<PAGE>
ANCHOR NATIONAL LIFE INSURANCE COMPANY
INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
This Endorsement amends the Contract to which it is attached so that it may
qualify as an Individual Retirement Annuity (IRA) under Section 408(b) of the
Internal Revenue Code (Code) and the Regulations under that Section. The
endorsement may be amended from time to time to comply with changes in the
Internal Revenue Code. The Owner has the right to refuse to accept any such
amendment; however, we shall not be held liable for any tax consequences
incurred by the Owner as a result of such refusal. In the case of a conflict
with any provision in the Contract, the provisions of this Endorsement will
control. The effective date of this Endorsement is the Contract Date shown on
the Contract Data Page. The Contract is amended as follows:
1. The Owner, Annuitant and Payee shall be the same individual. The Owner,
Annuitant and Payee cannot be changed, except as otherwise permitted
under the IRC and applicable regulations. All distributions made while
the Owner is alive must be made to the Owner.
2. The interest of the Owner under this Contract shall be nonforfeitable
except as provided by law.
3. The Contract may not be sold, assigned, discounted, pledged as
collateral for a loan or as security for the performance of any
obligation or for any other purpose, or otherwise transferred (other
than a transfer incident to a divorce or separation instrument in
accordance with Section 408(d)(6) of the Code) to any person other than
to the Company.
4. This Contract is established for the exclusive benefit of the Owner and
his or her Beneficiary(ies).
5. Except in the case of a rollover contribution (as permitted by Code
Sections 402(c), 403(a)(4), 403(b)(8), or 408(d)(3)(1)), or a
contribution made in accordance with the terms of a Simplified Employee
Pension (SEP) as described in Code Section 408(k), or a nontaxable
transfer from an individual retirement account under 408(a) of the Code
or another IRA under Section 408(b) of the Code, contributions shall
not exceed $2,000 for any taxable year. All contributions must be in
cash.
Any refund of premiums (other than those attributable to excess
contributions) will be applied, before the close of the calendar year
following the year of the refund, toward the payment of future premiums
or the purchase of additional benefits.
No contribution will be accepted under a SIMPLE IRA plan established by
any employer pursuant to Code section 408(p). No transfer or rollover
of funds attributable to contributions made by a particular employer
under its SIMPLE IRA plan will be accepted from a SIMPLE IRA, that is,
an IRA used in conjunction with a SIMPLE IRA plan, prior to the
expiration of the 2-year period beginning on the date the individual
first participated in that employer's SIMPLE IRA plan.
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6. Unless otherwise permitted under applicable law, the Owner's entire
interest in the Contract shall be distributed no later than the
"required beginning date," or commence to be distributed beginning no
later than the "required beginning date," over
(a) the life of the Owner, or the lives of the Owner and his or
her designated Beneficiary (within the meaning of section
401(a) of the Code), or
(b) a period certain not extending beyond the life expectancy of
the Owner, or the joint and last survivor expectancy of the
Owner and his or her Beneficiary as required by law.
As used in this Endorsement, the term "required beginning date" means
April 1 of the calendar year following the calendar year in which the
Owner attains age 70 1/2, or such later date provided by law.
Payments must be made in periodic payments at intervals of no longer
than one year. In addition, payments must be either nonincreasing or
they may increase only as provided in Q&A F-3 of Section 1.401(a)(9)-1
of the Proposed Income Tax Regulations.
If the Owner's interest is to be distributed over a period greater than
one year, the amount to be distributed by December 31 of each year
(including the year in which the required beginning date occurs will be
made in accordance with the requirements of Code Section 401(a)(9),
including the incidental death benefit requirements of Code Section
401(a)(9)(G), and the regulations thereunder, including the minimum
distribution incidental benefit requirement of Code Section
1.401(a)(9)-2 of the Proposed Income Tax Regulations.
Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Unless
otherwise elected by the Owner by the time distributions are required
to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable by the Owner and shall apply to all
subsequent years. The life expectancy of a non-spouse designated
Beneficiary may not be recalculated. Instead, life expectancy will be
calculated using the attained age of such designated Beneficiary during
the calendar year in which the Owner attains age 70 1/2, and payments
for subsequent years shall be calculated based on such life expectancy
reduced by one for each calendar year which has elapsed since the
calendar year life expectancy was first calculated. Life expectancy for
distributions under an Annuity Payment Option may not be recalculated.
7. Unless otherwise permitted under applicable law, upon the death of the
Owner:
(a) if the Owner dies on or after the required beginning date (or
if distributions have begun before the required beginning date
as irrevocable annuity payments), the remaining portion of the
Owner's interest (if any) shall be distributed at least as
rapidly as under the method of distribution in effect as of
the Owner's death;
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(b) if the Owner dies before the required beginning date and an
irrevocable annuity distribution has not begun, the entire
interest will be distributed by December 31 of the calendar
year which contains the fifth anniversary of the Owner's death
except that:
(1) if the interest is payable to an individual who is
the Owner's designated Beneficiary, the designated
Beneficiary may elect to receive the entire interest
over the life of the designated Beneficiary or over a
period not extending beyond the life expectancy of
the designated Beneficiary, commencing on or before
December 31 of the calendar year immediately
following the calendar year in which the Owner died;
or
(2) if the designated Beneficiary is the Owner's
surviving spouse, the surviving spouse may elect to
receive the entire interest over the life of the
surviving spouse or over a period not extending
beyond the life expectancy of the surviving spouse,
commencing at any date on or before the later of (A)
December 31 of the calendar year immediately
following the calendar year in which the Owner died
or (B) December 31 of the calendar year in which the
Owner would have attained age 70 1/2. If the
surviving spouse dies before distributions begin, the
limitations of this paragraph 7 (without regard to
this paragraph (b)) will be applied as if the
surviving spouse were the Owner.
An irrevocable election of the method of distribution
by a designated Beneficiary who is the surviving
spouse must be made no later than the earlier of
December 31 of the calendar year containing the fifth
anniversary of the Owner's death or the date
distributions are required to begin pursuant to this
paragraph (b).
(3) if the designated Beneficiary is the Owner's
surviving spouse, the spouse may irrevocably elect to
treat the Contract as his or her own IRA. This
election will be deemed to have been made if such
surviving spouse, subject to the requirements of
Section 5 of this Endorsement, (i) makes a regular
IRA contribution to the Contract, (ii) makes a
rollover to or from the Contract, or (iii) fails to
elect that his or her interest will be distributed in
accordance with one of the preceding provisions of
this paragraph (b).
An irrevocable election of the method of distribution
by a designated Beneficiary who is not the surviving spouse
must be made no later than December 31 of the calendar year
immediately following the calendar year in which the Owner
died. If no such election is made, the entire interest will be
distributed by December 31 of the calendar year containing the
fifth anniversary of the Owner's death.
Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations. For
purposes of distributions beginning after the Owner's death, unless
otherwise elected by the surviving spouse by
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<PAGE>
the time distributions are required to begin, life expectancies
shall be recalculated annually. Such election shall be irrevocable
by the surviving spouse and shall apply to all subsequent years. In
the case of any other designated Beneficiary, life expectancies
shall be calculated using the attained age of such designated
Beneficiary during the calendar year in which distributions are
required to begin pursuant to this section, and payments for any
subsequent calendar year shall be calculated based on such life
expectancy reduced by one for each calendar year which has elapsed
since the calendar year life expectancy was first calculated. Life
expectancy for distributions under an Annuity Payment Option in the
Contract may not be recalculated.
Distributions under this section are considered to have begun if
distributions are made on account of the Owner reaching his or her
required beginning date or if prior to the required beginning date
distributions irrevocably commence over a period permitted and in an
annuity form acceptable under Section 1.401(a)(9) of the Proposed
Income Tax Regulations.
8. The Company shall furnish annual calendar year reports concerning the
status of the Contract.
The following provisions entitled MISSTATEMENT OF AGE, PROOF OF AGE AND SURVIVAL
and the table of Annuity Payment Options apply to Simplified Employee Pension
(SEP) contracts only:
9. The MISSTATEMENT OF AGE OR SEX section of the Contract is deleted and
replaced by the following section entitled MISSTATEMENT OF AGE.
MISSTATEMENT OF AGE
If the Age of any Annuitant has been misstated, future annuity payments
will be adjusted using the correct Age according to Our rates in effect
on the date that annuity payments were determined. Any overpayment from
the Fixed Account Options, plus interest at the rate of 4% per year,
will be deducted from the next payment(s) due. Any underpayment from
the Fixed Account Options, plus interest at the rate of 4% per year,
will be paid in full with the next payment due. Any overpayment from
the Subaccounts will be deducted from the next payment(s) due. Any
underpayment from the Subaccounts will be paid in full with the next
payment due.
10. The PROOF OF AGE, SEX OR SURVIVAL section of the Contract is deleted
and replaced by the following section entitled PROOF OF AGE AND
SURVIVAL.
PROOF OF AGE AND SURVIVAL. We may require satisfactory proof of correct
age at anytime. If any payment under this Contract depends on the
Annuitant being alive, we may require satisfactory proof of survival.
11. Except to the extent Treasury regulations allow us to offer additional
Annuity Payment Options that are acceptable to us, only Annuity Payment
Options 1 and 1v, 2 and 2v, 3 and 3v, 4 and 4v, 5 and 5v shall be
offered unless we consent to the use of an additional option. Under
Annuity Payment Options 2 and 2v, and 3 and 3v, the designated second
person must be either the Owner's spouse or an individual who is not
more than 10 years
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<PAGE>
younger than the Owner. Annuity Payment Options 3 and 3v are not
available to an Owner and the designated second person where the
life expectancy of the Owner and such person is less than 10 years.
Also, Annuity Payment Options 4 and 4v are not available to an Owner
where the Owner's life expectancy is less than 10 years, and Annuity
Payment Options 5 and 5v are not available to an Owner where the
Owner's life expectancy is less than 5 years.
Any additional Annuity Payment Option under the Contract must meet the
requirements of section 408(b) of the Code and applicable regulations.
The provisions of this Endorsement reflecting the requirements of Code
Sections 401(a)(9) and 408(b) override any additional Annuity Payment
Option inconsistent with such requirements.
If a guaranteed or specified period of payments is chosen under an
Annuity Payment Option, the length of the period must not exceed the
shorter of (1) the Owner's life expectancy, or if a designated second
person is named, the joint and last survivor expectancy of the Owner
and the designated second person, and (2) the applicable maximum period
under Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
12. If you return the Contract within 10 days after the Contract Date, the
Company will refund the amount of your Purchase Payments, without
adjustment for such items as sales commissions, administrative
expenses, and fluctuation in market value for the Valuation Period in
which the Contract is received. We reserve the right to allocate your
Purchase Payment(s) to the Cash Management Subaccount until the end of
the 10 day period. Thereafter, allocations will be made as shown on the
Contract Data Page.
13. The provisions of this Endorsement are intended to comply with the
requirements of the Code and applicable regulations for IRAs under
Section 408(b) of the Code. The Company reserves the right to amend the
Contract and this Endorsement from time to time, without the Owner's
consent, when such amendment is necessary to assure continued
qualification of the Contract as an IRA under Section 408(b) of the
Code (and any successor provision) as in effect from time to time. The
Owner has the right to refuse to accept any such amendment; however, we
shall not be held liable for any tax consequences incurred by the Owner
as a result of such refusal.
14. The table in the Annuity Payment Options section are deleted and
replaced by the following:
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<PAGE>
FIXED ANNUITY PAYMENT OPTIONS TABLE
BASIS OF COMPUTATION
The actuarial basis for the Table of Annuity Rates is the 1983a Annuity
Mortality Table with projection and a guaranteed interest rate of 3%. The
mortality table is projected using Projection Scale G factors, assuming
annuitization in the year 2000. The Fixed Annuity Payment Options Table does not
include any applicable premium tax.
OPTIONS 1 & 4 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
(Monthly installments for ages not shown will be furnished upon request.)
<TABLE>
<CAPTION>
OPTION 1 OPTION 4 OPTION 4
LIFE ANNUITY LIFE ANNUITY
AGE OF (W/120 PAYMENTS (W/240 PAYMENTS
ANNUITANT LIFE ANNUITY GUARANTEED) GUARANTEED)
<S> <C> <C> <C>
55 4.04 4.00 3.90
56 4.11 4.08 3.96
57 4.19 4.15 4.02
58 4.28 4.23 4.09
59 4.37 4.32 4.15
60 4.47 4.41 4.22
61 4.57 4.50 4.29
62 4.68 4.61 4.36
63 4.80 4.71 4.43
64 4.93 4.82 4.50
65 5.07 4.94 4.57
66 5.21 5.07 4.64
67 5.37 5.20 4.72
68 5.53 5.34 4.79
69 5.71 5.48 4.86
70 5.90 5.63 4.92
71 6.11 5.79 4.99
72 6.33 5.95 5.05
73 6.57 6.13 5.11
74 6.82 6.30 5.16
75 7.10 6.48 5.21
76 7.39 6.67 5.26
77 7.71 6.86 5.30
78 8.05 7.05 5.34
79 8.42 7.24 5.37
80 8.81 7.44 5.40
81 9.24 7.63 5.42
82 9.70 7.82 5.44
83 10.19 8.00 5.46
84 10.72 8.17 5.47
85 11.29 8.34 5.49
</TABLE>
6
<PAGE>
OPTION 2 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
(MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST.)
JOINT & 100% SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
AGE OF
ANNUITANT AGE OF ANNUITANT
55 60 65 70 75 80 85
<S> <C> <C> <C> <C> <C> <C> <C>
55 3.54 3.66 3.77 3.86 3.92 3.97 4.00
60 3.66 3.83 4.00 4.14 4.25 4.34 4.39
65 3.77 4.00 4.23 4.45 4.65 4.80 4.91
70 3.86 4.14 4.45 4.78 5.10 5.37 5.58
75 3.92 4.25 4.65 5.10 5.57 6.02 6.40
80 3.97 4.34 4.80 5.37 6.02 6.70 7.35
85 4.00 4.39 4.91 5.58 6.40 7.35 8.35
</TABLE>
OPTION 3 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
(MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST.)
JOINT & 100% SURVIVOR LIFE ANNUITY (W/120 PAYMENTS GUARANTEED)
<TABLE>
<CAPTION>
AGE OF
ANNUITANT AGE OF ANNUITANT
55 60 65 70 75 80 85
<S> <C> <C> <C> <C> <C> <C> <C>
55 3.54 3.66 3.77 3.86 3.92 3.96 3.99
60 3.66 3.83 3.99 4.13 4.24 4.32 4.37
65 3.77 3.99 4.22 4.44 4.63 4.78 4.86
70 3.86 4.13 4.44 4.76 5.07 5.31 5.47
75 3.92 4.24 4.63 5.07 5.50 5.89 6.19
80 3.96 4.32 4.78 5.31 5.89 6.46 6.92
85 3.99 4.37 4.86 5.47 6.19 6.92 7.55
</TABLE>
OPTION 5 - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
FIXED PAYMENT FOR SPECIFIED PERIOD
<TABLE>
<CAPTION>
NUMBER MONTHLY NUMBER MONTHLY NUMBER MONTHLY NUMBER MONTHLY
OF YEARS PAYMENT OF YEARS PAYMENT OF YEARS PAYMENT OF YEARS PAYMENT
<S> <C> <C> <C> <C> <C> <C> <C>
10 9.61 17 6.23 24 4.84
11 8.86 18 5.96 25 4.71
5 17.91 12 8.24 19 5.73 26 4.59
6 15.14 13 7.71 20 5.51 27 4.47
7 13.16 14 7.26 21 5.32 28 4.37
8 11.68 15 6.87 22 5.15 29 4.27
9 10.53 16 6.53 23 4.99 30 4.18
</TABLE>
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<PAGE>
VARIABLE ANNUITY PAYMENT OPTIONS TABLE
BASIS OF COMPUTATION
The actuarial basis for the Table of Annuity Rates is the 1983a Annuity
Mortality Table with projection and an effective annual Assumed Investment Rate
of 3.5%. The mortality table is projected using Projection Scale G factors,
assuming annuitization in the year 2000. The Variable Annuity Payment Options
Table does not include any applicable premium tax.
OPTIONS 1v & 4v - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
(Monthly installments for ages not shown will be furnished upon request.)
<TABLE>
<CAPTION>
OPTION 1v OPTION 4v OPTION 4v
LIFE ANNUITY LIFE ANNUITY
AGE OF (W/120 PAYMENTS (W/240 PAYMENTS
ANNUITANT LIFE ANNUITY GUARANTEED) GUARANTEED)
<S> <C> <C> <C>
55 4.33 4.30 4.19
56 4.41 4.37 4.25
57 4.49 4.44 4.31
58 4.57 4.52 4.37
59 4.66 4.61 4.43
60 4.76 4.70 4.50
61 4.86 4.79 4.56
62 4.98 4.89 4.63
63 5.09 5.00 4.70
64 5.22 5.11 4.77
65 5.36 5.22 4.84
66 5.50 5.35 4.91
67 5.66 5.48 4.98
68 5.83 5.61 5.05
69 6.00 5.76 5.12
70 6.20 5.91 5.18
71 6.40 6.06 5.25
72 6.62 6.23 5.31
73 6.86 6.39 5.36
74 7.12 6.57 5.42
75 7.39 6.75 5.46
76 7.69 6.93 5.51
77 8.01 7.12 5.55
78 8.35 7.31 5.58
79 8.72 7.50 5.62
80 9.11 7.69 5.64
81 9.54 7.88 5.67
82 10.00 8.07 5.69
83 10.50 8.24 5.70
84 11.03 8.42 5.72
85 11.60 8.58 5.73
</TABLE>
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<PAGE>
OPTION 2v - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
(MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST.)
JOINT & 100% SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
AGE OF
ANNUITANT AGE OF ANNUITANT
55 60 65 70 75 80 85
<S> <C> <C> <C> <C> <C> <C> <C>
55 3.83 3.95 4.06 4.14 4.21 4.26 4.29
60 3.95 4.11 4.28 4.42 4.53 4.62 4.68
65 4.06 4.28 4.50 4.73 4.92 5.08 5.19
70 4.14 4.42 4.73 5.05 5.37 5.64 5.85
75 4.21 4.53 4.92 5.37 5.84 6.29 6.67
80 4.26 4.62 5.08 5.64 6.29 6.97 7.62
85 4.29 4.68 5.19 5.85 6.67 7.62 8.61
</TABLE>
OPTION 3v - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
(MONTHLY INSTALLMENTS FOR AGES NOT SHOWN WILL BE FURNISHED UPON REQUEST.)
JOINT & 100% SURVIVOR LIFE ANNUITY (W/120 PAYMENTS GUARANTEED)
<TABLE>
<CAPTION>
AGE OF
ANNUITANT AGE OF ANNUITANT
55 60 65 70 75 80 85
<S> <C> <C> <C> <C> <C> <C> <C>
55 3.83 3.95 4.06 4.14 4.21 4.25 4.28
60 3.95 4.11 4.27 4.41 4.52 4.61 4.66
65 4.06 4.27 4.50 4.72 4.91 5.05 5.14
70 4.14 4.41 4.72 5.03 5.33 5.58 5.75
75 4.21 4.52 4.91 5.33 5.77 6.16 6.45
80 4.25 4.61 5.05 5.58 6.16 6.72 7.17
85 4.28 4.66 5.14 5.75 6.45 7.17 7.80
</TABLE>
OPTION 5v - TABLE OF MONTHLY INSTALLMENTS PER $1,000.
PAYMENT FOR SPECIFIED PERIOD
<TABLE>
<CAPTION>
NUMBER MONTHLY NUMBER MONTHLY NUMBER MONTHLY NUMBER MONTHLY
OF YEARS PAYMENT OF YEARS PAYMENT OF YEARS PAYMENT OF YEARS PAYMENT
<S> <C> <C> <C> <C> <C> <C> <C>
10 9.83 17 6.47 24 5.09
11 9.09 18 6.20 25 4.96
5 18.12 12 8.46 19 5.97 26 4.84
6 15.35 13 7.94 20 5.75 27 4.73
7 13.38 14 7.49 21 5.56 28 4.63
8 11.90 15 7.10 22 5.39 29 4.53
9 10.75 16 6.76 23 5.24 30 4.45
</TABLE>
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<PAGE>
All other terms and conditions of the Contract remain unchanged.
ANCHOR NATIONAL LIFE INSURANCE COMPANY
/s/ Susan L. Harris /s/ Eli Broad
------------------------- ----------------------
Susan L. Harris Eli Broad
Secretary President
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