<PAGE>
Policy Number SPECIMEN
Insured JOHN DOE
Initial Specified Amount $100,000 Date of Issue May 1, 2000
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
A Stock Company Home Office Location: 120 Madison Street, Suite 1700
Syracuse, New York 13202
Administrator Mailing Address: The Lincoln National Life Insurance Company
350 Church Street
Hartford, CT 06103-1106
Lincoln Life & Annuity Company of New York ("Lincoln New York") agrees to pay
the Death Benefit Proceeds to the Beneficiary upon receipt of due proof of the
Insured's death during the continuance of the policy. Such payment shall be made
as provided under GENERAL PROVISIONS, PAYMENT OF PROCEEDS. Lincoln New York
further agrees to pay the Surrender Value to the Owner upon surrender of the
policy.
RIGHT TO EXAMINE THE POLICY. The policy may be returned to the insurance agent
through whom it was purchased or to Lincoln New York within 10 days after
receipt of the policy (60 days after its receipt where required by law for
policies issued in replacement of other insurance). During this period (the
"Right-to-Examine Period"), any premium paid will be placed in the Money Market
Fund and, if the policy is so returned, it will be deemed void from the Date of
Issue and Lincoln New York will refund all premium paid. If the policy is not
returned, the premium payment will be processed as set forth in PREMIUM AND
REINSTATEMENT PROVISIONS, ALLOCATION OF NET PREMIUM PAYMENTS.
ANY BENEFITS AND VALUES PROVIDED BY THE POLICY BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.
THE DEATH BENEFIT PROCEEDS ON THE DATE OF ISSUE EQUAL THE INITIAL SPECIFIED
AMOUNT OF THE POLICY. THEREAFTER, THE DEATH BENEFIT PROCEEDS MAY VARY UNDER THE
CONDITIONS DESCRIBED UNDER INSURANCE COVERAGE PROVISIONS. THE DURATION OF
COVERAGE IS VARIABLE AND MAY INCREASE OR DECREASE BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT.
The policy is issued and accepted subject to the terms set forth on the
following pages, which are made a part of the policy. In consideration of the
application and the payment of premiums as provided, the policy is executed by
Lincoln New York as of the Date of Issue.
/s/ Joanne Collins
Registrar PRESIDENT
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Non-Participating Variable life insurance payable upon death of the Insured.
Adjustable Death Benefit.
Surrender Value payable upon surrender of the
policy.
Flexible premiums payable to when the Insured reaches Age 100.
Investment results reflected in policy benefits.
Premium Payments and Supplementary Coverages as shown in the
Policy Specifications.
LN680 NY 1
<PAGE>
<TABLE>
TABLE OF CONTENTS
Page*
<S> <C>
Policy Specifications...........................................................................................3
Schedule 1: Surrender Charges...................................................................................5
Schedule 2: Expense Charges and Fees............................................................................6
Schedule 3: Table of Guaranteed Maximum Cost of Insurance Rates Per $1,000......................................7
Schedule 4: Corridor Percentages Table..........................................................................8
Definitions.....................................................................................................9
Premium and Reinstatement Provisions............................................................................11
Ownership, Assignment and Beneficiary Provisions................................................................13
Variable Account Provisions.....................................................................................14
Policy Values Provisions........................................................................................15
Transfer Privilege Provision....................................................................................17
Optional Sub-Account Allocation Programs.......................................................................18
Nonforfeiture and Surrender Value Provisions....................................................................18
Loan Provisions.................................................................................................19
Insurance Coverage Provisions...................................................................................20
General Provisions..............................................................................................22
</TABLE>
Followed by Optional Methods of Settlement and Any Riders
*Page 4 is intentionally "blank."
LN680 NY 2
<PAGE>
POLICY SPECIFICATIONS
Policy Number SPECIMEN
Insured JOHN DOE
Initial Specified Amount $100,000 Date of Issue MAY 1, 2000
Minimum Specified Amount $100,000 Issue Age 35
Monthly Anniversary Day 15 Premium Class STANDARD
LN680 FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
BENEFIT AMOUNT: See Initial Specified Amount
DEATH BENEFIT OPTION: Death Benefit Option is 1. (See INSURANCE COVERAGE
PROVISIONS.)
PREMIUM PAYMENTS: Initial premium paid with application $715.00
Planned Premium $715.00
Additional premium payments may vary by frequency or
amount.
PAYMENT MODE: ANNUALLY
NO LAPSE PREMIUM: A payment of at least $52.61 is due as of the Date of
Issue and each Monthly Anniversary Day during the
first 10 policy years thereafter to guarantee the
policy will not lapse during those years. All or a
portion of the remaining monthly premiums can be paid
in advance at any time. (For example, 12 times this
amount could be paid at the beginning of a Policy
Year to satisfy the requirements for that Policy Year.
The No Lapse Provision applies to the first 10
Policy Years only. See PREMIUM AND REINSTATEMENT
PROVISIONS, No Lapse Provision.)
NOTE: Except during years when the No Lapse Provision is in effect, the
policy will terminate before the Insured reaches Age 100 if the
actual premiums paid and investment experience are insufficient to
continue coverage to such a date. Crediting of additional interest is
not guaranteed and, subject to the guaranteed minimum rate. Lincoln
New York has the right to change the amount of interest credited and
the amount of Cost of Insurance or other expense charges deducted
which may require more premium to be paid than was illustrated, or
the Accumulation Values may be less than those illustrated.
UNDER FEDERAL LAW, THIS POLICY MAY NOT QUALIFY AS LIFE INSURANCE
AFTER THE INSURED REACHES AGE 100 AND MAY BE SUBJECT TO ADVERSE TAX
CONSEQUENCES. A TAX ADVISOR SHOULD BE CONSULTED PRIOR TO THE
CONTINUATION OF THE POLICY AFTER THE INSURED REACHES AGE 100.
Limits on Allocation of Net Premium Payments: All allocations of Net Premium
Payments must be made in whole percentages and in aggregate must total 100%.
Premium Payments will be allocated net of the Premium Load specified in SCHEDULE
2.
Limits on Transfers from the Fixed Account: Transfers from the Fixed Account
shall be made only within the 30 day period after an anniversary of the Date of
Issue. The amount of all such transfers in any such 30 day period shall not
exceed the lesser of: (a) 25% of the Fixed Account Value as of that Policy
Anniversary, or (b) $250,000. (See TRANSFER PRIVILEGE PROVISION.)
(Continued on page 3.1)
LN680 NY 3
<PAGE>
POLICY SPECIFICATIONS
Policy Number SPECIMEN
Insured JOHN DOE
Initial Specified Amount $100,000 Date of Issue MAY 1, 2000
Minimum Specified Amount $100,000 Issue Age 35
Monthly Anniversary Day 15 Premium Class STANDARD
OWNER
The Insured
BENEFICIARY
Jane Doe, Wife, if surviving the Insured
LN680 NY 3.1
<PAGE>
This Page Intentionally Blank
<PAGE>
SCHEDULE 1: SURRENDER CHARGES
The charge assessed upon full surrender of the policy will be the lesser of the
Surrender Charge shown or the then current Net Accumulation Value. Upon either a
partial surrender or a decrease in Specified Amount, no surrender charge is
applied. An additional surrender charge table will apply to each increase in
Specified Amount permitted by Lincoln New York. The additional table will apply
as of the date of the increase.
<TABLE>
<CAPTION>
SURRENDER CHARGE AS OF
POLICY YEAR BEGINNING OF POLICY YEAR
----------- ------------------------
<S> <C>
1 $2,450.60
2 $2,450.60
3 $2,367.70
4 $2,281.60
5 $2,192.20
6 $2,099.50
7 $2,003.10
8 $1,903.10
9 $1,799.30
10 $1,691.40
11 $1,579.40
12 $1,462.80
13 $1,341.50
14 $1,215.20
15 $1,083.80
16 and thereafter $0.00
</TABLE>
The procedures for full and partial surrenders and the imposition of surrender
charges for full surrenders are described in greater detail in NONFORFEITURE AND
SURRENDER VALUE PROVISIONS.
A transaction fee of the lesser of $25 or 2% of the amount surrendered is
assessed for each partial surrender and will be processed as set forth in
NONFORFEITURE AND SURRENDER VALUE PROVISIONS, PARTIAL SURRENDER.
LN680 NY 5
<PAGE>
SCHEDULE 2: EXPENSE CHARGES AND FEES
PREMIUM LOAD. Lincoln New York will deduct a Premium Load of 5.0% from each
premium payment.
MONTHLY ADMINISTRATIVE FEE. A Monthly Deduction is made on each Monthly
Anniversary Day from the Net Accumulation Value. (SEE POLICY VALUES PROVISIONS,
MONTHLY DEDUCTION.) The Monthly Deduction includes an administrative fee charge,
Cost of Insurance charges and any charges for supplemental riders or optional
benefits.
The monthly administrative fee consists of: (a) a fee of $10.00 per month during
each Policy Year; (b) a monthly charge per $1,000 of Initial Specified Amount
for the first 24 months from the Date of Issue, and (c) a monthly charge per
$1,000 for any increase in Specified Amount for the 24 months following the date
of increase. The charge(s) described in (b) and (c) will be determined using the
table below and will be based on the Insured's Age at the Date of Issue and at
the date of any increase in Specified Amount.
CHARGES AND FEES ASSOCIATED WITH THE VARIABLE SUB-ACCOUNTS. Lincoln New York
imposes a mortality and expense risk ("M&E") charge, which is calculated as a
percentage of the value of the Variable Sub-Accounts. The M&E charge is deducted
from each Variable Sub-Account at the end of each Valuation Period. This charge
is equal to an annual rate of .90% of a Variable Sub-Account's value during
Policy Years 1 through 19, and .20% during the 20th and later Policy Years.
Fund operating expenses may be deducted by each Fund as set forth in its
prospectus.
TRANSFER FEE. A transaction fee of $25 may be applied by Lincoln New York to
each transfer request in excess of 12 made during any Policy Year. A single
transfer request, either In Writing or by telephone, may consist of multiple
transactions.
<TABLE>
<CAPTION>
EXPENSE EXPENSE EXPENSE
CHARGE CHARGE CHARGE
AGE PER $1,000 AGE PER $1,000 AGE PER $1,000
-------------------------------------- ---------------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
0-12 0.0158 46 0.0950 65 0.2158
13 0.0200 47 0.0992 66 0.2242
14 0.0242 48 0.1033 67 0.2325
15-30 0.0283 49 0.1075 68 0.2408
-------------------------------------- ---------------------------------- ---------------------------------------
31 0.0325 50 0.1117 69 0.2492
32 0.0367 51 0.1158 70 0.2575
33 0.0408 52 0.1200 71 0.2658
34 0.0450 53 0.1242 72 0.2742
35 0.0492 54 0.1283 73 0.2825
-------------------------------------- ---------------------------------- ---------------------------------------
36 0.0533 55 0.1325 74 0.2908
37 0.0575 56 0.1408 75 0.2992
38 0.0617 57 0.1492 76 0.3200
39 0.0658 58 0.1575 77 0.3408
40 0.0700 59 0.1658 78 0.3617
-------------------------------------- ---------------------------------- ---------------------------------------
41 0.0742 60 0.1742 79 0.3825
42 0.0783 61 0.1825 80 0.4033
43 0.0825 62 0.1908 81+ 0.4242
44 0.0867 63 0.1992
45 0.0908 64 0.2075
-------------------------------------- ---------------------------------- ---------------------------------------
</TABLE>
LN680 NY 6
<PAGE>
SCHEDULE 3: TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
(MONTHLY RATES PER $1,000 OF NET AMOUNT AT RISK)
SPECIAL NOTE: The monthly Cost of Insurance Rate charged under the policy
varies based on the sex, Age, duration and premium class of
the person insured, but will not exceed the rates shown in
the table below. However, in determining the Guaranteed
Maximum Cost of Insurance Rates, Lincoln New York will add
to the rates below the amount of the Flat Extra Monthly
Insurance Cost, if any, shown in the POLICY SPECIFICATIONS.
If the person insured is in a rated premium class, the
Guaranteed Maximum Cost of Insurance Rates will be those in
the table multiplied by the Risk Factor, if any, shown in
the POLICY SPECIFICATIONS. The rates below are based on the
1980 CSO Tables (Male or Female as appropriate).
<TABLE>
<CAPTION>
MALE FEMALE MALE FEMALE MALE FEMALE
MONTHLY MONTHLY MONTHLY MONTHLY MONTHLY MONTHLY
AGE RATE RATE AGE RATE RATE AGE RATE RATE
----------------------------------- ----------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.34845 0.24089 35 0.17586 0.13752 70 3.30338 1.84590
1 0.08917 0.07251 36 0.18670 0.14669 71 3.62140 2.02325
2 0.08251 0.06750 37 0.20004 0.15752 72 3.98666 2.24419
3 0.08167 0.06584 38 0.21505 0.17003 73 4.40599 2.51548
4 0.07917 0.06417 39 0.23255 0.18503 74 4.87280 2.83552
----------------------------------- ----------------------------------- -----------------------------------
5 0.07501 0.06334 40 0.25173 0.20171 75 5.37793 3.19685
6 0.07167 0.06084 41 0.27424 0.22005 76 5.91225 3.59370
7 0.06667 0.06000 42 0.29675 0.23922 77 6.46824 4.01942
8 0.06334 0.05834 43 0.32260 0.25757 78 7.04089 4.47410
9 0.06167 0.05750 44 0.34929 0.27674 79 7.64551 4.97042
----------------------------------- ----------------------------------- -----------------------------------
10 0.06084 0.05667 45 0.37931 0.29675 80 8.30507 5.52957
11 0.06417 0.05750 46 0.41017 0.31677 81 9.03761 6.17118
12 0.07084 0.06000 47 0.44353 0.33761 82 9.86724 6.91414
13 0.08251 0.06250 48 0.47856 0.36096 83 10.80381 7.77075
14 0.09584 0.06667 49 0.51777 0.38598 84 11.82571 8.72632
----------------------------------- ----------------------------------- -----------------------------------
15 0.11085 0.07084 50 0.55948 0.41350 85 12.91039 9.76952
16 0.12585 0.07501 51 0.60870 0.44270 86 14.03509 10.89151
17 0.13919 0.07917 52 0.66377 0.47523 87 15.18978 12.08770
18 0.14836 0.08167 53 0.72636 0.51276 88 16.36948 13.35774
19 0.15502 0.08501 54 0.79730 0.55114 89 17.57781 14.70820
----------------------------------- ----------------------------------- -----------------------------------
20 0.15836 0.08751 55 0.87326 0.59118 90 18.82881 16.15259
21 0.15919 0.08917 56 0.95591 0.63123 91 20.14619 17.71416
22 0.15752 0.09084 57 1.04192 0.66961 92 21.57655 19.43814
23 0.15502 0.09251 58 1.13378 0.70633 93 23.20196 21.40786
24 0.15169 0.09501 59 1.23235 0.74556 94 25.28174 23.83051
----------------------------------- ----------------------------------- -----------------------------------
25 0.14752 0.09668 60 1.34180 0.78979 95 28.27411 27.16158
26 0.14419 0.09918 61 1.46381 0.84488 96 33.10677 32.32378
27 0.14252 0.10168 62 1.60173 0.91417 97 41.68475 41.21204
28 0.14169 0.10501 63 1.75809 1.00267 98 58.01259 57.81394
29 0.14252 0.10835 64 1.93206 1.10539 99 83.33333 83.33333
----------------------------------- ----------------------------------- -----------------------------------
30 0.14419 0.11251 65 2.12283 1.21731
31 0.14836 0.11668 66 2.32623 1.33511
32 0.15252 0.12085 67 2.54312 1.45461
33 0.15919 0.12502 68 2.77350 1.57247
34 0.16669 0.13168 69 3.02328 1.69955
----------------------------------- -----------------------------------
</TABLE>
LN680 NY 7
<PAGE>
SCHEDULE 4: CORRIDOR PERCENTAGES TABLE
As of the Date of Issue of this policy the formula in effect to determine the
amount under item (ii) of INSURANCE COVERAGE PROVISIONS; DEATH BENEFIT PROCEEDS
is based on a percent of the Accumulation Value as determined from the following
table:
<TABLE>
<CAPTION>
CORRIDOR CORRIDOR
AGE PERCENTAGE AGE PERCENTAGE
------------ ------------ ------------ ------------
<S> <C> <C> <C>
0-40 250% 70 115%
41 243 71 113
42 236 72 111
43 229 73 109
44 222 74 107
------------ ------------ ------------ ------------
45 215 75 105
46 209 76 105
47 203 77 105
48 197 78 105
49 191 79 105
------------ ------------ ------------ ------------
50 185 80 105
51 178 81 105
52 171 82 105
53 164 83 105
54 157 84 105
------------ ------------ ------------ ------------
55 150 85 105
56 146 86 105
57 142 87 105
58 138 88 105
59 134 89 105
------------ ------------ ------------ ------------
60 130 90 105
61 128 91 104
62 126 92 103
63 124 93 102
64 122 94 101
------------ ------------ ------------ ------------
65 120 95 100
66 119 96 100
67 118 97 100
68 117 98 100
69 116 99 100
------------ ------------ ------------ ------------
</TABLE>
LN680 NY 8
<PAGE>
DEFINITIONS
ACCUMULATION VALUE. The sum of (i) the Fixed Account value, (ii) the Variable
Account value, and (iii) the Loan Account value under the policy.
ADMINISTRATOR MAILING ADDRESS. The Administrator Mailing Address for the policy
is indicated on the front cover.
AGE. The age of the Insured at her or his nearest birthday.
COST OF INSURANCE. See POLICY VALUES PROVISIONS, COST OF INSURANCE.
COST OF INSURANCE RATES. This term is defined in SCHEDULE 3.
DATE OF ISSUE. The date from which Policy Years, Policy Anniversaries, and Age
are determined. The Date of Issue is shown in the POLICY SPECIFICATIONS.
DEATH BENEFIT PROCEEDS. The amount payable to the Beneficiary upon death of the
Insured in accordance with (a) the Death Benefit Option elected, and (b) GENERAL
PROVISIONS, PAYMENT OF PROCEEDS. The two Death Benefit Options are described in
INSURANCE COVERAGE PROVISIONS, Death Benefit Options.
DUE PROOF OF DEATH. A certified copy of an official death certificate, a
certified copy of a decree of a court of competent jurisdiction as to the
finding of death, or any other proof of death satisfactory to Lincoln New York.
FIXED ACCOUNT. The account under which principal is guaranteed and interest is
credited at a rate of not less than 4% per year. (See POLICY VALUES PROVISION,
INTEREST CREDITED UNDER FIXED ACCOUNT.) Fixed Account assets are general assets
of Lincoln New York and are held in Lincoln New York's general account.
FUND(S). The Funds in the Variable Sub-Account portfolios to which the Owner may
allocate Net Premium Payments or transfers and in the shares of which such
allocations shall be invested. Each Fund is an open-end management investment
company registered under the 1940 Act.
GRACE PERIOD. See PREMIUM AND REINSTATEMENT PROVISIONS, GRACE PERIOD.
IN WRITING. With respect to any notice to Lincoln New York, this term means a
written form satisfactory to Lincoln New York and received by it at the
Administrator Mailing Address. With respect to any notice by Lincoln New York to
the Owner, any assignee or other person, this term means written notice by
ordinary mail to such person at the most recent address in Lincoln New York's
records.
LOAN ACCOUNT. The account in which policy indebtedness (outstanding loans and
interest) accrues once it is transferred out of the Fixed and/or Variable
Sub-Accounts. The Loan Account is part of Lincoln New York's general account.
MONTHLY ANNIVERSARY DAY. The Day of the month, as shown in the POLICY
SPECIFICATIONS, when Lincoln New York makes the Monthly Deduction, or the next
Valuation Day if that day is not a Valuation Day or is nonexistent for that
month.
LN680 NY 9
<PAGE>
DEFINITIONS (CONTINUED)
MONTHLY DEDUCTION. The Monthly Deduction is made from the Net Accumulation
Value; this deduction includes the Cost of Insurance, an administrative expense
charge and charges for supplemental riders or benefits, if applicable. (See
POLICY VALUES PROVISIONS, MONTHLY DEDUCTION.) The first Monthly Deduction is
made as of the Date of Issue. Monthly Deductions occur thereafter on each
Monthly Anniversary Day.
MORTALITY AND EXPENSE RISK (M&E) RATE. A daily rate assessed by Lincoln New York
as a percentage of the value of the Variable Sub-Accounts for its assumption of
mortality and expense risks. The M&E Rate is specified in SCHEDULE 2.
NET ACCUMULATION VALUE. The Accumulation Value less the Loan Account Value.
NET PREMIUM PAYMENT. The portion of a premium payment, after deduction of the
Premium Load as specified in SCHEDULE 2, available for allocation to the Fixed
and/or Variable Sub-Accounts.
1940 ACT. The Investment Company Act of 1940, as amended.
NO LAPSE PREMIUM. The premium required to be paid to guarantee the policy will
not lapse during the first 10 policy years. (See PREMIUM AND REINSTATEMENT
PROVISIONS, No Lapse Provision.)
NYSE. New York Stock Exchange.
POLICY ANNIVERSARY. The day of the year the policy was issued, or the next
Valuation Day if that day is not a Valuation Day or is nonexistent for that
year.
POLICY YEAR. Each twelve-month period, beginning on the Date of Issue, during
which the policy is in effect.
RIGHT-TO-EXAMINE PERIOD. See RIGHT TO EXAMINE THE POLICY, on the Cover of the
policy.
SEC. The Securities and Exchange Commission.
SPECIFIED AMOUNT. The Specified Amount is shown in the Policy Specifications or
in subsequent Policy Specifications, if later changed. The Specified Amount is
chosen by the Owner and used in determining the amount of the Death Benefit
Proceeds. It may be increased or decreased as described in INSURANCE COVERAGE
PROVISIONS; CHANGES IN SPECIFIED AMOUNT AND DEATH BENEFIT OPTIONS.
SUB-ACCOUNT. The investment options available under this policy, including
Variable Sub-Accounts and the Fixed Account.
SURRENDER VALUE. See NONFORFEITURE AND SURRENDER VALUE PROVISIONS, SURRENDER
VALUE.
VALUATION DAY. Any day on which the NYSE is open for business, except a day
during which trading on the NYSE is restricted or on which an SEC-determined
emergency exists or on which the valuation or disposal of securities is not
reasonably practicable, as determined under applicable law.
VALUATION PERIOD. The period beginning immediately after the close of business
on a Valuation Day and ending at the close of business on the next Valuation
Day.
LN680 NY 10
<PAGE>
DEFINITIONS (CONTINUED)
VARIABLE LIFE ACCOUNT M. The Lincoln Life & Annuity Company of New York (LLANY)
Flexible Premium Variable Life Account consisting of all Variable Sub-Account(s)
invested in shares of the Fund(s). Variable Account assets are separate account
assets of Lincoln New York, the investment performance of which is kept separate
from that of the general assets of Lincoln New York. Variable Account assets are
not chargeable with the general liabilities of Lincoln New York.
VARIABLE ACCUMULATION UNIT. A unit of measure used to calculate the value of a
Variable Sub-Account.
PREMIUM AND REINSTATEMENT PROVISIONS
PREMIUMS. The initial premium must be paid for coverage to be effective (see
INSURANCE COVERAGE PROVISIONS, DATE OF COVERAGE). Additional premium may be
paid, with the consent of Lincoln New York and subject to the requirements under
ADDITIONAL PREMIUMS, at any time before the Insured reaches Age 100. There is no
minimum premium requirement. However, except as provided under the NO LAPSE
PROVISION, the policy will lapse subject to the terms set forth in the GRACE
PERIOD if the Net Accumulation Value is insufficient to pay a Monthly Deduction.
PAYMENT OF PREMIUM. The initial premium is payable at the Administrator Mailing
Address or to an authorized representative of Lincoln New York. All subsequent
premium payments are payable at the Administrator Mailing Address.
PLANNED PREMIUM. If the Owner chooses to make periodic premium payments, Lincoln
New York shall send premium reminder notices In Writing for the amounts and with
the frequency elected by the Owner. Changes in the amounts or frequency of such
payments will be subject to the consent of Lincoln New York.
ADDITIONAL PREMIUM. In addition to any planned premium, it is possible to make
additional premium payments of no less than $100 at any time before the Insured
reaches Age 100. Lincoln New York reserves the right to limit the amount or
frequency of any such additional premium payments. If a payment of any
additional premium would increase the difference between the Death Benefit
Proceeds and the Accumulation Value, Lincoln New York may reject the additional
premium payment unless satisfactory evidence of insurability is furnished to
Lincoln New York. If a payment of additional premium would cause the policy to
cease to qualify as insurance for federal income tax purposes, Lincoln New York
may reject all or such excess portion of the additional premium. Any additional
payment received by Lincoln New York shall be applied to repay any outstanding
loans and to that extent shall not be treated as premium, unless Lincoln New
York is specifically instructed otherwise In Writing by the Owner.
ALLOCATION OF NET PREMIUM PAYMENTS. Net Premium Payments may be allocated to the
Fixed and/or Variable Sub-Accounts under the policy subject to POLICY
SPECIFICATIONS, LIMITS ON ALLOCATION OF NET PREMIUM PAYMENTS. All Net Premium
Payments received before the end of the Right-to-Examine Period shall be
allocated upon the expiration of the Right-to-Examine Period in accordance with
the allocation percentages specified in the application. Subsequent Net Premium
Payments shall be allocated on the same basis as the most recent Net Premium
Payment unless Lincoln New York is otherwise instructed In Writing.
LN680 NY 11
<PAGE>
PREMIUM AND REINSTATEMENT PROVISIONS (CONTINUED)
NO LAPSE PROVISION. If elected on the application, this policy includes a No
Lapse Provision during the first 10 policy years. The No Lapse Premium due on or
before each Monthly Anniversary Day is specified in the POLICY SPECIFICATIONS.
As long as the sum of all premium payments less any indebtedness and partial
surrenders is at least equal to the sum of the No Lapse Premiums due since the
Date of Issue, the policy will not lapse during those years even if the Net
Accumulation Value is insufficient to meet the Monthly Deductions.
A period of 61 days will be granted for payment of the No Lapse Premium if on
any Monthly Anniversary Day it is determined that the No Lapse Premium
requirement has not been met. At least 31 days before the end of that period,
Lincoln New York will notify the Owner of the amount of premium necessary to
maintain the No Lapse Provision.
The No Lapse Provision will terminate at the beginning of the 11th Policy Year,
or sooner if (a) the No Lapse Premium requirements are not met, (b) there is an
increase in the Specified Amount, or (c) there is a change in the Death Benefit
Option. Once the No Lapse Provision is terminated, it cannot be reinstated. The
No Lapse Provision applies for the first 10 policy years only. Continuing to pay
the No Lapse Premium amount beyond the expiration of the No Lapse Provision does
not guarantee that the policy will not lapse.
COVERAGE DATE. The Planned Premium amount as shown in the Policy Specifications
page, payable in accordance with the payment mode specified, may not continue
the policy in force until the Policy Anniversary after the Insured reaches Age
100 even if the amount is paid as scheduled. The duration for which the policy
will continue will depend upon:
1. The amount, timing, and frequency of premium payment;
2. Changes in the Specified Amount and Death Benefit options;
3. Changes in current interest credits and insurance costs;
4. Changes in deductions for riders, if any; and
5. Partial Surrenders and loans.
GRACE PERIOD. Except as provided under the NO LAPSE PROVISION, if on any Monthly
Anniversary Day the Net Accumulation Value is insufficient to cover the current
Monthly Deduction, or if the amount of indebtedness exceeds the Accumulation
Value less the surrender charge(s), Lincoln New York shall send a notice In
Writing to the Owner and any assignee of record. Such notice shall state the
amount which must be paid to avoid termination. The Net Premium Payment due will
be at least equal to (a) the amount by which the Monthly Deduction Amount
exceeds the Net Accumulation Value, or (b) the amount by which the indebtedness
exceeds the Accumulation Value less the surrender charge(s), and (c) enough
additional premium to maintain the policy in force for at least two months.
If the amounts set forth in the notice are not paid to Lincoln New York on or
before the day that is the later of (a) 31 days after the date of mailing of the
notice, and (b) 61 days after the Monthly Anniversary Day with respect to which
such notice applies (together, the "Grace Period"), then the policy shall
terminate. All coverage under the policy will then lapse without value.
REINSTATEMENT. After the policy has lapsed due to the failure to make a
necessary payment before the end of an applicable Grace Period, the policy may
be reinstated provided (a) the policy has not been surrendered, (b) there is an
application for reinstatement In Writing, (c) satisfactory evidence of
insurability is furnished to Lincoln New York, (d) enough premium is paid to
keep the policy in force for at least 2 months, and (e) any accrued loan
interest is paid. The reinstated policy shall be effective as of the
LN680 NY 12
<PAGE>
PREMIUM AND REINSTATEMENT PROVISIONS (CONTINUED)
Monthly Anniversary Day after the date on which Lincoln New York approves the
application for reinstatement. The Net Premium Payment and any loan repayment
upon reinstatement will be allocated as set forth under ALLOCATION OF NET
PREMIUM PAYMENTS and LOAN PROVISIONS, LOAN ACCOUNT and LOAN REPAYMENT. Upon
reinstatement, the surrender charges assessed at the time of lapse will be
credited to the Accumulation Value (in proportion to the then current allocation
of Net Premium Payments), and the surrender charges set forth in SCHEDULE 1 will
be reinstated as of the Policy Year in which the policy lapsed.
OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS
OWNER. The Owner on the Date of Issue will be the person designated in the
POLICY SPECIFICATIONS. If no person is designated as Owner, the Insured will be
the Owner.
RIGHTS OF OWNER. While the Insured is alive except as provided below and subject
to any applicable state law, the Owner may exercise all rights and privileges
under the policy including the right to: (a) release or surrender the policy to
Lincoln New York, (b) agree with Lincoln New York to any change in or amendment
to the policy, (c) transfer all rights and privileges to another person, (d)
change the Beneficiary, and (e) assign the policy.
The Owner may exercise any rights and privileges under the policy without the
consent, subject to any applicable state law, of any designated Beneficiary if
the Owner has reserved the right to change the Beneficiary. If there is an
assignment of the policy recorded with Lincoln New York, the Owner may exercise
the rights and privileges under the policy only with the consent of the recorded
assignee.
Unless provided otherwise, if the Owner is a person other than the Insured and
dies before the Insured, all of the rights and privileges of the Owner under the
policy shall vest in the Owner's executors, administrators or assigns.
TRANSFER OF OWNERSHIP. The Owner may transfer all rights and privileges of the
Owner. On the date of transfer, the transferee shall become the Owner and shall
have all the rights and privileges of the Owner. The Owner may revoke any
transfer before the date of transfer.
A transfer, or a revocation of transfer, shall be In Writing and shall take
effect the later of the date of transfer specified by the Owner or the date it
is recorded by Lincoln New York, and any payment made or any action taken or
allowed by Lincoln New York before such time in reliance on the recorded
ownership of the policy shall be without prejudice to Lincoln New York.
Unless otherwise directed by the Owner, with the consent of any assignee
recorded with Lincoln New York, a transfer shall not affect the interest of any
Beneficiary designated before the date of transfer.
ASSIGNMENT. Assignment of the policy shall be In Writing and shall be effective
when Lincoln New York receives it. Lincoln New York shall not be responsible for
the validity or sufficiency of any assignment. An assignment of the policy shall
remain effective only so long as the assignment remains in force. If an
assignment so provides, it shall transfer the interest of any designated
transferee or of any Beneficiary if the Owner has reserved the right to change
the Beneficiary.
BENEFICIARY. The Beneficiary on the Date of Issue shall be the person designated
in the POLICY SPECIFICATIONS. Unless provided otherwise, the interest of any
Beneficiary who dies before the Insured shall vest in the Owner or the Owner's
executors, administrators or assigns.
CHANGE OF BENEFICIARY. The Beneficiary may be changed from time to time. Unless
provided otherwise,
LN680 NY 13
<PAGE>
OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS (CONTINUED)
the right to change the Beneficiary is reserved to the Owner. A request for
change of Beneficiary shall be In Writing, signed by the Owner and, if the right
to change the Beneficiary has not been reserved to the Owner, signed by the
existing Beneficiary. A change of Beneficiary shall be effective, retroactive to
the date of request, only when the change recorded by Lincoln New York, and any
payment made or any action taken or allowed by Lincoln New York before such time
in reliance on its records as to the identity of the Beneficiary shall be
without prejudice to Lincoln New York.
VARIABLE ACCOUNT PROVISIONS
VARIABLE ACCOUNT AND VARIABLE SUB-ACCOUNTS. Assets invested on a variable basis
are held in the separate account ("Variable Account") which is designated in the
Definitions provision of the policy. The separate account was established by a
resolution of Lincoln New York's Board of Directors as a "separate account"
under the insurance law of the State of New York, Lincoln New York's state of
domicile and is registered as a unit investment trust under the 1940 Act. The
assets of the Variable Account (except assets in excess of the reserves and
other contract liabilities of the Variable Account) shall not be chargeable with
liabilities arising out of any other business conducted by Lincoln New York and
the income, gains or losses from the Variable Account assets shall be credited
or charged against the Variable Account without regard to the income, gains or
losses of Lincoln New York. The Variable Account assets are owned and controlled
exclusively by Lincoln New York, and Lincoln New York is not a trustee with
respect to such assets.
The Variable Account is divided into Variable Sub-Accounts. The assets of each
Variable Sub-Account shall be invested fully and exclusively in shares of the
appropriate Fund for such Variable Sub-Account. The investment performance of
each Variable Sub-Account shall reflect the investment performance of the
appropriate Fund. For each Variable Sub-Account, Lincoln New York shall maintain
Variable Accumulation Units as a measure of the investment performance of the
Fund shares held in such Variable Sub-Account.
Subject to any vote by persons entitled to vote thereon under the 1940 Act,
Lincoln New York may elect to operate the Variable Account as a management
company instead of a unit investment trust under the 1940 Act or, if
registration under the 1940 Act is no longer required, to deregister the
Variable Account. In the event of such a change, Lincoln New York shall endorse
the policy to reflect the change and may take any other necessary or appropriate
action required to effect the change. Any changes in the investment policies of
the Variable Account shall first be approved by the New York Insurance
Commissioner and approved or filed, as required, in any other state or other
jurisdiction where the policy was issued.
INVESTMENTS OF THE VARIABLE SUB-ACCOUNTS. All amounts allocated or transferred
to a Variable Sub-Account will be used to purchase shares of the appropriate
Fund. Each Fund shall at all times be registered under the 1940 Act as an
open-end management investment company. The Funds available for investment and
for which Variable Sub-Accounts have been established as of the Date of Issue
are listed in the application for the policy. Lincoln New York, after due
consideration of appropriate factors, may add additional Funds at any time or
may eliminate or substitute Funds in accordance with FUND WITHDRAWAL AND
SUBSTITUTED SECURITIES. Any and all distributions made by a Fund will be
reinvested in additional shares of that Fund at net asset value. Deductions by
Lincoln New York from a Variable Sub-Account will be made by redeeming a number
of Fund shares at net asset value equal in total value to the amount to be
deducted.
LN680 NY 14
<PAGE>
VARIABLE ACCOUNT PROVISIONS (CONTINUED)
INVESTMENT RISK. Fund share values fluctuate, reflecting the risks of changing
economic conditions and the ability of a Fund's investment adviser or
sub-adviser to manage that Fund and anticipate changes in economic conditions.
As to the Variable Account assets, the Owner bears the entire investment risk of
gain or loss.
FUND WITHDRAWAL AND SUBSTITUTED SECURITIES. If a particular Fund ceases to be
available for investment by the Variable Account, or Lincoln New York determines
that further investment in the particular Fund is not appropriate in view of the
purposes of the Variable Account (including without limitation that it is not
appropriate in light of legal, regulatory or federal income tax considerations),
Lincoln New York may withdraw the particular Fund as a possible investment in
the Variable Account and may substitute shares of a new or different Fund for
shares of the withdrawn Fund. Lincoln New York shall obtain any necessary
regulatory or other approvals. Lincoln New York may make appropriate
endorsements to the policy to the extent reasonably required to reflect any
withdrawal or substitution.
POLICY VALUES PROVISIONS
ACCUMULATION VALUE. The Accumulation Value equals the sum of (i) the Fixed
Account value, (ii) the Variable Account value, and (iii) the Loan Account
value. At any point in time, therefore, the Accumulation Value reflects (a) Net
Premium Payments made, (b) the amount of any partial surrenders, (c) any
increases or decreases as a result of market performance in the Variable
Sub-Accounts, (d) interest credited under the Fixed Account, (e) interest
credited under the Loan Account, and (f) all expenses and fees as specified
under SCHEDULE 2.
FIXED ACCOUNT VALUE. The Fixed Account value, if any, with respect to the
policy, at any point in time, is equal to the sum of the Net Premium Payments
allocated or other amounts (net of any charges) transferred to the Fixed Account
plus interest credited to such account less the portion of the Monthly
Deductions applied to the Fixed Account and less any partial surrenders or
amounts transferred from the Fixed Account.
INTEREST CREDITED UNDER FIXED ACCOUNT. Lincoln New York will credit interest to
the Fixed Account daily. The interest rate applied to the Fixed Account will be
the greater of: (a) a compounded daily rate of 0.010746% (equivalent to a
compounded annual rate of 4%), or (b) a rate determined by Lincoln New York from
time to time. Such rate will be established on a prospective basis, and once
credited, such interest will be nonforfeitable.
LOAN ACCOUNT VALUE. The Loan Account value, if any, with respect to the policy,
is the amount of any outstanding loan(s), including any interest charged on the
loan(s). (See LOAN PROVISIONS, LOAN ACCOUNT.)
INTEREST RATE CREDITED ON LOAN ACCOUNT VALUE. The annual rate at which interest
is credited on the Loan Account Value will be 7%.
VARIABLE ACCOUNT VALUE. The Variable Account value, if any, with respect to the
policy, for any Valuation Period is equal to the sum of the then stated values
of all Variable Sub-Accounts under the policy. A Variable Accumulation Unit is a
unit of measure used in the calculation of the value of each Variable
Sub-Account. The stated value of each Variable Sub-Account is determined by
multiplying the number of Variable Accumulation Units, if any, credited or
debited to such Variable Sub-Account with respect to the policy by the Variable
Accumulation Unit Value of the particular Variable Sub-Account for such
Valuation Period.
LN680 NY 15
<PAGE>
POLICY VALUES PROVISIONS (CONTINUED)
VARIABLE ACCUMULATION UNIT VALUE. All or part of a Net Premium Payment allocated
or transferred to a Variable Sub-Account is converted into Variable Accumulation
Units. The number of units will be calculated by dividing each amount allocated,
transferred, distributed or redeemed by the Accumulation Unit Value of the
appropriate Variable Sub-Account at the end of the Valuation Period in which it
is received. The Accumulation Unit Value for each Variable Sub-Account was
initially established at $10.00. It may thereafter increase or decrese from on
Valuation Period to the next. The Variable Accumulation Unit Value for a
Variable Sub-Account for the later Valuation Period is determined as follows:
1. The total value of Fund shares held in the Variable Sub-Account is
calculated by multiplying the number of Fund shares owned by the Variable
Sub-Account at the end of the preceding Valuation Period by the net asset
value per share of the Fund at the end of the current Valuation Period and
adding any dividend or other distribution of the Fund made during the
Valuation Period; minus
2. The liabilities of the Variable Sub-Account at the end of the Valuation
Period; such liabilities include daily charges imposed on the Variable
Sub-Account and may include a charge or credit with respect to any taxes
paid or reserved for by Lincoln New York that Lincoln New York determines
result from the operations of the Variable Account; and
3. The difference between the values obtained under steps (1) and (2) is
divided by the number of Variable Accumulation Units for that Variable
Sub-Account outstanding at the beginning of the current Valuation Period.
The daily charges imposed on a Variable Sub-Account for any Valuation Period are
equal to the M&E charge multiplied by the number of calendar days in the
Valuation Period.
The Variable Accumulation Unit Value may increase or decrease from Valuation
Period to Valuation Period.
COST OF INSURANCE. The Cost of Insurance is determined monthly. Such cost is
calculated as (1), multiplied by the result of (2) minus (3), where:
(1) is the Cost of Insurance Rate as described in COST OF INSURANCE RATES,
(2) is the Death Benefit at the beginning of the policy month, divided by
1.0032737, and
(3) is the Accumulation Value at the beginning of the policy month prior to the
deduction for the monthly Cost of Insurance
COST OF INSURANCE RATES. The Cost of Insurance Rates are determined from time to
time by Lincoln New York based on its expectations of future mortality, Fixed
Account investment earnings, persistency, and expenses, and vary as set forth in
SCHEDULE 3. The actuarial formula used to make such determination has been filed
with the insurance supervisory official of the jurisdiction in which the policy
is delivered. A portion of such Cost of Insurance rates may represent a recovery
of expenses associated with the administration of the policy; such recovery may
be greater in the early policy years. Any change in Cost of Insurance Rates will
apply to all individuals of the same class as the Insured. The Cost of Insurance
Rates shall not exceed the amounts described in SCHEDULE 3.
MONTHLY DEDUCTION. Each month, on the Monthly Anniversary Day, Lincoln New York
will deduct the Monthly Deduction by withdrawing the amount from the Fixed and
Variable Sub-Accounts in proportion to
LN680 NY 16
<PAGE>
POLICY VALUES PROVISIONS (CONTINUED)
which the balances invested in such Fixed and Variable Sub-Accounts bear to the
Net Accumulation Value as of the date on which the deduction is made, unless
otherwise agreed In Writing by Lincoln Life and the Owner. The Monthly Deduction
for a policy month will be calculated as Charge (1) plus Charge (2) where:
CHARGE (1) is the Cost of Insurance (as described in COST OF INSURANCE) and the
cost of any supplemental riders or optional benefits, and
CHARGE (2) is the Monthly Administrative Fee as described under SCHEDULE 2.
BASIS OF COMPUTATIONS. The Cost of Insurance Rates are guaranteed to be no
greater than that calculated based on the applicable 1980 Commissioners Standard
Ordinary Mortality Table (Age nearest birthday).
All policy values are at least equal to that required by the jurisdiction in
which the policy is delivered. A detailed statement of the method of computing
values has been filed with the insurance supervisory official of that
jurisdiction.
TRANSFER PRIVILEGE PROVISION
TRANSFER PRIVILEGE. At any time while the policy is in force, other than during
the Right-to-Examine Period, the Owner has the right to transfer amounts among
the Fixed and Variable Sub-Accounts then available under the policy. All such
transfers are subject to the following provisions. Transfers may be made In
Writing. Transfer requests must be received at the Administrator Mailing Address
prior to the time of day set forth in the prospectus and provided the NYSE is
open for business, in order to be processed as of the close of business on the
date the request is received; otherwise, the transfer will be processed on the
next business day the NYSE is open for business. A single transfer request, In
Writing, may consist of multiple transactions.
Transfers from the Fixed Account are subject to the POLICY SPECIFICATIONS,
LIMITS ON TRANSFERS. Transfers to the Fixed Account will earn interest as
specified under POLICY VALUES PROVISIONS, INTEREST CREDITED UNDER FIXED ACCOUNT.
Transfers involving Variable Sub-Accounts will reflect the purchase or
cancellation of Variable Accumulation Units having an aggregate value equal to
the dollar amount being transferred to or from a particular Variable
Sub-Account. The purchase or cancellation of such units shall be made using
Variable Accumulation Unit values of the applicable Variable Sub-Account for the
Valuation Period during which the transfer is effective.
Unless otherwise changed by Lincoln New York to be less restrictive, transfers
shall be subject to the following conditions: (a) Up to 12 transfer requests may
be made during any Policy Year without charge, however, for each transfer
request in excess of 12, a transfer fee as set forth in SCHEDULE 2 may be
deducted on a pro-rata basis from the Fixed and/or Variable Sub-Accounts from
which the transfer is being made; (b) The amount being transferred may not be
less than $50 unless the entire value of the Fixed or Variable Sub-Account is
being transferred; (c) The amount being transferred may not exceed Lincoln New
York's maximum amount limit then in effect; (d) Transfers among the Variable
Sub-Accounts or from a Variable Sub-Account to the Fixed Account can be made at
any time; (e) Transfers involving Variable Sub-Account(s) shall be subject to
such additional terms and conditions as may be imposed by the Funds; and (f) Any
value remaining in the Fixed or a Variable Sub-Account following a transfer may
not be less than $100.
LN680 17
<PAGE>
TRANSFER PRIVILEGE PROVISION (CONTINUED)
If the investment strategy of a Variable Sub-Account were changed, the Owner may
transfer the amount in that Variable Sub-Account to the Fixed Account without a
transfer charge, even if the 12 free transfers have already been used. Moreover,
no transfer charge will be imposed when the Owner, in accordance with INSURANCE
COVERAGE PROVISIONS, RIGHT TO CONVERT and GENERAL PROVISIONS, CHANGE OF PLAN,
exchanges the policy for an equivalent fixed account policy, even if the 12 free
transfers have already been used.
OPTIONAL SUB-ACCOUNT ALLOCATION PROGRAMS
PROGRAM PARTICIPATION. The Owner may elect to participate in programs providing
for Dollar Cost Averaging or Automatic Rebalancing, without charge, but may
participate in only one program at any time.
DOLLAR COST AVERAGING. Dollar Cost Averaging systematically transfers specified
dollar amounts from the Money Market Sub-Account. Transfer allocations may be
made to one or more of the Sub-Accounts on a monthly or quarterly basis. By
making allocations on a regularly scheduled basis, instead of on a lump sum
basis, exposure to market volatility may be reduced. Dollar Cost Averaging will
not assure a profit or protect against a declining market. If Dollar Cost
Averaging is elected, the value in the Money Market Sub-Account must be at least
$1,000 initially. The minimum amount that may be allocated is $50 monthly.
An election for Dollar Cost Averaging is effective after receipt at the
Administrative Mailing Address of a request from the Owner, In Writing, or by
telephone, if adequately authenticated. An election is effective within 10
business days, but only if there is sufficient value in the Money Market
Sub-Account. Lincoln Life may, in its sole discretion, waive Dollar Cost
Averaging minimum deposit and transfer requirements.
Dollar Cost Averaging terminates automatically: (a) if the number of designated
transfers has been completed; (b) if the value in the Money Market Sub-Account
is insufficient to complete the next transfer; (c) one week after receipt at the
Administrative Mailing Address of a request for termination In Writing, or by
telephone, if adequately authenticated; or (d) if the policy is surrendered.
AUTOMATIC REBALANCING. Automatic Rebalancing periodically restores the
percentage of policy value allocated to each Variable Sub-Account to a level
pre-determined by the Owner (e.g. 20% Money Market, 50% Growth, 30% Utilities).
The Fixed Account is not subject to rebalancing. The pre-determined level is the
allocation initially selected on the application, until changed by the Owner. If
Automatic Rebalancing is elected, all Net Premium Payments allocated to the
Variable Sub-Accounts will be subject to Automatic Rebalancing.
The Owner may elect Automatic Rebalancing on a quarterly, semi-annual or annual
basis. Automatic Rebalancing may be elected, terminated or the allocation may be
changed at any time by the Owner, effective within 10 business days of receipt
of a request at the administrator mailing address In Writing or by telephone, if
adequately authenticated.
NONFORFEITURE AND SURRENDER VALUE PROVISIONS
SURRENDER. Surrender of the policy is effective on the business day of receipt
by Lincoln New York of the policy and a request for surrender In Writing,
provided that at the time of such receipt the policy is in force.
LN680 NY 18
<PAGE>
NONFORFEITURE AND SURRENDER VALUE PROVISIONS (CONTINUED)
SURRENDER VALUE. The amount payable on surrender of the policy (the "Surrender
Value") shall be the Net Accumulation Value less any accrued loan interest not
yet charged, and less any Surrender Charges as determined under the provision of
SCHEDULE 1.
The Surrender Value shall be paid by Lincoln New York in a lump sum or as
provided under the OPTIONAL METHODS OF SETTLEMENT rider. Any deferment of
payments by Lincoln New York will be subject to GENERAL PROVISIONS, DEFERMENT OF
PAYMENTS.
CONTINUATION OF COVERAGE. If the Insured is still living at Age 100 and the
policy has not lapsed or been surrendered, the Variable Account value, if any,
will be transferred to the Fixed Account on the next Monthly Anniversary Day
after the Insured becomes Age 100 and no further transfers among Funds will be
allowed. Lincoln New York will continue to credit interest to the Accumulation
Value as defined in POLICY VALUES PROVISIONS, INTEREST CREDITED UNDER FIXED
ACCOUNT, and no further Monthly Deductions, premium payments, expense charges,
administrative or policy fee will be made. The policy will remain in force until
it is surrendered or the Death Benefit Proceeds become payable.
PARTIAL SURRENDER. A partial surrender may be made from the policy on any
Valuation Day in accordance with the following as long as the policy is in force
even after Age 100. A partial surrender must be requested In Writing or, if
previously authorized, by telephone. A partial surrender may only be made if the
amount of the partial surrender, excluding the transaction fee as specified in
SCHEDULE 1, (a) is not less than $500; (b) is not more than 90% of the Surrender
Value of the policy as of the end of the Valuation Period ending on the
Valuation Day on which the request is accepted by Lincoln New York; and (c)
would not cause the Specified Amount to decline below the Minimum Specified
Amount set forth in the POLICY SPECIFICATIONS. The amount of the partial
surrender and the transaction fee shall be withdrawn from the Fixed and/or
Variable Sub-Accounts in proportion to the balances invested in such
Sub-Accounts.
Any surrender results in a withdrawal of funds from all of the Fixed and/or
Variable Sub-Accounts which have balances allocated to them. Any surrender from
a Variable Sub-Account will result in the cancellation of Variable Accumulation
Units which have an aggregate value on the date of the surrender equal to the
total amount by which the Variable Sub-Account is reduced. The cancellation of
such units will be based on the Variable Accumulation Unit value of the Variable
Sub-Account determined at the close of the Valuation Period during which the
surrender is effective.
EFFECT OF PARTIAL SURRENDERS ON ACCUMULATION VALUE AND SPECIFIED AMOUNT. As of
the end of the Valuation Day on which there is a partial surrender, (a) the
Accumulation Value shall be reduced by the sum of (i) the amount of the partial
surrender, plus (ii) the transaction fee specified in SCHEDULE 1; and (b) if
DEATH BENEFIT OPTION 1 is in effect, the Specified Amount shall be reduced by
the amount of the partial surrender.
LOAN PROVISIONS
POLICY LOANS. If the policy has Surrender Value, Lincoln New York will grant a
loan against the policy provided: (a) a proper loan agreement is executed and
(b) a satisfactory assignment of the policy to Lincoln New York is made. Loans
may continue to be made after the Insured's Age 100. The loan may be for any
amount up to 100% of the then current Surrender Value; however, Lincoln New York
reserves the right to limit the amount of such loan so that total indebtedness
will not exceed 90% of an amount equal to the then current Accumulation Value
less the surrender charge(s) as set forth under SCHEDULE 1. The amount borrowed
will be paid within seven days of Lincoln New York's receipt of such request,
except as Lincoln New York may be permitted to defer the payment of amounts as
specified under GENERAL PROVISIONS, DEFERMENT OF PAYMENTS.
LN680 NY 19
<PAGE>
LOAN PROVISIONS (CONTINUED)
The minimum loan amount is $500. Lincoln New York reserves the right to modify
this amount in the future. Lincoln New York will withdraw such loan from the
Fixed and/or Variable Sub-Accounts in proportion to the then current account
values, unless the Owner instructs Lincoln New York otherwise In Writing.
LOAN ACCOUNT. The amount of any loan will be transferred out of the Fixed and/or
Variable Sub-Accounts as described above. Such amount will become part of the
Loan Account Value. The outstanding loan balance at any time includes accrued
interest on the loan.
LOAN REPAYMENT. The outstanding loan balance (i.e. indebtedness) may be repaid
at any time during the lifetime of the Insured, however, the minimum loan
repayment is $100 or the amount of the outstanding indebtedness, if less. The
Loan Account will be reduced by the amount of any loan repayment. Any repayment
of indebtedness, other than loan interest, will be allocated to the Fixed and/or
Variable Sub-Accounts in the same proportion in which Net Premium Payments are
currently allocated, unless the Owner and Lincoln New York agree otherwise In
Writing.
INTEREST RATE CHARGED ON LOAN ACCOUNT. Interest charged on the Loan Account will
be at a rate equivalent to 8% per year, payable in arrears.
Interest charged on the Loan Account is payable annually on each Policy
Anniversary or as otherwise agreed In Writing by the Owner and Lincoln New York.
Such loan interest amount, if not paid when due, will be transferred out of the
Fixed and/or Variable Sub-Accounts in proportion to the then current Net
Accumulation Value and into the Loan Account, unless both the Owner and Lincoln
New York agree otherwise.
INDEBTEDNESS. The term "indebtedness" means money which is owed on this policy
due to an outstanding loan and interest accrued thereon but not yet charged. A
loan, whether or not repaid, will have a permanent effect on the Net
Accumulation Value and may have a permanent effect on the Death Benefit
Proceeds. Any indebtedness at time of settlement will reduce the proceeds
payable under the policy. A policy loan reduces the then current Net
Accumulation Value under the policy while repayment of a loan will cause an
increase in the then current Net Accumulation Value. The Owner should consult a
tax advisor prior to taking a loan.
If at any time the total indebtedness against the policy, including interest
accrued but not due, equals or exceeds the then current Accumulation Value less
any applicable surrender charge(s), a notice will be sent at least 31 days
before the end of the grace period to the Owner and to assignees, if any, that
this policy will terminate unless the indebtedness is repaid. The policy will
thereupon terminate without value at the end of the grace period subject to the
conditions in PREMIUM AND REINSTATEMENT PROVISIONS, GRACE PERIOD.
INSURANCE COVERAGE PROVISIONS
DATE OF COVERAGE. The date of coverage will be the Date of Issue provided the
initial premium has been paid and the policy accepted by the Owner (a) while the
Insured is alive, and (b) prior to any change in health and insurability as
represented in the application.
For any insurance that has been reinstated, the date of coverage will be the
Monthly Anniversary Day that coincides with or next follows the day the
application for reinstatement is approved by Lincoln New York, provided the
Insured is alive on such day. (See PREMIUM AND REINSTATEMENT PROVISIONS,
REINSTATEMENT.)
LN680 NY 20
<PAGE>
INSURANCE COVERAGE PROVISIONS (CONTINUED)
TERMINATION OF COVERAGE. All coverage under the policy terminates on the first
to occur of the following:
1. Surrender of the policy;
2. Death of the Insured; or
3. Failure to pay the amount of premium necessary to avoid termination before
the end of any applicable Grace Period
No action by Lincoln New York after such a termination of the policy, including
any Monthly Deduction made after termination of coverage, shall constitute a
reinstatement of the policy or waiver of the termination. Any such deduction
will be refunded.
DEATH BENEFIT PROCEEDS. If the Insured dies while the policy is in force,
Lincoln New York shall pay Death Benefit Proceeds equal to the greater of (i)
the amount determined under the Death Benefit Option in effect at the time of
the Insured's death, or (ii) an amount determined by Lincoln New York equal to
that required by the Internal Revenue Code to maintain the contract as a life
insurance policy. (See SCHEDULE 4.)
DEATH BENEFIT OPTIONS. Following are the Death Benefit Options available under
the policy:
DEATH BENEFIT OPTION 1:
THE SPECIFIED AMOUNT. The Specified Amount on the date of death, less any
indebtedness and partial surrenders.
DEATH BENEFIT OPTION 2:
SUM OF THE SPECIFIED AMOUNT AND THE ACCUMULATION VALUE. The sum of the
Specified Amount plus the Net Accumulation Value on the date of death, less
loan interest accrued, but not yet charged.
Unless DEATH BENEFIT OPTION 2 is elected, the Owner will be deemed to have
elected DEATH BENEFIT OPTION 1.
CHANGES IN SPECIFIED AMOUNT AND DEATH BENEFIT OPTION. Unless provided otherwise,
a change in Specified Amount or Death Benefit Option may be effected any time
while this policy is in force, provided the request for change is In Writing and
filed at the Administrator Mailing Address. All such changes are subject to the
consent of Lincoln New York and the following conditions.
CHANGES IN SPECIFIED AMOUNT:
1. If a decrease in the Specified Amount is requested, the decrease will
become effective on the Monthly Anniversary Day that coincides with or next
follows the receipt of the request provided any requirements, as determined
by Lincoln New York, are met.
In such event, Lincoln New York will reduce the existing Specified Amount
against the most recent increase first, then against the next most recent
increases successively, and finally, against insurance provided under the
original application; however, Lincoln New York reserves the right to limit
the amount of any decrease so that the Specified Amount will not be less
than the Minimum Specified Amount shown in the POLICY SPECIFICATIONS.
LN680 NY 21
<PAGE>
INSURANCE COVERAGE PROVISIONS (CONTINUED)
2. If an increase in the Specified Amount is requested:
(a) a supplemental application must be submitted and evidence of
insurability of the Insured satisfactory to Lincoln New York must be
furnished; and
(b) any other requirements as determined by Lincoln New York must be met.
If Lincoln New York approves the request, the increase will become
effective upon (i) the Monthly Anniversary Day that coincides with or next
follows the date the request is approved by Lincoln New York and (ii) the
deduction from the Accumulation Value (in proportion to the then current
account values of the Fixed and/or Variable Sub-Accounts) of the first
month's Cost of Insurance for the increase, provided the Insured is alive
on such day.
CHANGES IN DEATH BENEFIT OPTION:
1. On a change from DEATH BENEFIT OPTION 1 to DEATH BENEFIT OPTION 2:
The Specified Amount will be reduced by the Accumulation Value as of the
Monthly Anniversary Day that coincides with or next follows the date of
receipt of the request for change.
2. On a change from DEATH BENEFIT OPTION 2 to DEATH BENEFIT OPTION 1:
The Specified Amount will be increased by the Accumulation Value and the
date of the change will be the Monthly Anniversary Day that coincides with
or next follows the date of receipt of the request for change.
Lincoln New York will not allow a decrease in the amount of insurance below the
minimum amount required to maintain this contract as a life insurance policy
under the Internal Revenue Code.
RIGHT TO CONVERT. The Owner may convert this policy to a substantially
comparable flexible premium adjustable life insurance policy without evidence of
insurability for an amount of insurance not exceeding the death benefit of the
variable life insurance policy on the date of conversion.
PAID-UP INSURANCE OPTION. At any time, the Owner may transfer all of the
Variable Account Value to the Fixed Account and then surrender the policy for
reduced guaranteed nonparticipating paid-up insurance. No monthly administrative
fees would apply to such paid-up insurance. The amount of paid-up insurance will
be that which the surrender value will purchase when applied as a net single
premium at the Insured's then attained age using the guaranteed interest and
mortality basis set forth under the "Basis of Computations" provision of the
policy. The paid-up insurance will not include any supplementary or additional
benefits provided by rider under the original policy.
GENERAL PROVISIONS
THE POLICY. The policy and the application for the policy constitute the entire
contract between the parties. All statements made in the application shall be
deemed representations and not warranties. No statement may be used in defense
of a claim under the policy unless it is contained in the application and a copy
of the application is attached to the policy when issued.
Only the President, a Vice President, an Assistant Vice President, a Secretary,
a Director or an Assistant Director of Lincoln New York may execute or modify
the policy.
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GENERAL PROVISIONS (CONTINUED)
The policy is executed at the Administrator MAILING ADDRESS located on the front
cover of the policy.
NON-PARTICIPATION. The policy is not entitled to share in surplus distribution.
NOTICE OF CLAIM. Due Proof of Death must be furnished to Lincoln New York as
soon as reasonably practicable after the death of the Insured. Such notice shall
be given to Lincoln New York In Writing by or on behalf of the Owner.
PAYMENT OF PROCEEDS. Proceeds, as used in this policy, means the amount payable
(a) upon the surrender of this policy, or (b) upon the Insured's death.
The amount payable upon receipt of due proof of death will be the Death Benefit
Proceeds as of the date of death. (See INSURANCE COVERAGE PROVISIONS, DEATH
BENEFIT PROCEEDS.) Death Benefit Proceeds are payable from the Administrator
Mailing Address upon the Insured's death subject to the receipt of Due Proof of
Death and will include interest as required by any applicable state law. If the
death occurs during the Grace Period, Lincoln New York will pay the Death
Benefit Proceeds for the Death Benefit Option in effect immediately prior to the
GRACE PERIOD, reduced by any overdue monthly deductions.
If the policy is surrendered, the proceeds will be the Surrender Value described
in NONFORFEITURE AND SURRENDER VALUE PROVISIONS.
The proceeds are subject to the further adjustments described in the following
provisions:
1. Misstatement of Age or Sex;
2. Incontestability; and
3. Suicide.
When settlement is made, Lincoln New York may require return of the policy.
DEFERMENT OF PAYMENTS. Any amounts payable as a result of loans, surrender, or
partial surrenders will be paid within 7 days of Lincoln New York's receipt of
such request. However, payment of amounts from the Variable Sub-Accounts may be
postponed when the NYSE is closed or when the SEC declares an emergency.
Additionally, Lincoln New York reserves the right to defer the payment of such
amounts from the Fixed Account for a period not to exceed 6 months from the date
written request is received by Lincoln New York; during any such deferred
period, the amount payable will bear interest as required by law.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the Insured is misstated,
Lincoln New York will adjust all benefits to the amounts that would have been
purchased for the correct age and sex according to the basis specified in
SCHEDULE 3.
SUICIDE. If the Insured commits suicide, within 2 years from the Date of Issue,
the Death Benefit Proceeds will be limited to a refund of premiums paid, less
(a) any indebtedness against the policy and (b) the amount of any partial
surrenders. If the Insured commits suicide, within 2 years from the date of any
increase in the Specified Amount resulting from an application by the Owner
subsequent to the Date of Issue of the policy, the Death Benefit Proceeds with
respect to such increase will be limited to a refund of the monthly charges for
the cost of such additional insurance and the amount of insurance will be
limited to the amount of Death Benefit Proceeds applicable before such increase
was made provided that the increase became effective at least 2 years from the
Date of Issue of the policy.
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GENERAL PROVISIONS (CONTINUED)
INCONTESTABILITY. Except for nonpayment of Monthly Deductions, this policy will
be incontestable after it has been in force during the lifetime of the Insured
for 2 years from its Date of Issue. This means that Lincoln New York will not
use any misstatement in the application to challenge a claim or avoid liability
after that time. Any increase in the Specified Amount effective after the Date
of Issue will be incontestable only after such increase has been in force for 2
years during the lifetime of the Insured.
The basis for contesting an increase in Specified Amount will be limited to
material misrepresentations made in the supplemental application for the
increase. The basis for contesting after reinstatement will be (a) limited for a
period of 2 years from the date of reinstatement and (b) limited to material
misrepresentations made in the reinstatement application.
ANNUAL REPORT. Lincoln New York will send a report to the Owner at least once a
year without charge. The report will show the Accumulation Value as of the
reporting date and the amounts deducted from or added to the Accumulation Value
since the last report. The report will also show (a) the current Death Benefit
Proceeds, (b) the current policy values, (c) premiums paid and all deductions
made since the last report, (d) outstanding policy loans, and (e) any other
information required by the Superintendent of Insurance.
PROJECTION OF BENEFITS AND VALUES. Lincoln New York will provide a projection of
illustrative future Death Benefit Proceeds and values to the Owner at any time
upon written request and payment of a service fee, if any.
CHANGE OF PLAN. This policy may be exchanged for another policy only if Lincoln
New York consents to the exchange and all requirements for the exchange as
determined by Lincoln New York are met.
POLICY CHANGES - APPLICABLE LAW. This policy must qualify initially and continue
to qualify as life insurance under the Internal Revenue Code in order for the
Owner to receive the tax treatment accorded to life insurance under Federal law.
Therefore, to maintain this qualification to the maximum extent permitted by
law, Lincoln New York reserves the right to return any premium payments that
would cause this policy to fail to qualify as life insurance under applicable
tax law as interpreted by Lincoln New York. Further, Lincoln New York reserves
the right to make changes in this policy or to make distributions from the
policy to the extent it deems necessary, in its sole discretion, to continue to
qualify this policy as life insurance. Any such changes will apply uniformly to
all policies that are affected. The Owner will be given advance written notice
of such changes.
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LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Non-Participating Variable life insurance payable upon death of the Insured.
Adjustable Death Benefit.
Surrender Value payable upon surrender of the
policy. Flexible premiums payable to when the Insured
reaches Age 100.
Investment results reflected in policy benefits.
Premium Payments and Supplementary Coverages as shown in the Policy
Specifications.
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