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LAST SURVIVOR FLEXIBLE PREMIUM ADJUSTABLE
VARIABLE LIFE INSURANCE POLICY
NONPARTICIPATING
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BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
BMA TOWER, P. O. BOX 412879
KANSAS CITY, MO 64141
CALL (800) 423-9398 FOR ASSISTANCE OR QUESTIONS.
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA (referred to in this Policy as Us,
We, Our) will pay the Death Proceeds to the Beneficiary upon receipt of due
proof of both Insureds' deaths. Payment will be made only if this Policy is in
force on the date of the last surviving Insureds' death and the date of death is
before the Maturity Date. We will pay the Accumulation Value of this Policy,
less any Indebtedness, to the Owner on the Maturity Date if one of the Insureds
is then living.
All payments are subject to the provisions of this Policy.
FREE LOOK: THIS POLICY MAY BE RETURNED WITHIN [10] DAYS AFTER YOU RECEIVE IT. IT
CAN BE MAILED OR DELIVERED TO EITHER US OR THE AGENT WHO SOLD IT. RETURN OF THIS
POLICY BY MAIL IS EFFECTIVE ON BEING POST-MARKED, PROPERLY ADDRESSED AND POSTAGE
PREPAID TO OUR SERVICE CENTER. THE RETURNED POLICY WILL BE TREATED AS IF WE HAD
NEVER ISSUED IT. WE WILL REFUND ALL PREMIUMS PAID LESS ANY INDEBTEDNESS. WE WILL
ALLOCATE THE INITIAL NET PREMIUM TO THE MONEY MARKET SUBACCOUNT FOR [15] DAYS
FROM THE DATE THE UNDERWRITING PROCESS IS COMPLETED. UPON EXPIRATION OF THE [15]
DAYS, THE ACCUMULATION VALUE IN THE MONEY MARKET SUBACCOUNT WILL BE ALLOCATED AS
YOU HAVE DIRECTED.
This Policy is signed at Our home office in Kansas City, Missouri.
[Signed] [Signed]
-------------------------------- ----------------------------------
Secretary President
The Accumulation Value in the Fixed Account will earn interest at a minimum of
the guaranteed interest rate as shown on the Policy Schedule. Interest in excess
of the guaranteed interest rate may be applied in the calculation of the
Accumulation Value in the Fixed Account at such increased rate as We may
determine.
ACCUMULATION VALUE BENEFITS PROVIDED BY THIS POLICY WHEN BASED ON THE INVESTMENT
PERFORMANCE OF THE SEPARATE ACCOUNT WILL INCREASE OR DECREASE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. THE DURATION OR AMOUNT OF THE DEATH BENEFIT MAY
VARY BASED ON THE INVESTMENT PERFORMANCE OF THE SEPARATE ACCOUNT. THE DEATH
BENEFIT IS DESCRIBED IN THE DEATH BENEFIT SECTION OF THIS POLICY.
THIS IS A LEGAL CONTRACT. PLEASE READ IT CAREFULLY.
<PAGE>
TABLE OF CONTENTS
DEFINITIONS..................................................................5
OWNERSHIP AND BENEFICIARY....................................................8
General.............................................................8
Owner's Rights......................................................8
Joint Ownership.....................................................8
Contingent Owner....................................................8
Change of Ownership.................................................8
Assignment..........................................................8
Designation/Change of Beneficiary...................................8
Payment of Benefits.................................................8
Claims against Beneficiaries........................................9
THE CONTRACT.................................................................9
Consideration, Entire Contract......................................9
Modification of Policy..............................................9
Effective Date......................................................9
Incontestability....................................................9
Suicide............................................................10
Age, Sex...........................................................10
Annual Policy Report...............................................10
Projection of Benefits and Values..................................10
Maturity Date......................................................10
PREMIUMS 10
Premiums...........................................................10
Allocation of Premiums.............................................11
Change in Premium Payments.........................................11
Right to Refund....................................................11
Grace Period.......................................................11
Reinstatement......................................................11
SEPARATE ACCOUNT............................................................12
The Separate Account...............................................12
Valuation of Assets................................................12
Accumulation Units.................................................12
Accumulation Unit Value............................................12
Net Investment Factor..............................................12
CHARGES AND DEDUCTIONS......................................................13
Premium Charge.....................................................13
Monthly Deduction..................................................13
Cost of Insurance Charge...........................................13
Cost of Insurance Rate.............................................13
Monthly Rider Charges..............................................13
Policy Charge......................................................14
Risk Charge........................................................14
Other Taxes........................................................14
Surrender Charges..................................................14
Partial Surrender Fee..............................................14
<PAGE>
CALCULATION OF VALUES.......................................................14
Accumulation Value.................................................14
Cash Surrender Value...............................................14
Subaccount Accumulation Value......................................15
Fixed Account Accumulation Value...................................15
Interest Credited to Fixed Account.................................15
Insufficient Accumulation Value....................................15
Continuation of Insurance..........................................16
Computation of Values and Reserves.................................16
SUSPENSION OR DEFERRAL OF PAYMENTS..........................................16
DEATH BENEFIT...............................................................16
Death Benefit......................................................16
Change in Death Benefit Option.....................................17
Change in Specified Amount.........................................18
LOANS ...................................................................18
General............................................................18
Loan Value.........................................................19
Loan Interest (Charged)............................................19
Interest Credited..................................................19
Loan Repayment.....................................................19
Termination for Maximum Indebtedness...............................19
SURRENDERS..................................................................19
Total Surrender....................................................19
Partial Surrender..................................................20
TRANSFERS...................................................................20
TERMINATION.................................................................21
PAYMENT OPTIONS PROVISIONS..................................................21
Amount and Frequency of Payments...................................22
Payment Options....................................................22
Minimum Rate.......................................................23
Settlement Agreement...............................................23
Death of Payee.....................................................23
<PAGE>
POLICY SCHEDULE
<TABLE>
<CAPTION>
PLAN: Last Survivor Flexible Premium Adjustable Variable Life Insurance
<S> <C>
POLICY NUMBER: [0123456789]
POLICY DATE: [August 15, 2000]
MATURITY DATE: [August 15, 2065]
MONTHLY ANNIVERSARY DAY: [15]
INSURED 1: [John D. Doe]
Sex: [Male]
Issue Age: [35]
Rate Class: [Standard Non-Tobacco]
INSURED 2: [Jane A. Doe]
Sex: [Female]
Issue Age: [35]
Rate Class: [Standard Non-Tobacco]
OWNER: [Trust for John and Jane Doe]
BENEFICIARY: [As designated unless otherwise changed.]
INITIAL BASE POLICY SPECIFIED AMOUNT: [$250,000]
INITIAL SURVIVORSHIP TERM RIDER
AMOUNT (if applicable)*: [$000,000]
DEATH BENEFIT OPTION: [Level Death Benefit]
INITIAL PREMIUM: [$00.00]
PLANNED PREMIUM: [$00.00]
PAYABLE: [Annually]
5-YEAR NO-LAPSE MONTHLY MINIMUM
PREMIUM: [$00.00]
GUARANTEED MINIMUM DEATH BENEFIT
PREMIUM: [$00.00]
MINIMUM BASE POLICY SPECIFIED AMOUNT: [$250,000. If You change the Level Death Benefit Option
to Adjustable Death Benefit Option, then the minimum
Specified Amount cannot be less than $125,000]
MINIMUM INCREASE IN BASE POLICY
SPECIFIED AMOUNT: [$100,000 after first policy year]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
CHARGES:
PREMIUM CHARGE:
Policy Years: 1 - 10: [8.0%] of all premiums
Policy Years: 11 and later: [4.0%] of all premiums
POLICY CHARGE:
Per Policy Month for Policy Year 1: [$35.00]
Per Policy Month for Policy Years 2 and later: [Currently $7.50. This charge is not guaranteed and may
be increased, but it will not exceed $10.]
PER $1,000 OF SPECIFIED AMOUNT [$0.08 per month per $1,000 of Initial Base Policy
CHARGE: Specified Amount for first policy year.]
RISK CHARGE:
Per Policy Month for Policy Years 1 - 15: [0.07%, on a monthly basis, of the Accumulation Value in
the Separate Account.]
Per Policy Month for Policy Years 16 and later: [0.03%, on a monthly basis, of the Accumulation Value in
the Separate Account.]
COST OF INSURANCE: See Cost of Insurance Rate provision.
</TABLE>
<TABLE>
<CAPTION>
SURRENDERS:
SURRENDER CHARGES FOR INITIAL BASE POLICY SPECIFIED AMOUNT:
Policy Year Surrender Charge
----------- ----------------
<S> <C> <C>
1 [$883.56]
2 [$883.56]
3 [$883.56]
4 [$795.20]
5 [$706.85]
6 [$618.49]
7 [$530.14]
8 [$441.78]
9 [$353.42]
10 [$265.07]
11 [$220.89]
12 [$176.71]
13 [$132.53]
14 [$ 88.36]
15 [$ 44.18]
16 and later [$ 0.00]
PARTIAL SURRENDER FEE: [$25]
MINIMUM PARTIAL SURRENDER AMOUNT: [$500.00]
REMAINING CASH SURRENDER VALUE: [$500.00]
</TABLE>
<PAGE>
ALLOCATION GUIDELINES:
[1. Currently, You can select as many Subaccounts as You wish,
including the Fixed Account.
2. Allocation percentages must be in whole numbers and must be at
least [1%]. Allocations made pursuant to a pre-scheduled transfer
are not subject to these limitations.
3. Our Allocation Guidelines are subject to change.]
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: [Subject to any transfer fees and any
minimum and maximum amounts that may be transferred, there is no
limitation on the number of transfers that can currently be made
between Subaccounts. Currently, You can make unlimited transfers to the
Fixed Account, subject to any transfer fees and any required minimum
and maximum amounts that may be transferred. Currently, You can only
make one transfer out of the Fixed Account each Calendar Year. We
reserve the right to modify the above, but the Owner will always be
allowed at least [12] transfers between Subaccounts in a Calendar
Year.]
NUMBER OF FREE TRANSFERS: [Currently, You are allowed [12] free
transfers each Calendar Year.]
TRANSFER FEE: [For each transfer in excess of the free transfers
permitted, the Transfer Fee is [$25]. Transfers made pursuant to a
pre-scheduled transfer will not be counted in determining the
application of the Transfer Fee.]
MINIMUM AND MAXIMUM AMOUNT TO BE TRANSFERRED: [The minimum amount that
can be transferred is $250 or Your entire interest in any Subaccount or
the Fixed Account, if the remaining balance is less than $250. The
maximum amount which can be transferred from the Fixed Account is
limited to [25%] of the Accumulation Value in the Fixed Account. This
requirement is waived if the transfer is pursuant to a pre-scheduled
transfer.]
MINIMUM AMOUNT THAT MUST REMAIN IN AN ACCOUNT AFTER A TRANSFER:
[$250.00 in any Subaccount or $250.00 in the Fixed Account.]
PRE-SCHEDULED TRANSFERS: [You can elect the Dollar Cost Averaging
Option, the Asset Allocation Option and the Asset Rebalancing Option.
However, that portion of Accumulation Value held in the Fixed Account
is not included in any pre-scheduled transfer option. We reserve the
right to limit the availability of any Subaccount or the Fixed Account
for a pre-scheduled transfer.]
FIXED ACCOUNT:
Guaranteed Interest Rate: [4%]
<TABLE>
<CAPTION>
LOAN ACCOUNT:
<S> <C>
Minimum Loan Amount: [$250]
Minimum Loan Account Interest Rate (Credited): [5.0%] for Policy Years 1 - 20
[5.5%] for Policy Years 21 and later
Loan Interest Rate (Charged): [5.66% in advance]
</TABLE>
[BASIS OF RESERVES: The reserve interest rate is 4.00%. The reserve
method is the Commissioner's Reserve Valuation Method.]
SEPARATE ACCOUNT: [BMA Variable Life Account A]
<PAGE>
INVESTMENT OPTIONS:
[INVESTORS MARK SERIES FUND, INC.
Intermediate Fixed Income Portfolio
Mid Cap Equity Portfolio
Money Market Portfolio
Global Fixed Income Portfolio
Small Cap Equity Portfolio
Large Cap Growth Portfolio
Large Cap Value Portfolio
Growth & Income Portfolio
Balanced Portfolio]
[BERGER/BIAM IPT
International Portfolio]
[AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
VP Income and Growth Fund
VP Value Fund]
[DREYFUS CORPORATION
Dreyfus Stock Index Fund
Dreyfus Disciplined Stock Portfolio]
[INVESCO FUNDS GROUP, INC.
VIF-High Yield Fund Portfolio
VIF-Equity Income Fund Portfolio]
[LAZARD ASSET MANAGEMENT
Lazard Retirement Small Cap Portfolio]
[ALGER AMERICAN FUND
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio]
[FIDELITY FUNDS
VIP Overseas Portfolio
VIP Growth Portfolio
VIP Contrafund Portfolio]
RIDERS: [Extension of Maturity Date Rider
Exchange Option Rider]
SERVICE CENTER: [BMA
9735 Landmark Parkway Drive
St. Louis, Missouri 63127-1690
1-800-423-9398]
<PAGE>
<TABLE>
<CAPTION>
POLICY RIDERS*:
<S> <C> <C> <C> <C> <C>
MONTHLY
POLICY NAME OF RIDER RIDER PAYABLE
RIDER(1) INSURED DATE AMOUNT CHARGE(2) UNTIL
EMD As stated in Application 8/15/2000 N/A N/A N/A
EXO As stated in Application 8/15/2000 N/A N/A N/A
</TABLE>
(2) These initial charges are part of the monthly deduction.
Charges are based on attained age and will increase yearly as
attained age increases.
POLICY RIDER (1)
EMD VL70 EXTENSION OF MATURITY DATE RIDER
EXO VL71 EXCHANGE OPTION RIDER
<PAGE>
<TABLE>
<CAPTION>
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE
RATES PER $1,000 NET AMOUNT AT RISK
<S> <C> <C> <C> <C> <C>
Beginning Monthly Rate Beginning Monthly Rate Beginning Monthly Rate
MO-DAY-YR Per $1,000 MO-DAY-YR Per $1,000 MO-DAY-YR Per $1,000
</TABLE>
We may charge less than the guaranteed maximum cost of insurance rates.
Any change in the cost of insurance rates will apply to all insureds of the same
insuring age, sex, class, and policy year.
<PAGE>
Unless otherwise provided in this Policy, or unless the content otherwise
requires, the following definitions and rules of construction shall apply
herein. In this Policy the neuter gender includes the feminine and masculine and
the singular number includes the plural, and the word "person" includes
corporation, partnership, firm, or association wherever the content so requires.
"Shall" and "will" and "agrees" are mandatory, "may" is permissive. All
references to the term of this Policy or the Policy term shall include any
extensions of such term.
DEFINITIONS
ACCUMULATION VALUE: The sum of Your Policy values in the Subaccounts, the Fixed
Account and the Loan Account.
ACCUMULATION UNIT: A unit of measure used to calculate Your Accumulation Value
in the Subaccounts.
AGE: Issue age is age last Birthday on the Policy Date. Attained Age is the
Issue Age plus the number of completed Policy Years.
AUTHORIZED REQUEST: A request, in a form satisfactory to Us, which is received
by the Service Center.
BENEFICIARY: The person who is named in the application or at a later date to
receive the Death Proceeds of this Policy or any rider(s).
BUSINESS DAY: Each day that the New York Stock Exchange is open for business.
The Separate Account will be valued each Business Day.
CASH SURRENDER VALUE: The Accumulation Value less the surrender charge, if any,
and less any Indebtedness.
COMPANY: Business Men's Assurance Company of America (BMA).
DEATH BENEFIT: The amount used to determine the Death Proceeds payable upon
proof of the last surviving Insureds' death while the Policy is in force. The
Death Benefit can be either Level or Adjustable.
DEATH PROCEEDS: Equal the Death Benefit less any Indebtedness.
EVIDENCE OF INSURABILITY: Information satisfactory to Us about both proposed
Insureds which is used to approve or reinstate this Policy or any rider(s).
FIXED ACCOUNT: A portion of the General Account into which You can allocate Net
Premiums or transfer Accumulation Values. It does not share in the investment
experience of any Subaccount of the Separate Account.
GENERAL ACCOUNT: Our general investment account which contains all of Our assets
with the exception of the Separate Account and other segregated asset accounts.
GOOD HEALTH: There has been no material change in health status since the date
of application and before You have received and paid the first Premium on the
Policy.
GRACE PERIOD: The 61 days that follow the date We mail a notice to You for
payment if the Cash Surrender Value is not sufficient to cover the Monthly
Deduction.
INDEBTEDNESS: Unpaid Policy loans and unpaid Policy loan interest.
<PAGE>
INITIAL BASE POLICY SPECIFIED AMOUNT: The amount initially selected by You as
shown on the Policy Schedule.
INSUREDS: The two persons whose lives are insured under this Policy, as shown on
the Policy Schedule.
INVESTMENT OPTION(S): Those investments available under the
Policy. Current Investment Option(s) are shown on the Policy Schedule.
LOAN ACCOUNT: An account established within Our General Account for any amounts
transferred from the Fixed Account and the Separate Account as a result of
loans. The Loan Account is credited with interest and is not based on the
experience of any Separate Account.
MATURITY DATE: The date the Accumulation Value, less any Indebtedness, becomes
payable to You, as shown on the Policy Schedule. Insurance may terminate prior
to the Maturity Date if no Premiums are paid after the initial Premium or if
additional Premiums are not sufficient to continue insurance to such date.
Insurance is also affected by any changes in monthly deductions, the investment
performance of the selected Subaccounts and the amount of interest We credit to
the Fixed Account depending upon Your selections.
MONTHLY ANNIVERSARY DAY: The same day of each month as the Policy Date for each
succeeding month the Policy remains in force. If the Monthly Anniversary falls
on a day that is not a Business Day, any Policy transaction due as of that day
will be processed the first Business Day following such date.
NET PREMIUM: We deduct a Premium Charge from each Premium paid. Premium Charges
are shown on the Policy Schedule. The Net Premium is the Premium paid less the
Premium Charge.
OWNER: The Insureds are the Owner of this Policy unless otherwise designated. If
the Policy has joint Owners, then all reference to Owner includes the joint
Owner.
POLICY ANNIVERSARY: The same month and day as the Policy Date for each
succeeding year the Policy remains in force.
POLICY DATE: The date, as shown on the Policy Schedule, by which Policy months,
years and anniversaries are measured.
POLICY MONTH: The one month period from the Policy Date to the same date of the
next month, or from one Monthly Anniversary Day to the next.
POLICY YEAR: The one year period from the Policy Date to the first Policy
Anniversary or from one Policy Anniversary to the next.
PREMIUM: A payment You make towards this Policy that does not re-pay any
Indebtedness.
RATE CLASS: This is anything that would affect the level of Your Premium, such
as health status and tobacco use.
REINSTATEMENT: To restore coverage after this Policy has terminated.
SEPARATE ACCOUNT: A segregated asset account maintained by Us in which a portion
of Our assets has been allocated for this and certain other policies. It is
shown on the Policy Schedule.
SERVICE CENTER: The office indicated on the Policy Schedule of this Policy to
which notices, requests and Premiums must be sent. All sums payable to Us under
the Policy are payable only at the Service Center.
<PAGE>
SPECIFIED AMOUNT: The Specified Amount is the Initial Base Policy Specified
Amount plus each increase to the Specified Amount and less each decrease to the
Specified Amount. The Initial Base Policy Specified Amount and the Death Benefit
Option in effect on the Policy Date are shown on the Policy Schedule.
SUBACCOUNT: Separate Account assets are divided into Subaccounts. Assets of each
Subaccount will be invested in shares of a corresponding Investment Option.
TERMINATED: Both Insureds' lives are no longer insured under any of the terms
of this Policy or any riders.
UNDERWRITING PROCESS: The underwriting process begins the day We receive Your
application at the Service Center and ends the day We receive and approve all
required documents, including the Initial Premium, necessary to put the Policy
in force.
US, WE, OUR: Business Men's Assurance Company of America.
YOU, YOUR, YOURS: The Owner of this Policy
<PAGE>
OWNERSHIP AND BENEFICIARY
GENERAL - The Insureds are the Owner of the Policy as shown on the Policy
Schedule, unless otherwise designated. The Owner has all the interest and rights
under this Policy.
The Beneficiary is the person designated by You to receive any Death Proceeds.
OWNER'S RIGHTS -You may:
a. exercise all the rights and options that this Policy provides
or that We permit;
b. assign this Policy; and
c. agree with Us to any change to this Policy.
The consent of any irrevocable beneficiary is needed to exercise any of these
rights.
CONTINGENT OWNER - You may name a Contingent Owner. If the Owner dies before
both of the Insureds have died, ownership will pass to the Contingent Owner. If
there is no Contingent Owner, ownership will pass to the deceased Owner's
estate.
CHANGE OF OWNERSHIP - You may name a new Owner or may name or change a
Contingent Owner at any time while either of the Insureds are living. If a new
Owner or Contingent Owner is named, then, unless otherwise stated, any prior
designation of Contingent Owner will be voided.
You may request a change in ownership while either of the Insureds are living by
sending an Authorized Request to the Service Center. When acknowledged in
writing by Us, the change will take effect on the date the notice was signed. We
will not be liable for payment made or action taken before the notice was
acknowledged by Us.
ASSIGNMENT - Assignment of this Policy will be binding on Us only after a copy
of the assignment is acknowledged at the Service Center. We are not responsible
for the validity of any assignment. If the assignment is absolute, all of the
Owner's rights and that of any revocable Beneficiary are transferred to the
assignee. If the assignment is collateral, such rights are transferred only to
the extent of the assignee's interest.
DESIGNATION/CHANGE OF BENEFICIARY - The Beneficiary is the person named in the
application or by later designation to receive the Death Proceeds provided for
in this Policy or any rider.
You have the right to change a Beneficiary by sending an Authorized Request to
the Service Center, unless the designation of the Primary Beneficiary has been
made irrevocable. If an irrevocable Beneficiary has been designated, the Owner
and irrevocable Beneficiary must act together to exercise all changes under this
Policy, except transfers of Accumulation Value and Premium allocations which can
be effected by the Owner. Unless otherwise indicated, the right of an
irrevocable Beneficiary to receive the proceeds is terminated if the irrevocable
Beneficiary dies before both Insureds. When acknowledged in writing by Us, the
change will take effect on the date the notice was signed. We will not be liable
for payment made or action taken before the notice was acknowledged by Us.
PAYMENT OF BENEFITS - Upon the death of the last surviving Insured, due proof of
the death of the last surviving Insured must be received at Our Service Center.
Unless otherwise provided for in this Policy or in the application or Authorized
Request to the Service Center, the following provisions apply:
1. a Beneficiary is either a Primary Beneficiary or a Contingent
Beneficiary. If the Primary Beneficiary does not survive both
Insureds, then any proceeds are payable to the Contingent Beneficiary;
2. if there are no surviving Beneficiaries, We will pay the Death
Proceeds to the Owner or to the estate of the Owner, or to the
successors or transferees of the Owner;
3. two or more persons may be named as Primary Beneficiaries or
Contingent Beneficiaries. In that case, We will assume the proceeds
are to be paid in equal shares to the surviving Beneficiaries. The
Owner can specify other than equal share;
4. We may rely on the affidavit of any responsible person to determine
the identity or nonexistence of Beneficiaries not identified by name.
We may require proof of age or of the continued survival of any payee.
CLAIMS AGAINST BENEFICIARIES - To the extent allowed by law, no payment of
proceeds or interest will be subject to claims of a Beneficiary's creditors, or
legal process against a Beneficiary.
THE CONTRACT
CONSIDERATION; ENTIRE CONTRACT - This Policy is issued in consideration of: (a)
the application; and (b) the payment in advance of the required Premium. This
Policy, the application, and riders/amendments/supplements, if any, are the
entire contract between You and Us. Statements made in the application are
considered representations and not warranties except in the case of fraud. No
statement will void this Policy or be used in defense of a claim unless made in
the application or application for reinstatement.
MODIFICATION OF POLICY - No agent has authority to change this Policy or waive
any of its provisions. Any change in this Policy will be binding on Us only when
endorsed by Our President, Vice President, Secretary or Assistant Secretary.
To the extent permitted by applicable laws and regulation, We may make changes
without Your consent to the provisions of this Policy to comply with any
applicable federal or state laws including, but not limited to, requirements for
life insurance contracts under the Internal Revenue Code. You have the right to
refuse any such changes. However, in such an event, We cannot accept
responsibility for the tax treatment of this Policy.
EFFECTIVE DATE- This Policy will be effective as soon as it has been received by
You and the first Premium has been paid during the lifetime of both proposed
Insureds and there has been no material change in health status since the date
of application. If the first Premium is paid in exchange for a conditional
coverage receipt as of the date of the application, coverage will be effective
as stated in that receipt.
For any increase or addition to coverage, the Effective Date will be the first
Monthly Anniversary Day that falls on or next follows the date the application
for the increase or addition is approved by Us.
INCONTESTABILITY - This Policy will not be contestable as to statements made in
the application after it has been in force during the lifetimes of both Insureds
for two years from the Policy Date, except: (a) for nonpayment of Premium; and
(b) with respect to any additional benefits or Policy riders for disability or
accidental death.
If the Effective Date of a rider is later than the Policy Date, the rider will
not be contestable as to statements made in the application for such rider after
it has been in force during the lifetimes of both Insureds for two years from
the Effective Date of such rider, except with respect to any additional benefits
or Policy riders for disability or accidental death.
Any increase in Specified Amount effective after the Policy Date will not be
contestable after such increase has been in force during the lifetimes of both
Insureds for the two years that follow the Effective Date of such increased
Specified Amount.
If the Policy lapses and it is reinstated, We cannot contest any statements made
in the reinstatement application after the Policy has been in force during the
lifetimes of both Insureds for two years from the effective date of the
reinstatement application.
SUICIDE - If while this Policy is in force either of the Insureds commits
suicide, while sane or insane, within two years from the Policy Date, the
benefit payable will be limited to all Premiums paid, less Indebtedness and less
any prior partial surrenders. There will be a further deduction from the benefit
payable for the total rider charges, if any, for additional Insureds covered
under this Policy.
If while this Policy is in force either of the Insureds commits suicide, while
sane or insane, within two years from the Effective Date of any increase in
coverage, or additional benefits for both Insureds, the benefit payable with
respect to such increase or additional benefits will be limited to the Premium
paid for the cost of such increased coverage or additional benefits.
AGE, SEX - The age of each of the Insureds is the age of their last birthday on
the Policy Date or Policy Anniversary. If the age or sex shown on the Policy
Schedule is not correct, the Death Benefit will be adjusted to that which would
be purchased by the most recent cost of insurance charge at the correct age and
sex.
REPORTS - At least once each calendar year We will furnish You with a report
showing the amount of Death Benefit, Accumulation Value, premiums paid since
last report, the amount of debt and any other information as may be required by
law. Any reports sent will be sent to Your last known address.
PROJECTION OF BENEFITS AND VALUES - We will provide a projection of illustrative
future Death Benefits and Accumulation Values at any time after the first year
upon receipt of Your Authorized Request.
MATURITY DATE - The Maturity Date is the date when coverage is scheduled to
cease. The Maturity Date is shown on the Policy Schedule. If this Policy is in
force on the Maturity Date:
1. all insurance benefits end; and
2. the Accumulation Value less any Indebtedness will be paid as You
direct in a lump sum or under a payment option.
This Policy may end prior to the Maturity Date if the Cash Surrender Value is
insufficient to continue coverage to such date and adequate additional Premiums
are not paid.
PREMIUMS
PREMIUMS - The first Premium is due on the Policy Date. The amounts and
frequency of Planned Premiums are shown on the Policy Schedule. All Premiums are
payable at the Service Center. We reserve the right to limit the number and
amount of additional Premiums. We will provide a receipt if You request one.
You may change the frequency and/or increase or decrease the amount of Planned
Premiums. Subject to the terms and conditions of this Policy, You can make
additional Premium payments at any time. If an additional Premium will increase
the amount of coverage, We will require Evidence of Insurability of both
Insureds before the Net Premium is allocated to the Fixed Account or the
Subaccounts.
ALLOCATION OF PREMIUMS - Net Premiums are allocated to one or more of the
Subaccounts of the Separate Account or to the Fixed Account in accordance with
Your selection. Your initial Premium will be placed in a suspense account.
Subject to the Free Look period, the initial Premium will be kept within the
suspense account for the length of the Underwriting Process when it will be
moved to the Money Market Subaccount. The initial Net Premium will remain in the
Money Market Subaccount for 15 days. At the end of this period, We will allocate
Your initial Premium, less any charges, plus interest earned to the investment
option(s) You requested in the application.
Unless You inform Us otherwise, subsequent Net Premiums are allocated in
accordance with the selection in Your application. All allocations are subject
to the Allocation Guidelines shown on the Policy Schedule.
CHANGE IN PREMIUM PAYMENTS - You may elect to increase or decrease or to change
the frequency of Premium payments. Unless surrendered, this Policy remains in
force and will not be in default if no additional Premium payments are made. Any
change may affect surrender charges, transfers, loans, policy charges or
termination of the policy.
RIGHT TO REFUND - To receive the tax treatment accorded life insurance under
Federal laws, insurance under this Policy must initially qualify and continue to
qualify as life insurance under the Internal Revenue Code. To maintain
qualification to the maximum extent permitted by law, We reserve the right to
return Premiums paid which We determine will cause any coverage under this
Policy to fail to qualify as life insurance under applicable tax laws and any
changes in applicable tax laws or will cause it to become a modified endowment
contract. Additionally, We reserve the right to make changes in this Policy or
to make distributions to the extent We determine necessary to continue to
qualify this Policy as life insurance and to comply with applicable laws. We
will provide You advance written notice of any change.
GRACE PERIOD - At the end of any Policy Month, if the Cash Surrender Value is
not sufficient to cover the Monthly Deduction, a Grace Period of 61 days from
such day We mail a notice informing You of this will be allowed for the payment
of a Premium sufficient to cover the Monthly Deduction. This Policy will remain
in force during the Grace Period.
If this Premium is not paid within the Grace Period, all coverage under this
Policy will terminate without value at the end of the Grace Period. However,
during the first five Policy Years, this Policy will not terminate if the
cumulative Premiums are paid as stated in the Insufficient Accumulation Value
provision.
At least 30 days prior to the termination date, We will mail notice of
termination to Your last known address and the last known address of any
assignee of record.
If the last surviving Insured dies during the Grace Period, the Premiums
required to provide coverage to the date of the last surviving Insureds' death
will be deducted from any amounts payable under this Policy.
REINSTATEMENT - Unless surrendered for cash, this Policy may be reinstated
within five years after the date of termination and prior to the maturity date.
Conditions of reinstatement are:
1. evidence of insurability satisfactory to Us for all persons to be
insured under the reinstated Policy;
2. payment or reinstatement of all indebtedness on this Policy;
3. payment of a premium sufficient to provide enough Accumulation Value
to cover two months' monthly deductions due at time of termination;
and
4. payment of a premium sufficient to keep this Policy in force for at
least three Policy months following reinstatement.
The effective date of the reinstated Policy will be the first monthly
anniversary day that falls on or next follows the date the application for
reinstatement is approved by Us.
If this Policy terminates during the first five Policy years, the period during
which the cumulative premiums are payable (as stated in the Insufficient
Accumulation Value provision) is suspended. This period will resume on the
effective date of the reinstated Policy.
The length of any remaining period during which the surrender charge applies and
the amount of any remaining surrender charge is the same on the date of
reinstatement as on the date of termination.
SEPARATE ACCOUNT
THE SEPARATE ACCOUNT - The Separate Account is designated on the Policy
Schedule. It consists of assets We have set aside and have kept separate from
the rest of Our assets and those of Our other separate accounts. The assets of
the Separate Account, equal to reserves and other liabilities of this Policy and
those of other Owners, will not be charged with liabilities arising out of any
other business We may conduct. The investment policy of the Separate Account
shall not be changed without the approval of the Insurance Commissioner of the
state of domicile of the insurer, and the approval process is on file with the
Commissioner of the state where the policy is filed.
The Separate Account assets are divided into Subaccounts. The assets of the
Subaccounts are invested in the Investment Option(s) shown on the Policy
Schedule. We may add additional Investment Option(s) to those shown. You may be
permitted to transfer Your Accumulation Value or allocate Net Premiums to the
additional Subaccount(s). However, the right to make such transfers or
allocations will be limited by any terms and conditions We may impose.
Should the shares of any Investment Option(s) become unavailable for investment
by the Separate Account, or Our Board of Directors deems further investment in
the shares inappropriate, We may limit further purchase of such shares or
substitute shares of another Investment Option for shares already purchased.
VALUATION OF ASSETS - Assets of the Investment Option(s) held within the
Subaccounts will be valued at their net asset value on each Business Day.
ACCUMULATION UNITS - Accumulation Units shall be used to account for all amounts
allocated to or withdrawn from the Subaccounts of the Separate Account as a
result of Premium Payments, surrenders, transfers, or fees and charges. We will
determine the number of Accumulation Units of a Subaccount purchased or
canceled. This will be done by dividing the amount allocated to (or the amount
withdrawn from) the Subaccount by the dollar value of one Accumulation Unit of
the Subaccount as of the end of the Business Day during which the request for
the transaction is received at the Service Center.
ACCUMULATION UNIT VALUE - The Accumulation Unit Value for each Subaccount was
arbitrarily set initially at $10. Subsequent Accumulation Unit Values for each
Subaccount are determined by multiplying the Accumulation Unit Value for the
immediately preceding Business Day by the Net Investment Factor for the
Subaccount for the current Business Day.
The Accumulation Unit Value may increase or decrease from Business Day to
Business Day.
NET INVESTMENT FACTOR - The Net Investment Factor is equal to (1 - C) multiplied
by A divided by B, where:
A is
(i) net asset value per share of the Investment Option held in the
Subaccount at the end of the current Business Day; plus
(ii) any dividend or capital gains per share declared on behalf of
such Investment Option that has an ex-dividend date within the
current Business Day.
B is
the net asset value per share of the Investment Option held by
the Subaccount for the immediate preceding Business Day.
C is
a charge factor, if any, for any taxes or any tax reserve We
have established as a result of the operation or maintenance
of the Separate Account.
CHARGES AND DEDUCTIONS
PREMIUM CHARGE - We deduct a Premium Charge from each Premium You make.
The Premium Charges are set out on the Policy Schedule.
MONTHLY DEDUCTION - The initial Monthly Deduction is made on the Policy Date. On
each Monthly Anniversary Day We make a Monthly Deduction from the Accumulation
Value of Your Policy. The Monthly Deduction equals the :
a. Cost of Insurance for this Policy; plus
b. monthly rider charges, if any; plus
c. monthly Policy Charge; plus
d. Per $1,000 of Specified Amount Charge; plus
e. Risk Charge.
The Monthly Deduction will be taken on a pro-rata basis from the Subaccounts and
the Fixed Account, exclusive of the Loan Account.
COST OF INSURANCE CHARGE - The Cost of Insurance Charge for a Policy Month
equals the appropriate Cost of Insurance Rate per $1,000, including any
substandard ratings, times the Net Amount at Risk. The Net Amount at Risk
equals:
Level Death Benefit. For the Level Death Benefit Option, the Net Amount at Risk
is the greater of the:
1. Specified Amount divided by [1.0032737 ] less the Accumulation
Value; and
2. Accumulation Value times the applicable Minimum Death Benefit
Corridor Percentage divided by [1.0032737 ], less the
Accumulation Value.
Adjustable Death Benefit Option. For the Adjustable Death Benefit Option, the
Net Amount at Risk is the greater of:
1. the Specified Amount plus the Accumulation Value divided by
[1.0032737], less the Accumulation Value; and
2. the Accumulation Value times the applicable Minimum Death
Benefit Corridor Percentage divided by [1.0032737], less the
Accumulation Value.
The Minimum Death Benefit Corridor Percentages are shown in the
Death Benefit Provision.
COST OF INSURANCE RATE - The monthly cost of insurance rate, per $1,000 of net
amount at risk, is based on the sex, issue age, and rate class of each of the
Insureds and the Policy Year. Monthly cost of insurance rates will be determined
by Us based on the expectations as to future experience. We may charge less than
the maximum cost of insurance rates as shown in the Table of Cost of Insurance
Rates contained in the Policy Schedule. Any change in the cost of insurance
rates will apply to all Insureds of the same age, sex, rate class and Policy
Year.
MONTHLY RIDER CHARGES - We charge separately for any riders attached to this
Policy. The riders that are attached to and form a part of this Policy are
listed on the Policy Schedule. We deduct the cost of the riders for a Policy
Month as part of the Monthly Deduction on each Monthly Anniversary Day.
POLICY CHARGE - We assess a Policy Charge which is shown on the Policy Schedule.
It is deducted each Monthly Anniversary Day as part of the Monthly Deduction.
PER $1,000 OF SPECIFIED AMOUNT CHARGE - We assess a Per $1,000 of Specified
Amount Charge which is shown in the Policy Schedule. It is deducted each Monthly
Anniversary Day during the first Policy Year and for 12 months following an
increase to the Specified Amount as part of the Monthly Deduction.
The amount deducted each month during the first Policy Year equals the Per
$1,000 of Specified Amount Charge rate as shown on the Policy Schedule times the
Initial Base Policy Specified Amount and divided by 1,000. The amount deducted
each month for the 12 months following an increase to the Specified Amount
equals the Per $1,000 of Specified Amount Charge rate as shown on the Policy
Schedule times the increase to the Specified Amount and divided by 1,000.
RISK CHARGE - Each Monthly Anniversary Day as part of the Monthly Deduction We
deduct a Risk Charge. The Risk Charge is set forth on the Policy Schedule.
OTHER TAXES - Any taxes paid to any governmental entity, whether federal, state
or local, may be charged against the Policy values or Premiums. We will, in Our
sole discretion, determine when taxes have resulted from the investment
experience of the Separate Account or receipt by Us of Premiums. We may at Our
discretion, pay any such taxes when due and deduct that amount from the
Accumulation Value at a later date. Payment at an earlier date does not waive
any right We may have to deduct amounts at a later date. We reserve the right to
establish a provision for federal income taxes if We determine, in Our sole
discretion, that We will incur a tax as a result of the operation of the
Separate Account. We will deduct for any income taxes incurred by Us as a result
of the operation of the Separate Account whether there was a provision for taxes
and whether or not it was sufficient. We will deduct any withholding taxes
required by applicable law.
SURRENDER CHARGES - If this Policy is surrendered before the 15th policy
anniversary or within 15 years following the effective date of any increase in
Specified Amount, a Surrender Charge will be deducted. The amount of the
Surrender Charge during each Policy Year is shown on the Policy Schedule. When
there is a partial surrender of Cash Surrender Value, a pro-rata portion of the
Surrender Charge is assessed for any amount that the Specified Amount is
reduced. The pro-rata surrender charge is calculated in the same manner as for a
requested decrease. (See Surrender provision.)
PARTIAL SURRENDER FEE - When there is a partial surrender of the Cash Surrender
Value, in addition to any Surrender Charge that may be assessed, We will charge
a Partial Surrender Fee which is shown on the Policy Schedule.
CALCULATION OF VALUES
ACCUMULATION VALUE - The total Accumulation Value reflects the Premiums paid,
Premium Charges, Monthly Deductions, the investment experience of the
Subaccounts selected, the interest earned on the Fixed Account, if selected, the
interest earned on the Loan Account, if any loans are outstanding, and any
deductions due to any partial surrenders.
Your Accumulation Value on the Policy Date equals Your initial Premium less the
Premium Charge, less the initial Monthly Deduction.
On each subsequent Business Day, Your Accumulation Value equals:
1. the sum of Your Accumulation Values in the Subaccounts You have
selected; plus
2. Your Accumulation Value in the Fixed Account, if You have selected the
Fixed Account; plus
3. Your Accumulation Value in the Loan Account, if any loans are
outstanding.
CASH SURRENDER VALUE - The Cash Surrender Value of Your Policy on a Business Day
is equal to the Accumulation Value as of the Business Day less any Indebtedness
and less any surrender charge that would be assessed if the Policy were
surrendered as of the Business Day.
SUBACCOUNT ACCUMULATION VALUE - Your Accumulation Value in any
Subaccount equals:
1. the number of Your Accumulation Units in that Subaccount on the
Business Day;
multiplied by
2. that Subaccount's Accumulation Unit Value for that Business Day.
FIXED ACCOUNT ACCUMULATION VALUE - On each Business Day, the Accumulation Value
in the Fixed Account equals:
1. the Fixed Account Accumulation Value on the preceding Business Day
plus interest from the preceding Business Day to the current Business
Day; plus
2. the portion of the Net Premiums allocated to the Fixed Account as of
the current Business Day; plus
3. the amount of transfers from the Subaccounts and the Loan Account to
the Fixed Account as of the current Business Day; less
4. the amount of any transfer from the Fixed Account to the Subaccounts
or the Loan Account as of the current Business Day; less
5. any partial surrender, any Partial Surrender Fee and any surrender and
partial surrender charges deducted from the Fixed Account as of the
current Business Day; less
6. the pro-rata portion of the Monthly Deduction from the Fixed Account
as of the current Business Day if the Business Day is also a Monthly
Anniversary Day.
INTEREST CREDITED TO THE FIXED ACCOUNT - Interest will accrue daily at a rate
not less than the Guaranteed Interest Rate shown on the Policy Schedule.
INSUFFICIENT ACCUMULATION VALUE - On any Monthly Anniversary Day, if the Cash
Surrender Value is not sufficient to cover the Monthly Deduction, this Policy
will terminate, subject to the Grace Period provision.
During the first five Policy Years this Policy will not terminate as long as the
cumulative Premiums paid to date are at least equal to (a) times (b) where:
(a) is the number of Monthly Anniversary Days that have occurred plus
one; and (b) is the No-Lapse Monthly Minimum Premium shown on the
Policy Schedule.
The cumulative Premiums paid are equal to: (1) the total Premiums paid; less (2)
any Indebtedness; less any (3) partial surrenders, Partial Surrender Fees
assessed and any pro-rata surrender charge assessed for the partial surrenders.
If there are any changes in the No-Lapse Monthly Minimum Premium, this Policy
will remain in force during the first five Policy Years as long as the
cumulative Premiums received on and after the date of the change are at least
equal to (c) plus (d) where:
(c) is (a) times (b) as defined above; and
(d) is the change in the No-Lapse Monthly Minimum Premium times the
number of Monthly Anniversary Days that have occurred starting
with the effective date of the change.
Any deduction for the cost of insurance after termination will not be considered
a reinstatement of this Policy or a waiver by Us of the termination. Any such
deduction will be credited to the Accumulation Value as of the date of the
deduction.
CONTINUATION OF INSURANCE - If the Planned Premiums are not paid and if no
additional Premiums are paid, coverage may continue subject to the Insufficient
Accumulation Value provision.
COMPUTATION OF VALUES AND RESERVES - The Commissioners' 1980 Standard Ordinary
Smoker or Nonsmoker Mortality Table, with interest, as shown on the Policy
Schedule and compounded yearly, is used to establish reserves and guaranteed
Fixed Account values.
A detailed statement of the methods of calculation has been filed with the
insurance supervisory official of the jurisdiction in which this policy is
delivered. All guaranteed values and benefits of this policy are not less than
the minimum values and benefits required by the laws of such jurisdiction.
SUSPENSION OR DEFERRAL OF PAYMENTS
We reserve the right to suspend or postpone payments from the Separate Account
for any period when:
1. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of securities held
in the Separate Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Separate
Account's net assets; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Owners.
Provided that applicable rules and regulations of the Securities and Exchange
Commission will govern whether the conditions described in (2) and (3) exist.
Transfers may also be postponed under the above circumstances.
We may defer the portion of any transfer, amount payable on surrender, or Policy
Loan from the Fixed Account for not more than six months.
DEATH BENEFIT
DEATH BENEFIT - The amount of Death Benefit depends upon the Specified Amount
and Your Policy's Accumulation Value on the date of the last surviving Insureds'
death, and the Death Benefit Option in effect at the time of death. The Initial
Base Policy Specified Amount and the Death Benefit Option in effect on the
Policy Date are shown on the Policy Schedule.
Level Death Benefit Option. The amount of the Death Benefit under the Level
Death Benefit Option is the greater of:
1. the Specified Amount on the date of death of the last surviving
Insured; or
2. the Accumulation Value on the date of death of the last surviving
Insured multiplied by the applicable factor from the Table of Minimum
Death Benefit Corridor Percentages shown below.
Adjustable Death Benefit Option. The amount of the Death Benefit under the
Adjustable Death Benefit Option is the greater of:
1. the Specified Amount on the date of death of the last surviving
Insured plus the Accumulation Value on the date of death of the last
surviving Insured; or
2. the Accumulation Value on the date of death of the last surviving
Insured multiplied by the applicable factor from the Table of Minimum
Death Benefit Corridor Percentages shown below.
The applicable percentage is a percentage that is based on the Attained Age of
the younger of the Insureds on the Policy Date plus the number of completed
Policy Years on the date that the Death Benefit is to be determined and is equal
to the following:
<TABLE>
---------------- ------------------------ ------------- -------------------
Attained Age Corridor Attained Corridor
Percentage Age Percentage
---------------- ------------------------ ------------- -------------------
<S> <C> <C> <C> <C>
0-40 250% 60 130%
41 243% 61 128%
42 236% 62 126%
43 229% 63 124%
44 222% 64 122%
45 215% 65 120%
46 209% 66 119%
47 203% 67 118%
48 197% 68 117%
49 191% 69 116%
50 185% 70 115%
51 178% 71 113%
52 171% 72 111%
53 164% 73 109%
54 157% 74 107%
55 150% 75-90 105%
56 146% 91 104%
57 142% 92 103%
58 138% 93 102%
59 134% 94 101%
95-100 100%
---------------- ------------------------ ------------- -------------------
</TABLE>
CHANGE IN DEATH BENEFIT OPTION - You may change the Death Benefit option after
this Policy has been in force for at least one year, subject to the following:
1. You must submit an Authorized Request;
2. once the Death Benefit option has been changed, it cannot be changed
again until the next Policy Year;
3. if the Level Death Benefit Option is to be changed to the Adjustable
Death Benefit Option, You must submit proof satisfactory to Us that
both Insureds are still living;
4. if the Level Death Benefit Option is changed to the Adjustable Death
Benefit Option the resulting Specified Amount cannot be less than the
Minimum Base Policy Specified Amount shown on the Policy Schedule. The
Specified Amount will be reduced to equal the Specified Amount less
the Accumulation Value on the date of change. This decrease will not
result in any decrease in Premiums or Surrender Charges; and
5. if the Adjustable Death Benefit Option is changed to Level Death
Benefit Option, the Specified Amount will be increased by an amount
equal to the Accumulation Value on the date of the change. This
increase will not result in any increase in Premiums or Surrender
Charges.
Any change in a Death Benefit option will take effect on the Monthly Anniversary
Day on or following the date We approve the request for the change.
CHANGE IN SPECIFIED AMOUNT - You may change the Specified Amount of this Policy
effective on any Monthly Anniversary Day after the Policy has been in force at
least one year, subject to the following requirements. Once the Specified Amount
has been changed, it cannot be changed again until the next Policy Year.
Specified Amount Increase. To increase the Specified Amount You must:
1. submit an application for the increase;
2. submit proof satisfactory to Us that each Insured is an insurable
risk; and
3. pay any additional Premium which is required.
The Specified Amount can only be increased while the older Insured is age 90 or
less and the younger Insured is age 85 or less. A Specified Amount increase will
take effect on the Monthly Anniversary Day on or following the day We approve
the application for the increase provided both Insureds are alive on that day.
The Specified Amount increase must be for at least the Minimum Increase in Base
Policy Specified Amount shown on the Policy Schedule. Each increase will have
its own surrender charge based on the increased issue ages, sex and rate classes
of the Insureds at the time of the increase. The rate classes that apply to any
Specified Amount increase may be different from the rate classes that apply to
the Initial Base Policy Specified Amount. Each increase will have its own Cost
of Insurance rates.
The following changes will be made to reflect the increase:
1. the No-Lapse Minimum Monthly Premium will be increased;
2. an additional surrender charge for the increase in Specified Amount
will apply.
We will furnish You with documentation showing You the rate classes for the
Specified Amount increase, the amount of the increase and the additional
Surrender Charges.
Specified Amount Decrease. You must request by Authorized Request any
decrease in the Specified Amount. The decrease will take effect on the
later of:
1. the Monthly Anniversary Day on or following the day We receive Your
request for the decrease; or
2. the Monthly Anniversary Day one year after the last change in
Specified Amount was made.
A Specified Amount decrease will be used to reduce any previous increases to the
Specified Amount which are then in effect starting with the latest increase and
continuing in the reverse order in which the increases were made. If any portion
of the decrease is left after all Specified Amount increases have been reduced,
it will be used to reduce the Initial Base Policy Specified Amount. We will not
permit a Specified Amount decrease that would reduce the Specified Amount below
the Minimum Base Policy Specified Amount shown on the Policy Schedule. For any
coverage change that results in a decrease in the Specified Amount, the
applicable Surrender Charge for the amount of decrease will be deducted from the
Accumulation Value.
The No-Lapse Minimum Monthly Premium will be reduced to reflect the Specified
Amount decrease.
LOANS
GENERAL - We will loan You money while this Policy is in force and not in a
Grace Period, with this Policy as the sole security. We will advance a loan
amount not to exceed the loan value. The loan must be secured by proper
assignment of this Policy. We may defer granting loans but not for more than six
months.
The Accumulation Value securing the loan is transferred to the Loan Account on a
pro-rata basis. The amount transferred from each Subaccount and the Fixed
Account will equal the ratio of the value each bears to the total unloaned
Accumulation Value. If You desire other than the above, You may specify the
specific Subaccounts from which the transfer is to be made.
Any Indebtedness will be deducted from any amount payable under this Policy.
No new loan may be taken which, in combination with existing loans and accrued
interest, is greater than the Loan Value.
LOAN VALUE - The loan value is equal to [90%] of the Accumulation Value as of
the date the Authorized Request for the loan is received at the Service Center
less: (a) an amount equal to the Surrender Charge, if any, that applies if this
Policy is surrendered in full; (b) any existing Indebtedness; (c) interest on
all Indebtedness on this Policy to the next Policy Anniversary; and (d) prior to
the ninth Policy Month, an amount equal to the balance of the monthly deductions
for the first Policy Year; or (e) on or after the ninth Policy Month, an amount
equal to the sum of the next three Monthly Deductions.
LOAN INTEREST (CHARGED) - Interest is payable in advance on the first interest
payment due date and on each Policy Anniversary that follows at the Loan
Interest Rate which is shown on the Policy Schedule. The interest rate applies
to the unpaid balance of the loan. The first interest payment is due on the date
of the loan.
If loan interest is not paid, the difference between the value of the Loan
Account and the Indebtedness will be transferred from the Subaccounts and the
Fixed Account on a pro-rata basis to the Loan Account.
INTEREST CREDITED - The Accumulation Value in the Loan Account will earn
interest at a rate not less than the Minimum Loan Account Interest Rate. The
Minimum Loan Account Interest Rate is shown on the Policy Schedule.
LOAN REPAYMENT - Loans may be repaid at any time while this Policy is in force.
There is no minimum loan repayment amount. Any loan repayment received will be
repaid according to Your current Allocation of Premiums.
Amounts received by Us will be applied as Premiums unless We are otherwise
instructed to apply such amounts as repayment of the loan.
TERMINATION FOR MAXIMUM INDEBTEDNESS - This Policy will terminate when
Indebtedness equals or exceeds the Accumulation Value less the Surrender Charge,
if any, that applies if this Policy is surrendered in full. Termination will be
effective 61 days after We send notice of the termination to Your last known
address and the last known address of any assignee of record.
SURRENDERS
TOTAL SURRENDER - You may terminate this Policy at any time by submitting an
Authorized Request to the Service Center. We will pay the Cash Surrender Value
to You as of the Business Day the Authorized Request is received in good order
and Our liability under this Policy will cease.
PARTIAL SURRENDER - After the first Policy Year, You may surrender a part of the
Cash Surrender Value by submitting an Authorized Request to the Service Center.
All partial surrenders are subject to the following:
1. a partial surrender must be for an amount at least equal to
the Minimum Partial Surrender Amount shown on the Policy.
2. unless You specify otherwise, the partial surrender will be
deducted on a pro-rata basis from the Fixed Account and the
Subaccounts; the Surrender Charge and the Partial Surrender
Fee are also deducted from the Accumulation Value; the Owner
may specify if a different allocation method is to be used,
however the proportion to be taken from the Fixed Account may
never be greater than the Fixed Account's proportion of the
total unloaned Accumulation Value.
3. You cannot replace the surrendered Cash Surrender Value.
4. upon a partial surrender, the Specified Amount may be reduced
if the Level Death Benefit Option is in effect. The Specified
Amount will not be reduced if the Adjustable Death Benefit
Option is in effect. The Specified Amount will be reduced by
the amount of the partial surrender if the Policy is not in
corridor.
5. a partial surrender is allowed twice each policy year and will
be limited to such amounts so that the partial withdrawal will
not reduce the Specified Amount below the Minimum Specified
Amount shown on the Policy Schedule or reduce the Cash
Surrender Value below the remaining Cash Surrender Value
amount shown on the Policy Schedule.
6. a pro-rata portion of the Surrender Charge is assessed for any
amount by which the Specified Amount is reduced. A Partial
Surrender Fee also applies.
TRANSFERS
A transfer is subject to the following:
1. the maximum number of transfers and the number of transfers
which may be made which are not subject to a Transfer Fee are
shown on the Policy Schedule;
2. a Transfer Fee is deducted if a transfer exceeds the maximum
number of free transfers. The Transfer Fee is shown on the
Policy Schedule. The Transfer Fee is deducted from the amount
that is transferred;
3. You may not make a transfer until the end of the Free Look
period;
4. the minimum and maximum amounts which may be transferred are
shown on the Policy Schedule;
5. a transfer will be effective as of the end of the Business Day
when We receive an acceptable transfer request containing all
required information;
6. neither We nor Our Service Center are liable for a transfer
made in accordance with Your instructions;
7. We reserve the right to restrict the number of transfers per
year and to restrict transfers from being made on consecutive
Business Days;
8. Your right to make transfers is subject to modification if We
determine, in Our sole opinion, that the exercise of the right
by one or more Owners is, or would be, to the disadvantage of
other Owners. Restrictions may be applied in any manner
reasonably designed to prevent any use of the transfer right
which is considered by Us to be to the disadvantage of other
Owners. A modification could be applied to transfers to or
from one or more of the Subaccounts and could include but not
be limited to:
a. the requirement of a minimum time period between each
transfer;
b. not accepting transfer requests of an agent acting under
a power of attorney on behalf of more than one Owner; or
c. limiting the dollar amount that may be transferred by an
Owner at any one time.
9. during times of drastic economic or market conditions, We may
suspend the transfer privilege temporarily without notice and
treat transfer requests based on their separate components --
a redemption order with a simultaneous request for purchase of
another Subaccount. In such a case, the redemption request
would be processed at the source Subaccount's next determined
Accumulation Unit Value but the purchase into the new
Subaccount would be effective at the next determined
Accumulation Unit Value for the new Subaccount only after We
receive the proceeds from the Investment Option which
underlies the source Subaccount or the source Subaccount
otherwise receives cash.
TERMINATION
This Policy will terminate on the earliest of these dates:
1. the Maturity Date;
2. the date the last surviving Insured dies;
3. the end of the Grace Period;
4. the date, as stated in the Loan provision, that the
Indebtedness equals or exceeds the Accumulation Value, less
the Surrender Charge, if any;
5. the date surrender of the Policy is effective, as stated in
the Surrender and Surrender Value provision; or
6. the first Monthly Anniversary day that falls on or next
follows Your Authorized Request to cancel this Policy.
We may request the return of this Policy.
PAYMENT OPTIONS PROVISION
At any time, by sending an Authorized Request to the Service Center, You may
select any of the payment options described below. If at the time of payment You
have not chosen an option, Your Beneficiary may select any of the payment
options described below. Other payment options acceptable to Us may be elected.
An election to receive distribution under a payment option must be made no later
than 30 days before the Maturity Date.
The Effective Date of the payment option will be the later of the date You
select or the date We receive all of the required forms at the Service Center.
The first payment will be due one month (or one modal period if other than a
monthly payment frequency is elected) following the Effective Date.
Payment options are available only with Our consent if (a) this Policy is
assigned; or (b) any Payee is not a natural person.
AMOUNT AND FREQUENCY OF PAYMENTS: The amount of each payment under a payment
option will be determined by applying the Death Proceeds on the Effective Date
to the Annuity Tables contained in this Policy for the payment option selected.
These Annuity Tables are based on the 1983 Individual Annuity Mortality Table
with mortality projected to the year 2000 by projection scale G and with an
annual effective interest rate of 3 1/2%. For the payment options described
below, We guarantee that the dollar amount of each payment after the first will
not be affected by variations in mortality or expense experience. If on the
Effective Date of the payment amounts, We are using tables of annuity rates for
these Policies which result in larger payment options, We will use those tables
instead. Where permitted, purchase payments will depend on the Age and sex of
the Annuitant and Joint Annuitant, where applicable.
Upon the election of a payment option, the Death Proceeds will be allocated to
the General Account. Payments will be fixed, and will not vary based on the
experience of any Subaccount.
If the amount available to apply under any payment option is less than $2,500,
We reserve the right to pay such amount in one sum, in lieu of making payments
under a payment option.
Payments will automatically be made monthly. Subject to Our approval, quarterly,
semi-annual or annual payments may be chosen by sending an Authorized Request to
the Service Center. However, if any payment provided for would be or becomes
less than $20, We would have the right to reduce the frequency of payment to an
interval that will result in each payment being at least $20.
PAYMENT OPTIONS -
OPTION 1 - LIFE ANNUITY. We will make monthly annuity payments during the life
of the Annuitant and ceasing with the last annuity payment due prior to the
Annuitant's death.
OPTION 2 - LIFE ANNUITY WITH 120 OR 240 MONTHLY ANNUITY PAYMENTS GUARANTEED - We
will make monthly annuity payments during the life of the Annuitant with a
guarantee that if at the Annuitant's death there have been less than 120 or 240
monthly annuity payments made as selected, monthly annuity payments will
continue to a designated Payee for the remainder of the guaranteed period. You
may elect to have the present value of the guaranteed monthly annuity payments
remaining, as of the date notice of the Annuitant's death is received at the
Service Center, commuted at the Statutory Calendar Year Interest Rate based on
the NAIC Standard Valuation Law for Single Premium Immediate Annuities
corresponding to the Effective Date of the payment option. We will require the
return of this Policy and proof of death prior to the payment of any commuted
values.
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY. We will make monthly annuity
payments during the joint lifetime of the Annuitant and the Joint Annuitant.
Upon the death of the Annuitant, if the Joint Annuitant is then living, annuity
payments will continue to be paid during the remaining lifetime of the Joint
Annuitant at a level of 100%, of the previous level, as selected. Monthly
annuity payments cease with the final annuity payment due prior to the last
survivor's death.
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH 120 OR 240 MONTHLY ANNUITY
PAYMENTS GUARANTEED. We will make monthly annuity payments during the joint
lifetime of the Annuitant and the Joint Annuitant. Monthly annuity payments will
continue to be paid during the remaining lifetime of the Joint Annuitant at 100%
of the previous level. If at the last death of the Annuitant and the Joint
Annuitant, there have been less than 120 or 240 monthly annuity payments made as
selected, monthly annuity payments will continue to a designated Payee for the
remainder of the guaranteed period. You may elect to have the present value of
the guaranteed monthly annuity payments remaining, as of the date notice of the
last death of the Annuitant and Joint Annuitant is received at the Service
Center, commuted at the Statutory Calendar Year Interest Rate based on the NAIC
Standard Valuation Law for Single Premium Immediate Annuities corresponding to
the Effective Date of the payment option. We will require the return of this
Policy and proof of death prior to the payment of any commuted values.
MINIMUM RATE - The interest rate guaranteed is 3% under Options 1, 3, and
4. The minimum rate for Option 2 is based on the 1937 Standard Annuity
Mortality Table at 2 1/2%. Additional interest may be paid as determined by Us.
SETTLEMENT AGREEMENT - At the time a payment option is elected, We require
exchange of this Policy for a settlement agreement which covers the payment
option. The Effective Date of such agreement will be the date proceeds are
applied under the settlement agreement.
DEATH OF PAYEE - If the payee has died, the value of any remaining guaranteed
payments will be paid to the payee's estate, unless otherwise provided in the
election of the option. The value will be based on the interest rate shown in
the settlement agreement, but not less than the guaranteed rate for the payment
option elected.
<PAGE>
<TABLE>
<CAPTION>
ANNUITY PAYMENTS FOR THE LIFE OF THE PAYEE, WITH GUARANTEED PERIODS
----------------------------------------------------------------------------------------------------------------------------
Monthly Payment Per $1000 of Adj. Contract Monthly Payment Per $1000 of Adj.
Male Value Female Contract Value
--------------------------------------------- ------------ ----------------------------------------------
Annuitant Life 10 Years 20 Years Annuitant Life 10 Years 20 Years
Age Only Guaranteed Guaranteed Age Only Guaranteed Guaranteed
--------------- ----------- ---------------- ---------------- ------------ ------------ ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50 4.37 4.33 4.23 50 4.05 4.03 3.99
51 4.44 4.40 4.28 51 4.10 4.08 4.03
52 4.51 4.47 4.34 52 4.16 4.14 4.08
53 4.58 4.54 4.39 53 4.22 4.20 4.13
54 4.66 4.61 4.45 54 4.28 4.26 4.18
55 4.75 4.69 4.51 55 4.35 4.32 4.24
56 4.84 4.77 4.57 56 4.42 4.39 4.29
57 4.93 4.86 4.63 57 4.49 4.46 4.35
58 5.04 4.95 4.69 58 4.57 4.54 4.41
59 5.14 5.05 4.76 59 4.66 4.62 4.48
60 5.26 5.15 4.82 60 4.75 4.70 4.54
61 5.38 5.26 4.89 61 4.84 4.79 4.61
62 5.51 5.37 4.95 62 4.94 4.88 4.68
63 5.65 5.49 5.01 63 5.05 4.98 4.74
64 5.80 5.62 5.08 64 5.17 5.09 4.81
65 5.96 5.75 5.14 65 5.29 5.20 4.88
66 6.13 5.89 5.20 66 5.42 5.32 4.95
67 6.32 6.03 5.25 67 5.56 5.44 5.02
68 6.51 6.18 5.31 68 5.71 5.57 5.09
69 6.72 6.33 5.36 69 5.88 5.71 5.16
70 6.94 6.49 5.41 70 6.05 5.85 5.22
71 7.18 6.65 5.46 71 6.24 6.01 5.29
72 7.44 6.82 5.50 72 6.44 6.17 5.35
73 7.71 6.98 5.54 73 6.66 6.34 5.40
74 7.99 7.15 5.57 74 6.90 6.51 5.45
75 8.30 7.33 5.60 75 7.16 6.69 5.50
76 8.63 7.50 5.63 76 7.44 6.88 5.54
77 8.98 7.67 5.65 77 7.75 7.07 5.58
78 9.35 7.84 5.67 78 8.07 7.26 5.61
79 9.76 8.01 5.69 79 8.42 7.46 5.64
80 10.18 8.18 5.70 80 8.80 7.66 5.66
81 10.64 8.33 5.72 81 9.20 7.85 5.68
82 11.12 8.49 5.73 82 9.64 8.04 5.70
83 11.64 8.64 5.73 83 10.12 8.22 5.71
84 12.20 8.77 5.74 84 10.63 8.40 5.72
85 12.77 8.90 5.74 85 11.19 8.57 5.73
--------------- ----------- ---------------- ---------------- ------------ ------------ ---------------- ----------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUITY PAYMENTS FOR JOINT LIFE, WITH GUARANTEED PERIODS
---------------------- ----------------- ----------------------------------------------------------------------------
Monthly Payment Per $1000 of Adj. Contract Value*
Primary Contingent ----------------------------------------------------------------------------
Annuitant Annuitant Joint Life 10 Years 20 Years
Age Age Only Guaranteed Guaranteed
---------------------- ----------------- -------------------------- -------------------------- ---------------------
<S> <C> <C> <C> <C> <C>
50 50 3.78 3.78 3.78
51 51 3.82 3.82 3.82
52 52 3.87 3.87 3.87
53 53 3.91 3.91 3.91
54 54 3.96 3.96 3.95
55 55 4.01 4.01 4.00
56 56 4.07 4.07 4.06
57 57 4.13 4.13 4.11
58 58 4.19 4.19 4.17
59 59 4.25 4.25 4.23
60 60 4.32 4.32 4.29
61 61 4.39 4.39 4.36
62 62 4.47 4.47 4.42
63 63 4.56 4.55 4.49
64 64 4.64 4.64 4.57
65 65 4.74 4.73 4.64
66 66 4.84 4.83 4.72
67 67 4.95 4.93 4.80
68 68 5.06 5.05 4.88
69 69 5.18 5.16 4.96
70 70 5.31 5.29 5.04
71 71 5.45 5.42 5.11
72 72 5.61 5.56 5.19
73 73 5.77 5.71 5.26
74 74 5.94 5.88 5.32
75 75 6.13 6.04 5.39
76 76 6.33 6.22 5.45
77 77 6.54 6.40 5.50
78 78 6.78 6.59 5.54
79 79 7.02 6.79 5.58
80 80 7.29 6.99 5.62
81 81 7.58 7.20 5.65
82 82 7.88 7.41 5.67
83 83 8.21 7.62 5.69
84 84 8.57 7.82 5.71
85 85 8.94 8.03 5.72
---------------------- ----------------- -------------------------- -------------------------- ----------------------
*Payments continue at 100% of the chart value until the death of the last
surviving annuitant or until the end of the guaranteed period, if later.
Payment factors for ages and annuity forms provided by this Policy, but not
shown above, are available upon request.
</TABLE>
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LAST SURVIVOR FLEXIBLE PREMIUM ADJUSTABLE
VARIABLE LIFE INSURANCE POLICY
NONPARTICIPATING
---------------------------------------------------------------------
BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA
BMA TOWER, P. O. BOX 412879
KANSAS CITY, MO 64141
CALL (800) 423-9398 FOR ASSISTANCE OR QUESTIONS.
