Cova Financial Services Life Insurance Company
700 Market Street
St. Louis, Missouri 63101
ROTH INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
This Endorsement forms a part of the Contract to which it is attached. The
effective date of this Endorsement is the same as the issue date of the
Contract. The following provisions apply to a Contract which is issued as a Roth
IRA under the Internal Revenue Code of 1986, as amended, ("Code") Section 408A.
In the case of a conflict with any provisions in the Contract and any other
Endorsements or Riders, the provisions of this Endorsement will control. The
Contract is amended as follows:
1. The Owner is the Annuitant.
2. This Contract is not transferable.
3. This Contract, and the benefits under it, cannot be sold, assigned or
pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose to any person other than to the issuer
of the Contract.
4. The Owner's entire interest in this Contract is nonforfeitable.
5. This Contract is established for the exclusive benefit of the Owner and the
Owner's Beneficiary(ies).
6. Purchase Payments--
(a) Maximum permissible amount. Except in the case of a qualified rollover
contribution or a recharacterization (as defined in (e) below), no
Purchase Payment will be accepted unless it is in cash and the total of
such contributions to all the Owner's Roth IRAs for a taxable year does
not exceed $2,000, or the Owner's compensation, if less, for that
taxable year. The contribution described in the previous sentence that
may not exceed the lesser of $2,000 or the Owner's compensation is
referred to as a "regular contribution." A "qualified rollover
contribution" is a rollover contribution that meets the requirements of
section 408(d)(3) of the Code, except the one-rollover-per-year rule of
section 408(d)(3)(B) does not apply if the rollover contribution is
from an IRA other than a Roth IRA (a "nonRoth IRA"). Purchase Payments
may be limited under (b) through (d) below.
(b) Regular contribution limit. If (i) and/or (ii) below apply, the maximum
regular contribution that can be made to all the Owner's Roth IRAs for
a taxable year is the smaller amount determined under (i) or (ii).
(i) The maximum regular contribution is phased out ratably between
certain levels of modified adjusted gross income ("modified AGI,"
defined in (f) below) in accordance with the following table:
<TABLE>
<CAPTION>
Filing Status Full Contribution Phase-out Range No Contribution
Modified AGI
<S> <C> <C> <C>
Single or Head $95,000 or less Between $95,000 $110,000 or
of Household and $110,000 more
Joint Return $150,000 or less Between $150,000 $160,000 or
or Qualifying and $160,000 more
Widow(er)
Married-- $0 Between $0 $10,000 or
Separate Return and $10,000 more
</TABLE>
If the Owner's modified AGI for a taxable year is in the phase-out
range, the maximum regular contribution determined under this
table for that taxable year is rounded up to the next multiple of
$10 and is not reduced below $200.
(ii) If the Owner makes regular contributions to both Roth and nonRoth
IRAs for a taxable year, the maximum regular contribution that can
be made to all the Roth IRAs for that taxable year is reduced by
the regular contributions made to the nonRoth IRAs for the taxable
year.
(c) Qualified rollover contribution limit. A rollover from a nonRoth IRA
cannot be made to this IRA if, for the year the amount is distributed
from the nonRoth IRA, (i) the Owner is married and files a separate
return, (ii) the Owner is not married and has modified AGI in excess of
$100,000 or (iii) the Owner is married and together the Owner and the
Owner's spouse have modified AGI in excess of $100,000. For purposes of
the preceding sentence, a husband and wife are not treated as married
for a taxable year if they have lived apart at all times during that
taxable year and file separate returns for the taxable year.
(d) Simple IRA limits. No contributions will be accepted under a SIMPLE IRA
Plan established by any employer pursuant to Section 408(p). Also, 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
Owner first participated in that employer's SIMPLE IRA Plan.
(e) Recharacterization. A regular contribution to a nonRoth IRA may be
recharacterized pursuant to the rules in section 1.408A-5 of the
Proposed Income Tax Regulations as a regular contribution to this IRA,
subject to the limits in (b) above.
(f) Modified AGI. For purposes of (b) and (c) above, modified AGI for a
taxable year is defined in Section 408A(c)(3)(C)(i) and does not
include any amount included in adjusted gross income as a result of a
rollover from a nonRoth IRA (a "conversion").
7. No amount is required to be distributed prior to the death of the Owner for
whose benefit the Contract was originally established.
8. (a) Upon the death of the Owner, distribution of any remaining benefits
shall be completed by December 31 of the calendar year containing the fifth
anniversary of the Owner's death except to the extent that an election is
made to receive distributions in accordance with (i) or (ii) below:
(i) If the Owner's interest is payable to a designated Beneficiary, than
the entire interest of the individual may be distributed over the life
or over a period certain not greater than 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
individual died.
(ii)If the designated Beneficiary is the Owner's surviving spouse, the date
distributions are required to begin in accordance with (i) above shall
not be earlier than the later of (A) December 31 of the calendar year
in which the individual died or (B) December 31 of the calendar year in
which the individual would have attained age 70 1/2.
(b) If the designated Beneficiary is the individual's surviving spouse, the
spouse may elect to treat the Contract as his or her own Roth IRA. This
election will be deemed to have been made if such surviving spouse
makes a regular contribution to the Contract, makes a rollover to or
from such Contract, or fails to take distributions under (a) above.
(c) Payments required under (a)(i) or (a) (ii) above must be made at
intervals of no longer than 1 year and must be either nonincreasing or
increasing as provided in Q&A F-3 of Section 1.401 (a)(9)-1 of the
Proposed Income Tax Regulations.
(d) Life expectancy is computed by use of the expected return multiples in
Table V of Section 1.72-9 of the Income Tax Regulations. If the
designated Beneficiary is the individual's surviving spouse, then,
unless otherwise elected by the surviving spouse by the time
distributions are required to begin, the surviving spouse's life
expectancy 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
Beneficiary during the calendar year in which distribution are required
to begin pursuant to (i) or (ii) above, 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 expectancies shall not be
recalculated for payments made under an Annuity Option.
9. Separate records will be maintained for the interest of each Owner and the
Company will furnish annual calendar year reports concerning the status of
the Contract.
10. The Company may at its option either accept additional future payments or
terminate the Contract by a lump sum payment of the then present value of
the paid up benefit if no premiums have been received for two full
consecutive policy years and the paid up annuity benefit at maturity would
be less than $20 per month.
All other terms and conditions of the Contract remain unchanged.
Cova Financial Services Life Insurance Company has caused this Endorsement to be
signed by its President and Secretary.
Form 7024 (11/00)
