As filed with the Securities and Exchange Commission on May 8, 2000.
File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
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JACKSON NATIONAL LIFE SEPARATE ACCOUNT IV
(Exact Name of Trust)
JACKSON NATIONAL LIFE INSURANCE COMPANY
(Name of Depositor)
5901 Executive Drive
Lansing, Michigan 48911
(Complete Address of Depositor's Principal Executive Offices)
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JACKSON NATIONAL LIFE INSURANCE COMPANY
5901 Executive Drive
Lansing, Michigan 48911
(Name and Complete Address of Agent for Service)
Copies to:
Joan E. Boros, Esq. Patrick W. Garcy, Esq.
Jorden Burt Boros Cicchetti Jackson National Life Insurance Company
Berenson & Johnson LLP 5901 Executive Drive
1025 Thomas Jefferson Street, N.W. Lansing, Michigan 48911
Washington, D.C. 20007-5201
Title of securities being offered: variable portion of modified single premium
variable life insurance policy and last survivor modified single premium
variable life insurance policy.
Approximate date of proposed public offering: as soon as practicable after the
effective date of this registration statement.
The registrant hereby amends this registration statement on such dates as may be
necessary to delay its effective date until the registrant shall file a further
amendment which specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the registration statement shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.
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<PAGE>
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
(SINGLE LIFE AND SURVIVORSHIP)
ISSUED BY
JACKSON NATIONAL LIFE INSURANCE COMPANY
IN CONNECTION WITH ITS
JACKSON NATIONAL LIFE SEPARATE ACCOUNT IV
5901 Executive Drive
Lansing, Michigan 48911
JACKSON NATIONAL LIFE SERVICE CENTER
P.O. BOX 378002
DENVER, COLORADO 80237-8002
1-800-766-4683
IMG SERVICE CENTER
P.O. BOX 30386
LANSING, MICHIGAN 48909-7886
1-800-777-7779
Jackson National Life Insurance Company is offering the modified single premium
variable life insurance policies described in this prospectus. The policies
provide insurance coverage on the life of one Insured (Single Life Policy) and
on the lives of two Insureds (Survivorship Policy). The description of the
"policy" or "policies" in this prospectus is fully applicable to both the Single
Life Policy and the Survivorship Policy. Please read this prospectus carefully
before investing and keep it for future reference.
The policies currently offer 28 allocation options, including 27 variable
investment options, each of which is a investment division of Jackson National
Life Separate Account IV, and our Guaranteed Account. Each investment division
invests exclusively in shares of one of the portfolios of JNL(R) Series Trust.
We do not guarantee a minimum Policy Value on amounts allocated to the
investment divisions and, therefore, the policies do not have a guaranteed
minimum Policy Value. The portion of your Policy Value in the Separate Account
will vary depending on the investment performance of the portfolios underlying
the investment divisions to which you allocate your premium. You bear the entire
investment risk on amounts allocated to the investment divisions. The investment
policies and risks of each portfolio are described in the accompanying
prospectuses for the JNL(R) Series Trust and its portfolios. The Policy Value
will also reflect premiums paid, amounts withdrawn, and cost of insurance and
other charges.
VARIABLE LIFE INSURANCE POLICIES INVOLVE RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL. THEY ARE NOT DEPOSITS OF ANY BANK OR INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
IT MAY NOT BE ADVANTAGEOUS FOR YOU TO PURCHASE VARIABLE LIFE INSURANCE TO
REPLACE YOUR EXISTING INSURANCE COVERAGE OR IF YOU ALREADY OWN A VARIABLE LIFE
INSURANCE POLICY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. JACKSON NATIONAL DOES NOT AUTHORIZE ANY
INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS BASED IN THIS PROSPECTUS.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS __________, 2000.
<PAGE>
TABLE OF CONTENTS
GLOSSARY OF TERMS...........................................................
YOUR POLICY -- QUESTIONS AND ANSWERS........................................
FEES AND EXPENSES...........................................................
PURCHASING A POLICY AND ALLOCATING PREMIUM..................................
Applying for a Policy....................................................
Premium..................................................................
Allocation of Premium....................................................
Policy Value.............................................................
Accumulation Unit Value..................................................
Transfer of Policy Value.................................................
Transfers Authorized by Telephone........................................
Dollar Cost Averaging and Other Periodic Transfers.......................
Asset Rebalancing........................................................
THE SEPARATE ACCOUNT........................................................
The Portfolios..............................................................
Voting Privileges..........................................................
Additions, Deletions, and Substitutions of Securities.......................
THE GUARANTEED ACCOUNT......................................................
POLICY BENEFITS AND RIGHTS..................................................
Death Benefit............................................................
Death Benefit Payment Options............................................
Optional Insurance Benefits..............................................
Policy Loans.............................................................
Withdrawals..............................................................
Status of Policy at Attained Age 100.....................................
Termination and Grace Period.............................................
Reinstatement............................................................
Right to Examine the Policy..............................................
Postponement of Payment..................................................
CHARGES AND DEDUCTIONS......................................................
Daily Deduction..........................................................
Cost of Insurance Charge.................................................
Policy Maintenance Charge................................................
Withdrawal Charge........................................................
Transfer Charge..........................................................
Illustration Charge......................................................
Additional Policy Charges................................................
Portfolio Expenses.......................................................
Special Provisions for Group or Sponsored Arrangements...................
GENERAL POLICY PROVISIONS...................................................
Statements to Owners.....................................................
Limit on Right to Contest................................................
Suicide..................................................................
Misstatement as to Age and Sex...........................................
Beneficiary..............................................................
Assignment...............................................................
Creditors' Claims........................................................
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Dividends................................................................
Notice and Elections.....................................................
Modification.............................................................
Survivorship Policy......................................................
FEDERAL TAX CONSIDERATIONS..................................................
Taxation of Jackson National and the Separate Account....................
Tax Status of the Policies...............................................
Diversification Requirements.........................................
Owner Control........................................................
Tax Treatment of Life Insurance Death Benefit Proceeds...................
Tax Deferral During Accumulation Period..................................
Policies Which Are MECs..............................................
Policies Which Are Not MECs..........................................
Survivorship Policies....................................................
Treatment at Attained Age 100............................................
Actions to Ensure Compliance with the Tax Law............................
Federal Income Tax Withholding...........................................
Tax Advice...............................................................
DESCRIPTION OF JACKSON NATIONAL AND THE SEPARATE ACCOUNT....................
Jackson National Life Insurance Company..................................
Officers and Directors of Jackson National...............................
The Separate Account.....................................................
Safekeeping of the Separate Account's Assets.............................
State Regulation of Jackson National.....................................
DISTRIBUTION OF POLICIES....................................................
LEGAL PROCEEDINGS...........................................................
LEGAL MATTERS...............................................................
REGISTRATION STATEMENT......................................................
EXPERTS.....................................................................
FINANCIAL STATEMENTS........................................................
APPENDIX....................................................................
3
<PAGE>
GLOSSARY OF TERMS
We have capitalized certain terms used in this prospectus. To help you
understand these terms, we have defined them in this section.
ACCUMULATION UNIT - An accounting unit of measurement that we use to calculate
the value in a investment division.
ALLOCATION DATE - The date we allocate premium from the money market division to
the divisions elected on the application (or the most recent allocation
instructions provided by the contract owner.
ATTAINED AGE - An Insured's rated age on the Policy Date plus the number of full
years since the Policy Date.
CODE - Internal Revenue Code of 1986, as amended.
DAILY DEDUCTION - The amount deducted on a daily basis when calculating the
value of an Accumulation Unit. It represents the mortality and expense risk
charge, administrative charge, and tax charge.
DEATH BENEFIT PROCEEDS - The amount we will pay to the beneficiary(ies) under
the policy upon the death of the Insured in the case of a Single Life Policy and
the death of the last surviving Insured in the case of a Survivorship Policy.
DEATH BENEFIT - The greater of the initial death benefit as shown in your
policy, reduced by any partial withdrawal, plus any increase in coverage due to
additional premium; or the Minimum Death Benefit; less any Debt, and less any
overdue cost of insurance charge and policy maintenance charge if the Insured
dies during the Grace Period.
DEBT - The sum of all unpaid policy loans and accrued interest.
EARNINGS - Your Policy Value reduced by Remaining Premium.
GUARANTEED ACCOUNT - An allocation option under the policy that earns an
annually declared rate of interest of not less than 3%. Assets allocated to the
Guaranteed Account are part of our general account.
GRACE PERIOD - The 61-day period during which your policy remains in force after
we send you written notice that your policy will lapse if you do not make an
additional payment.
INSURED - A person whose life is insured under the policy. Single Life Policies
have one Insured and Survivorship Policies have two Insureds.
ISSUE DATE - The date Jackson National issued your policy and from which we
measure contestability periods. It may be later than the Policy Date.
LOAN ACCOUNT - An account established as part of our general account for amounts
transferred from the investment divisions and/or the Guaranteed Account as
security for your policy loans.
MINIMUM DEATH BENEFIT - Your Policy Value multiplied by the death benefit
percentage applicable to the Attained Age as shown in the policy.
MONTHLY ANNIVERSARY - The same day in each month as the Policy Date. For those
months not having such a day, it is the last day of that month.
OWNER - The person(s) having the privileges of ownership defined in the policy.
The Owner(s) may or may not be the same person(s) as the Insured(s). If your
policy is issued pursuant to a retirement plan, your ownership privileges may be
modified by the plan.
POLICY ANNIVERSARY - An annual anniversary of the Policy Date.
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POLICY DATE - The effective date of insurance coverage under your policy. It is
used to determine Policy Anniversaries, Policy Years, and Monthly Anniversaries.
POLICY VALUE - The sum of your values in the Separate Account, the Guaranteed
Account, and the Loan Account.
POLICY YEAR - Each twelve-month period beginning on the Policy Date or any
Policy Anniversary.
REMAINING PREMIUM - The total premium paid into the policy reduced by
withdrawals of premiums.
RIGHT TO EXAMINE PERIOD - The period of time starting on the Issue Date during
which you can cancel your policy. During the Right to Examine Period, we will
allocate your premium to the Money Market Investment division. If you do not
cancel your policy during the Right to Examine Period, we will reallocate your
premium according to your instructions on the allocation date .
SEPARATE ACCOUNT - Jackson National Life Separate Account IV, the segregated
asset account of Jackson National that funds the policies.
SERVICE CENTER - Jackson National Life Service Center, P.O. Box 378002, Denver,
Colorado 80237-8002, 1-800-766-4683 or IMG Service Center, P.O. Box 30386,
Lansing, Michigan 48909-7886, 1-800-777-7779. You can send express mail to the
Jackson National Life Service Center at 8055 E. Tufts Avenue, 2nd Floor, Denver,
Colorado 80237 or the IMG Service Center at 5901 Executive Drive, Lansing,
Michigan 48911.
WITHDRAWAL VALUE - The Policy Value less any applicable withdrawal charge, taxes
payable, outstanding policy maintenance charge, and any Debt.
VALUATION DAY - Each day that we and the New York Stock Exchange are open for
business.
VALUATION PERIOD - The period of time over which we determine the change in the
value of the investment divisions. Each Valuation Period begins at the close of
normal trading on the New York Stock Exchange (currently 4:00 p.m. Eastern time)
on each Valuation Day and ends at the close of the New York Stock Exchange on
the next Valuation Day.
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YOUR POLICY - QUESTIONS AND ANSWERS
These are answers to questions that you may have about some of the most
important features of your policy. The policy is described more fully in the
rest of this prospectus. Please read this prospectus carefully. Unless otherwise
noted, the description of the policy contained in this prospectus assumes that
the policy is in force, that there is no Debt, and that current federal tax laws
apply.
1. WHAT IS A MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY?
The policy permits the Owner to pay a significant initial premium and, subject
to restrictions, additional premium. The policy has a Death Benefit, Policy
Value, and other features similar to life insurance policies providing fixed
benefits. It is a "variable" policy because the Policy Value and the Death
Benefit may vary according to the investment performance of the investment
divisions to which you allocate your premium and Policy Value. The Policy Value
is not guaranteed. The policy provides you with the opportunity to take
advantage of any increase in your Policy Value, but you also bear the risk of
any decrease.
2. WHO MAY PURCHASE A POLICY?
We will issue policies on the lives of prospective Insureds that meet our
simplified and/or full underwriting standards. You may purchase a Single Life
Policy to provide insurance coverage on the life of one Insured or a
Survivorship Policy to provide insurance coverage on the lives of two Insureds.
3. WHAT IS THE DEATH BENEFIT?
Under a Single Life Policy, we will pay the Death Benefit to the beneficiary
upon the death of the Insured. Under a Survivorship Policy, we will pay the
Death Benefit to the beneficiary upon the death of the last surviving Insured.
The Death Benefit is equal to the greater of:
(1) the initial death benefit shown in your policy, reduced by any partial
withdrawal, plus any increase in coverage due to additional premium; or
(2) the Minimum Death Benefit;
less any Debt, and less any overdue cost of insurance charge and policy
maintenance charge if the Insured dies during the Grace Period. Subject to
certain requirements, you can increase the Death Benefit by paying additional
premium. You can also decrease coverage under certain circumstances. We will
refuse to decrease coverage if such decrease would cause the policy to lose its
status as life insurance under the Code. A partial withdrawal will cause the
Death Benefit to decrease in direct proportion to the reduction in Policy Value.
As with a decrease in insurance coverage, we will not permit a partial
withdrawal if the decrease in Death Benefit would cause the policy to lose its
status as life insurance under the Code.
4. HOW IS MY POLICY VALUE DETERMINED?
At your request, your premium is allocated to one or more of the investment
divisions and/or allocated to the Guaranteed Account. Your Policy Value is the
sum of the values of your interests in the Separate Account, the Guaranteed
Account, and the Loan Account. Your Policy Value will depend on the investment
performance of the investment divisions and the amount of interest we credit to
the Guaranteed Account and the Loan Account, as well as the premium paid, amount
withdrawn, and charges assessed. We do not guarantee a minimum Policy Value on
the portion of your premium allocated to the Separate Account.
5. WHAT IS THE PREMIUM FOR THIS POLICY?
Your initial premium must be at least $10,000. If you choose, you may pay
additional premium of at least $1,000 each, subject to the restrictions
described in this prospectus. We may require you to complete a new application
and provide evidence of insurability if an increase in the Death Benefit would
result from additional premium. We will refuse to accept any additional premium
that would cause the policy to lose its status as life insurance under the Code.
However, we will not require evidence of insurability for one additional premium
of your choice, even if it would increase the Death Benefit of your policy, as
long as the additional premium does not exceed the lesser of $5,000 or 10% of
your initial premium.
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6. WHEN IS MY POLICY EFFECTIVE?
Your policy is effective on the Policy Date. If your application is approved,
your policy will be effective and your life insurance coverage will begin on the
date that we received your application and initial premium. If you did not
submit your initial premium with your application, we will require you to pay
your initial premium at or before issuance in order for the policy to become
effective. Insurance coverage will not begin and the policy will not be issued
until we receive your premium. We will begin to deduct the policy charges as of
the Policy Date.
The Issue Date marks the end of underwriting and the beginning of the Right to
Examine Period. When we issue your policy, your initial premium will be
allocated to the Money Market Investment division until the Right to Examine
Period ends. At that time, we will allocate the amount in the Money Market
Investment division to the other options according to your most recent
instructions.
While your application is in underwriting, if you have paid your initial
premium, we may provide you with temporary life insurance coverage in accordance
with the terms of our conditional receipt.
If we reject your application, we will not issue you a policy. We will return
any premium you paid, adding interest if, as and at the rate required in your
state. We will not subtract any policy charges from the amount we refund to you.
7. HOW IS MY PREMIUM ALLOCATED?
When you apply for the policy, you specify in your application how to allocate
your premium among the investment divisions and the Guaranteed Account. You must
use whole number percentages and the total allocation must equal 100%. The
minimum allocation percentage per allocation option is 1%. We will allocate any
additional premium according to those percentages until you give us new written
instructions. You may allocate your premium and Policy Value to up to 21
allocation options at any one time. In the future, we may change these limits.
We will temporarily allocate your initial premium to the Money Market Investment
division on the Issue Date. We will reallocate the amount in the Money Market
Investment division among the investment divisions and the Guaranteed Account,
in accordance with your instructions, at the end of theallocation date. As a
general rule, any additional premium will be allocated to the investment
divisions and the Guaranteed Account as of the date your premium is received at
our Service Center.
You may transfer Policy Value among the investment divisions and the Guaranteed
Account by writing to us or calling the service center listed on the front page.
You may not make any transfer that would cause your Policy Value to be allocated
to more than 21 allocation options at any one time. While you may transfer
amounts from the Guaranteed Account, certain restrictions apply. For more
information, see "Transfer of Policy Value" and "Transfers Authorized by
Telephone."
You may also use our dollar cost averaging program [or our asset rebalancing
program. Under the dollar cost averaging program, amounts are automatically
transferred to the investment divisions at regular intervals from the allocation
option of your choice. For more information, see "Dollar Cost Averaging." Under
the asset rebalancing program, you can periodically adjust the percentage of
your Policy Value allocated to each investment division to maintain a pre-set
level. Investment results will shift the balance of your Policy Value
allocations. If you elect asset rebalancing, we automatically transfer your
Policy Value according to the specified percentages at the frequency you
specify. For more information, see "Asset Rebalancing."
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8. WHAT ARE THE ALLOCATION OPTIONS UNDER THE POLICY?
You can allocate and reallocate your Policy Value among the investment divisions
of the Separate Account and the Guaranteed Account. The Guaranteed Account earns
a guaranteed minimum annual interest rate of 3%. Each investment division
invests in a single portfolio. The policy currently offers the following
portfolios as underlying investments:
JNL/Alger Growth Series
JNL/Alliance Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle Small Cap Equity Series
JNL/JP Morgan Enhanced S&P 500 Index Series
JNL/Janus Aggressive Growth Series
JNL/Janus Balanced Series
JNL/Janus Capital Growth Series
JNL/Janus Global Equities Series
JNL/Putnam Growth Series
JNL/Putnam International Equity Series
JNL/Putnam Mid-Cap Growth Series
JNL/Putnam Value Equity Series
JNL/S&P Conservative Growth I Series
JNL/S&P Moderate Growth I Series
JNL/S&P Aggressive Growth I Series
JNL/S&P Very Aggressive Growth I Series
JNL/S&P Equity Growth I Series
JNL/S&P Equity Aggressive Growth I Series
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government and Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price/JNL Mid-Cap Growth Series
T. Rowe Price/JNL Value Series
Each portfolio holds its assets separately from the assets of the other
portfolios. Each portfolio has distinct investment objectives and policies,
which are described briefly in this prospectus and in more detail in the
accompanying prospectuses for the portfolios.
9. MAY I TAKE OUT A POLICY LOAN?
Yes, you may borrow moneyafter your allocation date. You may borrow up to 90% of
the Withdrawal Value of your policy. We offer two types of loans - preferred
loans are loans against Earnings, while all other loans are regular loans. In
most instances policy loans are treated as distributions for federal tax
purposes. Therefore, you may incur tax liabilities if you take out a policy
loan. For more information, see "Policy Loans" and "Policies Which Are MECs."
10. WHAT CHARGES ARE DEDUCTED FROM MY POLICY VALUE?
The mortality and expense risk charge, administrative charge, and tax charge are
together referred to as the Daily Deduction and are deducted from the Unit
Values of the Investment Divisions beginning on the Policy Date. We apply the
Daily Deduction in calculating the value of Accumulation Units of each
investment division to compensate Jackson National for its expenses incurred and
certain risks assumed under the policy. The mortality and expense charge is
calculated at an annual rate equal to .90% during Policy Years 1-10 and .80%
thereafter. We deduct the administrative charge from the investment divisions at
an annual rate equal to .30% during Policy Years 1-10 and .15% thereafter. We
deduct the tax charge from the investment divisions at an annual rate equal to
.40% during Policy Years 1-10.
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We deduct the cost of insurance charge applicable to your policy from the Policy
Value on the Issue Date and on each Monthly Anniversary following the Issue
Date. If the Monthly Anniversary date falls on either the 29th, 30th or 31st of
the month, the cost of insurance charge will be taken on the last business day
in which we don't have these dates in the month. The charge is taken from the
investment divisions and the Guaranteed Account on a proportional basis.
If your Policy Value is less than $50,000 on a Policy Anniversary, we will
deduct a policy maintenance charge of $35 from your Policy Value on that Policy
Anniversary. The charge is taken from the investment divisions and the
Guaranteed Account on a proportional basis. If you make a full withdrawal on a
date other than the Policy Anniversary, we will deduct any applicable policy
maintenance charge from that amount.
We impose a withdrawal charge on certain withdrawals of your Policy Value to
cover a portion of the premium taxes we incur on your behalf and a portion of
the sales expenses we incur in distributing the policies. These sales expenses
include agents' commissions, advertising, and the printing of prospectuses. If
you make a withdrawal within 9 twelve-month periods of paying a premium (each
twelve-month period is referred to as a "premium year"), we may assess a
withdrawal charge as a percentage of premium withdrawn as shown below:
- ------------------ --- -- --- --- --- --- --- -- --- ----------
Premium Year 1 2 3 4 5 6 7 8 9 Thereafter
- ------------------ --- -- --- --- --- --- --- -- --- ----------
Withdrawal Charge 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%
- ------------------ --- -- --- --- --- --- --- -- --- ----------
The withdrawal charge does not apply after nine premium years. You may make
certain withdrawals free of any withdrawal charge each Policy Year.
You may make 15 transfers free of charge in any Policy Year. Thereafter, we will
deduct a charge of $25 per transfer from the transferred amount before
allocating it to the allocation option(s) you have requested.
We may charge a fee of up to $25 for each additional illustrationyou request
(after the first request) in a Policy Year.
We do not currently assess a charge for federal, state, or other taxes that may
be attributable to the operations of the Separate Account, but we reserve the
right to do so in the future
The charges assessed under the policies are summarized in the table called
"Policy Charges and Deductions" and described in more detail in "Charges and
Deductions."
In addition to the charges under the policies, each portfolio deducts amounts
from its assets to pay its management fees and other expenses. The prospectuses
for the portfolios describe these charges and expenses in more detail. WE MAY
RECEIVE COMPENSATION FROM THE INVESTMENT ADVISERS OR ADMINISTRATORS OF THE
PORTFOLIOS. SUCH COMPENSATION WILL BE CONSISTENT WITH THE SERVICES WE PROVIDE OR
THE COST SAVINGS RESULTING FROM THE ARRANGEMENT AND THEREFORE MAY DIFFER FROM
PORTFOLIO TO PORTFOLIO.
11. DO I HAVE ACCESS TO THE VALUE OF MY POLICY?
The value of your policy is available to you through loans and withdrawals. The
maximum amount of any loan taken is 90% of your Withdrawal Value as of the date
we grant the loan. You may also withdraw all or part of the Withdrawal Value of
your policy. Upon a full withdrawal, life insurance coverage under your policy
will end. The minimum amount of a partial withdrawal is $500. If your Policy
Value is less than $500 at the time of your request, we will treat your request
as a request for a full withdrawal. We may waive or change this limit. For more
information, see "Withdrawals."
12. WHAT ARE THE TAX CONSEQUENCES OF BUYING THIS POLICY?
Your policy is structured to meet the definition of life insurance under the
Code. We may need to limit the amount of premium you pay under the policy to
ensure that your policy continues to meet that definition.
In most circumstances, your policy will be considered a "modified endowment
contract," which is a form of life insurance contract under the Code. Special
rules govern the tax treatment of modified endowment contracts. Under current
tax law, death benefit payments under modified endowment contracts, like death
benefit payments under other life insurance contracts, generally are excluded
from the gross income of the beneficiary. Withdrawals and policy loans, however,
are treated differently. Amounts withdrawn and policy loans are treated first as
income, to the extent of any gain, and then as a return of premium. The income
portion of the distribution is includable in your taxable income. Also, an
additional ten percent penalty tax is generally imposed on the taxable portion
of amounts received before age 59 1/2. For more information on the tax treatment
of the policy, see "Federal Tax Considerations" and consult your tax adviser.
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13. CAN I RETURN THIS POLICY AFTER IT HAS BEEN ISSUED?
In most states, you may cancel your policy by returning it to us within ten days
after you receive it. In certain states, the Right to Examine Period may be
longer. If you return your policy during the Right to Examine Period, the policy
terminates and we will refund your premium, less any outstanding policy loans
and any partial withdrawal.
14. WHEN DOES COVERAGE UNDER THE POLICY END?
Unless you make a full withdrawal at an earlier date, your policy will remain in
force until a lapse occurs at the end of the Grace Period or we pay the Death
Benefit under the policy.
With respect to lapse, the policy will enter a Grace Period if the Withdrawal
Value of your policy is $0 or less, or, upon a failure to pay loan interest, the
Debt equals or exceeds the Policy Value less any applicable withdrawal charge in
effect at that time. The policy will terminate at the end of the Grace Period
unless you pay an amount sufficient to keep the policy in force. That amount is
the minimum amount that will pay at least two months of the cost of insurance
charge and any policy maintenance charge due before the end of the Grace Period.
If we do not receive that amount by the end of the Grace Period, the policy will
lapse without value and coverage under the policy will end.
15. CAN I GET AN ILLUSTRATION TO HELP ME UNDERSTAND HOW POLICY VALUES CHANGE
WITH INVESTMENT EXPERIENCE?
At your request we will provide you with a free personalized illustration
explaining future benefits under a policy. We reserve the right to charge a fee
of up to $25 for each additional illustration in any Policy Year. The
illustration will be personalized to reflect the Insured(s)' age, sex,
underwriting classification and proposed initial premium. The illustrated Policy
Value, Withdrawal Value, and Death Benefit will be based on certain hypothetical
assumed rates of return for the Separate Account. Your actual investment
experience will differ and as a result the actual values under your policy at
any time may be higher or lower than those illustrated. The personalized
illustrations follow the methodology and format of the hypothetical
illustrations that we filed with the Securities and Exchange Commission in the
registration statement.
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FEES AND EXPENSES
The following tables are designed to help you understand the fees and expenses
that you bear, directly or indirectly, as an Owner. The first table describes
the policy charges and deductions you bear directly under the policy. The second
table describes the fees and expenses of the portfolios that you bear indirectly
when you purchase a policy. It shows historical expenses of the portfolios as a
percentage of net assets after fee waivers and expense reimbursements, if
applicable, for the year ended December 31, 1999, unless otherwise indicated.
POLICY CHARGES AND DEDUCTIONS
Transaction Charges
Withdrawal Charge 9% of premium declining to 0% of premium(1) Transfer
Charge $25 per transfer in excess of 15 each Policy Year Illustration
Charge $25 per illustration in excess of 1 each Policy Year
Policy Value Charges(2)
Policy Maintenance Charge(3) $35 annually deducted on each Policy
Anniversary
Single Life Cost of Current Guaranteed
Insurance Charge (4) Ranges per month from $0.1443 per $1,000
net amount at risk to $83.33 per $1,000
net amount at risk(5)
Survivorship Cost of Current Guaranteed
Insurance Charge (4) Ranges per month from $0.0002167 per
$1,000 net amount at risk to $83.33 per
$1,000 net amount at risk(5)
Separate Account Charges(6)
Mortality and Expense Charge .90% annually during Policy Years
1-10 and .80% annually thereafter
Administrative Charge .30% annually during Policy Years 1-10
and .15% annually thereafter
Tax Charge .40% annually during Policy Years
1-10
(1) The withdrawal charge declines from 9% of premium during the first
twelve-month period after you pay a premium to 0% in the tenth twelve-month
period following a premium payment. This charge only applies to premium
withdrawn, not to withdrawals of Earnings or of the free withdrawal amount.
Each Policy Year an amount of up to the greater of 10% of any Remaining
Premium paid as of the Valuation Day that the request for withdrawal is
received, less any previous withdrawals taken during that Policy Year, or
100% of Earnings may be withdrawn without incurring a withdrawal charge.
Withdrawals during the Policy Year in excess of this amount may be subject
to a withdrawal charge. The amount available for a free withdrawal is not
cumulative and expires at the end of each Policy Year.
(2) These charges are deducted from the investment divisions and the Guaranteed
Account on a proportional basis.
(3) The policy maintenance charge is currently waived for policies with $50,000
or more of Policy Value.
(4) The current cost of insurance charge will never exceed the guaranteed cost
of insurance charge shown in the policy. The guaranteed cost of insurance
charge is based on Attained Age in the case of a Single Life Policy and
Policy Year in the case of a Survivorship Policy, as well as sex, smoking
status of the Insured(s) and rating age.
(5) The net amount at risk is the difference between the Death Benefit divided
by ______ and the Policy Value.
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<PAGE>
(6) These charges are deducted on a daily basis, reflected in the value of
Accumulation Units for the investment divisions, and shown as an annualized
percentage of average net assets of the Separate Account.
PORTFOLIO EXPENSES
AFTER FEE WAIVERS AND EXPENSE REIMBURSEMENTS
<TABLE>
<CAPTION>
Management Other Total Annual Portfolio
Fees Expenses Expenses
<S> <C> <C> <C>
JNL/Alger Growth Series 1.07% 0% 1.07%
JNL/Alliance Growth Series .88% 0% .88%
JNL/Eagle Core Equity Series .99% 0% .99%
JNL/Eagle Small Cap Equity Series 1.05% 0% 1.05%
JNL/J.P. Morgan Enhanced S&P 500 Index Series .90% 0% .90%
JNL/Janus Aggressive Growth Series 1.01% 0% 1.01%
JNL/Janus Balanced Series 1.05% 0% 1.05%
JNL/Janus Capital Growth Series 1.03% 0% 1.03%
JNL/Putnam Growth Series .97% 0% .97%
JNL/Putnam International Equity Series 1.18% 0% 1.18%
JNL/Putnam Midcap Growth Series 1.05% 0% 1.05%
JNL/S&P Conservative Growth Series I* .20% 0% .20%
JNL/S&P Moderate Growth Series I* .20% 0% .20%
JNL/S&P Aggressive Growth Series I* .20% 0% .20%
JNL/S&P Very Aggressive Growth Series I* .20% 0% .20%
JNL/S&P Equity Growth Series I* .20% 0% .20%
JNL/S&P Equity Aggressive Growth Series I* .20% 0% .20%
PPM America/JNL Balanced Series .82% 0% .82%
PPM America/JNL High Yield Bond Series .82% 0% .82%
PPM America/JNL Money Market Series .70% 0% .70%
Salomon Brothers/JNL Global Bond Series .95% 0% .95%
Salomon Brothers/JNL U.S. Government & Quality Bond Series .80% 0% .80%
T. Rowe Price/JNL Established Growth Series .93% 0% .93%
T. Rowe Price/JNL Mid-Cap Growth Series 1.03% 0% 1.03%
T. Rowe Price/JNL Value Series 1.00% 0% 1.00%
</TABLE>
Certain Series pay Jackson National Financial Services, LLC, the adviser, an
Administrative Fee of .10% for certain services provided to the JNL Series
Trust. The JNL/S&P Series do not pay an Administrative Fee. The Total Series
Annual Expenses reflect the inclusion of the Administrative Fee.
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<PAGE>
* Underlying Series Expenses. The expenses shown above are the annual operating
expenses for the JNL/S&P Series. Because the JNL/S&P Series invest in other
Series of the JNL Series Trust, the JNL/S&P Series will indirectly bear their
pro rata share of fees and expenses of the underlying Series in addition to the
expenses shown.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
of the JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P
Series would bear if they invested in a hypothetical mix of underlying
investment divisions. The adviser believes the expenses shown below to be a
likely approximation of the expenses the JNL/S&P Series will incur based on the
actual mix of underlying investment divisions. The expenses shown below include
both the annual operating expenses for the JNL/S&P Series and the annual
operating expenses for the underlying investment divisions. The actual expenses
of each JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Conservative Growth Series I...................... 1.134%
JNL/S&P Moderate Growth Series I.......................... 1.151%
JNL/S&P Aggressive Growth Series I........................ 1.176%
JNL/S&P Very Aggressive Growth Series I................... 1.180%
JNL/S&P Equity Growth Series I............................ 1.187%
JNL/S&P Equity Aggressive Growth Series I................. 1.184%
AFTER FEE WAIVERS AND EXPENSE REIMBURSEMENTS
[DETAILS REGARDING FEE WAIVERS AND EXPENSE REIMBURSEMENTS TO BE PROVIDED BY
AMENDMENT.]
<PAGE>
PURCHASING A POLICY AND ALLOCATING PREMIUM
APPLYING FOR A POLICY. You may apply to purchase a policy by submitting a
written application to us through one of our authorized agents. We will not
issue a policy to insure people who older than age 90. Before we issue a policy,
we require you to submit evidence of insurability satisfactory to us. Acceptance
of your application is subject to our underwriting rules. We reserve the right
to reject your application for any reason. Your policy may differ from the
general description in this prospectus because we need to comply with
differences in applicable state law. Variations from the information appearing
in this prospectus due to individual state requirements are described in
supplements that are attached to this prospectus or in endorsements to the
policy, as appropriate.
In general, we will issue your policy when we have received your initial premium
and we have determined that your application meets our underwriting
requirements. You would pay the initial premium with your application. If you do
not submit your initial premium with your application, we will require you to
pay sufficient premium to place your insurance in force at or before issuance.
We will not accept your initial premium if the resulting Death Benefit exceeds
our then-current limit.
If we approve your application, we begin to deduct policy charges as of the
Policy Date. If we reject your application, we will not issue you a policy. We
will return any premium you have paid, adding interest if, as, and at the rate
required in your state. We will not subtract any policy charges from the amount
we refund to you.
Simplified Underwriting. Under our current underwriting rules, proposed Insureds
are eligible for simplified underwriting without a medical examination, if the
application and initial payment meet our simplified underwriting standards.
Simplified underwriting is not available if the initial premium exceeds the
limits set in our simplified underwriting standards. Simplified underwriting
also is not available if the Insured(s) is(are) between the ages of 0 - 17 or
would be more than 80 years old on the Policy Date. For Survivorship Policies,
both Insureds must meet our simplified underwriting requirements. Simplified
underwriting requirements may vary by state. See your policy for additional
limitations and restrictions related to simplified underwriting.
If your application is approved through simplified underwriting, your policy
will be effective and life insurance coverage under the policy will begin on the
date that your application and initial premium are taken. If cash is received
with the application, your policy is effective on the date of underwriting. If
no cash is received with the application, your policy is effective on the date
of underwriting approval and the date last cash is received.
Full underwriting. If your application requires full underwriting and we approve
your application, your policy will be effective and life insurance coverage will
begin as of the date that we receive your initial premium. If you submit your
initial premium with your application, the effective date of your policy will be
the date of your application. Otherwise, we will require you to pay sufficient
premium to place your insurance in force at or before issuance. If you have paid
your initial premium, while your application is in underwriting we may provide
you with temporary life insurance coverage in accordance with the terms of our
conditional receipt.
PREMIUM. You must pay an initial premium to purchase a policy. The minimum
initial premium is $10,000. We may waive or change this minimum. If you choose,
you may pay additional premium subject to the following conditions:
(1) each additional premium must be at least $1,000;
(2) the premium will not disqualify your policy as life insurance under the
Code.
You may also pay additional premium at any time and in any amount necessary to
avoid lapse of your policy.
We reserve the right to refuse any premium that would cause the policy to lose
its status as life insurance under the Code. We require satisfactory evidence of
insurability before accepting any premium that results in an increase in the
Death Benefit. However, we will not require evidence of insurability for one
additional premium of your choice, even if it would increase the Death Benefit
of your policy, as long as the additional premium does not exceed the lesser of
$5,000 or 10% of your initial premium.
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<PAGE>
ALLOCATION OF PREMIUM. We temporarily allocate your initial premium to the Money
Market Investment division as of the Issue Date. In most states, you may cancel
your policy by returning it to us within ten days after you receive it. In
certain states, the Right to Examine Period may be longer. If you return your
policy during the Right to Examine Period, the policy terminates and we will
refund your premium less any outstanding policy loans and any withdrawal. If you
do not return the policy, we allocate the amount in the Money Market Investment
division to the investment divisions and the Guaranteed Account in accordance
with your instructions on the allocation date after the Right to Examine Period.
You must specify your allocation percentages in your application. Percentages
must be in whole numbers and the total allocation must equal 100%. The minimum
allocation percentage per allocation option is 1%. We allocate any additional
premiums according to those percentages until you give us new allocation
instructions. You may allocate your premium to up to 21 allocation options at
any given time. You may add or delete investment divisions and/or the Guaranteed
Account from your allocation instructions, but we will not execute instructions
that would cause your Policy Value to be allocated to more than 21 allocation
options at any one time. We may change these limits in the future.
We generally allocate your additional premium to the investment divisions and
the Guaranteed Account as of the date your premium is received at our Service
Center. If an additional premium results in an increase in the Death benefit and
thus requires underwriting, however, we may delay allocation until we have
completed underwriting. At that time, we will follow the allocation instructions
in our file unless you send us new allocation instructions with your payment.
POLICY VALUE. Your Policy Value is the sum of the value of your interests in the
Separate Account, the Guaranteed Account, and the Loan Account. Your Policy
Value may increase or decrease daily to reflect the performance of the
investment divisions you have chosen, the addition of interest credited to the
Guaranteed Account and the Loan Account, the addition of premium, and the
subtraction of withdrawals, interest, and charges assessed. There is no minimum
guaranteed Policy Value.
We make all valuations in connection with the policy, other than the initial
premium and additional premium requiring underwriting, on the day the premium or
your transaction request is received at our Service Center, if that day is a
Valuation Day. Otherwise, we make that determination on the next succeeding day
that is a Valuation Day.
ACCUMULATION UNIT VALUE. We measure your Policy Value in the Separate Account by
determining the value of the Accumulation Units that we credit to your policy.
When you invest in a investment division, we credit your policy with
Accumulation Units in that investment division. The number of Accumulation Units
we credit equals the amount invested in the investment division divided by the
value of the investment division's Accumulation Units on the Valuation Day that
the allocation is made. The number of Accumulation Units we credit increases
when premium is allocated to the investment division, amounts are transferred to
the investment division, and loan repayments are credited to the investment
division. The number decreases when certain charges are deducted from the
investment division (for example, the cost of insurance charge, policy
maintenance charge, and withdrawal charge), a loan is taken from the investment
division, a transfer is made to another allocation option, or a withdrawal is
made. However, these adjustments do not affect the value of an Accumulation
Unit.
The value of an Accumulation Unit for each investment division varies to reflect
the investment experience of the corresponding portfolio and the deduction of
certain charges and expenses. We set the value of an Accumulation Unit at $10
when each investment division is established. Thereafter, on each Valuation Day,
we determine the value of an Accumulation Unit for each of the investment
divisions as follows:
(1) Determine the total value of assets in the investment division;
(2) Subtract from that amount any Daily Deduction; and
(3) Divide the result by the number of outstanding Accumulation Units.
You should refer to the prospectuses for the portfolios for a description of how
the assets of each portfolio are valued since that determination directly
affects the investment experience of the corresponding investment division and,
therefore, your Policy Value.
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<PAGE>
TRANSFER OF POLICY VALUE. You may request a transfer of Policy Value among the
investment divisions and the Guaranteed Account in writing or by telephone after
the allocation date and we have reallocated the amount in the Money Market
Investment division according to your instructions. You may transfer all or a
portion of your value from one investment division to another investment
division or to the Guaranteed Account. You may make one transfer from the
Guaranteed Account to any investment division each Policy Year. This transfer
from the Guaranteed Account may not exceed the greater of $5,000 or 25% of your
value in the Guaranteed Account.
You may not have Policy Value allocated to more than 21 allocation options at
one time. We will not perform a transfer that would cause your policy to exceed
that limit. We may change this limit in the future.
As a general rule, we only make transfers on Valuation Days. If we receive your
request on one of those days, we make the transfer that day. Otherwise, we make
the transfer on the next day that is a Valuation Day. We process transfers at
the price next computed after we receive your transfer request.
We charge $25 for each transfer in excess of 15 during a Policy Year, which is
exclusive of any allocation date transfers. Transfers pursuant to the dollar
cost averaging or asset rebalancing program do not count against the number of
free transfers and will be made at the intervals you have selected in accordance
with the procedures and requirements we establish. We reserve the right to
change, terminate, limit, or suspend the transfer provisions at any time. If we
limit the transfer privileges, you may need to make a partial withdrawal to
access the Policy Value in the investment division from which you sought a
transfer.
TRANSFERS AUTHORIZED BY TELEPHONE. You may make transfers by telephone, unless
you advise us in writing not to accept telephone transfer instructions. The
cut-off time for telephone transfer requests is 4:00 p.m. Eastern time. Timely
requests are processed on that day at that day's price.
We use procedures that we believe provide reasonable assurance that telephone
authorized transfers are genuine. For example, we will ask you to provide
identifying information. Accordingly, we disclaim any liability for losses
resulting from allegedly unauthorized telephone transfers. However, if we do not
take reasonable steps to help ensure that a telephone authorization is valid, we
may be liable for such losses. We may change, terminate, limit, or suspend the
telephone transfer privilege at any time without notice.
DOLLAR COST AVERAGING AND OTHER PERIODIC TRANSFERS. Under our dollar cost
averaging program, you may authorize us to periodically transfer a fixed dollar
amount from the Guaranteed Account or one of the investment divisions to the
investment division(s) of your choice. Any election under dollar cost averaging
must be for a period of at least twelve months. The minimum transfer amount of
the dollar cost averaging program is $100 monthly, quarterly or annually as long
as it is for a period of at least 12 months. The minimum balance required is
$5,000.
The theory of dollar cost averaging is that by spreading your investment over
time, you may be able to reduce the effect of transitory market conditions on
your investment. In addition, because a given dollar amount purchases more units
when the unit prices are relatively low rather than when the prices are higher,
in a fluctuating market, the average cost per unit may be less than the average
of the unit prices on the purchase dates. However, participation in this program
does not assure you of a greater profit from your purchases under the program,
nor will it prevent or necessarily reduce losses in a declining market.
Moreover, while we refer to this program of periodic transfers generally as
dollar cost averaging, periodic transfers from a investment division with more
volatile performance experience is unlikely to produce the desired effects of
dollar cost averaging as would transfers from a less volatile investment
division.
Your request to participate in this program will be effective when we receive
your completed request form at our Service Center. Call or write us for a copy
of the request form and additional information concerning the program. We may
change, terminate, limit, or suspend dollar cost averaging at any time.
ASSET REBALANCING. Asset rebalancing allows you to readjust the percentage of
your Policy Value allocated to each investment division to maintain a pre-set
level of investment in various market segments. Over time, the variations in
each investment division's investment results will shift the balance of your
Policy Value allocations. Under the asset rebalancing program, we automatically
transfer your Policy Value, including additional premium unless you specify
otherwise, back to the percentages you specify in accordance with procedures and
requirements that we establish. All of your Policy Value allocated to the
investment divisions must be included in the asset rebalancing program, however,
you may not include your interest in the Guaranteed Account.
You may request asset rebalancing when you apply for your policy or by
submitting a completed written request to us at our Service Center Please call
or write us for a copy of the request form and additional information concerning
asset rebalancing.
16
<PAGE>
Asset rebalancing is consistent with maintaining your allocation of investments
among market segments, although it is accomplished by reducing your Policy Value
allocated to the better performing segments. Other investment programs, such as
the dollar cost averaging program, may not work in concert with asset
rebalancing. Therefore, you should monitor your use of these programs, as well
as other transfers or withdrawals, while asset rebalancing is being used. We may
change, terminate, limit, or suspend asset rebalancing at any time.
THE SEPARATE ACCOUNT
THE PORTFOLIOS. The Separate Account is divided into investment divisions. Each
investment division invests in shares of one of the portfolios. Each portfolio
is a separate investment series of JNL(R) Series Trust, an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). We briefly describe the portfolios below. You should
read the current prospectuses for the portfolios for more detailed and complete
information concerning the portfolios, their investment objectives and
strategies, and the investment risks associated with the portfolios. If you do
not have a prospectus for a portfolio, contact us and we will send you a copy.
Each portfolio holds its assets separate from the assets of the other portfolios
and each portfolio has its own distinct investment objective and policies. Each
portfolio operates as a separate investment fund and the income, gains, and
losses of one portfolio generally have no effect on the investment performance
of any other portfolio.
JNL/Alger Growth Series seeks long-term capital appreciation by investing
primarily in a diversified portfolio of equity securities of large, U.S. traded
companies.
JNL/Alliance Growth Series seeks long-term growth of capital by investing
primarily in a diversified portfolio of common stocks or securities with common
stock characteristics, which include securities convertible into or exchangeable
for common stock.
JNL/Eagle Core Equity Series seeks long-term capital appreciation and,
secondarily, current income by investing primarily in a diversified portfolio of
common stock of U.S. companies that meet the criteria for one of three separate
equity strategies - the growth equity strategy, the value equity strategy, and
the equity income strategy.
JNL/Eagle Small Cap Equity Series seeks long-term capital appreciation by
investing primarily in a diversified portfolio of equity securities of domestic
small capitalization companies with a market capitalization at the time of
purchase under $1 billion.
JNL/J.P. Morgan Enhanced S&P 500 Index Series seeks high total return from a
broadly diversified portfolio of equity securities by investing primarily in
large and medium capitalization U.S. companies.
JNL/Janus Aggressive Growth Series seeks long-term growth of capital by
investing primarily in a diversified portfolio of common stocks of U.S. and
foreign companies selected for their growth potential.
JNL/Janus Balanced Series seeks long-term capital growth, consistent with
preservation of capital and balanced by current income. The Series normally
invests 40-60% of its assets in securities selected primarily for their growth
potential and 40-60% of its assets in securities selected primarily for their
income potential. The Series will normally invest at least 25% of its assets in
fixed-income securities. The Fund may invest without limit in foreign
securities.
JNL/Janus Capital Growth Series seeks long-term growth of capital in a manner
consistent with the preservation of capital through a non-diversified portfolio
consisting primarily of common stock of U.S. and foreign companies selected for
their growth potential. The Series normally invests a majority of its equity
assets in medium-sized companies.
JNL/Janus Global Equities Series seeks long-term growth of capital in a manner
consistent with the preservation of capital by investing primarily in a
diversified portfolio of common stocks of foreign and domestic issuers. The
Series may invest to a lesser degree in other types of securities, including
preferred stock, warrants, convertible securities, and debt securities, such as
corporate bonds.
17
<PAGE>
JNL/Putnam Growth Series seeks long-term capital growth by investing primarily
in a diversified portfolio of common stock of domestic, large-capitalization
companies.
JNL/Putnam International Equity Series seeks long-term growth of capital through
a diversified portfolio consisting primarily of common stocks of non-U.S.
companies. The Series normally has at least three countries represented in its
portfolio, including both developed and emerging markets.
JNL/Putnam Mid-Cap Growth Series seeks capital appreciation by investing mainly
in common stocks of U.S. companies with a focus on growth stocks. Growth stocks
are issued by companies whose earnings the sub-adviser believes are likely to
grow faster than the economy as a whole.
JNL/Putnam Value Equity Series seeks capital growth, with income as a secondary
objective by investing primarily in a diversified portfolio of equity securities
of domestic, large-capitalization companies. For this purpose, equity securities
include common stocks, securities convertible into common stock and securities
with common stock characteristics, such as rights and warrants. The Series
considers a large-capitalization company to be one that, at the time its
securities are acquired by the Series, has a market capitalization of $2 billion
or greater.
JNL/S&P Conservative Growth Series I seeks capital growth and current income by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Conservative Growth Series I
may invest are the JNL/Alger Growth Series, JNL/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/J.P. Morgan
Enhanced S&P 500 Index Series, JNL/Janus Aggressive Growth Series,JNL/Janus
Balanced Series, JNL/Janus Capital Growth Series, JNL/Janus Global Equities
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Mid-Cap Growth Series, PPM
America/JNL Balanced Series, PPM America/JNL High Yield Bond Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe Price/JNL
Established Growth Series, T. Rowe Price/JNL Mid-Cap Growth Series, and T.Rowe
Price/JNL Value Series.
JNL/S&P Moderate Growth Series I seeks capital growth and current income by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Conservative Growth Series I
may invest are the JNL/Alger Growth Series, JNL/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/J.P. Morgan
Enhanced S&P 500 Index Series, JNL/Janus Aggressive Growth Series,JNL/Janus
Balanced Series, JNL/Janus Capital Growth Series, JNL/Janus Global Equities
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Mid-Cap Growth Series, PPM
America/JNL Balanced Series, PPM America/JNL High Yield Bond Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe Price/JNL
Established Growth Series, T. Rowe Price/JNL Mid-Cap Growth Series, and T.Rowe
Price/JNL Value Series.
JNL/S&P Aggressive Growth Series I seeks capital growth and current income by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Conservative Growth Series I
may invest are the JNL/Alger Growth Series, JNL/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/J.P. Morgan
Enhanced S&P 500 Index Series, JNL/Janus Aggressive Growth Series,JNL/Janus
Balanced Series, JNL/Janus Capital Growth Series, JNL/Janus Global Equities
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Mid-Cap Growth Series, PPM
America/JNL Balanced Series, PPM America/JNL High Yield Bond Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe Price/JNL
Established Growth Series, T. Rowe Price/JNL Mid-Cap Growth Series, and T.Rowe
Price/JNL Value Series.
JNL/S&P Very Aggressive Growth Series I seeks capital growth and current income
by investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Conservative Growth Series I
may invest are the JNL/Alger Growth Series, JNL/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/J.P. Morgan
Enhanced S&P 500 Index Series, JNL/Janus Aggressive Growth Series,JNL/Janus
Balanced Series, JNL/Janus Capital Growth Series, JNL/Janus Global Equities
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Mid-Cap Growth Series, PPM
America/JNL Balanced Series, PPM America/JNL High Yield Bond Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe Price/JNL
Established Growth Series, T. Rowe Price/JNL Mid-Cap Growth Series, and T.Rowe
Price/JNL Value Series.
18
<PAGE>
JNL/S&P Equity Growth Series I seeks capital growth and current income by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Conservative Growth Series I
may invest are the JNL/Alger Growth Series, JNL/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/J.P. Morgan
Enhanced S&P 500 Index Series, JNL/Janus Aggressive Growth Series,JNL/Janus
Balanced Series, JNL/Janus Capital Growth Series, JNL/Janus Global Equities
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Mid-Cap Growth Series, PPM
America/JNL Balanced Series, PPM America/JNL High Yield Bond Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe Price/JNL
Established Growth Series, T. Rowe Price/JNL Mid-Cap Growth Series, and T.Rowe
Price/JNL Value Series.
JNL/S&P Equity Aggressive Growth Series I seeks capital growth and current
income by investing in a diversified group of other Series of the Trust
(Underlying Series). The Underlying Series in which the JNL/S&P Conservative
Growth Series I may invest are the JNL/Alger Growth Series, JNL/Alliance Growth
Series, JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/J.P.
Morgan Enhanced S&P 500 Index Series, JNL/Janus Aggressive Growth
Series,JNL/Janus Balanced Series, JNL/Janus Capital Growth Series, JNL/Janus
Global Equities Series, JNL/Putnam Growth Series, JNL/Putnam International
Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Mid-Cap Growth Series,
PPM America/JNL Balanced Series, PPM America/JNL High Yield Bond Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe Price/JNL
Established Growth Series, T. Rowe Price/JNL Mid-Cap Growth Series, and T.Rowe
Price/JNL Value Series.
PPM America/JNL Balanced Series seeks reasonable income, long-term capital
growth and preservation of capital by investing primarily in a diversified
portfolio of common stock and fixed-income securities of U.S. companies. The
Series may invest in any type or class of security. The anticipated mix of the
Series' holdings is approximately 45-75% of its assets in equities and 25-55% in
fixed-income securities.
PPM America/JNL High Yield Bond Series is to provide a high level of current
income; its secondary investment objective is capital appreciation by investing
in fixed-income securities, with emphasis on higher-yielding, higher-risk,
lower-rated or unrated corporate bonds.
PPM America/JNL Money Market Series seeks to achieve as high a level of current
income as is consistent with the preservation of capital and maintenance of
liquidity by investing in high quality, short-term money market instruments by
investing in high quality, U.S. dollar-denominated money market instruments that
mature in 397 days or less.
Salomon Brothers/JNL Global Bond Series seeks a high level of current income. As
a secondary objective, the Series seeks capital appreciation. The Series seeks
to achieve its objective through a diversified portfolio consisting primarily of
fixed income securities of U.S. and foreign issuers.
Salomon Brothers/JNL U.S. Government & Quality Bond Series seeks to obtain a
high level of current income by investing primarily in a diversified portfolio
of debt obligations and mortgage-backed securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, including collateralized
mortgage obligations backed by such securities.
T. Rowe Price/JNL Established Growth Series seeks long-term growth of capital
and increasing dividend income by investing primarily in a diversified portfolio
of common stocks of well-established growth companies. A growth company is one
which (i) has demonstrated historical growth of earnings faster than the growth
of inflation and the economy in general, and (ii) has indications of being able
to continue this growth pattern in the future.
T. Rowe Price/JNL Mid-Cap Growth Series seeks long-term growth of capital by
investing primarily in a diversified portfolio of common stocks of medium-sized
(mid-cap) U.S. companies which the sub-adviser believes have the potential for
above-average earnings growth. The Sub-Adviser defines mid-cap companies as
those whose market capitalization, at the time of acquisition by the Series,
falls within the capitalization range of companies in the S&P MidCap 400 Index.
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T. Rowe Price/JNL Value Series seeks to provide long-term capital appreciation
by investing in common stocks believed to be undervalued. Income is a secondary
objective. In taking a value approach to investment selection, at least 65% of
total assets will be invested in common stocks the portfolio manager regards as
undervalued.
We do not promise that the portfolios will meet their investment objectives.
Amounts you have allocated to investment divisions may grow in value, decline in
value, or grow less than you expect, depending on the investment performance of
the portfolios in which those investment divisions invest. You bear the
investment risk that those portfolios may not meet their investment objectives.
YOU SHOULD CAREFULLY REVIEW THE PORTFOLIOS' PROSPECTUSES BEFORE ALLOCATING
AMOUNTS TO THE INVESTMENT DIVISIONS.
We automatically reinvest all dividends and capital gains distributions from a
portfolio in shares of that portfolio at net asset value. The income and
realized and unrealized gains or losses on the assets of each investment
division are separate and are credited to or charged against the particular
investment division without regard to income, gains or losses from any other
investment division or from any other part of our business. We use the premium
you allocate to a investment division to purchase shares in the corresponding
portfolio and redeem shares in the portfolios to meet policy obligations or make
adjustments in reserves. The portfolios are required to redeem their shares at
net asset value and to make payment within seven days.
Certain of the portfolios sell their shares to separate accounts underlying both
variable life insurance and variable annuity contracts. It is conceivable that
in the future it may be unfavorable for variable life insurance separate
accounts and variable annuity separate accounts to invest in the same portfolio.
Although neither we nor any of the portfolios currently foresees any such
disadvantages either to variable life insurance or variable annuity contract
owners, each portfolio's board of directors intends to monitor events in order
to identify any material conflicts between variable life and variable annuity
contract owners and to determine what action, if any, should be taken in
response thereto. If a board of directors were to conclude that separate
investment funds should be established for variable life and variable annuity
separate accounts, Owners will not bear the related expenses.
VOTING PRIVILEGES. As a general matter, you do not have a direct right to vote
the shares of the portfolios held by the investment division to which you have
allocated your Policy Value. Under current interpretations, however, you are
entitled to give us instructions on how to vote those shares with respect to
certain matters. We notify you when your instructions are needed and will
provide proxy materials or other information to assist you in understanding the
issue. We determine the number of votes for which you may give voting
instructions as of the record date set by the relevant portfolio for the
shareholder meeting at which the vote will occur.
As a general rule, you are the person entitled to give voting instructions.
However, if you assign your policy, the assignee may be entitled to give voting
instructions. Retirement plans may have different rules for voting by plan
participants. If you send us written voting instructions, we follow your
instructions in voting the portfolio shares attributable to your policy. If you
do not send us written instructions, we vote the shares attributable to your
policy in the same proportion as we vote the shares for which we have received
instructions from other Owners. We vote shares that we hold in the same
proportion as we vote the shares for which we have received instructions from
Owners.
We may, when required by state insurance regulatory authorities, disregard Owner
voting instructions if the instructions require that the shares be voted so as
to cause a change in the sub-classification or investment objective of one or
more of the portfolios or to approve or disapprove an investment advisory
contract for one or more of the portfolios.
In addition, we may disregard voting instructions in favor of changes initiated
by Owners to the investment objectives or the investment adviser of the
portfolios if we reasonably disapprove of the proposed change. We would
disapprove a proposed change only if the proposed change is contrary to state
law or prohibited by state regulatory authorities or we reasonably conclude that
the proposed change would not be consistent with the investment objectives of
the portfolio or would result in the purchase of securities for the portfolio
that vary from the general quality and nature of investments and investment
techniques utilized by the portfolio. If we disregard voting instructions, we
will include a summary of that action and our reasons for that action in the
next semi-annual financial report to you.
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This description reflects our view of currently applicable law. If the law
changes or our interpretation of the law changes, we may decide that we are
permitted to vote the portfolio shares without obtaining instructions from our
Owners and we may choose to do so.
ADDITIONS, DELETIONS, AND SUBSTITUTIONS OF SECURITIES. If the shares of any of
the portfolios are no longer available for investment by the Separate Account or
if, in our judgment, further investment in the shares of a portfolio is no
longer preferred, we may add or substitute shares of another portfolio or mutual
fund for portfolio shares already purchased or to be purchased in the future.
Any substitution will comply with the requirements of the 1940 Act.
We also reserve the right to make the following changes in the operation of the
Separate Account and the investment divisions:
(a) to operate the Separate Account in any form permitted by law;
(b) to take any action necessary to comply with applicable law or obtain
and continue any exemption from applicable laws;
(c) to transfer assets from one investment division to another, or from
any investment division to our general account;
(d) to add, combine, or remove investment divisions in the Separate
Account;
(e) to change the way in which we assess charges, as long as the charges
do not exceed the maximum guaranteed charges under the policies;and
(f) to assess a charge for taxes attributable to the operations of the
Separate Account or for other taxes.
If we take any of these actions, we will comply with the then applicable legal
requirements.
THE GUARANTEED ACCOUNT
If you select a guaranteed account, your money will be placed with Jackson
National's other assets. The guaranteed accounts are not registered with the SEC
and the SEC does not review the information we provide to you about the
guaranteed accounts. Your contract contains a more complete description of the
guaranteed accounts.
The portion of the policy relating to the Guaranteed Account is not registered
under the Securities Act of 1933 (1933 Act) and the Guaranteed Account is not
registered as an investment company under the 1940 Act. Accordingly, neither the
Guaranteed Account nor any interests in the Guaranteed Account are subject to
the provisions or restrictions of the 1933 Act or the 1940 Act, and the
disclosure regarding the Guaranteed Account has not been reviewed by the staff
of the Securities and Exchange Commission. The statements about the Guaranteed
Account in this prospectus may be subject to generally applicable provisions of
the federal securities laws regarding accuracy and completeness.
You may allocate part or all of your premium to the Guaranteed Account. Under
this option, we guarantee the principal amount allocated to the Guaranteed
Account and a minimum rate of interest of 3% that will be credited to the amount
in the Guaranteed Account. From time to time and at our sole discretion, we may
set a higher current interest rate applicable to premium and transfers allocated
to the Guaranteed Account during a Policy Year. We may declare different rates
for amounts that are allocated to the Guaranteed Account at different times. We
determine interest rates in accordance with a variety of factors.
Amounts allocated to the Guaranteed Account are part of the general account of
Jackson National. We invest the assets of the general account in accordance with
applicable laws governing the investments of insurance company general accounts.
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We may delay payment of withdrawals from the Guaranteed Account for up to 6
months from the date we receive your written withdrawal request. We pay interest
on the deferred amount at such rate as may be required by the applicable state
or jurisdiction.
POLICY BENEFITS AND RIGHTS
DEATH BENEFIT. While your policy is in force, we will pay the Death Benefit upon
the death of the Insured or, if your policy is a Survivorship Policy, upon the
death of the last surviving Insured. Under a Survivorship Policy, you must first
notify us of the death of the first Insured to die. We will pay the Death
Benefit to the named beneficiary(ies) or, if none survives, to the contingent
beneficiary(ies), within seven days. We will pay the Death Benefit in a lump sum
or according to one of the optional payment plans described below.
The Death Benefit is equal to the greater of:
(1) the initial death benefit shown in your policy, reduced by any partial
withdrawal, plus any increase in coverage due to additional premium; or
(2) the Minimum Death Benefit;
plus any rider benefits payable, less any Debt, and less any overdue cost of
insurance charge and policy maintenance charge if the Insured dies during the
Grace Period.
We determine the amount of the Death Benefit as of the end of the Valuation
Period ending on the Valuation Day before the day we make payment. We pay the
Death Benefit proceeds within seven days after we have received due proof of
death and all other requirements we deem necessary have been satisfied. From the
time of the death of the Insured until the Death Benefit is paid, any amount
allocated to the Separate Account is subject to investment risk borne by the
beneficiary. During that time, we will credit interest to the Death Benefit as
required by applicable law.
After the Issue Date, the Death Benefit can be increased or decreased at your
request. However, we reserve the right to limit the number of changes to the
Death Benefit each Policy Year. To increase coverage, we require an additional
premium and may require a new application requesting the increase and evidence
of insurability of the Insured(s) satisfactory to us. We refuse any decrease in
coverage that would cause the policy to lose its status as life insurance under
the Code. Similarly, we do not permit any partial withdrawal if the resulting
decrease in Death Benefit would cause the policy to lose its status as life
insurance under the Code.
DEATH BENEFIT PAYMENT OPTIONS. We will pay the Death Benefit in a lump sum or,
if the amount payable is at least $2,000, you may choose one of the payment
options that we offer. The payment options described below are not available if
the beneficiary is an assignee, corporation, partnership, association, trustee,
executor, administrator, or fiduciary. We transfer to our general account any
amount placed under a payment option so that it will not be affected by the
investment performance of the Separate Account. At our discretion, we may
declare excess interest in addition to the minimum rate of interest applicable
to a particular payment option.
You may request or change a payment option by writing to us at our Service
Center before the death of the Insured(s). If no payment option is in effect at
the death of the Insured (the last surviving Insured in the case of the
Survivorship Policy), the beneficiary may elect a payment option.
The following payment options are available under the policies:
Option 1 - Benefits at Interest. We pay interest monthly, quarterly,
semi-annually, or annually on proceeds left on deposit with us during the
lifetime of the beneficiary or for a specified period. Benefits may be withdrawn
at any time subject to a minimum payment of $100. We credit interest to unpaid
balances at a rate of not less than 4%.
Option 2 - Payment for a Fixed Period. We pay installments until the proceeds,
plus interest, are paid in full. Installments may be paid monthly, quarterly,
semi-annually, or annually and the minimum payment is $50. The rate per $1,000
of the monthly payment is shown in the Payment Option Table in the policy. The
present value of any unpaid balance may be withdrawn at any time. If the
beneficiary dies before all guaranteed payments have been made, the present
value of any remaining guaranteed payments will be paid to the payee designated
by the beneficiary, or if none, to the beneficiary's estate. We credit interest
at a rate of not less than 3%.
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Option 3 - Life Income. We pay benefits monthly, quarterly, semi-annually, or
annually during the lifetime of the beneficiary, subject to satisfactory proof
of the age of the beneficiary. A minimum payment under this option is $50. The
rate per $1,000 of the monthly payment is shown in the Payment Option Table in
the policy. The minimum number of payments may be guaranteed. If no guarantee
period is selected, payments stop when the beneficiary dies. If the beneficiary
dies before all guaranteed payments have been made, the present value of any
remaining guaranteed payments are paid to the payee designated by the
beneficiary, or if none, to the beneficiary's estate. We credit interest at a
rate of not less than 3%.
POLICY LOANS. While the policy is in force and not in the Grace Period and after
the allocation date you may borrow money from us using the policy as the only
security for your loan. Loans have priority over the claims of any assignee or
any other person. You may borrow up to 90% of the Withdrawal Value of your
policy as of the end of the Valuation Period in which we grant your loan
request. . The minimum loan amount is $500.00.
When we make a policy loan to you, we transfer to the Loan Account a portion of
the Policy Value equal to the loan amount. We process the loan pro rata from the
investment divisions and the Guaranteed Account, unless you instruct us
otherwise in writing. We credit interest to the Loan Account at the minimum
guaranteed rate shown in your policy. On each Policy Anniversary, the value of
the Loan Account is set equal to the Debt. Accordingly, we transfer to the Loan
Account an amount of Policy Value equal to the amount by which the Debt exceeds
the value of the Loan Account. Similarly, if the value in the Loan Account
exceeds Debt, we transfer the excess from the Loan Account to the investment
divisions and the Guaranteed Account on a proportional basis.
We offer two types of loans. Preferred loans are loans against Earnings. The
interest rate credited to the Loan Account for a preferred loan is currently 6%.
All other loans are regular loans, which currently earn 4% interest. For
purposes of determining the type of loan taken, each loan is treated as coming
first from Earnings and then from premium.
Every loan accrues interest daily at a declared annual rate not to exceed 6%.
Interest on policy loans is due on each Policy Anniversary and is added to the
loan principal if not paid when due.
While the policy is in force, you may repay all or part of a policy loan without
any penalty. To repay a loan in full, the loan repayment must equal the Debt. If
you intend a payment to be a loan repayment rather than additional premium, you
must clearly identify the payment as such or we treat it as additional premium.
We first apply all loan repayments to any regular loans you may have taken. When
we receive a loan repayment, we transfer an equal amount from the Loan Account
to the investment divisions and Guaranteed Account on a proportional basis.
A policy loan, whether or not repaid, will have a permanent effect on your
Policy Value because the investment results of each investment division and the
interest paid on the Guaranteed Account will apply only to the amounts remaining
in those accounts. The longer a loan is outstanding, the greater the effect is
likely to be. The effect could be favorable or unfavorable. If the investment
divisions and/or Guaranteed Account earn more than the annual interest rate for
amounts held in the Loan Account, your Policy Value will not increase as rapidly
as it would if you had not taken a policy loan. If the investment divisions
and/or Guaranteed Account earn less than that rate, then your Policy Value will
be greater than it would have been if you had not taken a policy loan. Also, if
you do not repay a policy loan, your Debt will be subtracted from the Death
Benefit and Withdrawal Value otherwise payable.
In addition, you may realize taxable income when you take a policy loan. In most
instances, a policy is treated as a MEC for federal tax purposes. As a result,
policy loans are treated as withdrawals for tax purposes, and the amount of the
loan equal to any increase in your Policy Value may be treated as taxable income
to you. In addition, you may also incur an additional 10% percent penalty tax.
You should also be aware that interest on policy loans is generally not
deductible. Before you take a policy loan, you should consult your tax adviser
and carefully consider the potential impact of a policy loan on your rights and
benefits under the policy.
WITHDRAWALS. While your policy is in force, you may withdraw all or part of your
Withdrawal Value by sending a written request to our Service Center. The
Withdrawal Value equals the Policy Value less any applicable withdrawal charge,
taxes payable, the policy maintenance charge, and any Debt.
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For a full withdrawal, the policy or a lost policy affidavit must be received at
our Service Center along with the withdrawal request. We then pay you the
Withdrawal Value determined as of the end of the Valuation Period during which
we receive your written request for withdrawal. Your policy terminates on the
day we receive your written request. We generally will pay you the Withdrawal
Value of the policy within seven days of our receiving your complete written
request or on the effective withdrawal date you have requested, whichever is
later.
You may receive a portion of the Withdrawal Value by making a partial withdrawal
from your policy. Your written request for a partial withdrawal will be
effective on the day we receive it at our Service Center, or, if not a Valuation
Day, the next day that is a Valuation Day. We pay you the amount requested less
any applicable withdrawal charge. The minimum partial withdrawal amount is $500
or the entire value of your policy if less. Unless you request otherwise, we
process the partial withdrawal from the investment divisions and the Guaranteed
Account in proportion to each one's respective value at the time.
A partial withdrawal reduces the Death Benefit under your policy as well as the
Policy Value. We reduce the Death Benefit by an amount proportionate to the
reduction in the Policy Value caused by the partial withdrawal. Partial
withdrawals are not permitted if the Death Benefit reduction would cause the
policy to lose its status as life insurance under the Code.
A withdrawal may give rise to taxable income and we recommend that you consult
your tax adviser before making a withdrawal. The tax consequences of making a
full withdrawal are discussed in "Federal Tax Considerations."
STATUS OF POLICY AT ATTAINED AGE 100. The policies do not have a maturity date.
If an Insured reaches age 100 while your policy is in force, we will transfer
all of your value in the Separate Account to the Guaranteed Account and we will
stop charging the Daily Deduction and the cost of insurance charge to your
policy. At that time, the death benefit provisions under your policy will no
longer apply. All other provisions of the policies will continue to apply.
TERMINATION AND GRACE PERIOD. Your policy will terminate and life insurance
coverage will end when one of the following events first occurs:
(a) you make a full withdrawal under your policy;
(b) the Grace Period ends and your policy lapses; or
(c) the Insured dies, in the case of the Single Life Policy, and the last
surviving Insured dies in the case of the Survivorship Policy.
Your policy will enter the Grace Period if your Withdrawal Value is $0 or less
or if, at any time, Debt equals or exceeds the Policy Value less any applicable
withdrawal charge. The Grace Period begins on the day after we send you and any
assignee notice of the amount necessary to keep your policy in force. The policy
will terminate unless you pay that amount, which is equal to at least two months
of the cost of insurance charge and any policy maintenance charge due before the
end of the Grace Period. If you do not pay that amount by the end of the Grace
Period, your policy will lapse without value and coverage will end.
The policy will continue in effect through the Grace Period. If the Insured or
last surviving Insured, as applicable, dies during the Grace Period, we will pay
a Death Benefit in accordance with your instructions. However, we will reduce
the proceeds by any overdue cost of insurance charge and policy maintenance
charge.
REINSTATEMENT. If your policy lapses, you may apply for reinstatement of the
policy within three years of the date of lapse by sending a written request to
our Service Center. We will require satisfactory evidence of the insurability of
the Insured(s) at the same risk classification as at the time of issuance of the
policy. The reinstatement amount (or charge) must be sufficient to cover all
past due cost of insurance charges and any policy maintenance charge assessed
during the Grace Period, plus an additional amount sufficient to keep the policy
in force for three months after the date of reinstatement. In addition, you must
provide payment or agree to the reinstatement of any policy loan, including all
past due interest on the loan from the date of lapse to the date of
reinstatement. The reinstated loan will be allocated to the Loan Account at that
time. The effective date of the reinstatement will be the Valuation Day
immediately following our approval of your request for reinstatement.
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The Policy Value on the reinstatement date will equal the Policy Value at the
time of lapse plus any additional premium that is not considered payment of past
due charges or of loan repayments. The portion of the Policy Value not allocated
to the Loan Account on the reinstatement date will be allocated to the
investment divisions and Guaranteed Account according to your most recent
allocation instructions. The Death Benefit of the reinstated policy cannot
exceed the Death Benefit at the time of lapse. The withdrawal charge in effect
upon reinstatement will be the withdrawal charge that existed on the date of
lapse.
A Survivorship Policy may be reinstated only if both Insureds are still alive
or, if only one Insured is alive, the lapse occurred after the death of the
first Insured.
RIGHT TO EXAMINE THE POLICY. In most states, you may cancel your policy by
returning it to us within ten days after you receive it. In certain states,
however, the Right to Examine Period may be longer. If you return your policy,
the policy terminates and we will pay you an amount equal to your premium less
any outstanding loans and any withdrawals. We will pay the refund within seven
days of receiving your request and the policy. No withdrawal charge is imposed
upon return of a policy within the Right to Examine Period.
POSTPONEMENT OF PAYMENT. We may defer for up to fifteen days if there is money
in the variable contract the payment of any amount attributable to premium paid
by check to allow the check a reasonable time to clear. We ordinarily pay any
amount attributable to your Policy Value allocated to the Separate Account
within seven days, except that we may suspend or postpone any transfers or
payments to or from the investment divisions if any of the following events
occur:
(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 determined by the Securities and Exchange
Commission, so that it is not reasonably practicable to dispose of the
Separate Account's investments or to determine the value of its
assets.
(4) The Securities and Exchange Commission by order so permits for your
protection.
In addition, we may delay payment from the Guaranteed Account for up to six
months. We will pay interest on the deferred amount at such rate as may be
required by the applicable state or jurisdiction.
CHARGES AND DEDUCTIONS
We assess charges and deductions under the policies against your value in the
investment divisions and the Policy Value generally. Additional charges and
expenses are paid out of the portfolios' assets, as described in the
prospectuses of the portfolios.
DAILY DEDUCTION. On each Valuation Day, we deduct from the investment divisions
the mortality and expense risk charge, administrative charge, and tax charge.
These charges are reflected in the value of Accumulation Units of each
investment division. Together these charges are called the Daily Deduction.
Mortality and Expense Charge. The mortality and expense risk charge compensates
Jackson National for the mortality and expense risks it assumes in connection
with the policies. The mortality risk includes the risk that the cost of
insurance charge will be insufficient to meet the claims and risks under the
Minimum Death Benefit. We also assume a risk that on the Monthly Anniversary
preceding the death of an Insured the Death Benefit will exceed the amount on
which the cost of insurance charges were based. The expense risk is the risk
that expenses incurred in issuing and administering the policies will exceed the
administrative charge set in the policies. The mortality and expense risk charge
is calculated at an annual rate equal to .90% during Policy Years 1-10 and .80%
thereafter.
Administrative Charge. The administrative charge compensates Jackson National
for its administrative expenses in connection with the policies and the Separate
Account. Jackson National performs or delegates all such administrative
functions, which include preparation of annual reports and statements,
maintenance of investment division and Separate Account records, and filing
fees. In addition, certain expenses such as administrative personnel costs,
mailing costs, data processing costs, legal fees, accounting fees, and costs
associated with accounting, valuation, regulatory and reporting requirements are
attributable to both the policies and maintenance of the Separate Account. The
administrative charge is calculated at an annual rate equal to .30% during
Policy Years 1-10 and .15% thereafter.
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Tax Charge. The tax charge compensates Jackson National for its increased
federal tax liability under the federal tax laws (also known as a DAC tax) and
for premium taxes. The tax charge is calculated at an annual rate equal to .40%
during Policy Years 1-10.
COST OF INSURANCE CHARGE. The cost of insurance charge is effective as of the
Policy Date and deducted on the Issue Date and each Monthly Anniversary
thereafter by canceling Accumulation Units. If the Monthly Anniversary falls on
a day other than a Valuation Day, the charge will be determined on the next
Valuation Day. The cost of insurance charge is intended to pay for the cost of
providing life insurance coverage for the Insured(s). We guarantee that this
charge will not exceed the maximum cost of insurance charge determined on the
basis of the rates shown in the table of guaranteed maximum monthly cost of
insurance rates in your policy. The current and guaranteed cost of insurance
charges are based on Attained Age in the case of a Single Life Policy and Policy
Year in the case of a Survivorship Policy, as well as sex, rating class, and
smoking status of the Insured(s).
POLICY MAINTENANCE CHARGE. Each year on the Policy Anniversary we will deduct a
policy maintenance charge of $35 from your Policy Value by canceling
Accumulation Units. This charge is waived if your Policy Value is at least
$50,000 on that day. The policy maintenance charge compensates Jackson National
for additional expenses of policy administration, including those associated
with preparing the policies and confirmations, maintenance of Owner records, and
the cost of other services necessary to service Owners, as well as those
administrative expenses listed above attributable to both the policies and the
Separate Account. The policy maintenance charge is taken from your value in the
investment divisions and the Guaranteed Account on a proportional basis. If you
make a full withdrawal on a date other than the Policy Anniversary, we will
deduct any applicable policy maintenance charge from that amount.
WITHDRAWAL CHARGE. If you make a withdrawal during the first nine premium years,
we may impose a withdrawal charge as a percentage of premium withdrawn. A
premium year is the twelve-month period following payment of the premium. We
will deduct the withdrawal charge from the value remaining in your policy by
canceling Accumulation Units. The withdrawal charge does not apply after nine
premium years as shown below:
- ------------------ --- -- --- --- --- --- --- -- --- ----------
Premium Year 1 2 3 4 5 6 7 8 9 Thereafter
- ------------------ --- -- --- --- --- --- --- -- --- ----------
Withdrawal Charge 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%
- ------------------ --- -- --- --- --- --- --- -- --- ----------
Earnings are not subject to the withdrawal charge. For purposes of the
withdrawal charge, withdrawals are treated as coming first from Earnings and
then from the oldest Remaining Premium. The withdrawal charge is based on the
amount of Remaining Premium you withdraw.
Each Policy Year you may withdraw free of any withdrawal charge an amount equal
to the greater of:
(a) 10% of any Remaining Premium paid as of the Valuation Day that we
receive your request for withdrawal, less any previous withdrawal
taken during that Policy Year; or
(b) 100% of Earnings.
The amount available for withdrawal is not cumulative and expires at the end of
each Policy Year.
The withdrawal charge is imposed to cover our actual premium tax expenses and
sales expenses, which include agents' sales commissions and other sales and
distribution expenses. We expect to recover total premium tax expenses and sales
expenses of the policies over the life of the policies. To the extent premium
taxes and distribution costs are not recovered by the withdrawal charge, we may
make up any shortfall from the assets of our general account, which includes
funds derived from the Daily Deduction charged to the investment divisions and
other fees and charges under the policies.
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TRANSFER CHARGE. You may make 15 transfers free of charge in any Policy Year. We
will deduct a charge of $25 per transfer in excess of 15 from the transferred
amount before allocating it to the allocation option(s) you have requested. This
charge does not apply to transfers made under the dollar cost averaging [or
asset rebalancing] programs.
ILLUSTRATION CHARGE. At your request, we will provide you with one personalized
illustration free of charge each Policy Year. We may charge a fee of up to $25
for any additional illustration you may request.
ADDITIONAL POLICY CHARGES. We do not currently assess a charge for federal,
state, or other taxes that may be attributable to the operations of the Separate
Account, but we reserve the right to do so in the future.
PORTFOLIO EXPENSES. You indirectly bear the charges and expenses of the
portfolios whose shares are held by the investment divisions to which you
allocate your Policy Value. The Separate Account purchases shares of the
portfolios at net asset value. Each portfolio's net asset value reflects
management fees and other operating expenses already deducted from the
portfolio's assets. For a summary of historical expenses of the portfolios, see
the table called "Portfolio Expenses" above. For more information concerning the
management fees and other charges against the portfolios, see the prospectuses
and the statements of additional information for the portfolios, which are
available upon request.
We may receive compensation from the investment advisers or administrators of
the portfolios. Such compensation will be consistent with the services we
provide or the cost savings resulting from the arrangement and, therefore, may
differ from portfolio to portfolio.
SPECIAL PROVISIONS FOR GROUP OR SPONSORED ARRANGEMENTS. Where permitted by state
insurance laws, policies may be purchased under group or sponsored arrangements.
We may reduce or waive the charges and deductions described above for policies
issued under these arrangements. Among other things, we may waive withdrawal
charges for employees, officers, directors, agents, and their immediate family
members. We will reduce these charges and deductions in accordance with our
rules in effect when we approve the application. To qualify for a reduction, a
group or sponsored arrangement must satisfy our criteria as to, for example, the
size of the group, the expected number of participants, and anticipated premium
from the group. Generally, the sales contacts and effort, administrative costs,
and mortality cost per policy vary based on such factors as the size of the
group or sponsored arrangements, the purposes for which policies are purchased,
and certain characteristics of the group's members. The amount of reduction and
the criteria for qualification will reflect the reduced sales effort and
administrative costs resulting from, and the different mortality experience
expected as a result of, sales to qualifying groups and sponsored arrangements.
From time to time, we may modify on a uniform basis both the amounts of
reductions and the criteria for qualification. Reductions in these charges will
not be unfairly discriminatory.
GENERAL POLICY PROVISIONS
STATEMENTS TO OWNERS. Each year following your Policy Anniversary, we will send
you a report showing information concerning your policy transactions in the past
year and the current status of your policy. The report will include information
such as the Policy Value as of the end of the current and the prior year, the
current Death Benefit, Withdrawal Value, Debt, withdrawals, Earnings, premium
paid, and deductions made since the last annual report. We will also include any
information required by state law or regulation.
We will mail you confirmations or other appropriate notices of policy
transactions. In addition, we will send you the financial statements of the
portfolios and other reports as specified in the 1940 Act. Please give us 30
days written notice of any address change. Please read your statements and
confirmations carefully, verify their accuracy, and contact us within 30 days
with any question you may have.
LIMIT ON RIGHT TO CONTEST. We may not contest the insurance coverage under the
policy after the policy has been in force during the lifetime of the Insured(s)
for two years from the Issue Date, except for nonpayment of any required
premium. A reinstated or modified policy may be contested only with respect to
material misrepresentations made in the application for such reinstatement or
request for policy modifications. In the case of an increase in coverage under
the policy, only the amount of the increase may be contested with respect to
material misrepresentations made in the related application.
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In issuing a policy, we rely on your application. Your statements in that
application, in the absence of fraud, are considered representations and not
warranties. We will not use any statement made in connection with the
application to void the policy or to deny a claim unless that statement is
contained in the written application.
SUICIDE. If an Insured commits suicide while sane or insane within two years of
the Issue Date, we will return to you an amount equal to the premium paid less
any withdrawals and any Debt. If an Insured commits suicide while sane or insane
within two years of the effective date of any increase in coverage, we will
return to you an amount equal to the premium paid for such increase in coverage
less any withdrawals and any Debt associated with such increase. The applicable
suicide exclusion period may be longer or shorter in certain states.
MISSTATEMENT AS TO AGE AND SEX. If the age or sex of an Insured is incorrectly
stated in the application, the benefits under the policy will be those that the
premium paid would have purchased at the correct age and sex.
BENEFICIARY. You name the beneficiary(ies) in the application. You may change
the beneficiary by submitting a written request to the Service Center, unless an
irrevocable beneficiary was previously named. We will provide a form to be
signed and filed with us. Your request for a change in beneficiary will take
effect when we record the change. Until we record the change in beneficiary, we
are entitled to rely on your most recent instructions in our files. Accordingly,
we are not liable for making a payment to the person shown in our files or
taking any other related action before that time.
If you name more than one primary beneficiary, we will divide the Death Benefit
equally among your beneficiaries unless you instruct otherwise. The interest of
any beneficiary who dies before the Insured(s) ends at his or her death. If no
primary beneficiary survives the Insured(s), we will divide the Death Benefit
equally among any surviving named contingent beneficiary(ies), unless you
instruct otherwise. If no beneficiary is living, we will pay the Death Benefit
to the Owner or the Owner's estate.
ASSIGNMENT. You may assign your policy while it is in force. You must notify us
of an assignment in writing. Until we receive notice from you, we are not liable
for any action we may take or payments we may make that may be contrary to the
terms of your assignment. We are not responsible for the validity of an
assignment. Your rights and the rights of the beneficiary may be affected by an
assignment. An assignment may result in income tax and a 10% penalty tax. You
should consult your tax adviser before assigning your policy.
CREDITORS' CLAIMS. To the extent permitting by law, no benefits payable under
this policy will be subject to the claims of your creditors or the creditors of
your beneficiary.
DIVIDENDS. We will not pay any dividend under the policy, nor do the policies
share in the surplus or revenue of Jackson National.
NOTICE AND ELECTIONS. To be effective, all notices and elections under the
policy must be in writing, signed by you, and received by us at our Service
Center. Certain exceptions may apply. Unless otherwise provided in the policy,
all notices, requests and elections will be effective when received at our
Service Center complete with all necessary information.
MODIFICATION. We reserve the right to modify the policy without written notice
or your consent in the circumstances described in this prospectus or as
necessary to conform to applicable law or regulation or any ruling issued by a
governmental agency. The provisions of the policy will be construed so as to
comply with the requirements of Section 7702 of the Code.
SURVIVORSHIP POLICY. We offer policies on a single life and last survivor basis.
The Survivorship Policy operates almost identically to the Single Life Policy.
The primary difference is that the Survivorship Policy has two Insureds and the
Death Benefit is paid only upon the death of the last surviving Insured. Other
significant differences are:
(1) the cost of insurance charge differs because we base it on the
anticipated mortality of two Insureds and we do not pay the Death
Benefit until both Insureds have died;
(2) for a Survivorship Policy to qualify for simplified underwriting both
Insureds must meet our standards;
(3) for a Survivorship Policy to be reinstated, both Insureds must be
alive on the date of reinstatement or, if only one Insured is alive,
the lapse occurred after the death of the first Insured ; and
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(4) under a Survivorship Policy, provisions regarding incontestability,
suicide, and misstatements of age or sex apply to each Insured.
FEDERAL TAX CONSIDERATIONS
The following discussion is based upon our understanding of current federal
income tax law applicable to life insurance policies in general. We cannot
predict the probability that any changes in those laws will be made. Also, we do
not guarantee the tax status of the policies. You bear the complete risk that
the policies may not be treated as "life insurance contracts" under federal
income tax laws.
In addition, this discussion does not include a detailed description of the
federal income tax consequences of the purchase of these policies or any
discussion of special tax rules that may apply to certain purchase situations.
We also have not considered any applicable state or other tax laws. You should
seek tax advice concerning the effect on your personal tax liability of the
transactions permitted under the policies, as well as any other question you may
have concerning the tax status of the policies or the possibility of changes in
the tax law.
TAXATION OF JACKSON NATIONAL AND THE SEPARATE ACCOUNT. Jackson National is taxed
as a life insurance company under Part I of Subchapter L of the Code. The
operations of the Separate Account are taxed as part of the operations of
Jackson National. Investment income and realized capital gains are not taxed to
the extent that they are applied under the policies.
Accordingly, we do not anticipate that Jackson National will incur any federal
income tax liability attributable to the operation of the Separate Account (as
opposed to the federal tax related to the receipt of premium under the
policies). Therefore, we are not making any charge or provision for federal
income taxes. However, if the tax treatment of the Separate Account is changed,
we may charge the Separate Account for its share of the resulting federal income
tax.
In several states we may incur state and local taxes on the operations of the
Separate Account. We currently are not making any charge or provision for them
against the Separate Account. If these taxes should be increased, we may make a
charge or provision for them against the investment divisions. If we do so, the
value of Accumulation Units and, therefore, the investment results of the
investment divisions will be reduced.
TAX STATUS OF THE POLICIES. The policies are structured to satisfy the
definition of a life insurance contract under the Code. As a result, the Death
Benefit ordinarily will be fully excluded from the gross income of the
beneficiary. The Death Benefit will be included in your gross estate for federal
estate tax purposes if the proceeds are payable to your estate. The Death
Benefit will also be included in your estate if the beneficiary is not your
estate but you retained incidents of ownership in the policy. Examples of
incidents of ownership include the right to change beneficiaries, to assign the
policy or revoke an assignment, and to pledge the policy or obtain a policy
loan. If you are the Owner and the Insured under a policy and if you transfer
all incidents of ownership in the policy more than three years before your
death, the Death Benefit will not be included in your gross estate. State and
local estate and inheritance tax consequences may also apply.
In addition, certain transfers of the policies or payment of the Death Benefit,
either during life or at death, to individuals (or trusts for the benefit of
individuals) two or more generations below that of the transferor may be subject
to the federal generation-skipping transfer tax.
In the absence of final regulations or other pertinent interpretations of the
Code, some uncertainty exists as to whether a substandard risk policy will meet
the statutory definition of life insurance. If a policy were deemed not to be
life insurance for tax purposes, it would not provide most of the tax advantages
usually provided by life insurance. We reserve the right to amend the policies
to comply with any future changes in the Code, any regulations or rulings under
the Code and any other requirements imposed by the Internal Revenue Service
("IRS").
In addition, you may use the policy in various arrangements, including
non-qualified deferred compensation or salary continuance plans, split dollar
insurance plans, executive bonus plans, retiree medical benefit plans and
others. The tax consequences of such plans may vary depending on the particular
facts and circumstances of each individual arrangement. Therefore, if you are
contemplating the use of a policy in any arrangement the value of which depends
in part on its tax consequences, you should to consult a qualified tax adviser
regarding the tax treatment of the proposed arrangement.
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Diversification Requirements. Section 817(h) of the Code requires that the
underlying assets of variable life insurance contracts be diversified. The Code
provides that a variable life insurance contract will not be treated as life
insurance for federal income tax purposes for any period and any subsequent
period for which the investments are not adequately diversified. If the policy
were disqualified for this reason, you would lose the tax deferral advantages of
the policy and would be subject to current federal income taxes on all earnings
allocable to the policy.
The Code provides that variable life insurance contracts such as the policy meet
the diversification requirements if, as of the close of each quarter, the
underlying assets meet the diversification standards for a regulated investment
company, and no more than 55% of the total assets consist of cash, cash items,
U.S. Government securities and securities of other regulated investment
companies. For purposes of determining whether or not the diversification
standards of Section 817(h) of the Code have been met, each U.S. government
agency or instrumentality is treated as a separate issuer.
The United States Treasury Department also has issued regulations that establish
diversification requirements for the investment accounts underlying variable
contracts such as the policies. These regulations amplify the diversification
requirements set forth in the Code and provide an alternative to the provision
described above. Under these regulations, an investment account will be deemed
adequately diversified if: (1) no more than 55% of the value of the total assets
of the account is represented by any one investment; (2) no more than 70% of the
value of the total assets of the account is represented by any two investments;
(3) no more than 80% of the value of the total assets of the account is
represented by any three investments; and (4) no more than 90% of the value of
the total assets of the account is represented by any four investments.
These diversification standards are applied to each investment division of the
Separate Account by looking to the investments of the portfolio underlying the
investment division. One of our criteria in selecting the portfolios is that
their investment managers intend to manage them in compliance with these
diversification requirements.
Owner Control. In certain circumstances, variable life insurance contract owners
will be considered the owners, for tax purposes, of separate account assets
underlying their contracts. In those circumstances, the contract owners could be
subject to taxation on the income and gains from the separate account assets.
In published rulings, the Internal Revenue Service has stated that a variable
insurance contract owner will be considered the owner of separate account
assets, if the owner possesses incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. When the
diversification regulations were issued, the Treasury Department announced that
in the future, it would provide guidance on the extent to which variable
contract owners could direct their investments among investment divisions
without being treated as owners of the underlying assets of the Separate
Account. As of the date of this prospectus, no such guidance has been issued. We
cannot predict when or whether the Treasury Department will issue that guidance
or what position the Treasury Department will take. In addition, although
regulations are generally issued with prospective effect, it is possible that
regulations may be issued with retroactive effect.
The ownership rights under the policy are similar in many respects to those
described in IRS rulings in which the contract owners were not deemed to own the
separate account assets. In some respects, however, they differ. For example,
under the policy you have many more investment options to choose from than were
available under the contracts involved in the published rulings, and you may be
able to transfer Policy Value among the investment options more frequently than
in the published rulings. Because of these differences, it is possible that you
could be treated as the owner, for tax purposes, of the portfolio shares
underlying your policy and therefore be subject to taxation on the income and
gains on those shares. Moreover, it is possible that the Treasury Department's
position, when announced, may adversely affect the tax treatment of existing
policies. We, therefore, reserve the right to modify the policy as necessary to
attempt to prevent you from being considered the owner for tax purposes of the
underlying assets.
The remainder of this discussion assumes that the policy will be treated as life
insurance for federal tax purposes.
TAX TREATMENT OF LIFE INSURANCE DEATH BENEFIT PROCEEDS. In general, the amount
of the Death Benefit payable under a policy is excludable from gross income
under the Code. Certain transfers of the policy, however, may result in a
portion of the Death Benefit being taxable.
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If the Death Benefit is not received in a lump sum and is, instead, applied
under one of the payment options, payments generally will be prorated between
amounts attributable to the Death Benefit, which will be excludable from the
beneficiary's income, and amounts attributable to interest (occurring after the
Insured's death), which will be includable in the beneficiary's income.
TAX DEFERRAL DURING ACCUMULATION PERIOD. Under existing provisions of the Code,
except as described below, any increase in your Policy Value is generally not
taxable to you unless you receive or are deemed to receive amounts from the
policy before the Insured dies. If you make a full withdrawal under your policy,
the Withdrawal Value will be includable in your income to the extent the amount
received exceeds the "investment in the contract." The "investment in the
contract" generally is the total premium and other consideration paid for the
policy, less the aggregate amount received under the policy previously to the
extent such amounts received were excludable from gross income. Whether partial
withdrawals (or other amounts deemed to be distributed) from the policy
constitute income depends, in part, upon whether the policy is considered a
"modified endowment contract" ("MEC") for federal income tax purposes.
Policies Which Are MECs
- -----------------------
Characterization of a policy as a MEC. In general, this policy will constitute a
MEC unless (1) it was received in exchange for another life insurance contract
which was not a MEC, (2) no premium or other consideration (other than the
exchanged contract) are paid into the policy during the first 7 Policy Years,
and (3) there is no withdrawal or reduction in the death benefit during the
first 7 Policy Years. In addition, even if the policy initially is not a MEC, it
may, in certain circumstances, become a MEC if there is a later increase in
benefits or any other "material change" of the policy within the meaning of the
tax law.
Tax Treatment of Withdrawals, Loans, Assignments and Pledges under MECs. If your
policy is a MEC, withdrawals from your policy will be treated first as
withdrawals of income and then as a recovery of premium. Thus, you may realize
taxable income upon a withdrawal if the Policy Value exceeds the investment in
the policy. You may also realize taxable income when you take a policy loan,
because any loan (including unpaid loan interest) under the policy will be
treated as a withdrawal for tax purposes. In addition, if you assign or pledge
any portion of the value of your policy (or agree to assign or pledge any
portion), the assigned or pledged portion of your Policy Value will be treated
as a withdrawal for tax purposes. Before assigning, pledging, or requesting a
loan under a policy that is a MEC, you should consult a qualified tax adviser.
Penalty Tax. Generally, withdrawals (or the amount of any deemed withdrawals)
from a MEC are subject to a penalty tax equal to 10% of the portion of the
withdrawal that is includable in income, unless the withdrawals are made: (1)
after you reach age 59 1/2, (2) because you have become disabled (as defined in
the tax law), or (3) as substantially equal periodic payments over your life or
life expectancy (or the joint lives or life expectancies of you and your
beneficiary, as defined in the tax law). Certain other exceptions to the 10%
penalty tax may apply.
Aggregation of Policies. All life insurance policies that are MECs and that are
purchased by the same person from us or any of our affiliates within the same
calendar year will be aggregated and treated as one life insurance policy for
purposes of determining the amount of a withdrawal (including a deemed
withdrawal) that is includable in taxable income.
Policies Which Are Not MECs
- ---------------------------
Tax Treatment of Withdrawals Generally. If your policy is not a MEC, the amount
of any withdrawal from the policy will be treated first as a non-taxable
recovery of premium and then as income from the policy. Thus, only the portion
of a withdrawal that exceeds the investment in the policy immediately before the
withdrawal will be includable in taxable income.
Certain Distributions Required by the Tax Law in the First 15 Policy Years. As
indicated above, the Code limits the amount of premium that may be made and the
Policy Values that can accumulate relative to the Death Benefit. Where cash
distributions are required under the Code in connection with a reduction in
benefits during the first 15 years after the policy is issued (or if withdrawals
are made in anticipation of a reduction in benefits, within the meaning of the
Code, during this period), some or all of such amounts may be includable in
taxable income.
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Tax Treatment of Loans. If your policy is not a MEC, a loan received under the
policy generally will be treated as indebtedness for tax purposes, rather than a
withdrawal of Policy Value. As a result, you will not realize taxable income on
any part of the loan as long as the policy remains in force. If you make a full
withdrawal under your policy, however, any outstanding loan balance will be
treated as an amount received by you as part of the Withdrawal Value.
Accordingly, you may be subject to taxation on the loan amount at that time.
Moreover, if any portion of your policy loan is a preferred loan, a portion of
your policy loan may be includable in your taxable income. Generally, you may
not deduct interest paid on loans under the policy, even if you use the loan
proceeds in your trade or business.
SURVIVORSHIP POLICY. Although we believe that the policy, when issued as a
Survivorship Policy, meets the definition of life insurance contract under the
Code, the Code does not directly address how it applies to Survivorship
Policies. In the absence of final regulations or other guidance under the Code
regarding this form of policy, there is necessarily some uncertainty whether a
Survivorship Policy will meet the Code's definition of life insurance. If you
are considering purchasing a Survivorship Policy, you should consult a qualified
tax adviser.
If the Owner is the last surviving Insured, the Death Benefit will generally be
includable in the Owner's estate on his or her death for purposes of the federal
estate tax. If the Owner dies and was not the last surviving Insured, the fair
market value of the policy may be included in the Owner's estate. In general,
the Death Benefit is not included in the last surviving Insured's estate if he
or she neither retained incidents of ownership at death nor had given up
ownership within three years before death.
TREATMENT AT ATTAINED AGE 100. If an Insured reaches age 100, we will transfer
your value in the Separate Account to the Guaranteed Account and stop charging
the Daily Deduction and the cost of insurance charge to your policy. At that
time, the death benefit provisions under your policy will no longer apply. We
believe the policies will continue to qualify as life insurance under the Code,
however, there is some uncertainty regarding this treatment. It is possible,
therefore, that you would be viewed as constructively receiving the Withdrawal
Value when an Insured reaches age 100. If that occurs, you would realize taxable
income at that time, even though the value under your policy had not been
distributed.
ACTIONS TO ENSURE COMPLIANCE WITH THE TAX LAW. We believe that the maximum
amount of premium we intend to permit for the policies will comply with the Code
definition of life insurance. We will monitor the amount of your premium, and,
if your total premium during a Policy Year exceed those permitted by the Code,
we will refund the excess premium within 60 days of the end of the Policy Year
and will pay interest and other earnings (which will be includable in taxable
income) as required by law on the amount refunded. We reserve the right to
increase the Death Benefit (which may result in larger charges under a policy)
or to take any other action deemed necessary to ensure the compliance of the
policy with the federal tax definition of life insurance.
FEDERAL INCOME TAX WITHHOLDING. We will withhold and remit to the federal
government a part of the taxable portion of withdrawals made under a policy,
unless the Owner notifies us in writing at or before the time of the withdrawal
that he or she chooses not to have withholding. As Owner, you will be
responsible for the payment of any taxes and early distribution penalties that
may be due on the amounts received under the policy, whether or not you choose
withholding. You may also be required to pay penalties under the estimated tax
rules, if your withholding and estimated tax payments are insufficient to
satisfy your total tax liability.
TAX ADVICE. This summary is not a complete discussion of the tax treatment of
the policy. You should seek tax advice from an attorney who specializes in tax
issues.
DESCRIPTION OF JACKSON NATIONAL AND THE SEPARATE ACCOUNT
JACKSON NATIONAL LIFE INSURANCE COMPANY. Jackson National is a stock life
insurance company organized under the laws of the state of Michigan in June
1961. Its legal domicile and principal business address is 5901 Executive Drive,
Lansing, Michigan 48911. Jackson National is admitted to conduct life insurance
and annuity business in the District of Columbia and all states except New York.
Jackson National is ultimately a wholly-owned subsidiary of Prudential plc in
London, England.
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OFFICERS AND DIRECTORS OF JACKSON NATIONAL. Our directors and executive officers
are listed below, together with information as to their current principal
business affiliation and principal occupations during the past five years. Where
no dates are given, the person has held that position for at least the past five
years.
Name and Business Address Position with Company Principal Occupations
During Past 5 Years
- ------------------------- --------------------- ------------------------
John B. Banez Vice President -
5901 Executive Drive Systems and Programming
Lansing, Michigan 48911
Jonathan Bloomer Chairman and Director
Laurence Poutney Hill
London, England EC4R 0EU
Connie J. (Dalton) Van Doorn Vice President -Variable
8055 East Tufts Avenue Annuity Administration
Suite 200
Denver, Colorado 80237
Gerald W. Decius Vice President -
5901 Executive Drive Systems Model Office
Lansing, Michigan 48911
Lisa C. Drake Vice President & Actuary
5901 Executive Drive
Lansing, Michigan 48911
Joseph D. Emanuel Vice President & Associate
5901 Executive Drive General Counsel
Lansing, Michigan 48911
Robert A. Fritts Vice President & Controller
5901 Executive Drive Financial Operations
Lansing, Michigan 48911
William A. Gray Senior Vice President -
5901 Executive Drive Product Development &
Lansing, Michigan 48911 Special Markets
Victor Gallo Senior Vice President - Group Pension
5901 Executive Drive
Lansing, Michigan 48911
James D. Garrison Vice President - Tax
5901 Executive Drive
Lansing, Michigan 48911
Rhonda K. Grant Vice President - Government
5901 Executive Drive Relations
Lansing, Michigan 48911
Alan C. Hahn Senior Vice President -
5901 Executive Drive Marketing
Lansing, Michigan 48911
Andrew B. Hopping Executive Vice President,
5901 Executive Drive Chief Financial Officer and
Lansing, Michigan 48911 Director
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<PAGE>
Wyvetter A. Holcomb Vice President - Telephone
5901 Executive Drive Service Center
Lansing, Michigan 48911
Stephen A. Hrapkiewicz Vice President - Human
5901 Executive Drive Resources
Lansing, Michigan 48911
Brion S. Johnson Vice President - Financial
5901 Executive Drive Operations and Treasurer
Lansing, Michigan 48911
Timo P. Kokko Vice President - Support
5901 Executive Drive Services
Lansing, Michigan 48911
Everett W. Kunzelman Vice President - Underwriting
5901 Executive Drive
Lansing, Michigan 48911
David B. LeRoux Senior Vice President -
5 Becker Farm Rd. 4th Floor Group Pension
Roseland, New Jersey 07068
Lynn W. Lopes Vice President - Group
5 Becker Farm Rd. 4th Floor Pension
Roseland, New Jersey 07068
Clark P. Manning Chief Operating Officer and
5901 Executive Drive Director
Lansing, Michigan 48911
Thomas J. Meyer Senior Vice President,
5901 Executive Drive General Counsel and
Lansing, Michigan 48911 Secretary
Keith R. Moore Vice President - Technology
5901 Executive Drive
Lansing, Michigan 48911
Jacky Morin Vice President - Group
5901 Executive Drive Pension
Lansing, Michigan 48911
P. Chad Myers Vice President - Asset
5901 Executive Drive Liability Management
Lansing, Michigan 48911
J. George Napoles Senior Vice President and
5901 Executive Drive Chief Information Officer
Lansing, Michigan 48911
John O. Norton Vice President - Actuary
5901 Executive Drive
Lansing, Michigan 48911
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<PAGE>
Mark Nerud Vice President - Fund
225 West Wacker Drive Accounting and Administration
Suite 120
Chicago, Illinois 60606
Bradley J. Powell Vice President - Institutional
5901 Executive Drive Marketing Group
Lansing, Michigan 48911
James B. Quinn Vice President - Broker
5901 Executive Drive Management
Lansing, Michigan 48911
Robert P. Saltzman President, Chief Executive
5901 Executive Drive Officer and Director
Lansing, Michigan 48911
Scott L. Stolz Senior Vice President -
5901 Executive Drive Administration
Lansing, Michigan 48911
Robert M. Tucker Vice President - Technical
5901 Executive Drive Support
Lansing, Michigan 48911
THE SEPARATE ACCOUNT. The Separate Account was established in 1999 as a
segregated asset account of Jackson National. The Separate Account meets the
definition of a "separate account" under the federal securities laws and is
registered with the Securities and Exchange Commission as a unit investment
trust under the 1940 Act. The Securities and Exchange Commission does not
supervise the management of the Separate Account or Jackson National.
We own the assets of the Separate Account, but we hold them separate from our
other assets. To the extent that these assets are attributable to the policies
offered by this prospectus, these assets are not chargeable with liabilities
arising out of any other business we may conduct. Income, gains, and losses,
whether or not realized, from assets allocated to the Separate Account are
credited to or charged against the Separate Account without regard to our other
income, gains, or losses. Our obligations arising under the policies are general
corporate obligations of Jackson National.
The Separate Account is divided into investment divisions. The assets of each
investment division are invested in the shares of one of the portfolios. We do
not guarantee the investment performance of the Separate Account, its investment
divisions, or the portfolios. Values allocated to the Separate Account will rise
and fall with the values of shares of the portfolios and are also reduced by
policy charges. In the future, we may use the Separate Account to fund other
variable life insurance policies. We will account separately for each type of
variable life insurance policy funded by the Separate Account.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS. We hold the assets of the Separate
Account. We keep those assets physically segregated and held separate and apart
from our general account assets. We maintain records of all purchases and
redemptions of shares of the portfolios.
STATE REGULATION OF JACKSON NATIONAL. We are subject to the laws of Michigan and
regulated by the Michigan Department of Insurance. Every year we file an annual
statement with the Department of Insurance covering our operations for the
previous year and our financial condition as of the end of the year. We are
inspected periodically by the Department of Insurance to verify our contract
liabilities and reserves. The National Association of Insurance Commissioners
also examines us periodically. Our books and records are subject to review by
the Department of Insurance at all times. We are also subject to regulation
under the insurance laws of every jurisdiction in which we operate.
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<PAGE>
DISTRIBUTION OF POLICIES
Jackson National Life Distributors, Inc. (JNLD), a subsidiary of Jackson
National, serves as distributor of the policies. JNLD is located at 401 Wilshire
Boulevard, Suite 1200, Santa Monica, California 90401. It is registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended, and is a
member of the National Association of Securities Dealers, Inc.
Registered representatives of broker-dealers who are licensed insurance agents
appointed by Jackson National, either individually or through an incorporated
insurance agency sell the policies described in this prospectus. JNLD enters
into selling agreements with the unaffiliated broker-dealers whose personnel
participate in the offer and sale of the policies. In some states, policies may
be sold by representatives who may be acting as broker-dealers without separate
registration under the Securities Exchange Act of 1934, as amended, pursuant to
legal and regulatory exceptions.
The maximum sales compensation payable by Jackson National is not more than ___%
of premium paid. In addition, we may pay or permit other promotional incentives,
in cash, or credit or other compensation.
LEGAL PROCEEDINGS
There are no pending legal proceedings affecting the Separate Account. Jackson
National has been named as a defendant in civil litigation proceedings
substantially similar to other litigation brought against many life insurers
alleging misconduct in the sale of insurance products. These matters are
sometimes referred to as market conduct litigation. The litigation against JNL
purports to include purchasers of certain life insurance and annuity products
from JNL during the period from 1981 to present. JNL has retained national and
local counsel experienced in the handling of such litigation, and is vigorously
defending these actions. A favorable outcome is anticipated, and at this time it
is not feasible to make a meaningful estimate of the amount or range of loss
that could result from an unfavorable outcome in such actions. In addition, JNL
is a defendant in several individual actions that involve similar issues,
including an August 1999 verdict against JNL for $32.5 million in punitive
damages. JNL has appealed the verdict on the basis that it is not supported by
the facts or the law, and a ruling reversing the judgment is being sought.
LEGAL MATTERS
Patrick W. Garcy, Esquire, has passed upon all matters of Michigan law
pertaining to the policy, including the validity of the policy and our right to
issue the policy under Michigan law. The law firm of Jorden Burt Boros Cicchetti
Berenson & Johnson LLP, 1025 Thomas Jefferson St., Suite 400 East, Washington,
D.C. 20007-5201, serves as special counsel to Jackson National with regard to
the federal securities laws.
REGISTRATION STATEMENT
We have filed a registration statement with the Securities and Exchange
Commission under the 1933 Act with respect to the policies offered by this
prospectus. This prospectus does not contain all the information set forth in
the registration statement and the exhibits filed as part of the registration
statement. You should refer to the registration statement and the exhibits for
further information concerning the policies, the Separate Account, and Jackson
National. The descriptions in this prospectus of the policies and other legal
instruments are summaries. You should refer to those instruments as filed for
their precise terms.
EXPERTS
The financial statements for Jackson National and the related financial
statement schedule included in this prospectus for the year ended 1999 have been
audited by KPMG LLP, independent auditors, as stated in their reports. The
financial statements for Jackson National and the related financial statement
schedule included in this prospectus for the years ended 1998 and 1997 have been
audited by PricewaterhouseCoopers LLP, independent auditors, as stated in their
reports. We have included those financial statements and the supplemental
schedule in reliance upon the reports of KPMG LLP and PricewaterhouseCoopers
LLP, respectively, given upon their authority as experts in accounting and
auditing. Actuarial matters included in this prospectus and the registration
statement of which it is a part, including the hypothetical policy
illustrations, have been examined by ________________, and are included in
reliance upon his opinion as to their reasonableness.
36
<PAGE>
FINANCIAL STATEMENTS
The consolidated financial statements for Jackson National as of December 31,
1999, 1998 and 1997, and the related financial statement schedule are included
in this prospectus. No financial statements are included for the Separate
Account because it has not yet commenced operations, has no assets or
liabilities, and has received no income or incurred any expense. The financial
statements of Jackson National that are included should be considered only as
bearing upon Jackson National's ability to meet its contractual obligations
under the policies. Jackson National's financial statements do not bear on the
investment experience of the assets held in the Separate Account.
[TO BE FILED BY AMENDMENT]
<PAGE>
[BACK COVER]
The Securities and Exchange Commission maintains a web site at www.sec.gov that
contains additional information that may be of interest to you about Jackson
National Life Insurance Company, Jackson National Life Separate Account IV, and
the policies offered by this prospectus. The web site also contains additional
information about the portfolios underlying the policies.
<PAGE>
PART II - OTHER INFORMATION
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, as amended, the undersigned registrant hereby undertakes
to file with the Securities and Exchange Commission such supplementary and
periodic information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
REPRESENTATION AS TO FEES AND CHARGES
Jackson National Life Insurance Company hereby represents that the fees
and charges deducted under the policies registered by this registration
statement in the aggregate are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by Jackson National
Life Insurance Company.
REPRESENTATION PURSUANT TO RULE 6E-3(T)
Jackson National Life Insurance Company hereby represents that the
policies are eligible for reliance on Rule 6e-3(T).
UNDERTAKING AS TO INDEMNIFICATION
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of the registrant, the registrant has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
CONTENTS OF REGISTRATION STATEMENT
This registration statement consists of the following papers and documents:
Facing Sheet
Prospectus consisting of 38 pages
Undertaking to File Reports
Representation As To Fees and Charges
Representation Pursuant to Rule 6e-3(T)
Undertaking As To Indemnification
Signatures
Exhibits
<PAGE>
EXHIBITS
1. Exhibits required by paragraph A of the instructions as to exhibits of Form
N-8B-2:
(1) Resolution of the Board of Directors of Jackson National Life
Insurance Company authorizing establishment of Jackson National
Life Separate Account IV (filed herewith)
(2) Not applicable
(3) (a) Form of Distribution Agreement (to be filed by
pre-effective amendment)
(b) Form of Selling Group Agreement (to be filed by
pre-effective amendment)
(c) Schedule of Sales Commissions (to be filed by
pre-effective amendment)
(4) Not applicable
(5) (a) Form of Modified Single Premium Variable Life Insurance
Policy (filed herewith)
(b) Form of Last Survivor Modified Single Premium Variable
Life Insurance Policy (filed herewith)
(6) (a) Articles of Incorporation of Jackson National Life
Insurance Company (1)
(b) By-laws of Jackson National Life Insurance Company (1)
(7) Not applicable
(8) Form of Participation Agreement (to be filed by pre-effective
amendment)
(9) Not applicable
(10) Form of Application (filed herewith)
2. Opinion and Consent of Counsel (to be filed by pre-effective amendment)
3. Not applicable
4. Not applicable
5. Consent of KPMG LLP (to be filed by pre-effective amendment)
6. Consent of PricewaterhouseCoopers LLP (to be filed by pre-effective
amendment)
7. Consent of Jorden Burt Boros Cicchetti Berenson & Johnson LLP (to be filed
by pre-effective amendment)
8. Actuarial Opinion and Consent (to be filed by pre-effective amendment)
9. Procedures memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) (to be filed by
pre-effective amendment)
10. Illustrations (to be filed by pre-effective amendment)
11. Powers of Attorney (filed herewith)
- ------------------------
(1) Incorporated by reference to Pre-Effective Amendment No. 1 to registration
statement on Form N-4 (File Nos. 333-70697 and 811-09119) as filed on or
about August 13, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned thereunto duly authorized in the city of Lansing,
State of Michigan, on the 8th day of May, 2000.
JACKSON NATIONAL LIFE SEPARATE ACCOUNT IV
BY: JACKSON NATIONAL LIFE INSURANCE COMPANY
By: Andrew B. Hopping*
---------------------------------------
Andrew B. Hopping, Executive Vice
President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Peter Davis* Chairman and Director May 8, 2000
- -------------------
Peter Davis
Robert P. Saltzman* President, Chief Executive Officer, May 8, 2000
- ------------------- and Director
Robert P. Saltzman
Clark P. Manning* Chief Operating Officer and Director May 8, 2000
- -------------------
Clark P. Manning
Andrew B. Hopping* Executive Vice President, Chief May 8, 2000
- ------------------- Financial Officer, and Director
Andrew B. Hopping
*By: /s/ Thomas J. Meyer
----------------------------
Thomas J. Meyer
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
1.(1) Resolution of the Board of Directors of Jackson National Life
Insurance Company authorizing establishment of Jackson National Life
Separate Account IV
1.(5) (a) Form of Modified Single Premium Variable Life Insurance Policy
(b) Form of Last Survivorship Modified Single Premium Variable
Life Insurance Policy
1.(10) Form of Application
11. Powers of Attorney
EX-99.A1
CERTIFICATE OF SECRETARY
JACKSON NATIONAL LIFE INSURANCE COMPANY
The undersigned, being the duly elected, qualified and acting Secretary of
Jackson National Life Insurance Company, a Michigan corporation ("JNL"), hereby
certifies that the attached is a full, true and correct copy of resolutions duly
adopted by the Board of Directors of JNL at a meeting held on the 16th day of
December, 1997 at which a quorum was present; and that such resolutions have not
been altered or repealed and remain in full force and effect as of the date
hereof.
SEPARATE ACCOUNT IV
WHEREAS, Section 500.925 of the Michigan Insurance Laws permits a
domestic life insurance company to establish one or more separate
accounts;
WHEREAS, it is desired that the Company create such a separate
account to house certain of its variable life insurance products;
NOW, THEREFORE, BE IT RESOLVED, that a separate account referred
to herein as "Separate Account IV" is hereby established:
FURTHER RESOLVED: That the assets of Separate Account IV shall be
derived solely from (a) sale of variable life insurance products,
(b) funds corresponding to dividend accumulation with respect to
investment of such assets, and (c) advances made by the Company in
connection with operation of Separate Account IV;
FURTHER RESOLVED: That this Company shall maintain in Separate
Account IV assets with a fair market value at least equal to the
statutory valuation reserves for the variable life insurance
policies;
FURTHER RESOLVED: That any two of the President, Vice Presidents
and/or the Treasurer of the Company (the "Officers") be, and each
of them hereby is authorized in his or her discretion, as it may
deem appropriate from time to time, in accordance with applicable
laws and regulations (a) to divide Separate Account IV into
divisions and sub-divisions with each division or sub-division
investing in shares of designated investment companies or other
appropriate securities, (b) to modify or eliminate any such
divisions or sub-divisions, (c) to designate further any division
or sub-division thereof and (d) to change the designation of
Separate Account IV to another designation;
1
<PAGE>
FURTHER RESOLVED: That the Officers of the Company be, and each of
them hereby is, authorized to invest cash from the Company's
general account in Separate Account IV or in any division thereof
as may be deemed necessary or appropriate to facilitate the
commencement of the operations of Separate Account IV or to meet
any minimum capital requirements under the Investment Company Act
of 1940, as amended, and to transfer cash or securities from time
to time between the Company's general account and Separate Account
IV as deemed necessary or appropriate so long as such transfers
are not prohibited by law and are consistent with the terms of the
variable life insurance policies issued by the Company providing
for allocations to Separate Account IV;
FURTHER RESOLVED: That the income, gains and losses (whether or
not realized) from assets allocated to Separate Account IV shall,
in accordance with any variable life insurance policies issued by
the Company providing for allocations to Separate Account IV, be
credited to or charged against Separate Account IV without regard
to the other income, gains or losses of the Company;
FURTHER RESOLVED: That authority is hereby delegated to the
President of the Company to adopt procedures providing for, among
other things, criteria by which the Company shall provide for a
pass-through of voting rights to the owners of variable life
insurance policies issued by the Company, providing for allocation
to Separate Account IV with respect to the shares of any
investment companies which are held in Separate Account IV.
FURTHER RESOLVED: That the Officers of the Company be, and each of
them hereby is, authorized and directed to prepare and execute any
necessary agreements to enable Separate Account IV to invest or
reinvest the assets of Separate Account IV in securities issued by
investment companies registered under the Investment Company Act
of 1940, as amended; or other appropriate securities as the
Officers of the Company may designate pursuant to the provisions
of the variable life insurance policies issued by the Company
providing for allocations to Separate Account IV;
FURTHER RESOLVED: That the fiscal year of Separate Account IV
shall end on the 31st day of December each year;
2
<PAGE>
FURTHER RESOLVED: That the Company may register under the
Securities Act of 1933 variable life insurance policies, or units
of interest thereunder, under which amounts will be allocated by
the Company to Separate Account IV to support reserves for such
policies and, in connection therewith, the Officers of the Company
be, and each of them hereby is, authorized to prepare, execute and
file with the Securities and Exchange Commission, in the name and
on behalf of the Company, registration statements under the
Securities Act of 1933, including prospectuses, supplements,
exhibits and other documents relating thereto, and amendments to
the foregoing, in such form as the Officer executing the same may
deem necessary or appropriate;
FURTHER RESOLVED: That the Officers of the Company be, and each of
them hereby is, authorized to take all actions necessary to
register Separate Account IV as a unit investment trust under the
Investment Company Act of 1940, as amended, and to take such
related actions as they deem necessary and appropriate to carry
out the foregoing;
FURTHER RESOLVED: That the Officers of the Company be, and each of
them hereby is, authorized to prepare, execute and file with the
Securities and Exchange Commission, applications and amendments
thereto for such exemptions from or orders under the Investment
Company Act of 1940, as amended, and the Securities Act of 1933,
and to request from the Securities and Exchange Commission no
action and interpretative letters as they may from time to time
deem necessary or desirable.
FURTHER RESOLVED: That the Officers of the Company be, and each of
them hereby is, authorized to prepare, execute and file all
periodic reports required under the Investment Company Act of
1940, as amended, and the Securities Exchange Act of 1934.
FURTHER RESOLVED: That the President of the Company, or such
person as is designated by him, is hereby appointed as agent for
service under any such registration statement and is duly
authorized to receive communications and notices from the
Securities and Exchange Commission with respect thereto, and to
exercise powers given to such agent by the Securities Act of 1933
and the Rules thereunder and any other necessary Acts.
3
<PAGE>
FURTHER RESOLVED: That the Officers of the Company be, and each of
them hereby is, authorized to effect in the name and on behalf of
the Company, all such registrations, filings and qualifications
under blue sky or other applicable securities laws and regulations
and under insurance securities laws and insurance laws and
regulations of such states and other jurisdictions as they may
deem necessary or appropriate, with respect to the Company, and
with respect to any variable life insurance policies under which
amounts will be allocated by the Company to Separate Account IV to
support reserves for such policies; such authorization shall
include registration, filing and qualification of the Company and
of said policies, as well as registration, filing and
qualification of officers, employees and agents of the Company as
brokers, dealers, agents, salesmen or otherwise; and such
authorization shall also include, in connection therewith,
authority to prepare, execute, acknowledge and file all such
applications, applications for exemptions, certificates,
affidavits, covenants, consents to service of process and other
instruments, and to take all such action as the Officer executing
the same or taking such action may deem necessary or desirable.
FURTHER RESOLVED: That the Officers of the Company be, and each of
them hereby is, authorized to execute and deliver all such
documents and papers and to do or cause to be done all such acts
and things as they may deem necessary or desirable to carry out
the foregoing resolutions and the intent and purpose thereof.
Dated: May 8, 2000 /s/ Thomas J. Meyer
--------------------------------------
Thomas J. Meyer, Secretary
4
JACKSON NATIONAL LIFE INSURANCE COMPANY
5901 Executive Drive
Lansing, Michigan 48911
A Stock Company
[LOGO]
- --------------------------------------------------------------------------------
Thank you for choosing Jackson National Life Insurance Company. If You have
any questions, please contact the Company at the Service Center address
and telephone number shown on the Policy Data Page.
THIS MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY OFFERED BY
JACKSON NATIONAL LIFE IS A LEGAL CONTRACT BETWEEN YOU AND US.
READ YOUR POLICY CAREFULLY.
We agree to pay to the Beneficiary the Death Benefit Proceeds and any other
Policy benefits payable due to the Insured's death if the Insured dies while
this Policy is in force. This agreement is subject to the terms of this Policy.
THE DEATH BENEFIT PROCEEDS AND AMOUNTS IN THE SEPARATE ACCOUNT(S) ARE NOT
GUARANTEED AND MAY INCREASE OR DECREASE BASED UPON THE INVESTMENT EXPERIENCE OF
THE INVESTMENT DIVISION(S).
THE POLICY'S FIXED ACCOUNT VALUE IN THE GENERAL ACCOUNT WILL EARN INTEREST DAILY
AT A MINIMUM GUARANTEED EFFECTIVE ANNUAL RATE. INTEREST IN EXCESS OF THE
GUARANTEED RATE MAY BE APPLIED IN THE CALCULATION OF THE FIXED ACCOUNT VALUE AT
SUCH RATES AS THE COMPANY MAY DETERMINE.
- --------------------------------------------------------------------------------
NOTICE OF RIGHT TO EXAMINE POLICY
YOU MAY RETURN THIS POLICY TO THE SELLING PRODUCER OR JACKSON NATIONAL WITHIN
[10] DAYS AFTER YOU RECEIVE IT. IF THIS POLICY WAS PURCHASED AS A REPLACEMENT
YOU MAY RETURN THIS POLICY TO THE SELLING PRODUCER OR JACKSON NATIONAL WITHIN
[20] DAYS AFTER YOU RECEIVE IT. THE COMPANY WILL REFUND THE PREMIUM PAID, LESS
ANY OUTSTANDING POLICY LOANS AND/OR WITHDRAWALS. UPON SUCH REFUND, THE POLICY
SHALL BE VOID.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE This Contracts is signed by the Company
LIFE INSURANCE POLICY. DEATH /s/ Robert P. Saltzman
BENEFIT. PERIOD OF COVERAGE NOT President
GUARANTEED. NONPARTICIPATING. /s/ Thomas J. Meyer
Secretary
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Provision Page Number
--------- -----------
POLICY DATA PAGE [3
DEFINITIONS 4
GENERAL PROVISIONS 7
OWNERSHIP AND BENEFICIARY PROVISIONS 12
ACCUMULATION PROVISIONS 13
TRANSFER PROVISIONS 15
WITHDRAWAL PROVISIONS 16
POLICY LOAN PROVISIONS 17
DEATH BENEFIT PROVISIONS 19
PAYMENT OPTION TABLE 22]
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE
- --------------------------------------------------------------------------------
Policy Number: [9876543210]
Insured: [John Doe]
Insured's Actual Age: [35]
Insured's Issue Age/Sex: [35 Male]
Risk Classification: [Nontobacco]
Initial Premium Amount: [$10,000]
Initial Maximum Allowable Premium: [$10,000]
Initial Death Benefit: [$25,000]
Issue Date: [January 1, 2000]
Policy Date: [January 1, 2000]
Allocation Date: [January 16, 2000]
Issue State: [Michigan]
Owner: [Jane Doe]
Joint Owner: [John Doe]
Beneficiary(ies): [Daniel Doe]
3a
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
POLICY CHARGES
Annual Policy Maintenance Charge: An Annual Policy Maintenance Charge of no
more than [$35.00] will be deducted annually
from Your Policy Value on the Policy
Anniversary.
The Annual Policy Maintenance Charge is
applied to those Policies where the Policy
Value is less than [$50,000] on the Policy
Anniversary when the Annual Policy
Maintenance Charge is due.
On each Policy Anniversary the Annual Policy
Maintenance Charge will be taken from the
Fixed Account and the Investment Divisions
in proportion to their current value.
If a total Withdrawal is made on other than
a Policy Anniversary, any applicable Annual
Policy Maintenance Charge will be deducted.
Mortality and Expense Charge: This charge is deducted on a daily basis and
is equal to [.90%] annually during Policy
Years 1 - 10, and [.80%] annually afterward,
of the Separate Account Policy Value.
Administrative Charge: This charge is deducted on a daily
basis and is equal to [.30%] annually during
Policy Years 1 - 10, and [.15%] annually
afterward, of the Separate Account Policy
Value.
Tax Charge: This charge is deducted on a daily basis and
is equal to [.40%] annually of the Separate
Account Policy Value during the first 10
Policy Years.
Cost of Insurance Charge: This Charge is effective as of the Policy
Date and is deducted on the Issue Date and
each Monthly Anniversary thereafter.
The current Cost of Insurance Charge is
determined by Us. The maximum for this
charge, on a monthly basis, equals the
Guaranteed Maximum Monthly Cost of Insurance
Rate multiplied by the net amount at risk
(Death Benefit discounted by one month's
interest, minus the Policy Value). This
charge is deducted from the Investment
Division(s) and the Fixed Account in
proportion to their current value. See page
3g of this Policy for the maximum amounts
that may be charged for insurance coverage.
3b
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
Transfer Charge: A fee of [$25.00] is charged for each
transfer in excess of [15] in any Policy
Year. Any Transfer Charge is deducted from
the amount transferred prior to the
allocation to the new Policy Option.
Transfer Charges will not be applied to
transfers due to dollar cost averaging or
other asset allocation services provided by
the Company.
Illustration Charge: A fee of up to [$25.00] may be charged for
each in-force illustration in excess of one
in any Policy Year.
Daily Deduction: The following deductions will be made on a
daily basis:
the Mortality and Expense Charge;
the Administrative Charge;
the Tax Charge (if any).
The Daily Deduction will be taken on a
proportional basis from each Investment
Division.
Withdrawal Charge: The Company may assess a Withdrawal Charge
upon withdrawal as follows:
COMPLETED
YEARS SINCE
RECEIPT OF PERCENT OF
PREMIUM PREMIUM
0 9.00%
1 8.00%
2 7.00%
3 6.00%
4 5.00%
5 4.00%
6 3.00%
7 2.00%
8 1.00%
9 and thereafter 0.00%
The Withdrawal Charge is assessed to
compensate Us for sales expenses and any
premium taxes incurred by Us on Your behalf.
A specified amount of the Withdrawal Value
may be withdrawn free of Withdrawal Charges
each Policy Year (see Withdrawal
Provisions).
3c
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
TRANSFERS, PREMIUMS, LOANS, WITHDRAWALS, SEPARATE ACCOUNT
Transfers: FROM INVESTMENT DIVISION TO INVESTMENT
DIVISION. You may transfer all or a portion
of Your value in one Investment Division to
another Investment Division.
FROM INVESTMENT DIVISION TO THE FIXED
ACCOUNT. You may transfer all or a portion
of Your value in the Investment Division(s)
to the Fixed Account.
FROM THE FIXED ACCOUNT TO AN INVESTMENT
DIVISION. You may only make one transfer
from the Fixed Account to any Investment
Division(s) during any Policy Year (except
in the case of dollar cost averaging). This
transfer from the Fixed Account may not
exceed the greater of [$5,000] (or Your
Fixed Account Value, if less) or [25%] of
Your Fixed Account Value (except in the case
of dollar cost averaging).
Premiums: The initial Premium amount must be at least
[$10,000]. Any subsequent Premiums, if
allowed by Us, must be at least [$1,000].
The Company may waive these minimums at any
time.
The initial Premium will be allocated to a
money market Investment Division on the
Issue Date of the Policy. On the Allocation
Date the amount in Your money market
Investment Division will be allocated to the
Fixed Account and Investment Division(s)
according to the Premium allocation
specified by You in the application, or Your
most recent instructions received by Us, if
any.
The Owner may allocate initial Premium among
the Fixed Account and the Investment
Divisions. Such allocation may be made in
any percentage from [0% to 100%] in whole
percentages.
Subject to the guideline premium limitation
as defined in the Internal Revenue Code (as
amended), We will accept additional Premium
at any time. In order for this Policy to be
treated as life insurance under the Internal
Revenue Code (as amended), the sum of all
Premiums paid may not exceed the Maximum
Allowable Premium. We reserve the right to
refuse any Premium that would cause the
Policy to be disqualified as life insurance
under the Internal Revenue Code (as
amended). Any additional Premium that
results in an increase in the Death Benefit
3d
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
Premiums (Continued): will be accepted by Us only after We receive
acceptable evidence of insurability of the
Insured. The actual amount of any additional
Premium will affect the Policy Value and the
amount and duration of the Death Benefit
provided by this Policy.
Any additional Premium will be allocated
according to Your most recent instructions.
The entire Premium as paid will be deemed
earned when received by Us. No refund of any
portion of the Premium will be made as the
result of a death claim.
Loans: The Policy Loan Rate is [6%].
The rate of interest credited to Preferred
Loans is [6%].
The rate of interest credited to Regular
Loans is [4%].
Withdrawals: Minimum Partial Withdrawal: [$500] or the
entire Policy Value if less.
Separate Account: Jackson National Life Separate Account IV.
POLICY OPTIONS
An Owner may not allocate Policy Values to more than 21 Policy Options at any
one time. The Company may waive this restriction at its discretion.
FIXED ACCOUNT: Earns an annually declared rate of interest
guaranteed to be at least 3%.
INVESTMENT DIVISIONS: Investment Divisions as indicated on the
application.
The Company may periodically add or delete
Investment Divisions.
3e
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
ATTAINED DEATH ATTAINED DEATH
AGE BENEFIT AGE BENEFIT
PERCENTAGES PERCENTAGES
[0 through 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 through 90 105%
56 146% 91 104%
57 142% 92 103%
58 138% 93 102%
59 134% 94+ 101% ]
The Minimum Death Benefit percentages comply with Section 7702 of the Internal
Revenue Code (as amended).
3f
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
- ------------------------------ ---------------------------- --------------------------- ----------------------------
ATTAINED MAXIMUM MONTHLY COST PER ATTAINED MAXIMUM MONTHLY COST PER
AGE $1,000 AGE $1,000
- ------------------------------ ---------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
[35 0.1443 68 2.5282
36 0.1518 69 2.7908
37 0.1618 70 3.0886
38 0.1727 71 3.4298
39 0.1844 72 3.8253
40 0.1986 73 4.2749
41 0.2136 74 4.7716
42 0.2295 75 5.3054
43 0.2470 76 5.8727
44 0.2662 77 6.4695
45 0.2880 78 7.1000
46 0.3114 79 7.7848
47 0.3365 80 8.5472
48 0.3641 81 9.4095
49 0.3942 82 10.3922
50 0.4285 83 11.4945
51 0.4679 84 12.6988
52 0.5131 85 13.9806
53 0.5651 86 15.3265
54 0.6230 87 16.7180
55 0.6876 88 18.1509
56 0.7582 89 19.6476
57 0.8330 90 21.2331
58 0.9163 91 22.9495
59 1.0098 92 24.8700
60 1.1143 93 27.2013
61 1.2308 94 30.4289
62 1.3652 95 35.4922
63 1.5176 96 44.5151
64 1.6872 97 62.8314
65 1.8733 98 73.0824
66 2.0752 99+ 83.3333]
67 2.2920
- ------------------------------ ---------------------------- --------------------------- ----------------------------
</TABLE>
The Guaranteed Maximum Monthly Cost of Insurance Rates do not exceed rates based
on the 1980 Commissioner's Standard Ordinary table, age last birthday.
3g
<PAGE>
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POLICY DATA PAGE (CONT'D)
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["S&P(R)" is a trademark of the McGraw Hill Companies, Inc. and has been
licensed for use by the Company. This Policy is not sponsored, endorsed, sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of purchasing this Policy.]
[This Policy is not sponsored, endorsed, sold or promoted by Dow Jones. Dow
Jones makes no representation or warranty, express or implied, to the owners of
this Policy or any member of the public regarding the advisability of purchasing
this Policy. Dow Jones' only relationship to Jackson National Life Insurance
Company (JNL) is the licensing of certain copyrights, trademarks, servicemarks
and service names of Dow Jones. Dow Jones has no obligation to take the needs of
JNL or the owners of this Policy into consideration in determining, composing or
calculating the Dow Jones Industrial AverageSM. Dow Jones is not responsible for
and has not participated in the determination of the terms and conditions of
this Policy to be issued, including the pricing or the amount payable under the
Policy. Dow Jones has no obligation or liability in connection with the
administration or marketing of this Policy.
Dow Jones does not guarantee the accuracy and/or the completeness of the Dow
Jones Industrial AverageSM or any data included therein and Dow Jones shall have
no liability for any errors, omissions, or interruptions therein. Dow Jones
makes no warranty, express or implied, as to results to be obtained by JNL,
owners of this POLICY, or any other person or entity from the use of the Dow
Jones INDUSTRIAL averageSM or any data included therein. Dow Jones makes no
express or implied warranties, and expressly disclaims all warranties, of
merchantability or fitness for a particular purpose or use with respect to the
dow jones industrial averageSM or any data included therein. Without limiting
any of the foregoing, in no event shall Dow Jones have any liability for any
lost profits or indirect, punitive, special or consequential damages (including
lost profits), Even if notified of the possibility of such damages. There are no
THIRD party beneficiaries of any agreements or arrangements between Dow Jones
and jnl.]
- --------------------------------------------------------------------------------
Jackson National Life Service Center Express Mail:
[P.O. Box 378002 [Jackson National Life Service Center
Denver, CO 80237-8002 8055 E. Tufts Ave., 2nd Floor
1-800-766-4683] Denver, CO 80237]
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3h
<PAGE>
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DEFINITIONS
- --------------------------------------------------------------------------------
The following are key words used in this Policy. They are important in
describing both Your rights and Ours. When they are used, they are capitalized.
As You read Your Policy, refer back to these definitions.
ACCUMULATION UNIT. A unit of measure used to calculate the value in an
Investment Division.
ALLOCATION DATE: The date as shown on the Policy Data Page, on which the amount
in Your money market Investment Division is initially allocated to the Policy
Options of Your choice.
ATTAINED AGE. The Insured's rated age on the Policy Date, plus the number of
full years since the Policy Date.
BENEFICIARY(IES). The person(s) or entity(ies) designated to receive the Death
Benefit Proceeds upon the death of the Insured.
BUSINESS DAY. Each day when the New York Stock Exchange is open for business.
The Business Day ends when the New York Stock Exchange closes, usually 4:00 p.m.
Eastern time.
CONTESTABLE PERIOD. A two-year period which begins on the Issue Date of the
Policy, the date of Reinstatement of a lapsed Policy, or the effective date of
an increase in coverage of the Policy or a change in risk classification,
whichever occurs later.
DAILY DEDUCTION. Those charges against the Investment Divisions made on a daily
basis as described on the Policy Data Page.
DEATH BENEFIT. Initial Death Benefit as shown on the Policy Data Page less
reductions due to any partial withdrawals plus any increase in coverage due to
additional premiums, or the Minimum Death Benefit, if greater.
DEATH BENEFIT PROCEEDS. The amount that We will pay to the Beneficiary(ies) on
the death of the Insured while this Policy is in force.
DEBT. All unpaid Policy loans plus accrued interest on such loans.
EARNINGS. Policy Value minus Remaining Premium.
FIXED ACCOUNT. A Policy Option that earns an annually declared rate of interest.
Allocations made to the Fixed Account are part of the General Account of the
Company.
FIXED ACCOUNT VALUE. The Fixed Account Value is: (1) the Premium and any
subsequent amounts allocated to the Fixed Account; plus (2) any interest
credited; less (3) any amounts canceled or withdrawn for transfers, Annual
Policy Maintenance Charges, Cost of Insurance Charges, or withdrawals.
4
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS (CONT'D)
- --------------------------------------------------------------------------------
GENERAL ACCOUNT. An account maintained by the Company for all assets not
allocated to a Separate Account or other segregated account.
INSURED(S). The person whose life is covered by this Policy.
INVESTMENT DIVISION(S). A Policy Option within the Separate Account. Values in
the Investment Divisions will go up or down depending on the performance of the
underlying Portfolios.
ISSUE DATE. The date the Policy was issued by the Company, as shown on the
Policy Data Page, which begins the Contestable and Suicide periods.
JOINT OWNER. If there is more than one Owner, each Owner shall be a Joint Owner
of the Policy. Joint Owners have equal ownership rights and each must authorize
any exercising of those ownership rights under this Policy.
LOAN ACCOUNT. An account that is part of the General Account in which funds from
Your Investment Divisions and the Fixed Account are placed as security for Your
loan.
LOAN ACCOUNT VALUE. The amount set aside in the Loan Account to secure any Debt
and interest credited thereon.
MAXIMUM ALLOWABLE PREMIUM. The maximum total Premium that We will permit to be
paid for this Policy. This amount is set to comply with the limit required to
qualify this Policy as life insurance under the Internal Revenue Code (as
amended). This amount may be adjusted due to Policy changes.
MINIMUM DEATH BENEFIT. The Policy Value multiplied by the death benefit
percentage based upon the Attained Age of the Insured, as shown on the Policy
Data Page.
MONTHLY ANNIVERSARY. The same date as the Policy Date for each succeeding month,
except that for those months not having such a day, it is the last day of that
month.
MORTALITY AND EXPENSE CHARGE. This amount covers the risks assumed by Us that
the Cost of Insurance Charge specified in the Policy will be insufficient to
meet the actual claims incurred by Us. In addition, this amount covers Our risk
that Our actual expenses for issuing and administering Your Policy will exceed
the Annual Policy Maintenance Charge.
OWNER ("YOU," "YOUR"). The person or entity shown on the Policy Data Page who is
entitled to exercise all rights and privileges under this Policy. If Joint
Owners are named all references to Owner shall mean Joint Owners.
POLICY. This Modified Single Premium Variable Life Insurance contract between
You and Us.
POLICY ANNIVERSARY. An annual anniversary of the Policy Date.
5
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS (CONT'D)
- --------------------------------------------------------------------------------
POLICY DATE. The date Your coverage under this Policy begins.
POLICY LOAN RATE. The interest rate charged on Policy loans (see Policy Data
Page).
POLICY OPTION. The Fixed Account or an Investment Division offered by Us under
this Policy. (Each Policy Option is more fully explained in the Accumulation
Provisions.)
POLICY VALUE. The sum of the Separate Account Policy Value, the Fixed Account
Value, and the Loan Account Value.
POLICY YEAR. The twelve-month period immediately following the Policy Date or
any Policy Anniversary.
PORTFOLIO(S). A portfolio of a mutual fund in which the Investment Division
invests.
PREMIUM(S). Considerations paid into this Policy by or on behalf of the Owner.
REMAINING PREMIUM. The total Premium in the Policy reduced due to withdrawals.
The Remaining Premium will be reduced by the withdrawal of Premiums that incur
Withdrawal Charges, as well as the withdrawal of Premiums that are no longer
subject to Withdrawal Charges.
RIDER. A form which supplements the Policy or which provides additional
benefits. When a Rider is attached to the Policy it becomes a part of the Policy
and is subject to all the terms of the Policy unless We state otherwise in the
Rider.
SEPARATE ACCOUNT. A segregated asset account established and maintained by the
Company in which a portion of Our assets has been allocated for this and certain
other policies. It is shown in the Policy Data Page.
SEPARATE ACCOUNT POLICY VALUE. The current value of the amounts allocated to the
Investment Divisions within the Separate Account of the Policy.
SERVICE CENTER. The Company's address and telephone number as specified on the
Policy Data Page or as may be designated by Us from time to time.
WE, OUR, US, THE COMPANY, JNL. Jackson National Life Insurance Company.
WITHDRAWAL CHARGE. The charge assessed against certain withdrawals. (Please see
Policy Data Page and Withdrawal Provisions.)
WITHDRAWAL VALUE. The Policy Value reduced by any applicable Withdrawal Charge,
taxes payable, outstanding Annual Policy Maintenance Charge, and any Debt.
WRITTEN REQUEST. Information or instructions given to Us in writing in a form
satisfactory to Us. A Written Request takes effect when We accept it and it is
recorded at Our Service Center.
6
<PAGE>
- --------------------------------------------------------------------------------
GENERAL PROVISIONS
- --------------------------------------------------------------------------------
ASSIGNMENT. The Owner may assign this Policy while it is in force, but We will
not be bound by any assignment unless it is in writing and has been recorded at
the Company's Service Center. An assignment will take effect when recorded by
the Company. We are not responsible for any payment made before an assignment is
recorded. The Owner may exercise these rights subject to the interest of any
assignee or irrevocable beneficiary. We assume no responsibility for the
validity or tax consequences of any assignment. If You make an assignment, You
may have to pay income tax. You are encouraged to seek legal and/or tax advice.
BASIS OF VALUE. Values and reserves are determined in accordance with procedures
that recognize the variable nature of the values attributable to the Separate
Account. The method of calculating these values is consistent with the
regulations of the State of Michigan.
CHANGES IN POLICY COST FACTORS. Changes in Policy cost factors (interest rates
We credit on the Fixed Account Value, Cost of Insurance Charges) will be
determined by class and on future expectations for such elements as investments
earnings, mortality, persistency, expenses, and taxes. Any changes in Policy
cost factors will be determined in accordance with procedures and standards on
file and, if required, with the insurance supervisory official of the
jurisdiction in which this Policy is delivered.
CHARGES AND FEES. The Company may assess charges or fees under the Policy.
Please see the Policy Data Page for more information as to charges or fees.
CONFORMITY WITH STATE LAWS. This Policy will be interpreted under the law of the
state in which it is issued for delivery. Any provision that is in conflict with
the law of such state is amended to conform to the minimum requirements of such
law.
CONTESTABILITY. All statements made in the application will, in the absence of
fraud, be deemed representations and not warranties. No statement will void this
Policy or be used as a defense to a claim unless it is contained in the written
application. This Policy may not be contested after it has been in force during
the lifetime of the Insured for two years from the Issue Date except for
nonpayment of any required Premium.
If the Insured dies during a Contestable Period, the Company may investigate the
circumstances surrounding the original application, reinstatement application,
or application for increase in coverage or change in risk classification. A
reinstated or modified Policy may be contested only with respect to material
misrepresentations made in the application for such reinstatement or request for
Policy changes. In the case of an increase in coverage, only the amount of the
increase over the Death Benefit prior to the application for increase in
coverage may be contested with respect to material misrepresentations made in
such application.
As part of the contestable investigation, the Company may require the
Beneficiary(ies) to sign certain authorizations necessary for release of medical
records and other information relating to the Insured.
7
<PAGE>
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GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
DEFERMENT OF PAYMENTS. We may defer making payments to You from the Fixed
Account for up to six months, subject to applicable state law. Interest, subject
to state requirements, will be credited during this deferral period.
DOLLAR COST AVERAGING. The Owner may arrange to have a regular amount of money
periodically transferred automatically from the Fixed Account or one of the
Investment Divisions of the Policy to any other Investment Division(s). Any
election of dollar cost averaging must be for a period of not less than 12
months.
ENTIRE CONTRACT. The Policy, application, supplemental applications, and any
applicable riders, endorsements and amendments together make up the entire
contract between You and the Company.
GRACE PERIOD. This Policy will lapse 61 days after notice is mailed to You that
the Withdrawal Value of the Policy is below or equal to $0. This 61-day period
is the Grace Period.
If death occurs during the Grace Period, any overdue Cost of Insurance Charge
and Annual Policy Maintenance Charge will be deducted from any Death Benefit
Proceeds payable.
At the beginning of the Grace Period We will mail to You and any assignee
written notice of the amount necessary to continue this Policy in force through
the end of the Grace Period. The amount required will be a minimum amount that
will pay at least two months of Cost of Insurance Charge plus any Annual Policy
Maintenance Charge due before the end of the Grace Period. If that amount is not
paid by the end of the Grace Period, the Policy will lapse without value and
coverage will end.
ILLUSTRATIONS. Upon request We will provide You with an illustration projecting
future benefits under this Policy. We reserve the right to charge You for such
illustration, as stated on the Policy Data Page.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the Insured has been misstated,
the benefits available under this Policy will be those which the Premiums paid
would have purchased at the correct age and sex.
MODIFICATION OF POLICY. Any change or waiver of the provisions of this Policy
must be in writing and signed by the President, a Vice President, the Secretary,
or Assistant Secretary of the Company. No broker or producer has authority to
change or waive any provision of this Policy.
To the extent permitted by applicable laws and regulations, We may amend or
waive any portion of this Policy without notice or Your consent to comply with
any applicable federal or state laws, including but not limited to, requirements
for life insurance policies under the Internal Revenue Code (as amended). 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.
8
<PAGE>
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GENERAL PROVISIONS (CONT'D)
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NONPARTICIPATING. This Policy does not pay dividends nor does it share in the
surplus or revenue of the Company.
PAYMENT OF PREMIUMS. The first Premium must be paid at or before issue of the
Policy. No coverage under this Policy will be provided prior to the payment of
the required Premium.
PROOF OF AGE, SEX OR SURVIVAL. The Company may require satisfactory proof of
correct age or sex, as applicable, of the Insured at any time. If any payment
under this Policy is contingent upon the Insured, Owner, or Beneficiary being
alive, the Company may require satisfactory proof of such survival.
REINSTATEMENT. If this Policy lapses for any reason other than a full
withdrawal, it may be reinstated within three years of the date this Policy
lapsed, subject to the following:
1. Your written request for reinstatement is received at Our Service Center;
2. You provide Us with satisfactory evidence of the Insured's insurability at
the same risk classification as at the time of issuance of the Policy;
3. You provide payment of Premium sufficient to cover the past due Cost of
Insurance Charges and any Annual Policy Maintenance Charge for the coverage
provided by Us during the Grace Period, plus an additional amount
sufficient to keep the Policy in force for three months after the date of
reinstatement; and
4. You provide payment, or agree to the reinstatement of any loans against the
Policy, including all past due interest on the loan from the date of lapse
of this Policy to the date of reinstatement. The total reinstated loan will
be allocated at that time to the Loan Account.
The effective date of the reinstatement is the next Business Day following
approval by Us of Your application for reinstatement.
Any reinstatement will become incontestable during the lifetime of the Insured
after two years from the date of such reinstatement. The basis for contesting
any reinstatement will be limited to any misrepresentations made in the
application for such reinstatement.
Once reinstated, We will maintain the Death Benefit under the Policy at least
until the end of the three-month period after the Policy is reinstated.
The Death Benefit of the reinstated Policy cannot exceed the Death Benefit at
the time of lapse.
The Policy Value on the reinstatement date will equal:
1. The Policy Value at the time of lapse; plus
2. Any additional amounts paid into the Policy that are not considered
payment of past due charges or loan repayments.
The portion of the Policy Value not allocated to the Loan Account on the
reinstatement date will be allocated to the Investment Divisions and the Fixed
Account according to Your most recent Premium allocation instructions.
The Withdrawal Charge in effect upon reinstatement will be the Withdrawal Charge
that existed on the date the Policy lapsed.
9
<PAGE>
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GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
REPORTS. The Company will send You a report about Your Policy at least once a
year. We will also send You reports as required by law. They shall be addressed
to the last address of the Owner known to the Company.
SUBSTITUTION OF INVESTMENT PORTFOLIOS. We may substitute another underlying
Portfolio without Your consent. Substitution would occur if We determine that
the use of such underlying investment is no longer possible or We determine it
is no longer appropriate for the purposes of the Policy. No substitution will be
made without notice to You and without the prior approval of the Securities and
Exchange Commission and the state where the Policy was issued for delivery, if
required. Should a substitution, addition, or deletion occur, You will be
allowed to select from the then current Investment Divisions and substitution
may be made with respect to both existing Policy Value in that Investment
Division and the allocation of future Premiums.
SUSPENSION OF PAYMENTS. The Company may suspend or postpone any transfers or
payments to or from the Investment Divisions if any of the following occur:
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 such that it is not reasonably practical to dispose of
securities in the Separate Account or to determine the value of its assets;
or
4. The Securities and Exchange Commission, by order, so permits for the
protection of Policy Owners.
The applicable rules and regulations of the Securities and Exchange Commission
will govern whether the conditions described in 2. and 3. exist.
SUICIDE. If the Insured dies by suicide, while sane or insane, within two years
(one year for residents of Colorado and North Dakota) from the Issue Date of the
Policy, Our liability with respect to this Policy will terminate. We will return
to You an amount equal to the Premiums paid, adjusted for any partial
withdrawals and any Debt.
If the Insured dies by suicide, while sane or insane, within two years from the
effective date of any increase in coverage (one year for residents of Colorado
and North Dakota), Our liability with respect to the increase will terminate. We
will return to You an amount equal to the Premiums paid for such increase in
coverage, adjusted for any partial withdrawals and any Debt associated with such
increase.
TAXABLE STATUS. If this Policy is not a modified endowment contract (MEC), a
request for a Policy change that would trigger a change to a MEC status will not
be processed unless You specify otherwise in writing. Such changes could include
a change in risk classification, change in coverage, withdrawal, or any other
change specified in the Internal Revenue Code (as amended).
10
<PAGE>
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GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
TAXES. The Company may deduct from the Policy Value any applicable taxes payable
to a state or other government entity because of this Policy. Should We advance
any amount so due, We are not waiving any right to collect such amount at a
later date. In addition, the Company will deduct any withholding taxes required
by applicable law as a result of any withdrawals from this Policy.
WRITTEN NOTICE. Any notice We send to the Owner will be sent to the Owner's last
known address unless the Owner requests otherwise in writing. Any written
request or notice must be sent to the Service Center, unless We advise You
otherwise. You are responsible for promptly notifying the Company of any address
change.
11
<PAGE>
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OWNERSHIP AND BENEFICIARY PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. During the lifetime of the Insured, all rights under this Policy belong
to the Owner(s). If the Policy has Joint Owners, the consent of all Owners is
required for Policy changes. Upon the death of a Joint Owner, all rights shall
be vested in the surviving Owner(s).
CHANGE OF OWNERSHIP. The ownership of this Policy may be changed by the Owner(s)
at any time during the Insured's lifetime. Any change must be made by Written
Request to the Service Center. A change will take effect on the date the notice
is signed. However, the change will not apply to any payments made or actions
taken by Us before notice of such change is accepted and recorded at Our Service
Center. If You change the ownership, You may have to pay income tax. You are
encouraged to seek legal and/or tax advice.
BENEFICIARY. The Owner may designate the Beneficiary(ies) to receive any amount
payable under this Policy on the Insured's death. The original Beneficiary(ies)
will be named in the application. If two or more persons are named as Primary
Beneficiary(ies), those surviving the Insured will share equally unless
otherwise stated.
The Owner may change the Beneficiary(ies) by submitting a Written Request to the
Service Center, unless an irrevocable Beneficiary(ies) designation was
previously filed. Any change will take effect when recorded by the Company. The
Company is not liable for any payment made or action taken before the Company
records the change.
DEATH OF BENEFICIARY. The interest of any Beneficiary who dies before the
Insured will end at the death of the Beneficiary. The interest of any
Beneficiary who dies at the time of or within ten days after the death of the
Insured will also end if no Death Benefit Proceeds have been paid to the
Beneficiary. If no Primary Beneficiary(ies) survives the Insured, benefits will
be paid to any surviving Contingent Beneficiary(ies), if named, in equal shares,
unless otherwise stated. If there are no surviving Beneficiaries at the death of
the Insured, the Death Benefit Proceeds will be paid to the Owner, or the
Owner's estate if the Owner does not survive to receive payment.
<PAGE>
- --------------------------------------------------------------------------------
ACCUMULATION PROVISIONS
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT. The Separate Account is designated on the Policy Data Page. 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. These Policy assets in the
Separate Account are not chargeable with liabilities arising out of any other
business the Company may conduct. All the income, gains, and losses resulting
from these assets are credited to or charged against the variable life insurance
policies supported by the Separate Account, and not against any other policies
or contracts the Company may issue. The assets of the Separate Account will be
available to cover the liabilities of Our General Account only to the extent
that the assets of the Separate Account exceed the liabilities of the Separate
Account arising under the variable life insurance policies supported by the
Separate Account. The Separate Account consists of several Investment Divisions.
The assets of the Separate Account shall be valued at least as often as any
benefits of this Policy, but in no event will such valuation be less frequent
than monthly.
INVESTMENT DIVISIONS. The Policy offers Investment Divisions. The Investment
Divisions available at issue are shown on the application.
ACCUMULATION UNITS. The Separate Account Policy Value will go up or down
depending on the performance of the Investment Division(s). In order to monitor
the Separate Account Policy Value, the Company uses a unit of measure called an
Accumulation Unit. The value of an Accumulation Unit may go up or down from
Business Day to Business Day. Adjustments to the Separate Account Policy Value,
such as withdrawals, Withdrawal Charges, transfers, allocations to the Loan
Account, Annual Policy Maintenance Charges, and Cost of Insurance Charges result
in a redemption of Accumulation Units. However, these adjustments do not affect
the value of the Accumulation Units.
When You make an allocation or transfer to the Investment Division(s), the
Company credits Your Policy with Accumulation Units. The number of Accumulation
Units credited is determined by dividing the amount allocated by the
Accumulation Unit Value for that Investment Division at the close of the
Business Day.
ACCUMULATION UNIT VALUE. The Company determines the value of an Accumulation
Unit for each of the Investment Divisions. This is done by:
1. Determining the total value of assets held in the particular Investment
Division;
2. Subtracting from the amount any Daily Deductions; and
3. Dividing this amount by the number of outstanding Accumulation Units.
FIXED ACCOUNT. You may allocate Premium or make transfers to the Fixed Account
while the Policy is in force, subject to the provisions of the Policy.
FIXED ACCOUNT VALUE. The Fixed Account Value is determined in the following
manner:
o The initial Premium is allocated to the Fixed Account as designated by the
Owner pursuant to the terms of the Policy.
o Subsequent amounts may be allocated to the Fixed Account pursuant to the
terms of the Policy.
13
<PAGE>
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ACCUMULATION PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
o On each Monthly Anniversary, the Cost of Insurance Charge is deducted based
on the proportion that the Fixed Account Value bears to the Policy Value
less the Loan Account Value.
o On each Policy Anniversary, the Annual Policy Maintenance Charge is
deducted based on the proportion that the Fixed Account Value bears to the
Policy Value less the Loan Account Value.
o On each Business Day, amounts are deducted to reflect any partial
withdrawals, Withdrawal Charges, transfers, and amounts allocated to the
Loan Account, when such event occurs.
o Interest is credited on each Business Day as described below.
INTEREST TO BE CREDITED. The Company will credit interest to the Fixed Account.
Such interest will be credited at the annual effective interest rate the Company
prospectively declares from time to time, at the sole discretion of the Company.
The rate in effect at the time an allocation is made will be applied to those
funds allocated to the Fixed Account until the next Policy Anniversary. The then
current rate declared by the Company will be applied to the Fixed Account for
the next 12 months. The Company guarantees that it will credit interest to the
Fixed Account at not less 3% annually. Subsequent interest rates may be higher
or lower than those rates previously set by the Company.
14
<PAGE>
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TRANSFER PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. A transfer is subject to the following:
1. The maximum number of transfers and number of transfers that may be made
and are not subject to a Transfer Charge are shown on the Policy Data Page.
2. A Transfer Charge is deducted from the transferred amount prior to the
allocation to the new Policy Option if a transfer exceeds the maximum
number of free transfers, as stated on the Policy Data Page.
3. You may not make a transfer until after the Allocation Date.
4. The minimum and maximum amounts that may be transferred are shown on the
Policy Data Page.
5. A transfer will be effective as of the end of the Business Day when We
receive a transfer request acceptable to Us which contains all required
information.
6. We are not 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 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 the other Owners. A
modification could be applied to transfers to or from one or more of the
Investment Divisions and could include, but may not be limited to:
a. The requirement of a minimum time period between each transfer;
b. Not accepting transfer requests of any person 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 Your
transfer rights temporarily without notice. We will, however, make every
attempt to process Your request in a timely fashion.
15
<PAGE>
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WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. After the Allocation Date and while this Policy is in force, the Owner
may withdraw all or part of the Withdrawal Value under this Policy by informing
Us at Our Service Center.
A withdrawal may give rise to taxable income to You, and it is recommended that
You seek competent tax advice before making any such withdrawal.
FULL WITHDRAWAL. For a full withdrawal, this Policy, or a Lost Policy Affidavit,
must be returned to Our Service Center along with the withdrawal request.
Upon full withdrawal, the Owner will receive the Withdrawal Value.
PARTIAL WITHDRAWAL. If the withdrawal request does not specify from which
Investment Division(s) or the Fixed Account from which the withdrawal is to be
made, the request will be processed by making withdrawals from each Investment
Division and the Fixed Account in proportion to their respective value at the
time the withdrawal request is processed.
WITHDRAWAL CHARGES. Each withdrawal from the Policy may be subject to Withdrawal
Charges, in accordance with the table shown on the Policy Data Page and other
provisions of this Policy. Earnings withdrawn are not subject to Withdrawal
Charges.
For purposes of the Withdrawal Charge, withdrawals are treated as coming first
from Earnings, and then from the oldest Remaining Premium. Any part of a
withdrawal consisting of Earnings does not reduce Remaining Premium for the
purpose of calculating Withdrawal Charges. The Withdrawal Charge is based on the
Remaining Premiums withdrawn. We will deduct the Withdrawal Charge from the
remaining value in Your Policy. However, in no case will the total amount
received upon withdrawal be more than the Withdrawal Value.
FREE WITHDRAWAL CHARGE AMOUNT. Each Policy Year an amount of up to the greater
of 10% of any Remaining Premium paid as of the Business Day that the request for
withdrawal is received, less any previous withdrawals taken during that Policy
Year, or 100% of Earnings may be withdrawn without incurring a Withdrawal
Charge. Withdrawals during the Policy Year in excess of this amount may be
subject to a Withdrawal Charge. The amount available for withdrawal under this
provision is not cumulative, and expires at the end of each Policy Year.
EFFECT OF WITHDRAWAL ON DEATH BENEFIT. When a partial withdrawal is made, the
Death Benefit under the Policy is decreased by an amount proportionate to the
reduction in the Policy Value caused by the partial withdrawal (see Death
Benefit Provisions for further details).
Partial withdrawals will not be permitted if the Death Benefit reduction would
cause the Policy to fail to qualify as life insurance for federal tax purposes.
16
<PAGE>
- --------------------------------------------------------------------------------
POLICY LOAN PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. After the Allocation Date, You may receive a loan from the Policy as
long as the Policy:
1. Is in force and is not in the Grace Period; and
2. Is properly assigned to Us as the sole security for the loan.
We reserve the right to defer granting a loan for any period permitted by
applicable law, but in no event will such period be more than six months.
A loan may give rise to taxable income to You, and it is recommended that You
seek competent tax advice before the taking of any such loan.
LOAN AMOUNT AVAILABLE. The maximum amount of any new loan taken is [90%] of the
Withdrawal Value in effect on the date We grant the loan.
LOAN TYPES. There are two types of loans under this Policy. Loans against
Earnings are Preferred Loans, while all other loans are Regular Loans. For
purposes of determining the type of loan, each loan will be treated as coming
first from Earnings, and then from Premium.
We will determine the amount of a loan that is Preferred on the date of the
loan, and We will redetermine the total amount of Preferred Loans on each Policy
Anniversary.
LOAN ACCOUNT. All amounts held as security for any loan will be transferred to
an account known as the Loan Account.
Unless otherwise specified by You, the loan will be processed from each
Investment Division and Fixed Account proportionately based on their current
value.
On each Policy Anniversary, if the Loan Account Value exceeds Debt, the excess
will be transferred from the Loan Account to the Fixed Account and Investment
Division(s) proportionately based on their current value. If Debt exceeds the
Loan Account Value, the excess will be transferred from the Fixed Account and
Investment Division(s) on a proportionate basis to the Loan Account.
If at any time Debt equals or exceeds the Policy Value less any applicable
Withdrawal Charge in effect at that time, coverage under the Policy will
continue according to the terms of the Grace Period.
LOAN ACCOUNT VALUE. On each Policy Anniversary, the Loan Account Value is set
equal to the Debt. During the Policy Year, the Loan Account Value on any date is
equal to the Loan Account Value on the prior Policy Anniversary, plus any new
loans, less any loan repayments since the prior Policy Anniversary, plus any
credited interest.
LOAN INTEREST CHARGED. Every loan on this Policy will accrue interest at the
Policy Loan Rate as specified in the Policy Data Page. Loan interest is due on
the Policy Anniversary. Loan interest not paid when due will be added to the
loan principal.
17
<PAGE>
- --------------------------------------------------------------------------------
POLICY LOAN PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
LOAN INTEREST CREDITED. The Loan Account Value will be credited interest,
depending on the type of loan. See the Policy Data Page for the credited rates.
LOAN REPAYMENT. All or part of the Debt may be repaid at any time while this
Policy is in force. To repay a loan in full, the loan repayment must equal the
debt
Any payment received by Us which is intended as a loan repayment, rather than an
additional Premium payment, must be identified as such.
Loan Repayments will first be applied to all Regular Loans.
Upon receipt of any loan repayment amounts, unless otherwise instructed, funds
up to an amount equal to the Loan Account Value will be transferred from the
Loan Account to the Fixed Account and Investment Division(s) proportionately
based on their current value.
Failure to repay any loan or to pay any loan interest will not terminate this
Policy unless the total Debt equals or exceeds the Policy Value less any
applicable Withdrawal Charges in effect at that time.
18
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. If the Insured dies while this Policy is in force, and after the
expiration of all Contestable Periods, We will pay the Death Benefit Proceeds to
the Beneficiary within 60 days after We receive at Our Service Center due proof
of the Insured's death, as well as all other requirements We deem necessary.
The Death Benefit Proceeds are calculated on the date of payment and are equal
to:
1. The Death Benefit; plus
2. Any Rider benefits payable as a result of the Insured's death; less
3. Any Debt; less
4. Any overdue Cost of Insurance Charge and Annual Policy Maintenance Charge
if the Insured dies during the Grace Period.
If the Insured dies during a Contestable Period, We will complete Our
investigation and determination of the validity of the Policy under applicable
law before any Death Benefit Proceeds are paid.
We will add interest to the resulting amount owed for the period from the date
of death to the date of payment, as required by applicable law. We will compute
the interest at a rate We determine, but not less than the rate required by
applicable law.
The Death Benefit Proceeds will be exempt from the claims of the
Beneficiary's(ies') or assignees' creditors and from legal process to the extent
applicable law permits.
From the time of death of the Insured until the Death Benefit Proceeds are paid,
any amount allocated to an Investment Division will be subject to investment
risk. This investment risk is borne by the Beneficiary(ies).
DEATH BENEFIT CHANGES. After the Policy is issued, the Death Benefit can be
increased or decreased at Your request. We reserve the right to limit the number
of changes which can be made to the Death Benefit each Policy Year.
To increase the coverage We will require additional Premium and may require:
1. A new application requesting the increase; and
2. Evidence of insurability of the Insured satisfactory to Us.
You may also request to decrease coverage. The decrease will be subject to the
guideline premium limitation as defined in the Internal Revenue Code (as
amended). Any such decrease will be limited so that no additional distribution
of the Policy Value is required to comply with the guideline premium limitation.
PROTECTION OF BENEFITS. No Beneficiary may commute, encumber, alienate or assign
any payment under this Policy before it is due. To the extent permitted by law,
no payment will be subject to the debts, contracts, or engagements of any
Beneficiary. In addition, to the extent permitted by law, no payment will be
subject to any judicial process to levy You or to attach the same for payment
thereof.
EFFECT OF PARTIAL WITHDRAWAL ON DEATH BENEFIT. A partial withdrawal will cause
the Death Benefit to decrease in direct proportion to the reduction in the
Policy Value.
19
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
PAYMENT OF BENEFITS. Any amount payable at the death of the Insured under this
Policy will be paid in a single sum unless otherwise agreed.
ELECTION OF PAYMENT OPTIONS. The Owner may elect or change any payment option
during the lifetime of the Insured. If no payment option is in effect at the
Insured's death, a payment option may be elected by the Beneficiary. The
election or change can be made by Written Request to the Company.
PAYMENT OPTIONS. In lieu of a single lump-sum payment, one of the following
payment options, or other options made available by the Company, may be elected
if the amount payable exceeds [$2,000].
OPTION 1 - BENEFITS AT INTEREST. Benefits may remain on deposit during the
lifetime of the payee or for a specified period. Interest on the benefits will
be paid annually, semi-annually, quarterly or monthly. The rate of interest will
be no less than [4%] per year. All or part of the benefits may be withdrawn at
any time.
OPTION 2 - PAYMENT FOR A FIXED PERIOD. Benefits may be paid in annual,
semi-annual, quarterly or monthly payments until the benefits, plus interest,
have been paid in full. The rate per [$1,000] of the monthly payment is shown in
the Payment Option Table. The present value of any unpaid payments may be
withdrawn at any time and will be paid if a payee dies before the last payment
is made. If the payee dies before the guaranteed payments have been paid, the
present value of the remaining guaranteed payments will be paid to a
Beneficiary(ies) as designated by the payee. If no Beneficiary(ies) has been
designated, the present value of the remaining guaranteed payments will be
payable to the payee's estate.
OPTION 3 - LIFE INCOME. Benefits may be paid in annual, semi-annual, quarterly
or monthly payments during the lifetime of the payee. A minimum number of
payments may be guaranteed if desired. The rate per [$1,000] of the monthly
payment is shown in the Payment Option Table. Payment under this option is
subject to satisfactory proof to the Company of the age of the payee. If the
payee dies before the guaranteed payments have been paid, the present value of
the remaining guaranteed payments will be paid to a Beneficiary(ies) as
designated by the payee. If no Beneficiary(ies) has been designated, the present
value of the remaining guaranteed payments will be payable to the payee's
estate.
MINIMUM PAYMENTS. The minimum payment under Option 1 is [$100]. The minimum
payment under Options 2 and 3 is [$50]. The frequency of the payments will be
reduced so as to meet the minimums.
EXCESS INTEREST. Excess interest as declared by the Company may be used to
increase payments.
AVAILABILITY OF OPTIONS. These options are not available if the Beneficiary is
an assignee, corporation, partnership, association, trustee, executor,
administrator, or any fiduciary.
20
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
BASIS OF COMPUTATION. The actuarial basis for the Payment Option Table is the
Annuity 2000 Mortality Table with interest at [3%].
FREQUENCIES OF PAYMENTS. The payments shown in the Payment Option Table are
monthly payments. Payments may be made annually, semi-annually or quarterly, and
are calculated by the Company as follows:
NUMBER OF PAYMENTS METHOD OF
PER YEAR CALCULATION
One Monthly Payment
Multiplied by [11.839]
Two Monthly Payment
Multiplied by [5.963]
Four Monthly Payment
Multiplied by [2.993]
21
<PAGE>
- --------------------------------------------------------------------------------
PAYMENT OPTION TABLE
- --------------------------------------------------------------------------------
The following table is for a Policy whose net benefits are $1,000, and will
apply pro rata to the amount payable under this Policy.
<TABLE>
<CAPTION>
OPTION 2 MONTHLY INSTALLMENTS UNDER OPTION 3
No. of Monthly Age No. of Mos. Age No. of Mos. Age No. of Mos. Age No. of Mos.
MonthlyInstall- of Certain of Certain of Certain of Certain
Install- ments Payee Payee Payee Payee
ments
Male Life 120 240 Male Life 120 240 Female Life 120 240 Female Life 120 240
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
60 17.77 26 3.08 3.08 3.07 63 5.35 5.20 4.72 26 2.99 2.99 2.98 63 4.89 4.81 4.54
72 15.02 27 3.10 3.10 3.09 64 5.50 5.32 4.79 27 3.01 3.01 3.00 64 5.02 4.93 4.61
84 13.06 28 3.13 3.12 3.12 65 5.66 5.46 4.85 28 3.03 3.03 3.02 65 5.15 5.05 4.68
96 11.59 29 3.15 3.15 3.14 66 5.83 5.59 4.91 29 3.05 3.05 3.04 66 5.30 5.17 4.75
108 10.45 30 3.18 3.17 3.16 67 6.02 5.74 4.97 30 3.07 3.07 3.06 67 5.45 5.30 4.82
120 9.54 31 3.20 3.20 3.19 68 6.21 5.89 5.03 31 3.09 3.09 3.09 68 5.61 5.45 4.89
132 8.80 32 3.23 3.23 3.22 69 6.42 6.04 5.08 32 3.12 3.12 3.11 69 5.79 5.59 4.96
144 8.18 33 3.26 3.26 3.24 70 6.65 6.20 5.13 33 3.14 3.14 3.13 70 5.98 5.75 5.02
156 7.65 34 3.29 3.29 3.27 71 6.88 6.36 5.18 34 3.17 3.17 3.16 71 6.19 5.91 5.08
168 7.20 35 3.33 3.32 3.30 72 7.14 6.53 5.22 35 3.20 3.19 3.18 72 6.41 6.08 5.13
180 6.82 36 3.36 3.35 3.33 73 7.41 6.70 5.26 36 3.22 3.22 3.21 73 6.65 6.26 5.19
192 6.48 37 3.40 3.39 3.37 74 7.70 6.87 5.29 37 3.25 3.25 3.24 74 6.92 6.44 5.23
204 6.18 38 3.43 3.43 3.40 75 8.00 7.04 5.32 38 3.29 3.28 3.27 75 7.20 6.63 5.27
216 5.92 39 3.47 3.47 3.44 76 8.33 7.22 5.35 39 3.32 3.31 3.30 76 7.51 6.83 5.31
228 5.68 40 3.51 3.51 3.47 77 8.69 7.39 5.37 40 3.35 3.35 3.33 77 7.84 7.03 5.34
240 5.47 41 3.56 3.55 3.51 78 9.07 7.57 5.39 41 3.39 3.38 3.37 78 8.20 7.23 5.37
252 5.28 42 3.60 3.59 3.55 79 9.47 7.74 5.41 42 3.43 3.42 3.40 79 8.59 7.43 5.39
264 5.11 43 3.65 3.64 3.59 80 9.91 7.91 5.42 43 3.47 3.46 3.44 80 9.01 7.62 5.41
276 4.95 44 3.70 3.69 3.63 81 10.37 8.07 5.43 44 3.51 3.50 3.47 81 9.47 7.82 5.42
288 4.81 45 3.75 3.74 3.68 82 10.87 8.22 5.44 45 3.55 3.54 3.51 82 9.96 8.00 5.43
300 4.67 46 3.81 3.79 3.72 83 11.40 8.37 5.45 46 3.60 3.59 3.55 83 10.50 8.18 5.44
47 3.87 3.84 3.77 84 11.97 8.51 5.46 47 3.64 3.63 3.60 84 11.08 8.35 5.45
48 3.93 3.90 3.82 85 12.57 8.64 5.46 48 3.69 3.68 3.64 85 11.71 8.51 5.46
49 3.99 3.96 3.87 86 13.22 8.76 5.46 49 3.75 3.73 3.69 86 12.39 8.65 5.46
50 4.05 4.02 3.92 87 13.90 8.87 5.47 50 3.80 3.79 3.74 87 13.12 8.78 5.47
51 4.12 4.09 3.98 88 14.63 8.97 5.47 51 3.86 3.84 3.79 88 13.90 8.89 5.47
52 4.20 4.16 4.03 89 15.40 9.06 5.47 52 3.92 3.90 3.84 89 14.72 9.00 5.47
53 4.27 4.23 4.09 90 16.22 9.14 5.47 53 3.99 3.97 3.89 90 15.58 9.09 5.47
54 4.35 4.31 4.15 91 17.09 9.21 5.47 54 4.06 4.03 3.95 91 16.49 9.17 5.47
55 4.44 4.38 4.21 92 18.02 9.28 5.47 55 4.13 4.10 4.01 92 17.43 9.24 5.47
56 4.53 4.47 4.27 93 19.00 9.34 5.47 56 4.21 4.18 4.07 93 18.42 9.30 5.47
57 4.63 4.56 4.33 94 20.04 9.39 5.47 57 4.29 4.25 4.13 94 19.44 9.36 5.47
58 4.73 4.65 4.40 95 21.17 9.43 5.47 58 4.37 4.33 4.19 95 20.51 9.40 5.47
59 4.84 4.75 4.46 96 22.38 9.46 5.47 59 4.47 4.42 4.26 96 21.64 9.44 5.47
60 4.95 4.85 4.53 97 23.70 9.49 5.47 60 4.56 4.51 4.33 97 22.86 9.47 5.47
61 5.07 4.96 4.59 98 25.18 9.51 5.47 61 4.67 4.61 4.40 98 24.20 9.50 5.47
62 5.21 5.08 4.66 99 26.85 9.52 5.47 62 4.78 4.71 4.47 99 25.71 9.51 5.47
</TABLE>
JACKSON NATIONAL LIFE INSURANCE COMPANY
5901 Executive Drive
Lansing, Michigan 48911
A Stock Company
[LOGO]
- --------------------------------------------------------------------------------
Thank you for choosing Jackson National Life Insurance Company. If You have
any questions, please contact the Company at the Service Center address
and telephone number shown on the Policy Data Page.
THIS LAST SURVIVOR MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
OFFERED BY JACKSON NATIONAL LIFE IS A LEGAL CONTRACT BETWEEN YOU AND US.
READ YOUR POLICY CAREFULLY.
We agree to pay to the Beneficiary the Death Benefit Proceeds and any other
Policy benefits payable due to the Last Surviving Insured's death if both
Insureds die while this Policy is in force. This agreement is subject to the
terms of this Policy.
NO BENEFIT IS PAYABLE ON THE DEATH OF THE FIRST INSURED.
THE DEATH BENEFIT PROCEEDS AND AMOUNTS IN THE SEPARATE ACCOUNT(S) ARE NOT
GUARANTEED AND MAY INCREASE OR DECREASE BASED UPON THE INVESTMENT EXPERIENCE OF
THE INVESTMENT DIVISION(S).
THE POLICY'S FIXED ACCOUNT VALUE IN THE GENERAL ACCOUNT WILL EARN INTEREST DAILY
AT A MINIMUM GUARANTEED EFFECTIVE ANNUAL RATE. INTEREST IN EXCESS OF THE
GUARANTEED RATE MAY BE APPLIED IN THE CALCULATION OF THE FIXED ACCOUNT VALUE AT
SUCH RATES AS THE COMPANY MAY DETERMINE.
- --------------------------------------------------------------------------------
NOTICE OF RIGHT TO EXAMINE POLICY
YOU MAY RETURN THIS POLICY TO THE SELLING PRODUCER OR JACKSON NATIONAL WITHIN
[10] DAYS AFTER YOU RECEIVE IT. IF THIS POLICY WAS PURCHASED AS A REPLACEMENT
YOU MAY RETURN THIS POLICY TO THE SELLING PRODUCER OR JACKSON NATIONAL WITHIN
[20] DAYS AFTER YOU RECEIVE IT. THE COMPANY WILL REFUND THE PREMIUM PAID, LESS
ANY OUTSTANDING POLICY LOANS AND/OR WITHDRAWALS. UPON SUCH REFUND, THE POLICY
SHALL BE VOID.
- --------------------------------------------------------------------------------
LAST SURVIVOR MODIFIED SINGLE This Contract is signed by the Company
PREMIUM VARIABLE LIFE INSURANCE /s/ Robert P. Saltzman
POLICY. DEATH BENEFIT. PERIOD OF President
COVERAGE NOT GUARANTEED. /s/ Thomas J. Meyer
NONPARTICIPATING. Secretary
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Provision Page Number
POLICY DATA PAGE [3
DEFINITIONS 4
GENERAL PROVISIONS 7
OWNERSHIP AND BENEFICIARY PROVISIONS 12
ACCUMULATION PROVISIONS 13
TRANSFER PROVISIONS 15
WITHDRAWAL PROVISIONS 16
POLICY LOAN PROVISIONS 17
DEATH BENEFIT PROVISIONS 19
PAYMENT OPTION TABLE 22]
2
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE
- --------------------------------------------------------------------------------
Policy Number: [9876543210]
Insured: [John Doe]
Insured's Actual Age: [35]
Insured's Issue Age/Sex: [35 Male]
Insured's Risk Classification: [Nontobacco]
Second Insured: [Jane Doe]
Second Insured's Actual Age: [35]
Second Insured's Issue Age/Sex: [35 Female]
Second Insured's Risk Classification: [Nontobacco]
Initial Premium Amount: [$10,000]
Initial Maximum Allowable Premium: [$10,000]
Initial Death Benefit: [$25,000]
Issue Date: [January 1, 2000]
Policy Date: [January 1, 2000]
Allocation Date: [January 16, 2000]
Issue State: [Michigan]
Owner: [John Doe]
Joint Owner: [Jane Doe]
Beneficiary(ies): [Daniel Doe]
3a
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
POLICY CHARGES
Annual Policy Maintenance Charge: An Annual Policy Maintenance Charge of no
more than [$35.00] will be deducted annually
from Your Policy Value on the Policy
Anniversary.
The Annual Policy Maintenance Charge is
applied to those Policies where the Policy
Value is less than [$50,000] on the Policy
Anniversary when the Annual Policy
Maintenance Charge is due.
On each Policy Anniversary the Annual Policy
Maintenance Charge will be taken from the
Fixed Account and the Investment Divisions
in proportion to their current value.
If a total Withdrawal is made on other than
a Policy Anniversary, any applicable Annual
Policy Maintenance Charge will be deducted.
Mortality and Expense Charge: This charge is deducted on a daily basis and
is equal to [.90%] annually during Policy
Years 1 - 10, and [.80%] annually afterward,
of the Separate Account Policy Value.
Administrative Charge: This charge is deducted on a daily basis and
is equal to [.30%] annually during Policy
Years 1 - 10, and [.15%] annually afterward,
of the Separate Account Policy Value.
Tax Charge: This charge is deducted on a daily basis and
is equal to [.40%] annually of the Separate
Account Policy Value during the first 10
Policy Years.
Cost of Insurance Charge: This charge is effective as of the Policy
Date and is deducted on the Issue Date and
each Monthly Anniversary thereafter.
The current Cost of Insurance Charge is
determined by Us. The maximum for this
charge, on a monthly basis, equals the
Guaranteed Maximum Monthly Cost of Insurance
Rate multiplied by the net amount at risk
(Death Benefit discounted by one month's
interest, minus the Policy Value). This
charge is deducted from the Investment
Division(s) and the Fixed Account in
proportion to their current value. See page
3g of this Policy for the maximum amounts
that may be charged for insurance coverage.
3b
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
Transfer Charge: A fee of [$25.00] is charged for each
transfer in excess of [15] in any Policy
Year. Any Transfer Charge is deducted from
the amount transferred prior to the
allocation to the new Policy Option.
Transfer Charges will not be applied to
transfers due to dollar cost averaging or
other asset allocation services provided by
the Company.
Illustration Charge: A fee of up to [$25.00] may be charged for
each in-force illustration in excess of one
in any Policy Year.
Daily Deduction: The following deductions will be made on a
daily basis:
the Mortality and Expense Charge;
the Administrative Charge;
the Tax Charge (if any).
The Daily Deduction will be taken on a
proportional basis from each Investment
Division.
Withdrawal Charge: The Company may assess a Withdrawal Charge
upon withdrawal as follows:
COMPLETED
YEARS SINCE
RECEIPT OF PERCENT OF
PREMIUM PREMIUM
0 9.00%
1 8.00%
2 7.00%
3 6.00%
4 5.00%
5 4.00%
6 3.00%
7 2.00%
8 1.00%
9 and thereafter 0.00%
The Withdrawal Charge is assessed to
compensate Us for sales expenses and any
premium taxes incurred by Us on Your behalf.
A specified amount of the Withdrawal Value
may be withdrawn free of Withdrawal Charges
each Policy Year (see Withdrawal
Provisions).
3c
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
TRANSFERS, PREMIUMS, LOANS, WITHDRAWALS, SEPARATE ACCOUNT
Transfers: FROM INVESTMENT DIVISION TO INVESTMENT
DIVISION. You may transfer all or a portion
of Your value in one Investment Division to
another Investment Division.
FROM INVESTMENT DIVISION TO THE FIXED
ACCOUNT. You may transfer all or a portion
of Your value in the Investment Division(s)
to the Fixed Account.
FROM THE FIXED ACCOUNT TO AN INVESTMENT
DIVISION. You may only make one transfer
from the Fixed Account to any Investment
Division(s) during any Policy Year (except
in the case of dollar cost averaging). This
transfer from the Fixed Account may not
exceed the greater of [$5,000] (or your
Fixed Account Value, if less) or [25%] of
your Fixed Account Value (except in the case
of dollar cost averaging).
Premiums: The initial Premium amount must be at least
[$10,000]. Any subsequent Premiums, if
allowed by Us, must be at least [$1,000].
The Company may waive these minimums at any
time.
The initial Premium will be allocated to a
money market Investment Division on the
Issue Date of the Policy. On the Allocation
Date the amount in Your money market
Investment Division will be allocated to the
Fixed Account and Investment Division(s)
according to the Premium allocation
specified by You in the application, or your
most recent instructions received by Us, if
any.
The Owner may allocate initial Premium among
the Fixed Account and the Investment
Divisions. Such allocation may be made in
any percentage from [0% to 100%] in whole
percentages.
Subject to the guideline premium limitation
as defined in the Internal Revenue Code (as
amended), We will accept additional Premium
at any time. In order for this Policy to be
treated as life insurance under the Internal
Revenue Code (as amended), the sum of all
Premiums paid may not exceed the Maximum
Allowable Premium. We reserve the right to
refuse any Premium that would cause the
Policy to be disqualified as life insurance
under the Internal Revenue Code (as
amended). Any additional Premium that
results in an increase in the Death Benefit
3d
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
Premiums (Continued): will be accepted by Us only after We receive
acceptable evidence of insurability of each
Insured. The actual amount of any additional
Premium will affect the Policy Value and the
amount and duration of the Death Benefit
provided by this Policy.
Any additional Premium will be allocated
according to Your most recent instructions.
The entire Premium as paid will be deemed
earned when received by Us. No refund of any
portion of the Premium will be made as the
result of a death claim.
Loans: The Policy Loan Rate is [6%].
The rate of interest credited to Preferred
Loans is [6%].
The rate of interest credited to Regular
Loans is [4%].
Withdrawals: Minimum Partial Withdrawal: [$500] or the
entire Policy Value if less.
Separate Account: Jackson National Life Separate Account IV.
POLICY OPTIONS
An Owner may not allocate Policy Values to more than 21 Policy Options at any
one time. The Company may waive this restriction at its discretion.
FIXED ACCOUNT: Earns an annually declared rate of interest
guaranteed to be at least 3%.
INVESTMENT DIVISIONS: Investment Divisions as indicated on the
application.
The Company may periodically add or delete
Investment Divisions.
3e
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
ATTAINED DEATH ATTAINED DEATH
AGE BENEFIT AGE BENEFIT
PERCENTAGE PERCENTAGE
[0 through 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 through 90 105%
56 146% 91 104%
57 142% 92 103%
58 138% 93 102%
59 134% 94+ 101% ]
The Minimum Death Benefit percentages comply with Section 7702 of the Internal
Revenue Code (as amended).
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1,000 NET
AMOUNT AT RISK
<TABLE>
<CAPTION>
- ------------------------------ ---------------------------- --------------------------- ----------------------------
POLICY MAXIMUM MONTHLY COST PER POLICY MAXIMUM MONTHLY COST PER
YEAR $1,000 YEAR $1,000
- ------------------------------ ---------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
[1 0.0002167 34 0.7181333
2 0.0007000 35 0.8413833
3 0.0012917 36 0.9879167
4 0.0019917 37 1.1652417
5 0.0028333 38 1.3821417
6 0.0038750 39 1.6447083
7 0.0051167 40 1.9552333
8 0.0065750 41 2.3140417
9 0.0082917 42 2.7198667
10 0.0103000 43 3.1724417
11 0.0126833 44 3.6759917
12 0.0154750 45 4.2428000
13 0.0187417 46 4.8902167
14 0.0225583 47 5.6354917
15 0.0270667 48 6.4950333
16 0.0324250 49 7.4696083
17 0.0388333 50 8.5492167
18 0.0465917 51 9.7186333
19 0.0559333 52 10.9650333
20 0.0669083 53 12.2768167
21 0.0798917 54 13.6476417
22 0.0949167 55 15.0844500
23 0.1119667 56 16.5962750
24 0.1316167 57 18.2119333
25 0.1547917 58 19.9858917
26 0.1823667 59 22.0471750
27 0.2156083 60 24.6879583
28 0.2565250 61 28.4788750
29 0.3068333 62 34.5195750
30 0.3670417 63 44.7758750
31 0.4378250 64 61.9954083
32 0.5194417 65+ 83.3333333 ]
33 0.6123000
- ------------------------------ ---------------------------- --------------------------- ----------------------------
</TABLE>
The Guaranteed Maximum Monthly Cost of Insurance Rates do not exceed rates based
on the 1980 Commissioner's Standard Ordinary table, age last birthday.
3g
<PAGE>
- --------------------------------------------------------------------------------
POLICY DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
["S&P(R)" is a trademark of the McGraw Hill Companies, Inc. and has been
licensed for use by the Company. This Policy is not sponsored, endorsed, sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of purchasing this Policy.]
[This Policy is not sponsored, endorsed, sold or promoted by Dow Jones. Dow
Jones makes no representation or warranty, express or implied, to the owners of
this Policy or any member of the public regarding the advisability of purchasing
this Policy. Dow Jones' only relationship to Jackson National Life Insurance
Company (JNL) is the licensing of certain copyrights, trademarks, servicemarks
and service names of Dow Jones. Dow Jones has no obligation to take the needs of
JNL or the owners of this Policy into consideration in determining, composing or
calculating the Dow Jones Industrial AverageSM. Dow Jones is not responsible for
and has not participated in the determination of the terms and conditions of
this Policy to be issued, including the pricing or the amount payable under the
Policy. Dow Jones has no obligation or liability in connection with the
administration or marketing of this Policy.
Dow Jones does not guarantee the accuracy and/or the completeness of the Dow
Jones Industrial AverageSM or any data included therein and Dow Jones shall have
no liability for any errors, omissions, or interruptions therein. Dow Jones
makes no warranty, express or implied, as to results to be obtained by JNL,
owners of this POLICY, or any other person or entity from the use of the Dow
Jones INDUSTRIAL averageSM or any data included therein. Dow Jones makes no
express or implied warranties, and expressly disclaims all warranties, of
merchantability or fitness for a particular purpose or use with respect to the
dow jones industrial averageSM or any data included therein. Without limiting
any of the foregoing, in no event shall Dow Jones have any liability for any
lost profits or indirect, punitive, special or consequential damages (including
lost profits), Even if notified of the possibility of such damages. There are no
THIRD party beneficiaries of any agreements or arrangements between Dow Jones
and jnl.]
Jackson National Life Service Center Express Mail:
[P.O. Box 378002 Jackson National Life Service Center
Denver, CO 80237-8002 [8055 E. Tufts Ave., 2nd Floor
1-800-766-4683] Denver, CO 80237]
3h
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------
The following are key words used in this Policy. They are important in
describing both Your rights and Ours. When they are used, they are capitalized.
As You read Your Policy, refer back to these definitions.
ACCUMULATION UNIT. A unit of measure used to calculate the value in an
Investment Division.
ALLOCATION DATE: The date as shown on the Policy Data Page, on which the amount
in your money market Investment Division is initially allocated to the Policy
Options of Your choice.
ATTAINED AGE. The youngest Insured's rated age on the Policy Date, plus the
number of full years since the Policy Date.
BENEFICIARY(IES). The person(s) or entity(ies) designated to receive the Death
Benefit Proceeds upon the death of the Last Surviving Insured.
BUSINESS DAY. Each day when the New York Stock Exchange is open for business.
The Business Day ends when the New York Stock Exchange closes, usually 4:00 p.m.
Eastern time.
CONTESTABLE PERIOD. A two-year period which begins on the Issue Date of the
Policy, the date of Reinstatement of a lapsed Policy, or the effective date of
an increase in coverage of the Policy or a change in risk classification of
either Insured, whichever occurs later.
DAILY DEDUCTION. Those charges against the Investment Divisions made on a daily
basis as described on the Policy Data Page.
DEATH BENEFIT. Initial Death Benefit as shown on the Policy Data Page less
reductions due to any partial withdrawals plus any increase in coverage due to
additional premiums, or the Minimum Death Benefit, if greater.
DEATH BENEFIT PROCEEDS. The amount that We will pay to the Beneficiary(ies) on
the death of the Last Surviving Insured while this Policy is in force.
DEBT. All unpaid Policy loans plus accrued interest on such loans.
EARNINGS. Policy Value minus Remaining Premium.
FIXED ACCOUNT. A Policy Option that earns an annually declared rate of interest.
Allocations made to the Fixed Account are part of the General Account of the
Company.
FIXED ACCOUNT VALUE. The Fixed Account Value is: (1) the Premium and any
subsequent amounts allocated to the Fixed Account; plus (2) any interest
credited; less (3) any amounts canceled or withdrawn for transfers, Annual
Policy Maintenance Charges, Cost of Insurance Charges, or withdrawals.
4
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS (CONT'D)
- --------------------------------------------------------------------------------
GENERAL ACCOUNT. An account maintained by the Company for all assets not
allocated to a Separate Account or other segregated account.
INSURED(S). The persons whose lives are covered by this Policy.
INVESTMENT DIVISION(S). A Policy Option within the Separate Account. Values in
the Investment Divisions will go up or down depending on the performance of the
underlying Portfolios.
ISSUE DATE. The date the Policy was issued by the Company, as shown on the
Policy Data Page, which begins the Contestable and Suicide periods.
JOINT OWNER. If there is more than one Owner, each Owner shall be a Joint Owner
of the Policy. Joint Owners have equal ownership rights and each must authorize
any exercising of those ownership rights under this Policy.
LAST SURVIVING INSURED. The Insured who survives after the death of one of the
Insureds. If both Insureds die simultaneously, the Last Surviving Insured will
be the younger of the Insureds.
LOAN ACCOUNT. An account that is part of the General Account in which funds from
Your Investment Divisions and the Fixed Account are placed as security for Your
loan.
LOAN ACCOUNT VALUE. The amount set aside in the Loan Account to secure any Debt
and interest credited thereon.
MAXIMUM ALLOWABLE PREMIUM. The maximum total Premium that We will permit to be
paid for this Policy. This amount is set to comply with the limit required to
qualify this Policy as life insurance under the Internal Revenue Code (as
amended). This amount may be adjusted due to Policy changes.
MINIMUM DEATH BENEFIT. The Policy Value multiplied by the death benefit
percentage based upon the Attained Age, as shown on the Policy Data Page.
MONTHLY ANNIVERSARY. The same date as the Policy Date for each succeeding month,
except that for those months not having such a day, it is the last day of that
month.
MORTALITY AND EXPENSE CHARGE. This amount covers the risks assumed by Us that
the Cost of Insurance Charge specified in the Policy will be insufficient to
meet the actual claims incurred by Us. In addition, this amount covers Our risk
that Our actual expenses for issuing and administering Your Policy will exceed
the Annual Policy Maintenance Charge.
OWNER ("YOU," "YOUR"). The person or entity shown on the Policy Data Page who is
entitled to exercise all rights and privileges under this Policy. If Joint
Owners are named all references to Owner shall mean Joint Owners.
POLICY. This Last Survivor Modified Single Premium Variable Life Insurance
contract between You and Us.
5
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS (CONT'D)
- --------------------------------------------------------------------------------
POLICY ANNIVERSARY. An annual anniversary of the Policy Date.
POLICY DATE. The date Your coverage under this Policy begins.
POLICY LOAN RATE. The interest rate charged on Policy loans (see Policy Data
Page).
POLICY OPTION. The Fixed Account or an Investment Division offered by Us under
this Policy. (Each Policy Option is more fully explained in the Accumulation
Provisions.)
POLICY VALUE. The sum of the Separate Account Policy Value, the Fixed Account
Value, and the Loan Account Value.
POLICY YEAR. The twelve-month period immediately following the Policy Date or
any Policy Anniversary.
PORTFOLIO(S). A portfolio of a mutual fund in which the Investment Division
invests.
PREMIUM(S). Considerations paid into this Policy by or on behalf of the Owner.
REMAINING PREMIUM. The total Premium in the Policy reduced due to withdrawals.
The Remaining Premium will be reduced by the withdrawal of Premiums that incur
Withdrawal Charges, as well as the withdrawal of Premiums that are no longer
subject to Withdrawal Charges.
RIDER. A form which supplements the Policy or which provides additional
benefits. When a Rider is attached to the Policy it becomes a part of the Policy
and is subject to all the terms of the Policy unless We state otherwise in the
Rider.
SEPARATE ACCOUNT. A segregated asset account established and maintained by the
Company in which a portion of Our assets has been allocated for this and certain
other policies. It is shown in the Policy Data Page.
SEPARATE ACCOUNT POLICY VALUE. The current value of the amounts allocated to the
Investment Divisions within the Separate Account of the Policy.
SERVICE CENTER. The Company's address and telephone number as specified on the
Policy Data Page or as may be designated by Us from time to time.
WE, OUR, US, THE COMPANY, JNL. Jackson National Life Insurance Company.
WITHDRAWAL CHARGE. The charge assessed against certain withdrawals. (Please see
Policy Data Page and Withdrawal Provisions.)
WITHDRAWAL VALUE. The Policy Value reduced by any applicable Withdrawal Charge,
taxes payable, outstanding Annual Policy Maintenance Charge, and any Debt.
WRITTEN REQUEST. Information or instructions given to Us in writing in a form
satisfactory to Us. A Written Request takes effect when We accept it and it is
recorded at Our Service Center.
6
<PAGE>
- --------------------------------------------------------------------------------
GENERAL PROVISIONS
- --------------------------------------------------------------------------------
ASSIGNMENT. The Owner may assign this Policy while it is in force, but We will
not be bound by any assignment unless it is in writing and has been recorded at
the Company's Service Center. An assignment will take effect when recorded by
the Company. We are not responsible for any payment made before an assignment is
recorded. The Owner may exercise these rights subject to the interest of any
assignee or irrevocable beneficiary. We assume no responsibility for the
validity or tax consequences of any assignment. If You make an assignment, You
may have to pay income tax. You are encouraged to seek legal and/or tax advice.
BASIS OF VALUE. Values and reserves are determined in accordance with procedures
that recognize the variable nature of the values attributable to the Separate
Account. The method of calculating these values is consistent with the
regulations of the State of Michigan.
CHANGES IN POLICY COST FACTORS. Changes in Policy cost factors (interest rates
We credit on the Fixed Account Value, Cost of Insurance Charges) will be
determined by class and on future expectations for such elements as investments
earnings, mortality, persistency, expenses, and taxes. Any changes in Policy
cost factors will be determined in accordance with procedures and standards on
file and, if required, with the insurance supervisory official of the
jurisdiction in which this Policy is delivered.
CHARGES AND FEES. The Company may assess charges or fees under the Policy.
Please see the Policy Data Page for more information as to charges or fees.
CONFORMITY WITH STATE LAWS. This Policy will be interpreted under the law of the
state in which it is issued for delivery. Any provision that is in conflict with
the law of such state is amended to conform to the minimum requirements of such
law.
CONTESTABILITY. All statements made in the application will, in the absence of
fraud, be deemed representations and not warranties. No statement will void this
Policy or be used as a defense to a claim unless it is contained in the written
application. This Policy may not be contested after it has been in force during
the lifetime of both Insureds for two years from the Issue Date except for
nonpayment of any required Premium.
If an Insured dies during a Contestable Period, the Company may investigate the
circumstances surrounding the original application, reinstatement application,
or application for increase in coverage or change in risk classification. A
reinstated or modified Policy may be contested only with respect to material
misrepresentations made in the application for such reinstatement or request for
Policy changes. In the case of an increase in coverage, only the amount of the
increase over the Death Benefit prior to the application for increase in
coverage may be contested with respect to material misrepresentations made in
such application.
As part of the contestable investigation, the Company may require the
Beneficiary(ies) to sign certain authorizations necessary for release of medical
records and other information relating to an Insured.
7
<PAGE>
- --------------------------------------------------------------------------------
GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
DEFERMENT OF PAYMENTS. We may defer making payments to You from the Fixed
Account for up to six months, subject to applicable state law. Interest, subject
to state requirements, will be credited during this deferral period.
DOLLAR COST AVERAGING. The Owner may arrange to have a regular amount of money
periodically transferred automatically from the Fixed Account or one of the
Investment Divisions of the Policy to any other Investment Division(s). Any
election of dollar cost averaging must be for a period of not less than 12
months.
ENTIRE CONTRACT. The Policy, application, supplemental applications, and any
applicable riders, endorsements and amendments together make up the entire
contract between You and the Company.
GRACE PERIOD. This Policy will lapse 61 days after notice is mailed to You that
the Withdrawal Value of the Policy is below or equal to $0. This 61-day period
is the Grace Period.
If the Last Surviving Insured dies during the Grace Period, any overdue Cost of
Insurance Charge and Annual Policy Maintenance Charge will be deducted from any
Death Benefit Proceeds payable.
At the beginning of the Grace Period We will mail to You and any assignee
written notice of the amount necessary to continue this Policy in force through
the end of the Grace Period. The amount required will be a minimum amount that
will pay at least two months of Cost of Insurance Charge plus any Annual Policy
Maintenance Charge due before the end of the Grace Period. If that amount is not
paid by the end of the Grace Period, the Policy will lapse without value and
coverage will end.
ILLUSTRATIONS. Upon request We will provide You with an illustration projecting
future benefits under this Policy. We reserve the right to charge You for such
illustration, as stated on the Policy Data Page.
MISSTATEMENT OF AGE OR SEX. If the age or sex of either Insured has been
misstated, the benefits available under this Policy will be those which the
Premiums paid would have purchased at the correct age and sex.
If the age of either Insured is misstated in such a way that either Insured was
not eligible for coverage under this Policy, Our liability under this Policy is
limited to a return of Premium(s) paid, less any Debt and withdrawals, or the
Policy Value less any Debt, whichever is less.
MODIFICATION OF POLICY. Any change or waiver of the provisions of this Policy
must be in writing and signed by the President, a Vice President, the Secretary,
or Assistant Secretary of the Company. No broker or producer has authority to
change or waive any provision of this Policy.
8
<PAGE>
- --------------------------------------------------------------------------------
GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
To the extent permitted by applicable laws and regulations, We may amend or
waive any portion of this Policy without notice or Your consent to comply with
any applicable federal or state laws, including but not limited to, requirements
for life insurance policies under the Internal Revenue Code (as amended). 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.
NONPARTICIPATING. This Policy does not pay dividends nor does it share in the
surplus or revenue of the Company.
PAYMENT OF PREMIUMS. The first Premium must be paid at or before issue of the
Policy. No coverage under this Policy will be provided prior to the payment of
the required Premium.
PROOF OF AGE, SEX OR SURVIVAL. The Company may require satisfactory proof of
correct age or sex, as applicable, of an Insured at any time. If any payment
under this Policy is contingent upon an Insured, Owner, or Beneficiary being
alive, the Company may require satisfactory proof of such survival.
REINSTATEMENT. If this Policy lapses for any reason other than a full
withdrawal, it may be reinstated within three years of the date this Policy
lapsed, subject to the following:
1. Your written request for reinstatement is received at Our Service Center;
2. You provide Us with satisfactory evidence of each Insureds' insurability at
the same risk classification as at the time of issuance of the Policy;
3. You provide payment of Premium sufficient to cover the past due Cost of
Insurance Charges and any Annual Policy Maintenance Charge for the coverage
provided by Us during the Grace Period, plus an additional amount
sufficient to keep the Policy in force for three months after the date of
reinstatement; and
4. You provide payment, or agree to the reinstatement of any loans against the
Policy, including all past due interest on the loan from the date of lapse
of this Policy to the date of reinstatement. The total reinstated Loan will
be allocated at that time to the Loan Account.
The effective date of the reinstatement is the next Business Day following
approval by Us of Your application for reinstatement.
Any reinstatement will become incontestable during the lifetime of both Insureds
after two years from the date of such reinstatement. The basis for contesting
any reinstatement will be limited to any misrepresentations made in the
application for such reinstatement.
Once reinstated, We will maintain the Death Benefit under the Policy at least
until the end of the three-month period after the Policy is reinstated.
The Death Benefit of the reinstated Policy cannot exceed the Death Benefit at
the time of lapse.
9
<PAGE>
- --------------------------------------------------------------------------------
GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
The Policy Value on the reinstatement date will equal:
1. The Policy Value at the time of lapse; plus
2. Any additional amounts paid into the Policy that are not considered
payment of past due charges or loan repayments.
The portion of the Policy Value not allocated to the Loan Account on the
reinstatement date will be allocated to the Investment Divisions and the Fixed
Account according to Your most recent Premium allocation instructions.
The Withdrawal Charge in effect upon reinstatement will be the Withdrawal Charge
that existed on the date the Policy lapsed.
REPORTS. The Company will send You a report about Your Policy at least once a
year. We will also send You reports as required by law. They shall be addressed
to the last address of the Owner known to the Company.
SUBSTITUTION OF INVESTMENT PORTFOLIOS. We may substitute another underlying
Portfolio without Your consent. Substitution would occur if We determine that
the use of such underlying investment is no longer possible or We determine it
is no longer appropriate for the purposes of the Policy. No substitution will be
made without notice to You and without the prior approval of the Securities and
Exchange Commission and the state where the Policy was issued for delivery, if
required. Should a substitution, addition, or deletion occur, You will be
allowed to select from the then current Investment Divisions and substitution
may be made with respect to both existing Policy Value in that Investment
Division and the allocation of future Premiums.
SUSPENSION OF PAYMENTS. The Company may suspend or postpone any transfers or
payments to or from the Investment Divisions if any of the following occur:
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 such that it is not reasonably practical to dispose of
securities in the Separate Account or to determine the value of its assets;
or
4. The Securities and Exchange Commission, by order, so permits for the
protection of Policy Owners.
The applicable rules and regulations of the Securities and Exchange Commission
will govern whether the conditions described in 2. and 3. exist.
SUICIDE. If either of the Insureds die by suicide, while sane or insane, within
two years (one year for residents of Colorado and North Dakota) from the Issue
Date of the Policy, Our liability with respect to this Policy will terminate. We
will return to You an amount equal to the Premiums paid, adjusted for any
partial withdrawals and any Debt.
If either of the Insureds die by suicide, while sane or insane, within two years
from the effective date of any increase in coverage (one year for residents of
Colorado and North Dakota), Our liability with respect to the increase will
terminate. We will return to You an amount equal to the Premiums paid for such
increase in coverage, adjusted for any partial withdrawals and any Debt
associated with such increase.
10
<PAGE>
- --------------------------------------------------------------------------------
GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
TAXABLE STATUS. If this Policy is not a modified endowment contract (MEC), a
request for a Policy change that would trigger a change to a MEC status will not
be processed unless You specify otherwise in writing. Such changes could include
a change in risk classification, change in coverage, withdrawal, or any other
change specified in the Internal Revenue Code (as amended).
TAXES. The Company may deduct from the Policy Value any applicable taxes payable
to a state or other government entity because of this Policy. Should We advance
any amount so due, We are not waiving any right to collect such amount at a
later date. In addition, the Company will deduct any withholding taxes required
by applicable law as a result of any withdrawals from this Policy.
WRITTEN NOTICE. Any notice We send to the Owner will be sent to the Owner's last
known address unless the Owner requests otherwise in writing. Any written
request or notice must be sent to the Service Center, unless We advise You
otherwise. You are responsible for promptly notifying the Company of any address
change.
11
<PAGE>
- --------------------------------------------------------------------------------
OWNERSHIP AND BENEFICIARY PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. During the lifetime of the Insureds, all rights under this Policy
belong to the Owner(s). If the Policy has Joint Owners, the consent of all
Owners is required for Policy changes. Upon the death of a Joint Owner, all
rights shall be vested in the surviving Owner(s).
CHANGE OF OWNERSHIP. The ownership of this Policy may be changed by the Owner(s)
at any time during either Insured's lifetime. Any change must be made by Written
Request to the Service Center. A change will take effect on the date the notice
is signed. However, the change will not apply to any payments made or actions
taken by Us before notice of such change is accepted and recorded at Our Service
Center. If You change the ownership, you may have to pay income tax. You are
encouraged to seek legal and/or tax advice.
BENEFICIARY. The Owner may designate the Beneficiary(ies) to receive any amount
payable under this Policy on the Last Surviving Insured's death. The original
Beneficiary(ies) will be named in the application. If two or more persons are
named as Primary Beneficiary(ies), those surviving the Last Surviving Insured
will share equally unless otherwise stated.
The Owner may change the Beneficiary(ies) by submitting a Written Request to the
Service Center, unless an irrevocable Beneficiary(ies) designation was
previously filed. Any change will take effect when recorded by the Company. The
Company is not liable for any payment made or action taken before the Company
records the change.
DEATH OF BENEFICIARY. The interest of any Beneficiary who dies before the Last
Surviving Insured will end at the death of the Beneficiary. The interest of any
Beneficiary who dies at the time of or within ten days after the death of the
Last Surviving Insured will also end if no Death Benefit Proceeds have been paid
to the Beneficiary. If no Primary Beneficiary(ies) survives the Last Surviving
Insured, benefits will be paid to any surviving Contingent Beneficiary(ies), if
named, in equal shares, unless otherwise stated. If there are no surviving
Beneficiaries at the death of the Last Surviving Insured, the Death Benefit
Proceeds will be paid to the Owner, or the Owner's estate if the Owner does not
survive to receive payment.
12
<PAGE>
- --------------------------------------------------------------------------------
ACCUMULATION PROVISIONS
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT. The Separate Account is designated on the Policy Data Page. 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. These Policy assets in the
Separate Account are not chargeable with liabilities arising out of any other
business the Company may conduct. All the income, gains, and losses resulting
from these assets are credited to or charged against the variable life insurance
policies supported by the Separate Account, and not against any other policies
or contracts the Company may issue. The assets of the Separate Account will be
available to cover the liabilities of Our General Account only to the extent
that the assets of the Separate Account exceed the liabilities of the Separate
Account arising under the variable life insurance policies supported by the
Separate Account. The Separate Account consists of several Investment Divisions.
The assets of the Separate Account shall be valued at least as often as any
benefits of this Policy, but in no event will such valuation be less frequent
than monthly.
INVESTMENT DIVISIONS. The Policy offers Investment Divisions. The Investment
Divisions available at issue are shown on the application.
ACCUMULATION UNITS. The Separate Account Policy Value will go up or down
depending on the performance of the Investment Division(s). In order to monitor
the Separate Account Policy Value, the Company uses a unit of measure called an
Accumulation Unit. The value of an Accumulation Unit may go up or down from
Business Day to Business Day. Adjustments to the Separate Account Policy Value,
such as withdrawals, Withdrawal Charges, transfers, allocations to the Loan
Account, Annual Policy Maintenance Charges, and Cost of Insurance Charges result
in a redemption of Accumulation Units. However, these adjustments do not affect
the value of the Accumulation Units.
When You make an allocation or transfer to the Investment Division(s), the
Company credits Your Policy with Accumulation Units. The number of Accumulation
Units credited is determined by dividing the amount allocated by the
Accumulation Unit Value for that Investment Division at the close of the
Business Day.
ACCUMULATION UNIT VALUE. The Company determines the value of an Accumulation
Unit for each of the Investment Divisions. This is done by:
1. Determining the total value of assets held in the particular Investment
Division;
2. Subtracting from the amount any Daily Deductions; and
3. Dividing this amount by the number of outstanding Accumulation Units.
FIXED ACCOUNT. You may allocate Premium or make transfers to the Fixed Account
while the Policy is in force, subject to the provisions of the Policy.
FIXED ACCOUNT VALUE. The Fixed Account Value is determined in the following
manner:
o The initial Premium is allocated to the Fixed Account as designated by the
Owner pursuant to the terms of the Policy.
o Subsequent amounts may be allocated to the Fixed Account pursuant to the
terms of the Policy.
13
<PAGE>
- --------------------------------------------------------------------------------
ACCUMULATION PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
o On each Monthly Anniversary, the Cost of Insurance Charge is deducted based
on the proportion that the Fixed Account Value bears to the Policy Value
less the Loan Account Value.
o On each Policy Anniversary, the Annual Policy Maintenance Charge is
deducted based on the proportion that the Fixed Account Value bears to the
Policy Value less the Loan Account Value.
o On each Business Day, amounts are deducted to reflect any partial
withdrawals, Withdrawal Charges, transfers, and amounts allocated to the
Loan Account, when such event occurs.
o Interest is credited on each Business Day as described below.
INTEREST TO BE CREDITED. The Company will credit interest to the Fixed Account.
Such interest will be credited at the annual effective interest rate the Company
prospectively declares from time to time, at the sole discretion of the Company.
The rate in effect at the time an allocation is made will be applied to those
funds allocated to the Fixed Account until the next Policy Anniversary. The then
current rate declared by the Company will be applied to the Fixed Account for
the next 12 months. The Company guarantees that it will credit interest to the
Fixed Account at not less 3% annually. Subsequent interest rates may be higher
or lower than those rates previously set by the Company.
14
<PAGE>
- --------------------------------------------------------------------------------
TRANSFER PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. A transfer is subject to the following:
1. The maximum number of transfers and number of transfers that may be made
and are not subject to a Transfer Charge are shown on the Policy Data Page.
2. A Transfer Charge is deducted from the transferred amount prior to the
allocation to the new Policy Option if a transfer exceeds the maximum
number of free transfers, as stated on the Policy Data Page.
3. You may not make a transfer until after the Allocation Date.
4. The minimum and maximum amounts that may be transferred are shown on the
Policy Data Page.
5. A transfer will be effective as of the end of the Business Day when We
receive a transfer request acceptable to Us which contains all required
information.
6. We are not 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 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 the other Owners. A
modification could be applied to transfers to or from one or more of the
Investment Divisions and could include, but may not be limited to:
a. The requirement of a minimum time period between each transfer;
b. Not accepting transfer requests of any person 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 Your
transfer rights temporarily without notice. We will, however, make every
attempt to process Your request in a timely fashion.
15
<PAGE>
- --------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. After the Allocation Date and while this Policy is in force, the Owner
may withdraw all or part of the Withdrawal Value under this Policy by informing
Us at Our Service Center.
A withdrawal may give rise to taxable income to You, and it is recommended that
You seek competent tax advice before making any such withdrawal.
FULL WITHDRAWAL. For a full withdrawal, this Policy, or a Lost Policy Affidavit,
must be returned to Our Service Center along with the withdrawal request.
Upon full withdrawal, the Owner will receive the Withdrawal Value.
PARTIAL WITHDRAWAL. If the withdrawal request does not specify from which
Investment Division(s) or the Fixed Account from which the withdrawal is to be
made, the request will be processed by making withdrawals from each Investment
Division and the Fixed Account in proportion to their respective value at the
time the withdrawal request is processed.
WITHDRAWAL CHARGES. Each withdrawal from the Policy may be subject to Withdrawal
Charges, in accordance with the table shown on the Policy Data Page and other
provisions of this Policy. Earnings withdrawn are not subject to Withdrawal
Charges.
For purposes of the Withdrawal Charge, withdrawals are treated as coming first
from Earnings, and then from the oldest Remaining Premium. Any part of a
withdrawal consisting of Earnings does not reduce Remaining Premium for the
purpose of calculating Withdrawal Charges. The Withdrawal Charge is based on the
Remaining Premiums withdrawn. We will deduct the Withdrawal Charge from the
remaining value in Your Policy. However, in no case will the total amount
received upon withdrawal be more than the Withdrawal Value.
FREE WITHDRAWAL CHARGE AMOUNT. Each Policy Year an amount of up to the greater
of 10% of any Remaining Premium paid as of the Business Day that the request for
withdrawal is received, less any previous withdrawals taken during that Policy
Year, or 100% of Earnings may be withdrawn without incurring a Withdrawal
Charge. Withdrawals during the Policy Year in excess of this amount may be
subject to a Withdrawal Charge. The amount available for withdrawal under this
provision is not cumulative, and expires at the end of each Policy Year.
EFFECT OF WITHDRAWAL ON DEATH BENEFIT. When a partial withdrawal is made, the
Death Benefit under the Policy is decreased by an amount proportionate to the
reduction in the Policy Value caused by the partial withdrawal (see Death
Benefit Provisions for further details).
Partial withdrawals will not be permitted if the Death Benefit reduction would
cause the Policy to fail to qualify as life insurance for federal tax purposes.
16
<PAGE>
- --------------------------------------------------------------------------------
POLICY LOAN PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. After the Allocation Date, You may receive a loan from the Policy as
long as the Policy:
1. Is in force and is not in the Grace Period; and 2. Is properly assigned to Us
as the sole security for the loan.
We reserve the right to defer granting a loan for any period permitted by
applicable law, but in no event will such period be more than six months.
A loan may give rise to taxable income to You, and it is recommended that You
seek competent tax advice before the taking of any such loan.
LOAN AMOUNT AVAILABLE. The maximum amount of any new loan taken is [90%] of the
Withdrawal Value in effect on the date We grant the loan.
LOAN TYPES. There are two types of loans under this Policy. Loans against
Earnings are Preferred Loans, while all other loans are Regular Loans. For
purposes of determining the type of loan, each loan will be treated as coming
first from Earnings, and then from Premium.
We will determine the amount of a loan that is Preferred on the date of the
loan, and We will redetermine the total amount of Preferred Loans on each Policy
Anniversary.
LOAN ACCOUNT. All amounts held as security for any loan will be transferred to
an account known as the Loan Account.
Unless otherwise specified by You, the loan will be processed from each
Investment Division and Fixed Account proportionately based on their current
value.
On each Policy Anniversary, if the Loan Account Value exceeds Debt, the excess
will be transferred from the Loan Account to the Fixed Account and Investment
Division(s) proportionately based on their current value. If Debt exceeds the
Loan Account Value, the excess will be transferred from the Fixed Account and
Investment Division(s) on a proportionate basis to the Loan Account.
If at any time Debt equals or exceeds the Policy Value less any applicable
Withdrawal Charge in effect at that time, coverage under the Policy will
continue according to the terms of the Grace Period.
LOAN ACCOUNT VALUE. On each Policy Anniversary, the Loan Account Value is set
equal to the Debt. During the Policy Year, the Loan Account Value on any date is
equal to the Loan Account Value on the prior Policy Anniversary, plus any new
loans, less any loan repayments since the prior Policy Anniversary, plus any
credited interest.
LOAN INTEREST CHARGED. Every loan on this Policy will accrue interest at the
Policy Loan Rate as specified in the Policy Data Page. Loan interest is due on
the Policy Anniversary. Loan interest not paid when due will be added to the
loan principal.
17
<PAGE>
- --------------------------------------------------------------------------------
POLICY LOAN PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
LOAN INTEREST CREDITED. The Loan Account Value will be credited interest,
depending on the type of loan. See the Policy Data Page for the credited rates.
LOAN REPAYMENT. All or part of the Debt may be repaid at any time while this
Policy is in force. To repay a loan in full, the loan repayment must equal the
Debt.
Any payment received by Us which is intended as a loan repayment, rather than an
additional Premium payment, must be identified as such.
Loan Repayments will first be applied to all Regular Loans.
Upon receipt of any loan repayment amounts, unless otherwise instructed, funds
up to an amount equal to the Loan Account Value will be transferred from the
Loan Account to the Fixed Account and Investment Division(s) proportionately
based on their current value.
Failure to repay any loan or to pay any loan interest will not terminate this
Policy unless the total Debt equals or exceeds the Policy Value less any
applicable Withdrawal Charges in effect at that time.
18
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
- --------------------------------------------------------------------------------
GENERAL. If the Last Surviving Insured dies while this Policy is in force, and
after the expiration of all Contestable Periods, We will pay the Death Benefit
Proceeds to the Beneficiary within 60 days after We receive at Our Service
Center due proof of the Last Surviving Insured's death, as well as all other
requirements We deem necessary.
The Death Benefit Proceeds are calculated on the date of payment and are equal
to:
1. The Death Benefit; plus
2. Any Rider benefits payable as a result of the Last Surviving Insured's
death; less
3. Any Debt; less
4. Any overdue Cost of Insurance Charge and Annual Policy Maintenance Charge
if the Last Surviving Insured dies during the Grace Period.
If the Last Surviving Insured dies during a Contestable Period, We will complete
Our investigation and determination of the validity of the Policy under
applicable law before any Death Benefit Proceeds are paid.
We will add interest to the resulting amount owed for the period from the date
of death to the date of payment, as required by applicable law. We will compute
the interest at a rate We determine, but not less than the rate required by
applicable law.
The Death Benefit Proceeds will be exempt from the claims of the
Beneficiary's(ies') or assignees' creditors and from legal process to the extent
applicable law permits.
From the time of death of the Last Surviving Insured until the Death Benefit
Proceeds are paid, any amount allocated to an Investment Division will be
subject to investment risk. This investment risk is borne by the
Beneficiary(ies).
DEATH BENEFIT CHANGES. After the Policy is issued and while both Insureds are
alive, the Death Benefit can be increased at Your request. We reserve the right
to limit the number of changes which can be made to the Death Benefit each
Policy Year.
To increase the coverage We will require additional Premium and may require:
1. A new application requesting the increase; and
2. Evidence of insurability of each Insured satisfactory to Us.
While either Insured is alive, You may also request to decrease coverage. The
decrease will be subject to the guideline premium limitation as defined in the
Internal Revenue Code (as amended). Any such decrease will be limited so that no
additional distribution of the Policy Value is required to comply with the
guideline premium limitation.
PROTECTION OF BENEFITS. No Beneficiary may commute, encumber, alienate or assign
any payment under this Policy before it is due. To the extent permitted by law,
no payment will be subject to the debts, contracts, or engagements of any
Beneficiary. In addition, to the extent permitted by law, no payment will be
subject to any judicial process to levy You or to attach the same for payment
thereof.
EFFECT OF PARTIAL WITHDRAWAL ON DEATH BENEFIT. A partial withdrawal will cause
the Death Benefit to decrease in direct proportion to the reduction in the
Policy Value.
19
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
PAYMENT OF BENEFITS. Any amount payable at the death of the Last Surviving
Insured under this Policy will be paid in a single sum unless otherwise agreed.
NOTIFICATION OF FIRST DEATH OF THE INSUREDS. You must notify Us in writing and
give Us due proof of the first death of an Insured as soon as possible after
such death.
ELECTION OF PAYMENT OPTIONS. The Owner may elect or change any payment option
during the lifetime of either Insured. If no payment option is in effect at the
Last Surviving Insured's death, a payment option may be elected by the
Beneficiary. The election or change can be made by Written Request to the
Company.
PAYMENT OPTIONS. In lieu of a single lump-sum payment, one of the following
payment options, or other options made available by the Company, may be elected
if the amount payable exceeds [$2,000].
OPTION 1 - BENEFITS AT INTEREST. Benefits may remain on deposit during the
lifetime of the payee or for a specified period. Interest on the benefits will
be paid annually, semi-annually, quarterly or monthly. The rate of interest will
be no less than [4%] per year. All or part of the benefits may be withdrawn at
any time.
OPTION 2 - PAYMENT FOR A FIXED PERIOD. Benefits may be paid in annual,
semi-annual, quarterly or monthly payments until the benefits, plus interest,
have been paid in full. The rate per [$1,000] of the monthly payment is shown in
the Payment Option Table. The present value of any unpaid payments may be
withdrawn at any time and will be paid if a payee dies before the last payment
is made. If the payee dies before the guaranteed payments have been paid, the
present value of the remaining guaranteed payments will be paid to a
Beneficiary(ies) as designated by the payee. If no Beneficiary(ies) has been
designated, the present value of the remaining guaranteed payments will be
payable to the payee's estate.
OPTION 3 - LIFE INCOME. Benefits may be paid in annual, semi-annual, quarterly
or monthly payments during the lifetime of the payee. A minimum number of
payments may be guaranteed if desired. The rate per [$1,000] of the monthly
payment is shown in the Payment Option Table. Payment under this option is
subject to satisfactory proof to the Company of the age of the payee. If the
payee dies before the guaranteed payments have been paid, the present value of
the remaining guaranteed payments will be paid to a Beneficiary(ies) as
designated by the payee. If no Beneficiary(ies) has been designated, the present
value of the remaining guaranteed payments will be payable to the payee's
estate.
MINIMUM PAYMENTS. The minimum payment under Option 1 is [$100]. The minimum
payment under Options 2 and 3 is [$50]. The frequency of the payments will be
reduced so as to meet the minimums.
EXCESS INTEREST. Excess interest as declared by the Company may be used to
increase payments.
20
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
AVAILABILITY OF OPTIONS. These options are not available if the Beneficiary is
an assignee, corporation, partnership, association, trustee, executor,
administrator, or any fiduciary.
BASIS OF COMPUTATION. The actuarial basis for the Payment Option Table is the
Annuity 2000 Mortality Table with interest at [3%].
FREQUENCIES OF PAYMENTS. The payments shown in the Payment Option Table are
monthly payments. Payments may be made annually, semi-annually or quarterly, and
are calculated by the Company as follows:
NUMBER OF PAYMENTS METHOD OF
PER YEAR CALCULATION
One Monthly Payment
Multiplied by [11.839]
Two Monthly Payment
Multiplied by [5.963]
Four Monthly Payment
Multiplied by [2.993]
21
<PAGE>
- --------------------------------------------------------------------------------
PAYMENT OPTION TABLE
- --------------------------------------------------------------------------------
The following table is for a Policy whose net benefits are $1,000, and will
apply pro rata to the amount payable under this Policy.
<TABLE>
<CAPTION>
OPTION 2 MONTHLY INSTALLMENTS UNDER OPTION 3
No. of Monthly Age No. of Mos. Age No. of Mos. Age No. of Mos. Age No. of Mos.
MonthlyInstall- of Certain of Certain of Certain of Certain
Install- ments Payee Payee Payee Payee
ments
Male Life 120 240 Male Life 120 240 Female Life 120 240 Female Life 120 240
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
60 17.77 26 3.08 3.08 3.07 63 5.35 5.20 4.72 26 2.99 2.99 2.98 63 4.89 4.81 4.54
72 15.02 27 3.10 3.10 3.09 64 5.50 5.32 4.79 27 3.01 3.01 3.00 64 5.02 4.93 4.61
84 13.06 28 3.13 3.12 3.12 65 5.66 5.46 4.85 28 3.03 3.03 3.02 65 5.15 5.05 4.68
96 11.59 29 3.15 3.15 3.14 66 5.83 5.59 4.91 29 3.05 3.05 3.04 66 5.30 5.17 4.75
108 10.45 30 3.18 3.17 3.16 67 6.02 5.74 4.97 30 3.07 3.07 3.06 67 5.45 5.30 4.82
120 9.54 31 3.20 3.20 3.19 68 6.21 5.89 5.03 31 3.09 3.09 3.09 68 5.61 5.45 4.89
132 8.80 32 3.23 3.23 3.22 69 6.42 6.04 5.08 32 3.12 3.12 3.11 69 5.79 5.59 4.96
144 8.18 33 3.26 3.26 3.24 70 6.65 6.20 5.13 33 3.14 3.14 3.13 70 5.98 5.75 5.02
156 7.65 34 3.29 3.29 3.27 71 6.88 6.36 5.18 34 3.17 3.17 3.16 71 6.19 5.91 5.08
168 7.20 35 3.33 3.32 3.30 72 7.14 6.53 5.22 35 3.20 3.19 3.18 72 6.41 6.08 5.13
180 6.82 36 3.36 3.35 3.33 73 7.41 6.70 5.26 36 3.22 3.22 3.21 73 6.65 6.26 5.19
192 6.48 37 3.40 3.39 3.37 74 7.70 6.87 5.29 37 3.25 3.25 3.24 74 6.92 6.44 5.23
204 6.18 38 3.43 3.43 3.40 75 8.00 7.04 5.32 38 3.29 3.28 3.27 75 7.20 6.63 5.27
216 5.92 39 3.47 3.47 3.44 76 8.33 7.22 5.35 39 3.32 3.31 3.30 76 7.51 6.83 5.31
228 5.68 40 3.51 3.51 3.47 77 8.69 7.39 5.37 40 3.35 3.35 3.33 77 7.84 7.03 5.34
240 5.47 41 3.56 3.55 3.51 78 9.07 7.57 5.39 41 3.39 3.38 3.37 78 8.20 7.23 5.37
252 5.28 42 3.60 3.59 3.55 79 9.47 7.74 5.41 42 3.43 3.42 3.40 79 8.59 7.43 5.39
264 5.11 43 3.65 3.64 3.59 80 9.91 7.91 5.42 43 3.47 3.46 3.44 80 9.01 7.62 5.41
276 4.95 44 3.70 3.69 3.63 81 10.37 8.07 5.43 44 3.51 3.50 3.47 81 9.47 7.82 5.42
288 4.81 45 3.75 3.74 3.68 82 10.87 8.22 5.44 45 3.55 3.54 3.51 82 9.96 8.00 5.43
300 4.67 46 3.81 3.79 3.72 83 11.40 8.37 5.45 46 3.60 3.59 3.55 83 10.50 8.18 5.44
47 3.87 3.84 3.77 84 11.97 8.51 5.46 47 3.64 3.63 3.60 84 11.08 8.35 5.45
48 3.93 3.90 3.82 85 12.57 8.64 5.46 48 3.69 3.68 3.64 85 11.71 8.51 5.46
49 3.99 3.96 3.87 86 13.22 8.76 5.46 49 3.75 3.73 3.69 86 12.39 8.65 5.46
50 4.05 4.02 3.92 87 13.90 8.87 5.47 50 3.80 3.79 3.74 87 13.12 8.78 5.47
51 4.12 4.09 3.98 88 14.63 8.97 5.47 51 3.86 3.84 3.79 88 13.90 8.89 5.47
52 4.20 4.16 4.03 89 15.40 9.06 5.47 52 3.92 3.90 3.84 89 14.72 9.00 5.47
53 4.27 4.23 4.09 90 16.22 9.14 5.47 53 3.99 3.97 3.89 90 15.58 9.09 5.47
54 4.35 4.31 4.15 91 17.09 9.21 5.47 54 4.06 4.03 3.95 91 16.49 9.17 5.47
55 4.44 4.38 4.21 92 18.02 9.28 5.47 55 4.13 4.10 4.01 92 17.43 9.24 5.47
56 4.53 4.47 4.27 93 19.00 9.34 5.47 56 4.21 4.18 4.07 93 18.42 9.30 5.47
57 4.63 4.56 4.33 94 20.04 9.39 5.47 57 4.29 4.25 4.13 94 19.44 9.36 5.47
58 4.73 4.65 4.40 95 21.17 9.43 5.47 58 4.37 4.33 4.19 95 20.51 9.40 5.47
59 4.84 4.75 4.46 96 22.38 9.46 5.47 59 4.47 4.42 4.26 96 21.64 9.44 5.47
60 4.95 4.85 4.53 97 23.70 9.49 5.47 60 4.56 4.51 4.33 97 22.86 9.47 5.47
61 5.07 4.96 4.59 98 25.18 9.51 5.47 61 4.67 4.61 4.40 98 24.20 9.50 5.47
62 5.21 5.08 4.66 99 26.85 9.52 5.47 62 4.78 4.71 4.47 99 25.71 9.51 5.47
</TABLE>
LAST SURVIVOR MODIFIED SINGLE
PREMIUM VARIABLE LIFE INSURANCE
POLICY. DEATH BENEFIT. PERIOD OF
COVER NOT GUARANTEED.
NONPARTICIPATING.
22
EX-99.A10
Jackson National Life Insurance Company
For application questions or assistance,
please call 800/766-4683 (7:00 a.m. to 6:00 p.m. MT).
Application for
Perspective Lifesm
USE DARK INK ONLY
1. Proposed Insured
Name (first, middle initial, and last)
Street Address Apt. No.
City, State, and ZIP
Date of Birth State of Birth Sex
/ / n M n F
Social Security Number
/ /
2. Proposed Second Insured (Complete if applicable.)
Name (first, middle initial, and last)
Street Address Apt. No.
City, State, and ZIP
Date of Birth State of Birth Sex
/ / n M n F
Social Security Number
/ /
3. Owner (If other than Proposed Insured[s].) (If there are two
Insureds, the policy will be owned jointly unless otherwise specified below.)
Name (first, middle initial, and last)
Street Address Apt. No.
City, State, and ZIP
Relationship to Proposed Insured(s) E-mail Address
Social Security Number or Tax I.D. No.
4. Beneficiary -- Indicate % share
The beneficiary of the Second Insured (if applicable) shall be the Insured,
unless specified otherwise in Section 5.
Name of Primary Beneficiary(ies) Relationship(s) %
Name of Contingent Beneficiary(ies) Relationship(s) %
5. Special Requests and Remarks (Not applicable in Pennsylvania and
West Virginia.)
6. Insurance Applied for
Amount of Insurance Premium
6a. $ 6b. $
6c. Will the proposed policy replace any existing annuity or life insurance
policy? n Yes n No
If "Yes," list the following:
Name of transferring company
Policy number
Approximate amount $
My Request for Transfer
or Exchange of Assets form is attached. n Yes
6d. Please check one if applicable.
n I have enclosed a check for my initial payment of $ , and I have read
and received a copy of the Temporary Insurance Agreement.
n My initial payment will be transferred from the company named in 6c.
7. Premium Allocation (Whole percentages -- must total 100%)
Separate Account Investment Division Options
% JNL(R)/Janus Aggressive Growth
% JNL/Janus Capital Growth
% JNL/Janus Global Equities
% JNL/Alger Growth
% JNL/Eagle Core Equity
% JNL/Eagle SmallCap Equity
% JNL/J.P. Morgan Enhanced S&P 500(R)Index
% JNL/Putnam Growth
% JNL/Putnam Value Equity
% PPM America/JNL Balanced
% PPM America/JNL High Yield Bond
% PPM America/JNL Money Market
% Salomon Brothers/JNL Global Bond
% Salomon Brothers/JNL U.S. Government & Quality Bond
% T. Rowe Price/JNL Established Growth
% T. Rowe Price/JNL International Equity Investment
% T. Rowe Price/JNL Mid-Cap Growth
% JNL/First Trust The DowSM Target 10
% JNL/S&P Conservative Growth I
% JNL/S&P Moderate Growth I
% JNL/S&P Aggressive Growth I
% JNL/S&P Very Aggressive Growth I
% JNL/S&P Equity Growth I
% JNL/S&P Equity Aggressive Growth I
Fixed Account Option %
8. Rebalancing
I (We) authorize the Company to rebalance our accounts to the current
allocation.
Rebalancing should occur (choose one):
n Monthly n Quarterly n Semiannually n Annually
Beginning on ____/____/____ (mm/dd/yyyy)
9. Dollar-Cost Averaging
I (We) authorize the Company to transfer the following amount as indicated
below. Transfers are available from all accounts. Minimum transfer is $100.
Transfer Frequency (choose one):
n Monthly n Quarterly n Semiannually n Annually
Make the first transfer on ____/____/____ (mm/dd/yyyy)
From To Amount
$
$
$
$
10. Authorization for
Electronic Transactions (Please initial)
I (We) hereby authorize electronic transactions, subject to the conditions set
forth below: (If election is left blank, the Company
Yes No will assume "Yes.")
Jackson National Life Insurance Company (JNL) has procedures designed to provide
reasonable assurance that electronic transactions are genuine. Such procedures
include requesting identifying information and tape recording telephone
communications. If JNL fails to employ reasonable procedures to ensure that
electronic transactions are genuine, we may be held liable for such losses.
Neither JNL nor its producers or representatives who act on its behalf shall be
subject to any claim, loss, liability, cost or expense in connection with an
electronic transaction if acted on in good faith in reliance on this
authorization.
11. Proposed Insureds' Information
0
11a. Insured's Employer
11b. Insured's Annual Income 11c. Insured's Net Worth
$ $
11d. Second Insured's Employer (if applicable)
11e. Second Insured's Annual Income 11f. Second Insured's Net Worth
$ $
11g. Have you ever been declined for life insurance?
Insured n Yes n No 2nd Insured n Yes n No
11h. Have you ever had, or been treated by a member of the
medical profession for, cancer (other than basal cell skin
cancer), melanoma, any immunodeficiency disease, diabetes treated with insulin,
heart attack or disease, stroke, or any disorder of the central nervous system?
Insured n Yes n No 2nd Insured n Yes n No
11i. Have you within the past 5 years had or been treated by a member
of the medical profession for kidney failure, liver disorder, respiratory
disease, muscular disorder, mental or nervous disorder, Alzheimer's disease, or
alcohol or drug abuse?
Insured n Yes n No 2nd Insured n Yes n No
11j. To the best of your knowledge and belief, do you have, or have you
ever been told you have, or been treated (by a member of the medical profession)
for acquired immune deficiency syndrome (AIDS), AIDS-Related Complex (ARC), or
AIDS related conditions?
Insured n Yes n No 2nd Insured n Yes n No 11k. Have you smoked
cigarettes within the past 12 months?
Insured n Yes n No 2nd Insured n Yes n No
Details to any "Yes" answers above (including diagnosis, treatment, result,
date, duration, and physician's name and address).
11l. If we are unable to issue a life insurance policy, do you wish to receive
information about an annuity contract?
Insured n Yes n No 2nd Insured n Yes n No
12. Suitability To be completed by the Owner(s).
12a. Do you believe that the policy applied for in this application will meet
your insurance and financial objectives?
n Yes n No
12b. Do you understand that the death benefit, policy value, and withdrawal
value may increase or decrease, depending on the experience of the Fixed Account
and Separate Accounts?
n Yes n No
12c. Do you understand that the initial premium will be allocated to the money
market account upon issue of the policy until the Allocation Date?
n Yes n No
12d. Did you receive a copy of the prospectus?
n Yes n No
Date of prospectus _____/_____/_____ (mm/dd/yyyy)
13. Acknowledgement, Agreements, Representations, and Authorizations
13a. Owner's Statement
By signing this Application, I acknowledge that (please check the one
that applies): n I did receive an illustration that matches the
coverage applied for. n The coverage applied for differs from the
coverage illustrated.
n I did not receive an illustration.
13b. Agreements and Representations
General
I represent to the best of my knowledge and belief that all information
in this Application, and all additions to this Application including, but not
limited to, examination reports, questionnaires, and amendments are true,
complete and correctly recorded. I acknowledge that the Company will rely on
this information to determine whether, and on what terms, to issue a policy. I
understand that if any information is false, incomplete or incorrectly recorded,
any policy issued may be void. I have received and read the Notice of
Disclosure, Insurance Information Practices, Fair Credit Reporting Act, and
Medical Information Bureau Notice. I have received and read the Disclosure
Statement for terminal illness rider. I (We) certify the Social Security or Tax
Identification number shown in this application is correct.
Limits of Authority
I understand that no sales producer/representative is authorized to
accept risks or bind coverage, decide insurability, modify the Application or
the policy, or waive any of the Company's rights or requirements.
When Coverage Takes Effect
I agree that insurance coverage under the policy I am applying for will
not take effect until the Policy Issue Date, and then only if all of the
information provided in the Application, and all additions to the Application,
continues to be true and complete as of the Issue Date. However, commencement of
coverage is subject to the following conditions: (1) Coverage will not take
effect until the date the premium is received by the Company, and then only if
all of the information provided in the Application, and any additions to the
Application continue to be true and complete as of that date; (2) If a Health
Certificate is required, coverage will not take effect until the Certificate has
been truthfully and accurately completed and signed by the Proposed Insured(s),
and reviewed and approved by the Company. I understand that if any of the
information provided in the Application, or any additions to the Application,
changes prior to coverage becoming effective as set forth above, I must inform
the Company in writing, and no coverage will be in effect until the Company
determines whether to provide coverage and on what terms.
Authorization
I authorize any physician, medical practitioner, hospital or medically
related facility, insurance company, the Medical Information Bureau ("MIB"),
credit bureau(s), employers, or any other institution or person to release to
Jackson National Life Insurance Company, or to its reinsurers, if they choose to
request such information, any records or knowledge of conditions related to the
following:
My mental or physical health, including, but not limited to,
information regarding my HIV status, including all test records and results;
other insurance coverage; hazardous activities; character; general reputation;
mode of living; finances; vocation; and other personal traits for the purpose of
verifying information sworn on this application, and to determine eligibility
for insurance. I understand that information obtained will only be released to
reinsurers, the MIB, or those performing services in connection with my
Application or claim or as lawfully required. I agree that this authorization is
valid for 26 months, that a photocopy of it is as valid as the original, and
that I or an authorized representative may request a copy of this authorization.
Signed at (city/state) Date Signature of Parent or Guardian
(if necessary)
Signature of Proposed Insured Producer/Representative's Name
(please print)
Signature of Proposed Second Insured Signature of Producer/Representative
Signature of Owner(s) (if other than Proposed Insured)
PLEASE NOTE (NOT APPLICABLE IN OREGON, AND VIRGINIA): Any person who knowingly,
and with intent to defraud any insurance company or other person, files an
application for insurance or statement of claim containing any materially false
information or conceals for the purpose of misleading, information concerning
any fact material thereto, commits a fraudulent insurance act, which is a crime
and subjects such person to criminal and civil penalties. In Colorado, any
insurance company, or agent of an insurance company, who knowingly provides
false, incomplete, or misleading facts or information to an Owner(s) or claimant
for the purpose of defrauding, or attempting to defraud, the Owner(s) or
claimant with regard to a settlement or award payable from insurance proceeds,
shall be reported to the Colorado Division of Insurance within the Department of
Regulatory Agencies. D.C. RESIDENTS, WARNING: It is a crime to provide false or
misleading information to an insurer for the purpose of defrauding the insurer
or any other person. Penalties include imprisonment and/or fines. In addition,
an insurer may deny insurance benefits if false information materially related
to a claim was provided by the applicant. NEW JERSEY RESIDENTS: Any person who
includes any false or misleading information on an insurance policy is subject
to criminal and civil penalties.
14. Contact Information
A representative of Jackson National Life(R) may contact you for an interview to
help determine your eligibility for this coverage. For future communication,
please provide the following information:
Proposed Insured Proposed Second Insured
Best Time to Call
Next Best Time
Best Day to Call
Next Best Day
Please Call at n Home n Business n Home n Business
Home Phone
Business Phone
Fax Number
E-Mail Address
15. Producer/Representative Use Only
15a. Does the policy applied for replace an existing annuity or life
insurance policy? n Yes n No If "Yes," attach replacement forms as
required.
15b. Producer/Representative's Statement
By signing this Application, I acknowledge that (please check the one
that applies): n The coverage illustrated matches the coverage applied
for. n The coverage applied for differs from the coverage illustrated.
n I did not provide an illustration.
I acknowledge and represent that: (1) I read each question on the Application in
English, or in another language understood by the Proposed Insured(s), and
accurately recorded his/her responses; (2) I am not aware of any requested
information that was not disclosed or was misrepresented on the Application; and
(3) all information provided on this Report, or in response to Company inquiries
about the Application or the Proposed Insured(s) is true and correct to the best
of my knowledge and belief. I have given the Proposed Insured(s) the Notice of
Disclosure of Information. I certify that I am authorized and qualified to
discuss the Policy herein applied for. I have determined that this is a suitable
transaction for the Proposed Insured(s).
Signature of Producer/Representative Date Broker/Dealer Name
Printed Name of Producer/Representative Producer/Representative No.
Broker/Dealer No.
Telephone No. Fax No. E-Mail Address Option (please check one)
( ) ( ) n A n B n C
Temporary Insurance Agreement
MAKE CHECKS PAYABLE ONLY TO JACKSON NATIONAL LIFE INSURANCE COMPANY
PREMIUM CANNOT BE ACCEPTED if any Proposed Insured is over age 80.
Received from the sum of $ on this date____/____/____.
________
(Any reference in this Temporary Insurance Agreement to the Proposed Insured(s),
the policy, or an amount applied for, refers to the Proposed Insured(s), the
policy and the amount applied for on the Application to which this Temporary
Insurance was originally attached.)
(producer's initials)
COVERAGE
This Agreement provides life insurance coverage on a temporary basis, but only
if all conditions are met and then only to the extent of the LIMITS OF COVERAGE.
Upon due proof of death of the Proposed Insured while coverage under this
Agreement is in force, the Company will pay the benefits due the beneficiaries
listed on the Application to which this Agreement was attached.
CONDITIONS
1. The answers in all parts of the Application and any medical examination
report, Application supplement or amendment, must be true and complete as to all
material facts.
2. You must never have been treated for, or been advised by, a member of the
medical profession to seek treatment for: shortness of breath, emphysema,
chronic respiratory disorder, chest pains, discomfort or tightness of the chest,
palpitations, heart attack, any disorder of the heart, lymph glands, enlargement
of lymph nodes (glands), a tumor, cancer, any immunological disorder, drug or
alcohol abuse, or acquired immune deficiency syndrome (AIDS).
3. A check or money order for the premium, for the plan applied for, must be
submitted with the Application to which this Temporary Insurance Agreement was
attached. A check or money order returned for insufficient funds, or otherwise
uncollectable, will void this Agreement.
IF the above CONDITIONS are met, Temporary Insurance shall begin on the date of
this Agreement.
LIMITS OF COVERAGE -- $500,000 OR LESS
Temporary Insurance based on this Agreement, and all other Temporary Insurance
Agreements issued by the Company insuring the life of the Proposed Insured(s),
is limited to $500,000 or the amount applied for in the Application, WHICHEVER
IS LESS. If more than one Temporary Insurance Agreement insures the life of the
Proposed Insured(s), and the total amount applied for exceeds $500,000, the
beneficiaries under each Agreement shall receive a proportionate share of the
total limit of $500,000 based on the amounts applied for in each Application.
If the premium submitted with the Application and any other Application for a
policy on the life of the Proposed Insured(s) would purchase more than $500,000
of coverage based on the plan and premium mode applied for, and the Proposed
Insured(s) dies while this Agreement is in force, the Company will refund the
portion of the premium that would have purchased coverage in excess of $500,000.
Last Survivor Policy -- If the Application is for a Last Survivor policy,
Temporary Insurance benefits will be payable only upon the death of both
Proposed Insureds while coverage under this Agreement is in force.
Suicide -- If the Proposed Insured(s) dies by suicide while sane or insane,
while coverage under this Agreement is in force, the amount payable by the
Company will be equal to the premium(s) paid.
WHEN
COVERAGE TERMINATES Temporary Insurance shall terminate automatically, and no
coverage will be provided on the earliest of:
1. The date the Company offers to issue a policy on a substandard basis;
2. The date the Applicant advises the Company that he or she is no longer
interested in obtaining the policy applied for;
3. The date the Company returns any premium paid and/or declines to issue a
policy;
4. The date the coverage under the policy becomes effective pursuant to the
terms of the Application;
5. The date the Applicant fails or refuses to
accept delivery of a policy which has not become effective; or
6. Ninety (90) days after the date of this Agreement.
THIS AGREEMENT IS NOT A BINDER. NO PRODUCER/REPRESENTATIVE IS AUTHORIZED TO
ACCEPT RISKS OR BIND COVERAGE, DECIDE INSURABILITY, MODIFY THE TERMS OF THIS
AGREEMENT, OR WAIVE ANY OF THE COMPANY'S RIGHTS OR REQUIREMENTS.
Signed at (city/state) Date Signature of Parent or Guardian
(if necessary)
Signature of Proposed Insured Producer/Representative's Name
(please print)
Signature of Proposed Second Insured Signature of Producer/Representative
Signature of Owner(s) (if other than Proposed Insured)
V3402 12/99
Jackson National Life Insurance Company
For application questions or assistance,
please call 800/766-4683 (7:00 a.m. to 6:00 p.m. MT).0
(Leave with applicant)
DISCLOSURE STATEMENT FOR TERMINAL ILLNESS BENEFIT RIDER
DEATH BENEFITS WILL BE REDUCED IF A TERMINAL ILLNESS BENEFIT IS PAID
This Disclosure Statement is intended to provide you with a summary of the
Terminal Illness Benefit feature. This feature provides a benefit payment to the
Owner(s), in the event the Proposed Insured(s) incurs a terminal illness, equal
to any requested amount from 25% to 100% (or $250,000 if less) of your policy
death benefit less 1) an interest discount for 12 months and 2) any outstanding
policy loan and loan interest due and unpaid, multiplied by a benefit ratio; and
3) any amount due and unpaid during a policy's grace period which applies to a
period before the date of entitlement; and 4) an administrative expense charge
not to exceed $100. After the payment of a Terminal Illness Benefit, the policy
will be subject to the following adjustments:
1) The death benefit, gross premium, policy value, and remaining
premium will be reduced by a benefit ratio equal to the requested benefit
divided by the policy death benefit.
2) Any outstanding loan and loan interest will be reduced by the
portion of the loan repaid by any payment of a benefit under this rider.
Remaining Policy Death Outstanding
Premium Value Benefit Loan
Example: Before Terminal Illness Benefit $1,000 $5,000 $100,000$2,000
After Terminal Illness Benefit $ 800 $4,000 $ 80,000$1,600
Requested Interest Admin. Benefit
Benefit Discount Loan Fee Amount
$20,000 - $1,481 - $400 - $100 = $18,019
This example assumes a benefit request of 20% of the death benefit or $20,000, a
discounted interest rate of 8% and administrative fee of $100.
PLEASE NOTE THE FOLLOWING:
1) No producer/representative has the authority to alter or add to the
provisions set forth above.
2) The Terminal Illness Benefit does not become effective unless the
Proposed Insured's(s') terminal illness first manifests itself on or after the
30th day following the policy issue date.
3) This Terminal Illness Benefit is payable only once.
4) Payment of a Terminal Illness Benefit could adversely affect your
eligibility for Medicaid or other government benefits or entitlements. Because
Terminal Illness Benefits may be taxable, you should consult with your personal
tax adviser.
V2047 12/99
NOTICE OF DISCLOSURE OF INFORMATION
Information regarding your insurability will be treated as confidential except
that Jackson National Life Insurance Company or its reinsurers, may make a brief
report to the Medical Information Bureau, a nonprofit membership organization of
life insurance companies which operates an information exchange on behalf of its
members. Upon request by another member insurance company to which you have
applied for life or health insurance, or to which a claim is submitted, the
Medical Information Bureau will supply such company with the information it may
have in its files. Jackson National Life Insurance Company or its reinsurers may
also release information in its file to its reinsurers and to other life
insurance companies to which you may apply for life or health insurance, or to
which a claim is submitted. Upon receipt of a request from you, the Medical
Information Bureau will arrange disclosure of any information it may have in
your file. If you question the accuracy of information in the Bureau's file, you
may seek correction in accordance with the procedures set forth in the Federal
Fair Credit Reporting Act. The address of the Bureau's information office is
Post Office Box 105, Essex Station, Boston, Massachusetts 02112; telephone (617)
426-3660. Federal law requires you to be advised that in connection with your
application for insurance, an investigative consumer report may be prepared
whereby information is obtained through personal interviews with your neighbors,
friends or others with whom you are acquainted. Such reports are usually part of
the process of evaluating risks for life and health insurance. Inquiry may be
made into your character, general reputation, personal characteristics, and mode
of living. It is possible that a representative of a firm employed to make such
reports may call upon you in person. You have the right to request disclosure of
the nature and scope of the investigation upon your written request made within
a reasonable time after receipt of this notice. Information obtained through the
above inquiries is not designed to establish the sexual orientation of a
Proposed Insured(s), and no such inquiry will be made.
V3403 12/99
V3400A 12/99
Temporary Insurance Agreement
(Leave with applicant)
MAKE CHECKS PAYABLE ONLY TO JACKSON NATIONAL LIFE INSURANCE COMPANY
PREMIUM CANNOT BE ACCEPTED if any Proposed Insured is over age 80.
Received from the sum of $ on this date____/____/____.
________
(Any reference in this Temporary Insurance Agreement to the Proposed Insured(s),
the policy, or an amount applied for, refers to the Proposed Insured(s), the
policy and the amount applied for on the Application to which this Temporary
Insurance was originally attached.)
COVERAGE
This Agreement provides life insurance coverage on a temporary basis, but only
if all conditions are met and then only to the extent of the LIMITS OF COVERAGE.
Upon due proof of death of the Proposed Insured while coverage under this
Agreement is in force, the Company will pay the benefits due the beneficiaries
listed on the Application to which this Agreement was attached.
CONDITIONS
1. The answers in all parts of the Application and any medical examination
report, Application supplement or amendment, must be true and complete as to all
material facts.
2. You must never have been treated for, or been advised by, a member of the
medical profession to seek treatment for: shortness of breath, emphysema,
chronic respiratory disorder, chest pains, discomfort or tightness of the chest,
palpitations, heart attack, any disorder of the heart, lymph glands, enlargement
of lymph nodes (glands), a tumor, cancer, any immunological disorder, drug or
alcohol abuse, or acquired immune deficiency syndrome (AIDS).
3. A check or money order for the premium, for the plan applied for, must be
submitted with the Application to which this Temporary Insurance Agreement was
attached. A check or money order returned for insufficient funds, or otherwise
uncollectable, will void this Agreement. IF the above CONDITIONS are met,
Temporary Insurance shall begin on the date of this Agreement.
LIMITS OF COVERAGE -- $500,000 OR LESS
Temporary Insurance based on this Agreement, and all other Temporary Insurance
Agreements issued by the Company insuring the life of the Proposed Insured(s),
is limited to $500,000 or the amount applied for in the Application, WHICHEVER
IS LESS. If more than one Temporary Insurance Agreement insures the life of the
Proposed Insured(s), and the total amount applied for exceeds $500,000, the
beneficiaries under each Agreement shall receive a proportionate share of the
total limit of $500,000 based on the amounts applied for in each Application.
If the premium submitted with the Application and any other Application for a
policy on the life of the Proposed Insured(s) would purchase more than $500,000
of coverage based on the plan and premium mode applied for, and the Proposed
Insured(s) dies while this Agreement is in force, the Company will refund the
portion of the premium that would have purchased coverage in excess of $500,000.
Last Survivor Policy -- If the Application is for a Last Survivor policy,
Temporary Insurance benefits will be payable only upon the death of both
Proposed Insureds while coverage under this Agreement is in force.
Suicide -- If the Proposed Insured(s) dies by suicide while sane or insane,
while coverage under this Agreement is in force, the amount payable by the
Company will be equal to the premium(s) paid.
WHEN COVERAGE TERMINATES
Temporary Insurance shall terminate automatically, and no coverage will be
provided on the earliest of:
1. The date the Company offers to issue a policy on a substandard basis;
2. The date the Applicant advises the Company that he or she is no longer
interested in obtaining the policy applied for;
3. The date the Company returns any premium paid and/or declines to issue a
policy;
4. The date the coverage under the policy becomes effective pursuant to the
terms of the Application;
5. The date the Applicant fails or refuses to accept delivery of a policy which
has not become effective; or 6. Ninety (90) days after the date of this
Agreement.
THIS AGREEMENT IS NOT A BINDER. NO PRODUCER/REPRESENTATIVE IS AUTHORIZED TO
ACCEPT RISKS OR BIND COVERAGE, DECIDE INSURABILITY, MODIFY THE TERMS OF THIS
AGREEMENT, OR WAIVE ANY OF THE COMPANY'S RIGHTS OR REQUIREMENTS.
V3402 12/99
EX-99.A11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned as a
director and/or officer of JACKSON NATIONAL LIFE INSURANCE COMPANY (the
Depositor), a Michigan corporation, hereby appoints Andrew B. Hopping, Thomas J.
Meyer and Robert P. Saltzman (with full power to each of them to act alone) his
attorney-in-fact and agent, each with full power of substitution and
resubstitution, for and in his name, place and stead, in any and all capacities,
to execute, deliver and file in the names of the undersigned, any of the
documents referred to below relating to the registration statements on Form
N-8B2, under the Investment Company Act of 1940, as amended, and Form S-6 under
the Securities Act of 1933, as amended, or any successor form adopted by the
Securities and Exchange Commission covering the registration of a Variable Life
Insurance Policy issued by Jackson National Separate Account IV (the
Registrant), including the initial registration statements, any amendment or
amendments thereto, with all exhibits and any and all documents required to be
filed with respect thereto with any regulatory authority. Each of the
undersigned grants to each of said attorney-in-fact and agent, full authority to
do every act necessary to be done in order to effectuate the same as fully, to
all intents and purposes as he could do in person, thereby ratifying all that
said attorney-in-fact and agent, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney may be executed in one or more counterparts,
each of which shall be deemed to be an original, and all of which shall be
deemed to be a single document.
IN WITNESS WHEREOF, each of the undersigned director and/or officer
hereby executes this Power of Attorney as of the 31st day of March 2000.
/s/ Jonathan Bloomer
- --------------------------------------
Jonathan Bloomer, Director
/s/ Robert P. Saltzman
- --------------------------------------
Robert P. Saltzman, President, Chief
Executive Officer and Director
/s/ Clark P. Manning
- --------------------------------------
Clark P. Manning, Chief Operating Officer
and Director
/s/ Andrew B. Hopping
- --------------------------------------
Andrew B. Hopping, Executive Vice President,
Chief Financial Officer and Director
