be the divided by the Policy Value prior to the
greatest of (a), (b) or (c) where: Partial Withdrawal.
(a) is the Policy Value on the date we
receive due proof of death and an C. DEATH PRIOR TO ANNUITY COMMENCEMENT
election of a method of settlement; DATE
(b) is the Cash Value on the date we
receive due proof of death and an Death proceeds are payable contingent
election of a method of settlement, upon the relationships between the
and; owner, annuitant, successor owner and
(c) is the Guaranteed Minimum Death beneficiary as outlined below. The
Benefit (GMDB), plus any additional policy must be surrendered upon
premium payments received, less any settlement or on proof of death.
Gross Partial Withdrawals from the
date of death to the date of payment I. Annuitant and owner are the same.
of death proceeds.
When we have due proof that the owner
If you have not selected a payment died before the Annuity Commencement
option by the date of death, the Date, we will provide the death
beneficiary may make such election proceeds to the beneficiary.
within one year of the date we receive
due proof of the Owner's or Annuitant's a) Beneficiary is the deceased
death as described in C. below. The owner's surviving spouse. The
beneficiary may elect to receive the beneficiary may elect to continue
death proceeds as a lump sum payment or this policy as owner and annuitant
may use the death proceeds to provide rather than receiving the death
any of the annuity payment options proceeds. If the policy is
described in Section 10. Interest on continued, an amount equal to the
death proceeds will be paid as required excess, if any, of the Guaranteed
by law. Minimum Death Benefit over the
Policy Value will then be added to
B. GUARANTEED MINIMUM DEATH BENEFIT the Policy Value. This amount will
be added only once, at the time of
The Guaranteed Minimum Death Benefit such election. If the policy is
(GMDB) is the annual Step-Up Death continued, all future Surrender
Benefit. The amount of the death benefit Charges will be waived.
is equal to the largest Policy Value on
the Policy Date or on any Policy If this beneficiary elects to have
Anniversary prior to the earlier of the the death proceeds paid, the death
date of death or the Owner's 76th proceeds must be distributed:
birthday, plus any Premium Payments made
since then, minus any Adjusted Partial (1) by the end of 5 years after
Withdrawals made since then. the date of the deceased
owner's death, or
If the Owner is a nonnatural person, or (2) payments must begin no later
if the Owner has elected to have the death than one year after the
proceeds paid upon the death of the deceased owner's death and
Annuitant, the GMDB will be based upon must be made for a period
the Annuitant's age. certain or for this
beneficiary's lifetime, so
If the Owner is a nonnatural person, or long as any period certain
if the Owner has elected to have the does not exceed this
death proceeds paid upon the death of beneficiary's life
the Annuitant, the Guaranteed Minimum expectancy.
Death Benefit will be based upon the b) Beneficiary is not the deceased
Annuitant's age. owner's surviving spouse. The
death proceeds must be distributed
A Partial Withdrawal taken as provided as provided in l.a)(1) or l.a)(2)
in Section 5 will reduce the Guaranteed above.
Minimum Death Benefit by an amount c) Death proceeds which are not paid
referred to as the "Adjusted Partial to or for the benefit of a natural
Withdrawal". The Adjusted Partial person must be distributed by the
Withdrawal may be a different amount end of 5 years after the date of
than the Gross Partial Withdrawal the deceased owner's death.
described in Section 5. The Adjusted
Partial Withdrawal is the total amount
deducted from the GMDB as a result of a
Partial Withdrawal as used in the GMDB
provision. It is equal to the Gross
Partial Withdrawal described in Section
5, multiplied by an
</TABLE>
D322
PAGE 12
<PAGE>
SECTION 9 - DEATH PROCEEDS - CONT
<TABLE>
<S> <C>
II. Annuitant and owner are different waived If the successor owner
and the annuitant dies. elects to receive the Adjusted
Policy Value, the Adjusted
When we have due proof that the Policy Value must be
annuitant died prior to the Annuity distributed:
Commencement Date, the owner will
become the new annuitant and no (1) by the end of 5 years after
death proceeds are payable. If the the date of the deceased
owner is also the deceased owner's death, or
annuitant's surviving spouse, an (2) payments must begin no later
amount equal to the excess, if any, than one year after the
of the Guaranteed Minimum Death deceased owner's death and
Benefit over the Policy Value will must be made for a period
then be added to the Policy Value. certain or for the successor
This amount will be added only once owner's lifetime, so long as
Furthermore, all future surrender any period certain does not
charges will be waived. exceed the successor owner's
life expectancy.
However, in lieu of becoming the new b) Successor owner is not the
Annuitant, the owner may elect to deceased owner's surviving
have the death proceeds distributed spouse. The Adjusted Policy
to the beneficiary on the death of Value must be distributed as
the Annuitant. This election must be provided in III.a)(1) or
in writing and must be received by III.a)(2) above.
us prior to the Annuitant's death. c) Successor owner is not a natural
In such case, when we have due proof person. The Adjusted Policy
that the annuitant died prior to the Value must be distributed as
Annuity Commencement Date, we will provided in III.a)(1) above.
provide the death proceeds to the d) No successor owner survives the
beneficiary. deceased owner. The deceased
owner's estate will become the
a) If the owner has elected to have new owner (or the estate may
the death proceeds paid as a lump name a new owner). The executor
sum, the beneficiary must, within or Administrator must be named
60 days of our receipt of due in a form acceptable to us. The
proof of the annuitant's death, Adjusted Policy Value must be
either: distributed by the end of 5
1) receive the lump sum proceeds; or years after the date of the
2) elect to receive annuity deceased owner's death.
payments. Such payments must
begin within one year of our IV. More than one Owner.
receipt of due proof of the
annuitant's death and must be If there is more than one owner,
made for a period certain or then the death of any owner will be
for this beneficiary's treated the same as the death of
lifetime, so long as any the owner.
period certain does not exceed
this beneficiary's life D. DEATH ON OR AFTER THE ANNUITY
expectancy. COMMENCEMENT DATE
b) Death proceeds which are not paid
to or for the benefit of a The death proceeds on or after the
natural person must be Annuity Commencement Date depend on the
distributed by the end of 5 years payment option selected. If any owner
after the date of the annuitant's dies on or after the Annuity
death. Commencement Date, but before the entire
interest in the policy is distributed,
III. Annuitant and owner are different the remaining portion of such interest
and the owner dies. in the policy will be distributed to the
beneficiary at least as rapidly as under
If the owner dies prior to the the method of distribution being used as
Annuity Commencement Date and of the date of that owner's death.
before the entire interest in the
policy is distributed, the E. AN OWNER IS NOT AN INDIVIDUAL
successor owner will become the new
owner. The remaining portion of any In the case of a non tax-qualified
interest in the policy must be annuity, if any owner or beneficial
distributed to the extent provided owner, is not an individual, then for
below in III.a), III.b), III.c), or purposes of the federal income tax
III.d). mandatory distribution provisions in
subsection C or D above, (1) the primary
a) Successor owner is the deceased annuitant will be treated as the owner
owner's surviving spouse. The of the policy, and (2) if there is any
successor owner may elect to change in the primary annuitant, such a
continue this policy rather than change will be treated as the death of
receive the Adjusted Policy the owner.
Value. If the policy is
continued, all future Surrender
Charges will be
</TABLE>
DB322
PAGE 13
<PAGE>
SECTION 10 - ANNUITY PAYMENTS
A. GENERAL PAYMENT PROVISIONS Payee
Payment Unless you specify otherwise, the
payee shall be the annuitant, or the
If this policy is in force on the beneficiary as defined in the
Annuity Commencement Date, we will use Beneficiary provision.
the Fixed Account portion and/or the
Separate Account portion of the Adjusted Proof of Age
Policy Value to make annuity payments to
the Payee under Option 3 and/or 3-V, We may require proof of the age of
respectively, with 10 years certain, or any person who has an annuity
if elected, under one or more of the purchased under Options 3, 3-V, 5 and
other options described in this section. 5-V of this section before we make
However, the option(s) elected must the first payment.
provide for lifetime income or income
for a period of at least 60 months. You Minimum Proceeds
will become the annuitant at the Annuity
Commencement Date. Payments will be made If the proceeds are less than $2,000,
at 1, 3, 6 or 12 month intervals. We we reserve the right to pay them out
reserve the right to change the as a lump sum instead of applying
frequency of payments to avoid making them to a payment option.
payments of less than $50.00.
Premium Tax
Before the Annuity Commencement Date, if
the death proceeds become payable or if We may be required by law to pay
you surrender this policy, we will pay premium tax on the amount applied to
any proceeds in one sum, or if elected, a payment option. If so, we will
all or part of these proceeds may be deduct the premium tax before
placed under one or more of the options applying the proceeds.
described in this section. If we agree,
the proceeds may be placed under some Supplementary Contract
other method of payment instead.
Once proceeds become payable and a
Adjusted Age payment option has been selected,
this policy will terminate and we
Payments under Options 3 and 5 and the will issue a supplementary contract
first payment under Options 3-V and 5-V to reflect the terms of the selected
are determined based on the adjusted age option. The contract will name the
of the annuitant The adjusted age is the payees and will describe the payment
annuitant's actual age on the schedule.
annuitant's nearest birthday, at the
Annuity Commencement Date, adjusted as B. FIXED ACCOUNT PAYMENTS
follows:
Guaranteed Payment Options
Annuity
Commencement Date Adjusted Age The fixed account payment is
- ------------------- ------------------ determined by multiplying each $1,000
Before 2001 Actual Age of policy proceeds allocated to a
2001 - 2010 Actual Age minus 1 fixed payment option by the amounts
2011 - 2020 Actual Age minus 2 shown on page 16 for the option you
2021 - 2030 Actual Age minus 3 select Options 1, 2 and 4 are based
2031 - 2040 Actual Age minus 4 on a guaranteed interest rate of 3%.
After 2040 Actual Age minus 5
Options 3 and 5 are based on a
Election of Optional Method of Payment guaranteed interest rate of 3%, and
the "1983 Table a" (male, female, and
Before the Annuity Commencement Date you unisex if required by law) mortality
can elect or change a payment option. table improved to the year 2000 with
You may elect, in a notice you sign projection scale G. (The "1983 Table
which gives us the facts that we need, a" mortality rates are adjusted based
annuity payments that may be either on improvements in mortality since
variable, fixed, or a combination of 1983 to more appropriately reflect
both If you elect a combination, you increased longevity. This is
must also tell us what part of the accomplished using a set of
policy proceeds on the Annuity improvement factors referred to as
Commencement Date are to be applied to projection scale G.)
provide each type of payment (You must
also specify which Subaccounts). The Option 1 - Interest Payments
amount of a combined payment will be the
sum of the variable and fixed payments. We will pay the interest on the
Payments under a variable payment option amount we use to provide annuity
will reflect the investment performance payments in equal payments or this
of the selected Subaccount of the amount may be left to accumulate for
Separate Account. a period of time we and the
Certificate Owner agree to. We and
the Certificate Owner will agree on
withdrawal rights when you elect this
option. The interest rate we declare
for this option may be different that
the interest rate(s) credited prior
to the Annuity Commencement Date.
Option 2 - Income for a Specified
Period
We will make level payments only for
the fixed period you choose. In the
event of the death of the person
receiving payments prior to the end
of the fixed period elected, payment
will be continued to that person's
beneficiary or their present value
may be paid in a single sum. No funds
will remain at the end.
S977
PAGE 14
<PAGE>
SECTION 10 - ANNUITY PAYMENTS - CONT
Option 3 - Life Income - You may capital gain distributions
choose between: made by the fund for shares
held in that Subaccount if
1. No Period Certain - We will make the ax-dividend date occurs
level payments only during the during the Valuation
Annuitant's lifetime. Period; plus or minus
2. 10 Years Certain - We will make (3) a per share credit or
level payments for the longer of charge for any taxes
the Annuitant's lifetime or ten reserved for, which we
years. determine to have resulted
from the investment
3. Guaranteed Return of Policy operations of the
Proceeds - We will make level Subaccount.
payments for the longer of the
Annuitant's lifetime or until (b) is the net asset value of a
the total dollar amount of fund share held in that
payments we made to you equals Subaccount determined as of the
the amount applied to this end of the immediately
option. preceding Valuation Period.
Option 4 - Income of a Specified (c) is a factor representing the
Amount Mortality and Expense Risk Fee
and Administrative Charge. This
Payments are made for any specified factor is less than or equal
amount until the amount applied to to, on an annual basis, the
this option, with interest, are percentage shown on page 3 of
exhausted. This will be a series of the daily net asset value of a
level payments followed by a fund share held in the Separate
smaller final payment In the event Account for that Subaccount.
of the death of the person
receiving payments prior to the Determination of the First Variable
time proceeds with interest are Payment
exhausted, payments will be
continued to that person's The amount of the first variable
beneficiary or their present value payment is determined by
may be paid in a single sum. multiplying each $ 1,000 of policy
proceeds allocated to a variable
Option 5 - Joint and Survivor payment option by the amounts shown
Annuity on page 17 for the variable option
you select The tables are based on
Payments are made during the joint a 5% effective annual Assumed
lifetime of the Payee and a joint Investment Return and the "1983
Payee of your selection. Payments Table a" (male, female, and unisex
will be made as long as either if required by law) mortality table
person is living. improved to the year 2000 with
projection scale G. (The "1983
Current Payment Options Table a" mortality rates are
adjusted based on improvements in
The amounts shown in the tables on mortality since 1983 to more
page 12 are the guaranteed amounts. appropriately reflect increased
Current amounts offered to longevity. This is accomplished
individuals of the same class may using a set of improvement factors
be obtained from us. referred to as projection scale G.)
C. VARIABLE ACCOUNT PAYMENT OPTIONS Option 3-V - Life Income
Variable Annuity Units An election may be made between:
The policy proceeds you tell us to 1. "No Period Certain" - Payments
apply to a variable payment option will be made during the
will be used to purchase variable lifetime of the Annuitant.
annuity units in your chosen
Subaccounts. The dollar value of 2. "10 Years Certain" - Payments
variable annuity units in your will be made for the longer of
chosen Subaccounts will increase or the Annuitant's lifetime or ten
decrease reflecting the investment years. In the event of the
experience of your chosen death of the person receiving
Subaccounts. The value of a payments prior to the end of
variable annuity unit in a the period for which the
particular Subaccount on any election was made, payments
business day is equal to (a) will be continued to that
multiplied by (b) multiplied by person's beneficiary or their
(c), where: present value may be paid in a
single sum.
(a) is the variable annuity unit
value for that Subaccount on Option 5-V - Joint and Survivor
the immediately preceding Annuity
business day;
(b) is the net investment factor Payments are made as long as either
for that Subaccount for the the annuitant or the joint
Valuation Period; and annuitant is living.
(c) is the Assumed Investment
Return adjustment factor for Determination of Subsequent
the Valuation Period. Variable Payments
The Assumed Investment Return The amount of each variable annuity
adjustment factor for the valuation payment after the first will
period is the product of discount increase or decrease according to
factors of .99986634 per day to the value of the variable annuity
recognize the 5.0% effective annual units which reflect the investment
Assumed Investment Return. experience of the selected.
Subaccounts. Each variable annuity
The net investment factor used to payment after the first will be
calculate the value of a variable equal to the number of variable
annuity unit in each Subaccount for annuity units in the selected
the Valuation Period is determined Subaccounts multiplied by the
by dividing (a) by (b) and variable annuity unit value on the
subtracting (c) from the result, date the payment is made. The
where: number of variable annuity units in
each selected Subaccount is
(a) is the net result of: determined by dividing the first
variable annuity payment allocated
(1) the net asset value of a to the Subaccount by the variable
fund share held in that annuity unit value of that
Subaccount determined as of Subaccount on the Annuity
the end of the current Commencement Date.
valuation period; plus
(2) the per share amount of any
dividend or
SB977
PAGE 15
<PAGE>
GUARANTEED FIXED ACCOUNT PAYMENT OPTIONS
The amounts shown in these tables are the guaranteed amounts for each $1,000 of
the proceeds. Higher current amounts may be available at the time of settlement.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Option 2, Table I Option 3, Table II Option 3, Table III Option 3, Table IV
- ------------------------- ------------------------------------------------------------------------------------------
Number Amount of Monthly Installment for Monthly Installment for Monthly Installment for Life
of Years Monthly Life Life Guaranteed Return of
Payable Installment No Period Certain 10 Years Certain Proceeds
------------------------------------------------------------------------------------------------
Age* Male Female Unisex Male Female Unisex Male Female Unisex
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $3.87 $3.55 $3.71 $3.84 $3.54 $3.70 $3.73 $3.49 $3.61
51 3.93 3.60 3.77 3.90 3.59 3.75 3.79 3.53 3.66
52 4.00 3.65 3.83 3.97 3.64 3.81 3.84 3.58 3.71
53 4.07 3.71 3.90 4.04 3.70 3.87 3.90 3.63 3.76
5 $17.91 54 4.15 3.77 3.97 4.11 3.75 3.94 3.96 3.68 3.82
6 15.14 55 4.23 3.83 4.04 4.19 3.82 4.01 4.03 3.73 3.88
7 13.16 56 4.32 3.90 4.11 4.27 3.88 4.08 4.10 3.79 3.94
8 11.68 57 4.41 3.97 4.19 4.35 3.95 4.15 4.17 3.85 4.00
9 10.53 58 4.50 4.05 4.28 4.44 4.02 4.24 4.24 3.91 4.07
10 9.61 59 4.61 4.13 4.37 4.53 4.10 4.32 4.32 3.97 4.14
11 8.86 60 4.72 4.21 4.47 4.63 4.18 4.41 4.40 4.04 4.22
12 8.24 61 4.84 4.30 4.57 4.74 4.26 4.51 4.49 4.12 4.30
13 7.71 62 4.96 4.40 4.68 4.85 4.35 4.61 4.58 4.19 4.38
14 7.26 63 5.10 4.50 4.80 4.97 4.45 4.71 4.68 4.28 4.47
15 6.87 64 5.24 4.61 4.93 5.09 4.55 4.83 4.78 4.36 4.56
16 6.53 65 5.40 4.73 5.06 5.22 4.66 4.95 4.88 4.45 4.66
17 6.23 66 5.56 4.85 5.21 5.36 4.77 5.07 4.99 4.55 4.76
18 5.96 67 5.74 4.99 5.36 5.50 4.89 5.20 5.11 4.65 4.87
19 5.73 68 5.93 5.13 5.53 5.65 5.02 5.34 5.24 4.76 4.98
20 5.51 69 6.13 5.29 5.71 5.80 5.15 5.49 5.37 4.87 5.10
70 6.34 5.45 5.90 5.96 5.30 5.64 5.51 4.99 5.23
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Option 5, Table V
- -------------------------------------------------------------------------------------------------------------------
Monthly Installment For Joint and Full Survivor
- -------------------------------------------------------------------------------------------------------------------
Age of Age of Female Annuitant*
Male
------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less Than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $2.99 $3.05 $3.11 $3.18 $3.25 $3.32 $3.39
55 3.11 3.19 3.27 3.35 3.44 3.53 3.63
60 3.27 3.37 3.47 3.58 3.70 3.82 3.95
65 3.47 3.60 3.74 3.89 4.05 4.22 4.39
70 3.74 3.91 4.10 4.31 4.53 4.77 5.02
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Monthly Installment For Unisex Joint and Full Survivor
- -------------------------------------------------------------------------------------------------------------------
Age of Age of Joint Annuitant*
First
------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less Than Less Than Less Than Less Than Less Than Same As More Than
First First First First First First First
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $3.04 $3.09 $3.15 $3.21 $3.27 $3.33 $3.39
55 3.17 3.24 3.32 3.40 3.48 3.56 3.63
60 3.34 3.44 3.54 3.64 3.75 3.85 3.95
65 3.57 3.70 3.83 3.97 4.11 4.26 4.39
70 3.87 4.04 4.22 4.42 4.62 4.82 5.01
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
*Adjusted Age as defined in Section 10.A.
- --------------------------------------------------------------------------------
The annual, semi-annual or quarterly installments under Option 2 shall be the
monthly installment shown multiplied by 11.84, 5.96 or 2.99 respectively, and
for Options 3 and 5 the monthly installment shown multiplied by 11.80, 5.95
or 2.99 respectively.
- --------------------------------------------------------------------------------
Dollar amounts of monthly installments not shown in the above tables will be
calculated on the same basis as those shown and may be obtained from the
Company.
T831
PAGE 16
<PAGE>
VARIABLE PAYMENT OPTIONS
BASED ON ASSUMED INVESTMENT RETURN
The amounts shown in these tables are the initial payment amounts based on a
5.0% Assumed Investment Return for each $1,000 of the proceeds.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Option 3 - V, Table II Option 3 - V, Table III
- --------------- ----------------------------------------------------------------------------------------------------------
Monthly Installment for Life Monthly Installment for Life
No Period Certain 10 Years Certain
--------------------------------------------------------------------------------------------------------------------
Age* Male Female Unisex Male Female Unisex
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $5.11 $4.81 $4.96 $5.07 $4.79 $4.94
51 5.17 4.85 5.02 5.13 4.83 4.99
52 5.24 4.90 5.07 5.19 4.88 5.04
53 5.31 4.95 5.13 5.25 4.93 5.10
54 5.38 5.01 5.20 5.32 4.98 5.16
55 5.46 5.06 5.26 5.39 5.04 5.22
56 5.54 5.12 5.34 5.47 5.09 5.28
57 5.63 5.19 5.41 5.54 5.16 5.36
58 5.72 5.26 5.49 5.63 5.22 5.43
59 5.82 5.34 5.58 5.72 5.29 5.51
60 5.93 5.42 5.68 5.81 5.37 5.60
61 6.04 5.50 5.78 5.91 5.44 5.69
62 6.17 5.60 5.89 6.02 5.53 5.78
63 6.30 5.69 6.00 6.13 5.62 5.88
64 6.44 5.80 6.13 6.25 5.71 5.99
65 6.60 5.91 6.26 6.37 5.82 6.10
66 6.76 6.04 6.40 6.50 5.92 6.22
67 6.94 6.17 6.56 6.63 6.04 6.35
68 7.13 6.31 6.72 6.77 6.16 6.48
69 7.33 6.46 6.90 6.92 6.29 6.62
70 7.55 6.63 7.09 7.07 6.43 6.76
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Option 5V, Table V
- ------------------------------------------------------------------------------------------------------------------------------------
Monthly Installment For Joint and Full Survivor
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Age of Female Annuitant*
Male
-----------------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less Than Less Than Less Than Less Than Less Than Same As More Than
Male Male Male Male Male Male Male
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $4.32 $4.36 $4.41 $4.46 $4.51 $4.57 $4.62
55 4.42 4.47 4.53 4.60 4.67 4.75 4.83
60 4.54 4.62 4.70 4.80 4.90 5.01 5.12
65 4.71 4.82 4.94 5.07 5.22 5.37 5.53
70 4.95 5.10 5.27 5.46 5.67 5.89 6.13
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Monthly Installment For Unisex Joint and Full Survivor
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Age of Joint Annuitant*
First
-----------------------------------------------------------------------------------------------------------
Annuitant* 15 Years 12 Years 9 Years 6 Years 3 Years 3 Years
Less Than Less Than Less Than Less Than Less Than Same As More Than
First First First First First First First
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
50 $4.40 $4.45 $4.50 $4.55 $4.61 $4.67 $4.72
55 4.52 4.59 4.66 4.73 4.81 4.89 4.96
60 4.69 4.78 4.87 4.97 5.08 5.19 5.29
65 4.91 5.04 5.17 5.31 5.46 5.62 5.77
70 5.22 5.40 5.59 5.79 6.02 6.24 6.47
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Adjusted Age as defined in Section 10.A.
- --------------------------------------------------------------------------------
The annual, semi-annual or quarterly installments shall be the monthly
installment shown for Options 3-V and 5-V multiplied by 11.70, 5.93 or 2.99
respectively.
- --------------------------------------------------------------------------------
Dollar amounts of monthly installments not shown in the above tables will be
calculated on the same basis as those shown and may be obtained from the
Company.
TB831
PAGE 17
<PAGE>
SECTION 11 - GENERAL PROVISIONS
THE CONTRACT RIGHTS OF OWNER
The entire contract consists of The owner may, while the annuitant
this policy, endorsements, if any, is living:
and the application, or information
provided in lieu thereof, signed by 1. Assign this policy.
You.
2. Surrender the policy to us.
MODIFICATION OF POLICY
3. Amend or modify the policy with
No change in this policy is valid our consent.
unless made in writing by us and
approved by one of our officers. No 4. Receive annuity payments or name
Registered Representative has a Payee to receive the payments.
authority to change or waive any
provision of Your policy. 5. Exercise, receive and enjoy
every other right and benefit
TAX QUALIFICATION contained in the policy.
This policy is intended to qualify The use of these rights may be
as an annuity contract for federal subject to the consent of any
income tax purposes. The provisions assignee or irrevocable
of this policy are to be beneficiary; and of the spouse in a
interpreted to maintain such community or marital property
qualification, notwithstanding any state.
other provisions to the contrary.
To maintain such tax qualification, Unless we have been notified of a
we reserve the right to amend this community or marital property
policy to reflect any interest in this policy, we will
clarifications that may be needed rely on our good faith belief that
or are appropriate to maintain such no such interest exists and will
tax qualification or to conform assume no responsibility for
this policy to any applicable inquiry.
changes in the tax qualification
requirements. We will send You a SUCCESSOR OWNER
copy in the event of any such
amendment If You refuse such an A successor owner can be named in
amendment it must be by giving us the application, or information
written notice, and Your refusal provided in lieu thereof, or in a
may result in adverse tax notice you sign which gives us the
consequences. facts that we need. The successor
owner will become the new owner
NON -PARTICIPATING when you die, if you die before the
annuitant. If no successor owner
This policy will not share in our survives you and you die before the
surplus earnings. annuitant, your estate will become
the new owner.
AGE OR SEX CORRECTIONS
CHANGE OF OWNERSHIP
If the age or sex of the annuitant
has been misstated, the benefits In the case of a non-tax qualified
will be those which the premiums annuity, you can change the owner
paid would have purchased for the of this policy, from yourself to a
correct age and sex. If required by new owner, in a notice you sign
law to ignore differences in the which gives us the facts that we
sex of the annuitant, the annuity need. When this change takes
payments will be determined using effect, all rights of ownership in
the unisex factors in Section 10. this policy will pass to the new
owner.
Any underpayment made by us will be
paid with the next payment Any A change of owner or successor
overpayment made by us will be owner will not be effective until
deducted from future payments. Any it is recorded in our records.
underpayment or overpayment, will After it has been so recorded, the
include interest at 5% per year, change will take effect as of the
from the date of the wrong payment date you signed the notice.
to the date of the adjustment. However, if the annuitant dies
before the notice has been so
INCONTESTABILITY recorded, it will not be effective
as to those proceeds we have paid
This policy shall be incontestable before the change was recorded in
from the Policy Date. our records. We may require that
the change be endorsed in the
EVIDENCE OF SURVIVAL policy. Changing the owner or
naming a new successor owner
We have the right to require cancels any prior choice of
satisfactory evidence that a person successor owner, but does not
was alive if a payment is based on change the beneficiary or the
that person being alive. No payment annuitant.
will be made until we receive the
evidence. A change of ownership may result in
adverse tax consequences.
SETTLEMENT
ANNUITY COMMENCEMENT DATE
Any payment by us under this policy
is payable at our Home Office. The Annuity Commencement Date is
the date annuity payments begin.
This date may not be later than the
last day of the policy month
starting after the Annuitant
attains age 85, except as expressly
allowed by us, but in no event
later than the last day of the
policy month following the month in
which the Annuitant attains age 95.
You may change the Annuity
Commencement Date at any time
before the Annuity Commencement
Date by giving us 30 days' written
notice.
H745
PAGE 18
<PAGE>
SECTION 11 - GENERAL PROVISIONS - CONT
ASSIGNMENT become payable. If there is more
than one beneficiary and you failed
(a) In the case of a non tax- to specify their interest, they
qualified annuity, this policy will share equally. Payment will be
may be assigned. The made to the named contingent
assignment must be in writing beneficiary(ies) only if ail
and filed with us. primary beneficiaries have died
before the death proceeds become
(b) We assume no responsibility payable. If any primary beneficiary
for the validity of any is alive at the time the death
assignment Any claim made proceeds become payable, but dies
under an assignment shall be before receiving their payment,
subject to proof of interest their share will be paid to their
and the extent of the estate.
assignment.
In cases where the annuitant dies
(c) This policy may be applied for and the owner (who is not the
and issued to qualify as a tax- annuitant) elected to receive the
qualified annuity under death benefit in accordance with
certain sections of the Section 9, if the annuitant's
Internal Revenue Code. estate has been named as
Ownership of this policy then beneficiary, then payment will be
is restricted so that it will made to the owner.
comply with provisions of the
Internal Revenue Code. PROTECTION OF PROCEEDS
Assignment of this policy may Unless you so direct by filing
result in adverse tax consequences. written notice with us, no
beneficiary may assign any payments
BENEFICIARY under this policy before the same
are due. To the extent permitted by
Death proceeds, when payable in law, no payments under this policy
accordance with Section 9, are will be subject to the claims of
payable to the designated creditors of any beneficiary.
beneficiary or beneficiaries. Such
beneficiary(ies) must be named in DEFERMENT
the application, or information
provided in lieu thereof, and may We will pay any Partial Withdrawals
be changed without consent (unless or Surrender proceeds from the
irrevocably designated or required Separate Account within 7 days
by law) by notifying us in writing after we receive all requirements
on a form acceptable to us. The that we need. However, it may
change will take effect upon the happen that the New York Stock
date you sign it, whether or not Exchange is closed for trading
you are living when we receive it. (other than the usual weekend or
The notice must have been holiday closings), or the
postmarked (or show other evidence Securities and Exchange Commission
of delivery that is acceptable to restricts trading or determines
us) on or before the date of death that an emergency exists. If so, it
Your most recent change of may not be practical for us to
beneficiary notice will replace any determine the investment experience
prior beneficiary designations. No of the Separate Account In that
change will apply to any payment we case, we may defer transfers among
made before the written notice was the Subaccounts and to the Fixed
received. If an irrevocable Account, and determination or
beneficiary dies, you may designate payment of Partial Withdrawals or
a new beneficiary. Surrender proceeds.
You may direct that the beneficiary When permitted by law, we may defer
shall not have the right to paying any Partial Withdrawals or
withdraw, assign or commute any sum Surrender proceeds from the Fixed
payable under an option. In the Account for up to 6 months from the
absence of such election or date we receive your request. If
direction, the beneficiary may the Owner dies after the request is
change the manner of payment or received, but before the request is
make an election of any option. processed, the request will be
processed before the death proceeds
If any primary or contingent are determined. Interest will be
beneficiary dies before the paid on any amount deferred for 30
annuitant, that beneficiary's days or more. This rate will be 3%
interest in this policy ends with per year unless otherwise required
that beneficiary's death Only those by law.
beneficiaries living at the time of
the annuitant's death will be REPORTS TO OWNER
eligible to receive their share of
the Death Proceeds. In the event no We will give you an annual report
contingent beneficiaries have been at least once each Policy Year.
named and all primary beneficiaries This report will show the number
have died before the death proceeds and value of the accumulation units
become payable, the owner(s) will held in each of the Subaccounts as
become the beneficiary(ies) unless well as the value of the Fixed
elected otherwise in accordance Account. It will also give you the
with Section 9. If both primary and Death Benefit, Cash Value; and any
contingent beneficiaries have been other facts required by law or
named, payment will be made to the regulation.
named primary beneficiaries living
at the time the death proceeds
J745
PAGE 19
<PAGE>
PFL Life Insurance Company
Home Office located at 4333 Edgewood Road NE., Cedar Rapids, Iowa 52499
[LOGO PFL LIFE INSURANCE APPEARS HERE]
Flexible Premium Variable Annuity
Income Payable At Annuity Commencement Date
Benefits Based On The Performance Of The Separate Account
Are Variable And Are Not Guaranteed As To Dollar Amount (See Sections 6 and
10C.)
Non -Participating
INDEX
<TABLE>
<CAPTION>
Page Page
<S> <C> <S> <C>
Accumulation Units........... 9 Incontestability.............. 18
Age or Sex Corrections....... 18 Modification of Policy........ 18
Annuity Commencement Date.... 18 Nonparticipation.............. 18
Annuity Payments............. 14, 15 Owner......................... 18
Adjusted Policy Value........ 4 Partial Withdrawals........... 5, 6, 7
Assignment................... 19 Payee......................... 14
Beneficiary.................. 19 Payment of Premiums........... 4
Cash Value................... 5 Payment Option Tables......... 16, 17
Contract..................... 18 Policy Data Page.............. 3
Death Proceeds............... 12, 13 Policy Value.................. 4
Definitions.................. 2 Proof of Age.................. 14
Dollar Cost Averaging Option. 11 Protection of Proceeds........ 19
Evidence of Survival......... 18 Right to Cancel............... 1
Excess Interest Adjustment... 5 Separate Account.............. 8, 9
Fixed Account................ 10 Service Charge................ 4
Guaranteed Minimum Death Settlement.................... 18
Benefit.................... 12 Surrender Charges............. 7
Guaranteed Return of Fixed Transfers..................... 10, 11
Account Premium Payments... 7
Guaranteed Periods........... 10
</TABLE>
Y604
<PAGE>
EXHIBIT (5)(a)
--------------
GROUP MASTER APPLICATION
<PAGE>
Application for Group Insurance to
PFL LIFE INSURANCE COMPANY
Home Office: 4333 Edgewood Rd NE, Cedar Rapids IA 52499-0001
________________________________________________________________________________
hereby applies for Group Policy No. ____________ to which this application is
attached
Said Group Policy is hereby approved and the terms thereof are hereby accepted.
This application is executed in duplicate, with one part being attached to said
Policy and the other returned to PFL LIFE INSURANCE COMPANY.
It is understood and agreed that no agent of PFL Life Insurance Company has
power on behalf of said Company to make or modify this or any other application
for insurance.
This application supersedes any previous application for the said Group Policy.
Dated at _______________________________ this _____ day of __________, _________
__________________________________
By _______________________________
_________________________________ __________________________________
Agent Signature Agent Number
_________________________________
Agent Name (please print)
A-M-1000 (IA)
<PAGE>
EXHIBIT (5)(b)
--------------
GROUP CERTIFICATE ENROLLMENT APPLICATION
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Variable Annuity Enrollment Form
Issued by: PFL Life Insurance Company ("PFL Life") 4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001
Mail the enrollment form and check: PFL Life Insurance Company, Attn: Variable Annuity Dept.
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
In the event the owner is a trust, please provide verification of trustees.
1. OWNER
If no annuitant is Name: Phone No.:
specified in #2, the -------------------------------------------------------------------------------------------------------------
Owner will be the
Annuitant. Address: City: State: Zip:
-------------------------------------------------------------------------------------------------------------
[_] Male [_] Female SS#/TIN [_][_][_]-[_][_]-[_][_][_][_] Birthdate [_][_]/[_][_]/[_][_][_][_]
- -----------------------------------------------------------------------------------------------------------------------------------
JOINT OWNER(S)
Name: Phone No.:
-------------------------------------------------------------------------------------------------------------
Address: City: State: Zip:
-------------------------------------------------------------------------------------------------------------
[_] Male [_] Female SS#/TIN [_][_][_]-[_][_]-[_][_][_][_] Birthdate [_][_]/[_][_]/[_][_][_][_]
------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
2. ANNUITANT
Name: Relationship to Owner:
Complete only if ------------------------------------------------------------------------------------------------------------
different from Address: City: State: Zip:
Owner. ------------------------------------------------------------------------------------------------------------
[_] Male [_] Female SS#/ TIN [_][_][_]-[_][_]-[_][_][_][_] Birthdate [_][_]/[_][_]/ [_][_][_][_]
- ----------------------------------------------------------------------------------------------------------------------------------
3. BENEFICIARY(IES)
Primary: Relationship to Annuitant: %
--------------------------------------------------------------------------------------------- ----------
Primary: Relationship to Annuitant: %
--------------------------------------------------------------------------------------------- ----------
Contingent: Relationship to Annuitant: %
--------------------------------------------------------------------------------------------- ----------
Contingent: Relationship to Annuitant: %
--------------------------------------------------------------------------------------------- ----------
- -------------------------------------------------------------------------------------------------------------------------------
4. TELEPHONE
TRANSFERS
Following is authorized to make telephone transfer requests (check one only):
[_] Owner(s) only, or
[_] Owner(s) and Owner's Registered Representative (Print Rep Name) _________________________________
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
5. ALLOCATION
OF PREMIUM
PAYMENTS
Please check selected funds and fixed accounts. The initial premium will be allocated as selected here.
If Dollar Cost Averaging, see section 7 on reverse side.
VARIABLE OPTIONS:
Morgan Stanley Asset Management Inc. Montgomery Asset Management, L.L.C.
[_] Endeavor Asset Allocation Portfolio .0% [_] Endeavor Select 50 Portfolio .0%
----- -----
Initial Premium [_] Endeavor Money Market Portfolio .0%
$ -----
MFS Investment Management
T. Rowe Price Associates, Inc. [_] Endeavor High Yield Portfolio .0%
Make check payable [_] T. Rowe Price Equity Income Portfolio .0% -----
to PFL Life -----
Insurance Company. [_] T. Rowe Price Growth Stock Portfolio .0%
-----
Type of Annuity; [_] T. Rowe Price International Janus Capital Corporation
[_] Non- qualified Stock Portfolio .0% [_] Endeavor Janus Growth Portfolio .0%
----- -----
Qualified Types:
Also complete OpCap Advisors First Trust Advisors L.P.
Section 6. [_] Endeavor Value Equity Portfolio .0% [_] The Dow(SM) Target 10 (July Series) .0%
[_] IRA ----- -----
[_] Roth IRA [_] Endeavor Opportunity Value Portfolio .0% [_] The Dow(SM) Target 5 (July Series) .0%
[_] SEP/IRA ----- -----
[_] 403(b) [_] The DowSM Target 10 (January Series) .0%
[_] Keogh -----
[_] Roth Conversion J.P. Morgan Investment Management Inc. [_] The DowSM Target 5 (January Series) .0%
[_] Other _________ -----
___________________ [_] Endeavor Enhanced Index Portfolio .0%
___________________ ----- .0%
----------------------------------------------
Dreyfus Corporation .0%
----------------------------------------------
[_] Dreyfus U.S. Government .0%
----------------------------------------------
Securities Portfolio .0% .0%
----- ----------------------------------------------
[_] Dreyfus Small Cap Value Portfolio .0% .0%
----- ----------------------------------------------
<CAPTION>
FIXED OPTIONS:
<S> <C>
[_] Dollar Cost Averaging .0%
-----
(Must complete section 7.)
[_] 1 Year Guarantee Period .0%
-----
[_] 3 Year Guarantee Period .0%
-----
[_] 5 Year Guarantee Period .0%
-----
[_] 7 Year Guarantee Period .0%
-----
Total Variable and Fixed 100%
-----
. Policy values, when allocated to any
of the Variable Options are not
guaranteed as to fixed dollar amount.
. When funds are allocated to Fixed
Account Guarantee Periods, policy
values under certificate may increase
or decrease in accordance with Excess
Interest Adjustment Prior to the end of
Guarantee Period.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
6. QUALIFIED PLAN
INFORMATION
IRA/SEP/ROTH IRA ROTH IRA Rollover
$ _____________ Contribution for tax year ________ Date first established
$ _____________ Trustee to Trustee Transfer [_ ][_]/[_][_]/[_][_][_][_] or date of conversion
$ _____________ Rollover from [_]IRA [_]403(b) [_]Pension $__________________ Portion previously taxed
[_] Other _____________________________
</TABLE>
VA-ENROLL 5/99 18371 399
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
7. DOLLAR COST
AVERAGING Transfer Frequency: Transfer to (indicate investment option and percentage):
PROGRAM _________________________ _____.0% _____________________________ _____.0%
DCA Program Options _________________________ _____.0% _____________________________ _____.0%
[_] 6 month program _________________________ _____.0% _____________________________ _____.0%
Authorized by [_] 12 month program _________________________ _____.0% _____________________________ _____.0%
Owner Signature Number of transfers ____ _________________________ _____.0% _____________________________ _____.0%
in Section 11. _________________________ _____.0% _____________________________ _____.0%
Total: 100%
Other Frequency Options
[_] Monthly (6 min, 24 max)
[_] Quarterly (4 min, 8 max)
- -----------------------------------------------------------------------------------------------------------------------------------
8. OTHER
Family Income Protector Option:
[_] No [_] Yes (Available at an additional cost, see prospectus)
Please complete.
- ------------------------------------------------------------------------------------------------------------------------------------
9. MINIMUM
DEATH BENEFIT
Your selection cannot be changed after the certificate has been issued. If no option specified, Return of
Select one Premium Death Benefit will apply.
[_] 5% Annually Compounding Death Benefit: (Only if owner(s) and annuitant are under age 75 at time of
purchase). Annual Mortality and Expense (M&E) Risk Fee and Admin. Charge 1.60%.
[_] Double Enchanced Death Benefit: (Only available if owner(s) and the annuitant are under age 81 at time of
purchase). Annual M&E Risk Fee and Admin. Charge 1.60%.
[_] Return of Premium Death Benefit: Annual M&E Risk Fee and Admin. Charge 1.30%.
- ------------------------------------------------------------------------------------------------------------------------------------
10. REPLACEMENT
INFORMATION
Will this annuity replace or change any existing annuity of life insurance? [_] No [_] Yes (If Yes, complete
the following):
Company: Policy No.:
---------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
11. SIGNATURE(S) . Unless I have notified the Company of a community or marital property interest in this certificate, the
OF AUTHORIZATION Company will rely on a good faith belief that no such interest exists and will assume no responsibility
ACCEPTANCE for injury.
. To the best of my knowledge and belief, my answers to the questions on this application are correct and
true, and I agree that this enrollment form becomes a part of the annuity certificate when issued to me.
. I (we) am in receipt of a current prospectus for this variable annuity.
. This enrollment form is subject to acceptance by PFL Life. If this enrollment form is rejected for any
reason, PFL Life will be liable only for return of premiums paid.
[_] Check here if you want to be sent a copy of Statement of Additional Information.
I HAVE REVIEWED MY EXISTING ANNUITY COVERAGE AND FIND THIS COVERAGE SUITABLE FOR MY NEEDS.
Signed at: City: State: Date:
---------------------------------------------------------------------------------------------------------------
Owner(s): Annuitant (if not Owner):
---------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
12. AGENT Do you have any reason to believe the annuity for will replace or change any existing annuity or life
INFORMATION insurance? [_] No [_] Yes
I HAVE REVIEWED THE APPLICANT'S EXISTING ANNUITY COVERAGE AND FIND THIS COVERAGE IS SUITABLE FOR HIS/HER NEEDS.
Registered Representative/
Licensed Agent Name (please print): Signature:
--------------------------------------------------------------------------------------------------------------
Phone No.: SS#/TIN [_][_][_]-[_][_]-[_][_][_][_] [_]A [_]B [_]C
-----------------------------------------
PFL Life Agent #:
--------------------------------------------------------------------------------------------------------------
Firm Name:
--------------------------------------------------------------------------------------------------------------
Firm Address:
--------------------------------------------------------------------------------------------------------------
</TABLE>
VA-ENROLL 5/99 (B)
<PAGE>
EXHIBIT (5)(C)
--------------
INDIVIDUAL APPLICATION
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Application for Variable Annuity
Issued by: PFL Life Insurance Company ("PFL Life") 4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001
Mail the applicaton and check: PFL Life Insurance Company, Attn: Variable Annuity Dept.
- --------------------------------------------------------------------------------------------------------------------------------
In the event the owner is a trust, please provide verification of trustees.
1. OWNER
Name: Phone No.
---------------------------------------------------------------------------------------------------------
If no annuitant is
specified in #2, the Address: City: State: Zip:
---------------------------------------------------------------------------------------------------------
Owner will be the
Annuitant.
[_] Male [_] Female SS#/ TIN [_][_][_] - [_][_] - [_][_][_][_] Birthdate [_][_]/[_][_] /[_][_][_][_]
- --------------------------------------------------------------------------------------------------------------------------------
JOINT OWNER(S) Name: Phone No.
---------------------------------------------------------------------------------------------------------
Address: City: State: Zip:
---------------------------------------------------------------------------------------------------------
[_] Male [_] Female SS#/ TIN [_][_][_] - [_][_] - [_][_][_][_] Birthdate [_][_]/[_][_] /[_][_][_][_]
- --------------------------------------------------------------------------------------------------------------------------------
2. ANNUITANT Name: Relationship to Owner:
---------------------------------------------------------------------------------------------------------
Complete only if Address: City: State: Zip:
---------------------------------------------------------------------------------------------------------
different from Owner.
[_] Male [_] Female SS#/ TIN [_][_][_] - [_][_] - [_][_][_][_] Birthdate [_][_]/[_][_] /[_][_][_][_]
- --------------------------------------------------------------------------------------------------------------------------------
3. BENEFICIARY(IES) Primary: Relationship to Annuitant: %
------------------------------------------------------------------------------------------------ -------
Primary: Relationship to Annuitant: %
------------------------------------------------------------------------------------------------ -------
Contingent: Relationship to Annuitant: %
------------------------------------------------------------------------------------------------ -------
Contingent: Relationship to Annuitant: %
------------------------------------------------------------------------------------------------ -------
- --------------------------------------------------------------------------------------------------------------------------------
4. TELEPHONE Following is authorized to make telephone transfer requests (check one only):
TRANSFERS [_] Owner(s) only, or
[_] Owner(s) and Owner's Registered Representative (Print Rep Name) _________________________________
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
5. ALLOCATION Please check selected funds and fixed accounts. The initial premium will be allocated as selected here.
OF PREMIUM If Dollar Cost Averaging, section 7 on reverse side.
PAYMENTS
VARIABLE OPTIONS:
<S> <C> <C> <C> <C>
Morgan Stanley Asset Management Inc. Montgomery Asset Management, L.L.C.
[_] Endeavor Asset Allocation Portfolio .0% [_] Endeavor Select 50 Portfolio .0%
---- ----
Initial Premium [_] Endeavor Money Market Portfolio .0%
----
$ MFS Investment Management
T. Rowe Price Associates, Inc. [_] Endeavor High Yield Portfolio .0%
----
Make Check payable [_] T. Rowe Price Equity Income .0%
----
to PFL Life insurance [_] T. Rowe Price Growth Stock .0%
----
Company [_] T. Rowe Price International Janus Capital Corporation
Stock Portfolio .0% [_] Endeavor Janus Growth Portfolio .0%
---- ----
Type of Annuity:
[_] Non-qualified OpCap Advisors ___________________________________ .0%
----
Qualified Types: [_] Endeavor Value Equity Portfolio .0% ___________________________________ .0%
----
Also complete [_] Endeavor Opportunity Value Portfolio .0% ___________________________________ .0%
---- ----
Section 6
[_] IRA J.P. Morgan Investment Management Inc. .0% ___________________________________ .0%
---- ----
[_] Roth IRA [_] Endeavor Enhanced Index Portfolio .0% ___________________________________ .0%
---- ----
[_] SEP/IRA
[_] 403(b) Dreyfus Corporation
[_] Keogh [_] Dreyfus U.S. Government .0%
----
[_] Roth Conversion Securities Portfolio
[_] Other ________ [_] Dreyfus Small Cap Value Portfolio .0%
----
__________________
__________________
<CAPTION>
FIXED OPTIONS:
<S> <C>
[_] Dollar Cost Averaging .0%
----
(Must complete section 7.)
[_] 1 year Guarantee Period .0%
----
[_] 3 year Guarantee Period .0%
----
[_] 5 year Guarantee Period .0%
----
[_] 7 year Guarantee Period .0%
----
Total Varirable and Fixed 100%
----
. Policy values, when allocated to
any of the Variable Options are
not guaranteed as to fixed dollar
amount.
. When funds are allocated to
Fixed Account Guarantee
Periods, policy values under
policy may increase or decrease
in accordance with Excess
Interest Adjustment prior to the
end of guarantee Period.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
6. QUALIFIED PLAN IRA/SEP/ROTH IRA ROTH IRA Rollover
INFORMATION
<S> <C> <C>
$ ________________ Contribution for tax year ________ [_][_]/[_][_]/[_][_][_][_] Date first established
Or date of conversion
$ ________________ Trustee to Trustee Transfer
$ ________________ Rollover from [_] IRA [_] Pension $ __________________ Portion previously taxed
[_] Other ________________________
</TABLE>
VA-APP R799
<PAGE>
<TABLE>
<S> <C> <C>
7. DOLLAR COST
AVERAGING Transfer Frequency: Transfer to (indicate investment option
and percentage):
PROGRAM _____________________________ _____.0% __________________________ _____.0%
DCA Program Options _____________________________ _____.0% __________________________ _____.0%
Authorized by Owner [_] 6 month program _____________________________ _____.0% __________________________ _____.0%
Signature in Section 11. [_] 2 month program _____________________________ _____.0% __________________________ _____.0%
Number of transfers _____ _____________________________ _____.0% __________________________ _____.0%
Other Frequency Options _____________________________ _____.0% __________________________ _____.0%
[_] Monthly (6 min, 24 max) _____________________________ _____.0% __________________________ _____.0%
[_] Quarterly (4 min, 8 max) _____________________________ _____.0% __________________________ _____.0%
Total: 100%
- -----------------------------------------------------------------------------------------------------------------------------------
8. OTHER Family Income Protector Option:
[_] No [_] Yes (Available at an additional cost, see prospectus)
Please complete.
- -----------------------------------------------------------------------------------------------------------------------------------
9. REPLACEMENT Will this annuity replace or change any existing annuity of life insurance? [_] No [_] Yes (If Yes,
INFORMATION complete the following)
Company: Policy No.:
----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
10. SIGNATURE(S) . Unless I have notified the Company of a community or marital property interest in this certificate, the
OF AUTHORIZATION Company will rely on a good faith belief that no such interest exists and will assume no responsibility
ACCEPTANCE for injury.
. To the best of my knowledge and belief, my answers to the questions on this application are correct and
true, and I agree that this application becomes a part of the annuity certificate when issued to me.
. I (we) am in receipt of a current prospectus for this variable annuity.
. This application is subject to acceptance by PFL Life. If this application is rejected for any reason,
PFL Life will be liable only for return of premiums paid.
[_] Check here if you want to be sent a copy of Statement of Additional Information.
I HAVE REVIEWED MY EXISTING ANNUITY COVERAGE AND FIND THIS COVERAGE SUITABLE FOR MY NEEDS.
Signed at: City: State: Date:
----------------------------------------------------------------------------------------------------------
Owner(s): Annuitant (if not Owner):
----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
11. AGENT Do you have any reason to believe the annuity for will replace or change any existing annuity or life
INFORMATION insurance? [_] No [_] Yes
I HAVE REVIEWED THE APPLICANT'S EXISTING ANNUITY COVERAGE AND FIND THIS COVERAGE IS SUITABLE FOR HIS/HER
NEEDS.
Registered Representative/ Licensed
Agent Name (please print): Signature:
----------------------------------------------------------------------------------------------------------
Phone No.: SS#/TIN [_][_][_]-[_][_]-[_][_][_][_] [_] [_] A [_] B [_] C
--------------------------------------
PFL Life Agent #:
----------------------------------------------------------------------------------------------------------
Firm Name:
----------------------------------------------------------------------------------------------------------
Firm Address:
----------------------------------------------------------------------------------------------------------
</TABLE>
VA-APP R799 B
<PAGE>
EXHIBIT (8)(c)
--------------
AMENDMENT TO PARTICIPATION AGREEMENT
<PAGE>
AMENDED
-------
SCHEDULE A
----------
EFFECTIVE JUNE 1, 1999
Account(s), Policy(ies) and Portfolio(s) Subject
To the Participation Agreement
Among
Endeavor Series Trust,
Endeavor Management Company,
And
PFL Life Insurance Company
Accounts: PFL Endeavor Variable Annuity Account
- --------
AUSA Endeavor Variable Annuity Account
Peoples Benefit Life Insurance Company
Separate Account V
Peoples Benefit Life Insurance Company
Separate Account C
PFL Endeavor Variable Life Account
PFL Life Variable Annuity Account C
Policies: The Endeavor Variable Annuity
- --------
The Endeavor Platinum Variable Annuity
The AUSA Endeavor Variable Annuity
The Advisor's Edge Variable Annuity
The Endeavor Variable Life
The Endeavor Generations Plus Variable Annuity
Portfolios: Endeavor Asset Allocation
- ----------
Endeavor Money Market
T. Rowe Price Equity Income
T. Rowe Price Growth Stock
T. Rowe Price International Stock
Endeavor Value Equity
Endeavor Opportunity Value
Endeavor Enhanced Index
Dreyfus U.S. Government Securities
Dreyfus Small Cap Value
Endeavor Select 50
Endeavor High Yield
Endeavor Janus Growth Portfolio
Approved:
--------
Endeavor Management Co. PFL Life Insurance Company
By: /s/ Vincent J. McGuinness, By: /s/ William L. Busler
------------------------------ -------------------------
Vincent J. McGuinness, Jr. William L. Busler
Title: President Title: President
---------------------------- ----------------------
Date: June 24, 1999 Date: June 24, 1999
------------------------------ -----------------------
<PAGE>
AUSA Life Insurance Company, Inc. Endeavor Series Trust
By: /s/ William L. Busler By: /s/ Vincent J. McGuinness, Jr.
---------------------- -------------------------------
William L. Busler Vincent J. McGuinness, Jr.
Title: Vice President Title: President
------------------- ----------------------------
Date: June 24, 1999 Date: June 24, 1999
-------------------- -----------------------------
Peoples Benefit Life Insurance Company
By: /s/ Larry N. Norman
----------------------
Title: Vice President
-------------------
Date: June 24, 1999
--------------------
2
<PAGE>
EXHIBIT (9)
-----------
OPINION AND CONSENT OF COUNSEL
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
June 7, 1999
PFL Life Insurance Company
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499-0001
Dear Sir/Madam:
With reference to the Registration Statement on Form N-4 by PFL Life Insurance
Company and PFL Life Variable Annuity Account C with the Securities and Exchange
Commission covering extra credit variable annuity contracts, I have examined
such documents and such law as I considered necessary and appropriate, and on
the basis of such examination, it is my opinion that:
1. PFL Life Insurance Company is duly organized and validly existing under the
laws of the State of Iowa and has been duly authorized to issue immediate
variable annuity contracts by the Department of Insurance of the State of
Iowa.
2. PFL Variable Annuity Account C is a duly authorized and existing separate
account established pursuant to the provisions of Section 508A.1 of the
Iowa Insurance Code.
3. The Generations Plus Variable Annuity Contracts, when issued as
contemplated by said Form N-4 Registration Statement, will constitute
legal, validly issued and binding obligations of PFL Life Insurance
Company.
I hereby consent to the filing of this opinion as an exhibit to said N-4
Registration Statement.
Very truly yours,
PFL LIFE INSURANCE COMPANY
/s/ Frank A. Camp
Frank A. Camp
Division General Counsel
Financial Markets Division
<PAGE>
EXHIBIT (10)(b)
---------------
OPINION AND CONSENT OF ACTUARY
<PAGE>
[LETTERHEAD OF PFL LIFE INSURANCE COMPANY APPEARS HERE]
June 7, 1999
PFL Life Insurance Company
4333 Edgewood Road NE
Cedar Rapids, Iowa 52499-0001
Re: PFL Life Variable Annuity Account C Registration on Form N-4
SEC File No. 333-_______
Dear Sir/Madam:
With regard to the above registration statement, I have examined such documents
and made such inquiries as I have deemed necessary and appropriate, and on the
basis of such examination, have the following opinions:
Fees and charges deducted under the PFL Endeavor Generations Plus Variable
Annuity policies are those deemed necessary to appropriately reflect:
(1) the expenses incurred in the acquisition and distribution of the Policies,
(2) the expenses associated with the development and servicing of the
policies,
(3) the assumption of certain risks arising from the operation and management
of the Policies and that provides for a reasonable margin of profit.
Fees and charges assessed include:
(i) Service Charge and Administrative Charge
(ii) Contingent Deferred Sales Change (Surrender Charge)
(iii) Mortality and Expense Risk Free (M & E)
(iv) Taxes (including Premium and other Taxes if applicable)
The magnitude of each of the individual charges listed above in (i) through (iv)
is established in the pricing of the PFL Endeavor Generations Plus Variable
Annuity, to achieve a reasonable Return on Investment (ROI), which is within the
range of industry practice with respect to comparable variable annuity products.
<PAGE>
PFL Life Insurance Company
Page 2
June 7, 1999
In the process of determining the reasonable ROI, each individual charge is also
established within the reasonable range of industry practice. For example, in
conjunction with the pricing process the company has analyzed publicly available
information pertaining to similar industry products, taking into consideration
such factors as current charge levels, the existence of charge level guarantees,
and guaranteed annuity rates. The methodology and results of the comparative
surveys included in this analysis are maintained at the company's administrative
offices.
Except by coincidence, it is not expected that actual charges assessed in a
given year would exactly offset actual expenses incurred. Acquisition expenses
(as well as major product and/or systems development expenses) are incurred "up
front" and recovered, with a reasonable profit margin, through future years'
charges. In addition, the company cannot increase certain charges under the
Policies in the pricing process.
Therefore, in my opinion, the fees and charges deducted under the Policies, in
the aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the company.
I hereby consent to the use of this opinion, which is included as an Exhibit to
the Registration Statement.
/s/ Calvin R. Birkey
- ---------------------------
Calvin R. Birkey, FSA, MAAA
Managing Actuary
PFL Life Insurance Company
