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FORTIS BENEFITS INSURANCE COMPANY
St. Paul, Minnesota
A Stock Company
KELMOORE STRATEGY VARIABLE ANNUITY
We will pay the Annuitant the first of a series of annuity payments on the
Annuity Commencement Date. Subsequent payments will be paid on the same day of
each month according to the provisions of this contract. THE AMOUNT OF THE DEATH
BENEFIT WILL BE VARIABLE, AND WILL INCREASE OR DECREASE DEPENDING ON INVESTMENT
RESULTS OF THE SUBACCOUNTS OF THE SEPARATE ACCOUNT IF THE ENHANCED DEATH BENEFIT
RIDER IS NOT ATTACHED TO THIS CONTRACT. HOWEVER, IF THAT RIDER IS ATTACHED THE
AMOUNT OF THE DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER SPECIFIED CONDITIONS
AND MAY INCREASE OR DECREASE DEPENDING ON INVESTMENT RESULTS OF THE SUBACCOUNTS
OF THE SEPARATE ACCOUNT.
THE CONTRACT VALUE UNDER THIS POLICY INCREASES OR DECREASES DEPENDING ON
INVESTMENT RESULTS OF THE SUBACCOUNTS OF THE SEPARATE ACCOUNT. THERE IS NO
GUARANTEED MINIMUM CONTRACT VALUE.
This contract is issued in consideration of the payment of the Purchase Payment
shown on the contract data page.
Signed at the Home Office, St. Paul, Minnesota, on the contract date.
RIGHT TO RETURN CONTRACT
You may cancel this contract by delivering or mailing a Written notice or
sending a telegram to the company and returning the contract before midnight of
the tenth day after the date You receive it. Notice given by mail and return of
the contract by mail are effective on being postmarked, properly addressed, and
postage prepaid. The company must return the sum of (a) the difference between
the premiums paid including any contract fees or other charges and the amounts
allocated to any Separate Accounts under the contract and (b) the cash value of
the contract, or if the contract does not have a cash value, the reserve for the
contract, on the date the returned contract is received by the company or its
agent. The company must return the payment within 10 days after it receives
notice of cancellation and the returned contract.
DEAN C. KOPPERUD PEGGY ETTESTAD
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY-NON-PARTICIPATING. NO DIVIDENDS.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT ARE VARIABLE, MAY INCREASE
OR DECREASE, AND ARE NOT GUARANTEED AS TO AMOUNT. THE VARIABLE PROVISIONS OF
THIS CONTRACT ARE FOUND ON PAGE SIX .
KSVA
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READ YOUR CONTRACT CAREFULLY
This contract is a legal contract between the contract owner and Fortis Benefits
Insurance Company.
TABLE OF CONTENTS
Page #
DEFINITIONS...................................................................2
ANNUITANT..................................................................2
GENERAL PROVISIONS............................................................4
ASSIGNMENT AND OWNERSHIP RIGHTS............................................4
BENEFICIARY................................................................5
PURCHASE PAYMENTS..........................................................5
TERMINATION................................................................5
SEPARATE ACCOUNT..............................................................6
TRANSFERS.....................................................................7
SURRENDERS....................................................................7
DEATH BENEFIT.................................................................9
FIXED ANNUITY PAYMENTS.......................................................11
VARIABLE ANNUITY PAYMENTS....................................................11
Any contract amendments or endorsements follow the contract data page.
Additional benefits added by rider follow the Optional Annuity Forms Tables.
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CONTRACT DATA PAGE
ANNUITANT: JOHN DOE
OWNER: JOHN DOE
CONTRACT NUMBER: A12300
BENEFICIARY AT ISSUE: JANE DOE
CONTRACT AND ISSUE DATE: MAY 1, 1998
ANNUITY COMMENCEMENT DATE: MARCH 1, 2040
THE SURRENDER CHARGE IS 8% of each Purchase Payment for the first year and
decreases to 7%, 6%, 5%, 4%, 3%, 2% in years two through seven, respectively.
Details can be found on pages through .
THE MINIMUM CONTRACT VALUE IS $1000.
THE MAXIMUM ASSET CHARGE FACTOR for the base contract is 1.15% annually, or
0.0031507% daily.
THE MAXIMUM ENHANCED DEATH BENEFIT RIDER ASSET CHARGE FACTOR IS 0.45% or
0.0012329% daily. The combined base contract and optional rider asset charge
factor total is 1.60% annually or 0.0043836% daily.
CURRENT MAXIMUM
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TRANSFER CHARGE $0.00 $25.00
INITIAL PURCHASE PAYMENT: $5,000
FUTURE ALLOCATION OF NET PURCHASE PAYMENTS
Shown below is the Net Purchase Payment allocation You selected at the contract
Issue Date:
[SUBACCOUNT(S)] [PERCENTAGE(S)]
------------- -------------
[KELMOORE STRATEGY(TM)VARIABLE FUND]
[KELMOORE STRATEGY(TM)VARIABLE EAGLE FUND]
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DEFINITIONS
WE, US, OUR
Fortis Benefits Insurance Company.
YOU, YOUR
The owner of this contract, or after the annuity commencement date, the
Annuitant.
ACCUMULATION UNIT
A unit of measurement used to calculate the value of Your interest in the
Separate Account before the annuity commencement date.
ANNUITANT
The person or persons named in the Application and on whose life the first
annuity payment is to be made.
ANNIVERSARY, ANNIVERSARIES
After the contract date, the same day and month in each subsequent year.
ANNUITY UNIT
A unit of measurement to calculate Variable Annuity payments.
APPLICATION
The document You signed, if any, to apply for this contract.
BENEFICIARY
The person entitled to receive benefits as per the terms of the contract in case
of the death of the Annuitant or the contract owner, as applicable.
CONTRACT VALUE
The total of the Separate Account value.
CONTRACT YEAR
A period of 12 consecutive months beginning on the Issue Date or any Anniversary
thereafter.
DESIGNATED BENEFICIARY
The person designated as the Beneficiary by the contract owner.
FIXED ANNUITY
An annuity under which We promise to pay the Annuitant or other properly
designated payee one or more fixed payments.
FUND
The "Fund" or "Funds" are those investment portfolios available under the
contract to which the owner may allocate Net Purchase Payments, each of which
is, or is a series of, a management investment company registered under the
Investment Company Act of 1940.
HOME OFFICE
Our office at 500 Bielenberg Drive, Woodbury, Minnesota 55125; 1-800-800-2000,
extension 3057; Mailing address: P.O. Box 64272, St. Paul, Minnesota 55164.
ISSUE DATE
The date on which this contract becomes effective as shown on the contract data
page. NET PURCHASE PAYMENT The gross amount of the Purchase Payment less any
applicable premium taxes.
PURCHASE PAYMENT
An amount paid to the company under this contract as consideration for the
benefits described herein.
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SEPARATE ACCOUNT
A segregated investment account entitled Variable Account D, established by Us
pursuant to applicable law.
SUBACCOUNT
The subaccounts of the Separate Account to which Contract Value may be allocated
and earn a return. Each subaccount invests all of its assets in a different Fund
having the same investment policies and objectives as that subaccount.
VALUATION DATE
All business days except, with respect to any Subaccount, days on which the
related Fund does not value its shares.
VALUATION PERIOD
The period beginning with the close of business on a Valuation Date and ending
at the close of business for the next Valuation Date.
VARIABLE ANNUITY
An annuity under which We promise to pay the Annuitant or other properly
designated payee one or more payments which vary in amount in accordance with
the net investment experience of the applicable Subaccounts You select to
measure the value of the payment.
WRITTEN, IN WRITING
A written request or notice, signed and dated, and received at Our Home Office.
The form and content of the request or notice must be acceptable to Us.
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GENERAL PROVISIONS
THE CONTRACT
This contract along with any attached riders or application constitute the
entire contract. Any change or waiver of this contract or its provisions must be
made In Writing and signed by Our President, Secretary, and Registrar.
CONTROL
You may, during the lifetime of the Annuitant and without the consent of any
Beneficiary, assign or surrender this contract, amend or modify it with Our
Written consent, and exercise, receive and enjoy every other right, benefit and
privilege contained in this contract except as otherwise provided herein.
INCONTESTABILITY
This contract will be incontestable from the contract date.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Annuitant has been misstated, any amount payable will
be that which the Purchase Payments paid would have purchased at the correct age
and sex. If We have made any overpayments because of incorrect information about
age or sex, or any error or miscalculation, We will deduct the overpayment from
the next payment(s) due. We add underpayments to the next payment. The amount of
any adjustment will be paid or charged with interest at the rate of 3% per year.
ASSIGNMENT AND OWNERSHIP RIGHTS
The owner may assign his or her interest to another person. We take no
responsibility for the validity of any assignment.
An ownership change must be made In Writing and a copy must be sent to Our Home
Office. The change will be effective on the date it was made as soon as We
record it, although We are not bound by a change until the date it is recorded.
Owner and Beneficiary rights are subject to any assignment of record at Our Home
Office.
If this contract is part of a qualified plan under the Internal Revenue Code,
the ownership cannot be changed in any way unless the change is consistent with
the definition of annuity in 401(g) of the Internal Revenue Code, as amended. In
this case, the contract cannot be discounted, assigned, or pledged as collateral
or security for a loan, or for any other reason to a person other than Us,
except by the trustee of an employee trust qualified under the Internal Revenue
Code, the custodian of a custodial account treated as such, or the employer
under a qualified non-trusteed pension plan.
SETTLEMENT
All benefits under this contract are payable from Our Home Office.
NON-PARTICIPATING
This contract is non-participating and does not share in Our surplus earnings.
OWNERSHIP OF THE ASSETS
We will have exclusive and absolute ownership and control of Our assets,
including all assets allocated to the Separate Account. That portion of the
assets of the Separate Account equal to the reserves and other contract
liabilities with respect to the Separate Account shall not be chargeable with
liabilities arising out of any other business We may conduct.
ANNUITANT
If the person designated as the Annuitant in the application dies before the
Annuity Commencement Date and there is an additional annuitant named in the
Application who survives, the additional annuitant shall become the Annuitant.
If there is no named additional annuitant, or the additional annuitant has
predeceased the annuitant named in the Application, the owner, if he or she is a
natural person, shall become the Annuitant. The contract owner is not permitted
to name more than one annuitant under a contract used in connection with a
retirement plan that receives favorable tax treatment under the Internal Revenue
Code.
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BENEFICIARY
Before the annuity commencement date and while the Annuitant is living, You may
name or change a Beneficiary, a successor beneficiary, or the successor owner by
giving Us Written notice of the change. We are not responsible for the validity
of any change. A change will take effect as of the date it is signed but will
not affect any payments We make or action We take before receiving Your notice.
We need the consent of any irrevocably named person before making a requested
change. In the event of the death of a contract owner prior to the annuity
commencement date, the Beneficiary will be as follows. The Beneficiary shall be
the surviving owner, if any, notwithstanding that the beneficiary designated by
the contract owner(s) may be different. Otherwise, the Beneficiary will be the
beneficiary designated by the contract owner. If there is no such Designated
Beneficiary in effect or if such Designated Beneficiary is no longer living, the
estate of the last surviving contract owner will be the Beneficiary.
REPORTS
At least once a year We will send You a report containing information required
by the Investment Company Act of 1940 and applicable state laws.
VALUES AND BENEFITS
The values and benefits payable under this contract are at least equal to the
minimum values and benefits required by the statutes of the state in which this
contract is delivered.
RIGHTS RESERVED BY US
When required by law, We will obtain Your approval of changes and We will gain
approval from any appropriate regulatory authority. Such approval may not be
required in all cases, however. Examples of the changes We may make include:
(1) To make the contract meet the requirements of the Investment Company Act of
1940.
(2) To operate the Separate Account in any form permitted by law.
(3) To transfer any assets in any Subaccount to another Subaccount, or to one or
more Separate Accounts.
(4) To add, combine or remove Subaccounts in the Separate Account.
(5) To substitute for the Fund shares held in any Subaccount, the shares of
another Fund or the shares of another investment company or any other
investment permitted by law.
(6) To make any changes as required by the Internal Revenue Code or by any
other applicable law in order to continue treatment of the contract as an
annuity.
PURCHASE PAYMENTS
The Purchase Payment shown on the contract data page is due on or before the
contract date. We will accept additional Purchase Payments of at least $100 ($50
if made on a systematic plan) at any time after the contract date. We reserve
the right to refuse a Purchase Payment for any reason.
ALLOCATION OF PURCHASE PAYMENTS
The initial allocation of Purchase Payments is shown on the contract data page.
The percentage allocation for future Purchase Payments among the accounts may be
changed at any time by Written notice. Changes in allocations of prior Purchase
Payments are subject to the Transfer provision. Changes in the allocation will
be effective on the date We receive Your notice. The allocation may be 100% to
any account or may be divided among the accounts in whole percentage points
totaling 100%.
TERMINATION
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This contract remains in force until surrendered for its full value, or all
annuity payments have been made, or the death benefit has been paid.
If the Contract Value is less than the Minimum Contract Value shown on the Data
Page, We may cancel this contract on any Valuation Date. We will notify You at
least 90 days in advance of Our intention to cancel this contract. This
cancellation is considered a total surrender of this contract, subject to the
surrender charges.
SEPARATE ACCOUNT
SUBACCOUNTS
The Separate Account has several Subaccounts, each investing in one of the
corresponding Funds. Net Purchase Payments are initially allocated to the
Subaccounts as shown on the contract data page.
We will use the Net Purchase Payments to purchase Fund shares applicable to the
Subaccounts at their net asset value. We will be the owner of all Fund shares
purchased with the Net Purchase Payment.
SUBACCOUNT ACCUMULATION UNITS
Purchase Payments received under this contract and allocated to the Separate
Account will be credited in the form of Subaccount Accumulation Units. The
number of Subaccount Accumulation Units is found by dividing the amount of the
Net Purchase Payment allocated to the Subaccount by the Subaccount Accumulation
Unit value at the end of the Valuation Period in which the Purchase Payment was
received at the Home Office. The value of each Subaccount Accumulation Unit was
arbitrarily set as of the date the Subaccount first purchased the Fund shares.
Subsequent values on any Valuation Date are equal to the previous Subaccount
Accumulation Unit value times the net investment factor for the Valuation Period
ending on that Valuation Date.
SEPARATE ACCOUNT VALUE
Your Separate Account value is the total of the values of Your interest in each
Subaccount, which for that Subaccount is equal to (1) multiplied by (2) as set
forth below:
(1) the number of Subaccount Accumulation Units.
(2) Multiplied by the Subaccount Accumulation Unit value.
Your Separate Account value will vary from Valuation Date to Valuation Date
reflecting the total value of Your interest in the Subaccounts.
NET INVESTMENT FACTOR
The net investment factor is an index number which reflects charges to this
contract and the investment performance during a Valuation Period. If the net
investment factor is greater than one, the Subaccount Accumulation Unit value
has increased. If it is less than one, then the Subaccount Accumulation Unit
value has decreased. The net investment factor for a Subaccount is determined by
dividing (1) by (2), and then subtracting (3) from the result, where:
(1) is the net result of:
(a) the net asset value per share of the Fund shares held in the
Subaccount, determined at the end of the current Valuation Period.
(b) Plus the per share amount of any dividend or capital gain distributions
made on the Fund shares held in the Subaccount during the current
Valuation Period.
(c) Minus a per share charge for the increase Plus a per share credit for
the decrease, in any income taxes reserved for which We determine to
have resulted from the investment operations of the Subaccount or any
other taxes which are applicable to this contract.
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(2) is the net asset value per share of the Fund shares held in the Subaccount,
determined at the beginning of the current Valuation Period.
(3) is a factor representing the mortality risk, expense risk, administrative
expense charge, and rider charges, if any. We will determine the asset
charge factor annually, but in no event may it exceed the Maximum Asset
Charge Factor(s) as specified on the Contract Data Page.
PREMIUM TAXES
Premium taxes, if any, levied by any unit of government will be deducted from
the Contract Value.
CONTRACT VALUE
Your Contract Value is the total value of Your interest in each subaccount of
the Separate Account.
TRANSFERS
We will make transfers from one Subaccount to another Subaccount at the end of
the Valuation Period in which We receive Your request for the transfer . We
reserve the right to restrict the frequency of, or otherwise modify, condition,
terminate, or impose charges upon transfers. The current and maximum transfer
charges are shown on the Contract Data Page.
SURRENDERS
FULL SURRENDER
At any time prior to the annuity commencement date You may make a full surrender
of this contract by sending Us a Written request. The amount payable on
surrender is:
(1) the Contract Value at the end of the Valuation Period in which We receive
Your request;
(2) Minus any applicable surrender charge.
The amount payable upon surrender will not be less than the amount required by
state law.
Upon payment of the above surrender amount, this contract is terminated and We
have no further obligation under this contract.
All collateral assignees must consent to any surrender. We may require that this
contract be returned to Our Home Office prior to making payment.
PARTIAL SURRENDER
At any time prior to the annuity commencement date You may surrender a portion
of the Contract Value by sending Us a Written request.
You must surrender an amount equal to at least $500 including any surrender
charge. The remaining Contract Value, if any, must be greater than the minimum
stated on the Contract Data Page.
We will surrender Subaccount Accumulation Units from the Separate Account so
that the total amount surrendered equals the sum of the following:
(1) the dollar amount of Your partial surrender request.
(2) Plus any surrender charges.
You must specify the Subaccount(s) from which surrender is to be made.
Surrenders will be made effective at the end of the Valuation Period in which We
receive Your request. If You do not specify, the partial surrender will be taken
from the Subaccounts on a pro rata basis.
GENERAL SURRENDER PROVISIONS
The amount surrendered will normally be paid to You within seven days of:
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(1) Our receipt of Your Written request; and
(2) Our receipt of this contract, if required.
We reserve the right to defer payment of surrenders from the Separate Account
during any period which the New York Stock Exchange is closed for trading
(except for normal holiday closings) or when the Securities and Exchange
Commission has determined that a state of emergency exist which may make such
payment impractical.
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SURRENDER CHARGES
AMOUNT OF SURRENDER CHARGE
A surrender charge is imposed on the surrender of any Purchase Payment less than
[seven] years old which is not eligible for a free surrender. The amount of the
surrender charge is determined separately for each Purchase Payment and is
expressed as a percentage of the Purchase Payment as follows:
Number of Years Since Surrender Charge as a
Purchase Payment was Credited Percentage of Purchase Payment
----------------------------- ------------------------------
[Less than 1 8%
At least 1 but less than 2 7%
At least 2 but less than 3 6%
At least 3 but less than 4 5%
At least 4 but less than 5 4%
At least 5 but less than 6 3%
At least 6 but less than 7 2%
7 or more 0%]
ORDER OF SURRENDER
For purposes of calculations for full or partial surrenders, amounts are
determined as of the Valuation Date we receive Your surrender request.
Surrenders will be deemed to be taken from the Contract Value in the following
order:
(1) Old Purchase Payments - Purchase Payments that are more than seven years
old and not previously surrendered.
(2) New Purchase Payments - Purchase Payments that are less than seven years
old and not previously surrendered.
(3) Earnings - the current contract value minus the original value of all
Purchase Payments not previously surrendered.
FREE SURRENDER
Surrenders taken from the following amounts are not subject to a surrender
charge:
(1) Old Purchase Payments.
(2) In each Contract Year, 10% of all Purchase Payments that are less than
seven years old.
(3) Earnings.
SURRENDER CHARGES AT DEATH OR ANNUITIZATION
No surrender charge is imposed upon amounts applied to purchase an annuity or
upon payment of a death benefit.
DEATH BENEFIT
DEATH BENEFIT BEFORE THE ANNUITY COMMENCEMENT DATE
A death benefit will be paid to the Beneficiary if, prior to the annuity
commencement date:
(1) the contract owner dies, or
(2) the last remaining Annuitant dies, leaving no surviving contract owner who
is a natural person.
DEATH BENEFIT AMOUNT
The death benefit will be the Contract Value as of the date used for valuing the
death benefit.
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LIMITATION OF DEATH BENEFIT AMOUNT
Irrespective of the above, in no event will the amount payable as a death
benefit under this contract result in the excess of:
(1) the total amount of the death benefit paid on all Fortis Benefits Insurance
Company annuity policies upon the death of the Owner, over
(2) the total Contract Value as of the date of valuation of the death benefit
on all such Fortis Benefits Insurance Company annuity policies
exceeding $500,000.00. The excess reduction will be applied entirely under this
contract if there are no other Fortis annuity contracts, or if such other
contracts do not contain a similar limitation. If such other contracts contain a
similar limitation, this limitation will be applied on a proportionate basis to
all such contracts with this limitation.
PAYMENT OF DEATH BENEFIT
The death benefit will be paid when We receive:
(1) proof of the decedent's death; and
(2) a Written request from the Beneficiary for either a single sum or payment
under an annuity form.
We will pay a single sum to the Beneficiary unless an annuity option is chosen.
DEATH BENEFIT ON OR AFTER THE ANNUITY COMMENCEMENT DATE
If the Annuitant dies on or after the annuity commencement date, the Beneficiary
will receive the death benefit, if any, as provided by the annuity form in
effect.
DISTRIBUTION OF PROCEEDS AT DEATH OF OWNER
If the owner under a non-qualified contract dies prior to the Annuitant and
before the annuity commencement date, the death benefit must be distributed to
the Beneficiary, if then alive, either (1) within five years after the date of
Your death, or (2) over some period not greater than the life or expected life
of the Beneficiary, with annuity payments beginning within one year after the
date of Your death. The person named as Your beneficiary in the Application
shall be considered the Designated Beneficiary for the purposes of Section 72(s)
of the Internal Revenue Code and if no person then living has been so named,
then the Annuitant will automatically be the Designated Beneficiary for this
purpose. In all cases, any such Designated Beneficiary will not be entitled to
exercise any rights prohibited by applicable federal income tax law.
These mandatory distribution requirements will not apply when the Beneficiary is
the spouse of the deceased owner, if the spouse elects to continue this contract
in the spouse's own name, as owner. When the deceased owner was also the
Annuitant, the surviving spouse (if the Beneficiary) may elect to be named as
both owner and Annuitant and continue this contract.
If the payee dies after the annuity commencement date and before all of the
payments under the annuity form have been distributed, the remaining amount
payable, if any, must be distributed at least as rapidly as the method of
distribution then in effect.
PROOF OF DEATH
We accept any of the following as proof of death:
(1) A copy of a certified death certificate.
(2) A copy of a certified decree of a court of competent jurisdiction as to the
finding of death.
(3) A Written statement by a medical doctor who attended the deceased at the
time of death.
(4) Any other proof satisfactory to Us.
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PAYMENT OF BENEFITS
GENERAL
On the annuity commencement date, the Contract Value will be applied, as
specified by the contact owner, to provide payments to the Annuitant under one
or more of the annuity options provided in the contract or under such other
settlement options as may be agreed to by Us. If more than one person is named
as Annuitant, due to the designation of multiple Annuitants, the contract owner
may elect to name one of such persons to be the sole Annuitant as of the annuity
commencement date.
APPLICATION OF CONTRACT VALUE
We apply Your Contract Value to provide a Fixed Annuity, Variable Annuity or
some combination according to Your written instructions. If You do not tell Us
In Writing how to apply Your Contract Value, We will provide a Fixed Annuity. If
the Contract Value on the annuity commencement date is less than $5,000, We may
pay the Contract Value in a single sum and cancel this contract.
ANNUITY COMMENCEMENT DATE
The annuity commencement date is selected by You and stated in the Application.
You may change the annuity commencement date at any time if We receive Written
notice at least 30 days before both the current annuity commencement date and
the new annuity commencement date.
If the annuity commencement date does not occur on a Valuation Date that is at
least two years after the Issue Date, We reserve the right to change the annuity
commencement date to the first Valuation Date that is at least two years after
the Issue Date.
FREQUENCY AND AMOUNT OF PAYMENTS
Annuity payments will be made monthly unless We agree to a different payment
schedule. We reserve the right to change the frequency of either a Fixed Annuity
payment or a Variable Annuity payment so that each payment will be at least $50.
FIXED ANNUITY PAYMENTS
Fixed annuity payments start at the end of the Valuation Period that contains
the annuity commencement date. The amount of a first monthly payment for the
annuity form selected will be at least as favorable as the annuity tables of
this contract for each $1,000 of Contract Value applied as of the end of such
Valuation Period.
We may, as of the annuity commencement date, offer for sale, single premium
immediate annuity contracts. If so, the annuity benefits available under this
contract will be at least as favorable as the benefit available by using the
Contract Value to purchase one of Our single premium immediate annuities.
The dollar amount of any payments after the first payment are specified during
the entire period of annuity payments, according to the provisions of the
annuity form selected.
VARIABLE ANNUITY PAYMENTS
ANNUITY UNITS
We convert the Subaccount Accumulation Units into Subaccount Annuity Units at
the values determined at the end of the Valuation Period which contains the
annuity commencement date. The number of Subaccount Annuity Units remains
constant, as long as an annuity remains in force and allocation among the
Subaccounts has not changed.
Each Subaccount Annuity Unit value was arbitrarily set at $10 when the
Subaccount first converted Subaccount Accumulation Units into Annuity Units.
Subsequent values on any Valuation Date are equal to the previous Subaccount
Annuity Unit value times the net investment factor for that Subaccount for the
Valuation Period ending on that Valuation Date, with an offset for the 3%
assumed interest rate used in the annuity tables of this contract.
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Variable annuity payments start on the end of the Valuation Period that contains
the annuity commencement date. The amount of a first monthly payment for the
illustrated annuity forms, is shown in the annuity tables of this contract for
each $1,000 of Contract Value applied as of the end of such Valuation Period.
Payments after the first payment will vary in amount and are determined on the
first Valuation Date of each subsequent payment period. If the payment under the
annuity form selected is based on the variable Annuity Unit value of a single
Subaccount, the payment is found by multiplying the Subaccount Annuity Unit
value on the payment date by the number of Subaccount Annuity Units.
If the payment under the annuity form selected is based upon variable Annuity
Unit values of more than one Subaccount, the above procedure is repeated for
each applicable Subaccount. The sum of these payments is the Variable Annuity
payment.
We guarantee that the amount of each payment after the first payment will not be
affected by variations in expense or mortality experience.
OPTIONAL ANNUITY FORMS
You may select an annuity form or change a previous selection. The selection or
change must be In Writing and received by Us at least 30 days before the annuity
commencement date. If no annuity form selection is in effect on the annuity
commencement date, We automatically apply Option B, with payments guaranteed for
10 years.
The following options are available for the Fixed Annuity payments and the
Variable Annuity payments:
OPTION A. Life Annuity - Payments are made as of the first Valuation Date of
each monthly period during the Annuitant's life, starting with the annuity
commencement date. No payments will be made after the Annuitant dies.
OPTION B.Life Annuity with Payments Guaranteed for 10 Years or 20 Years -
Payments are made as of the first Valuation Date of each monthly period starting
on the annuity commencement date. Payments will continue as long as the
Annuitant lives. If the Annuitant dies before all of the guaranteed payments
have been made, We will continue installments of the guaranteed payments to the
Beneficiary.
OPTION C. Joint and Full Survivor Annuity - Payments are made as of the first
Valuation Date of each monthly period starting with the annuity commencement
date. Payments will continue as long as either the Annuitant or the joint
Annuitant is alive. Payments will stop when both the Annuitant and the joint
Annuitant have died.
We also have other annuity forms available and information about them can be
obtained by Writing to Us.
The annuity tables show the amount of the first annuity payment, for each $1,000
of Contract Value applied under Options A, B, and C.
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OPTION TABLES
Installments shown are for an initial monthly payment for each $1,000 of
Contract Value applied under an option. Age, as used in these tables, is age as
of nearest birthday on the annuity commencement date. Rates for monthly payments
for ages and periods certain not shown, if allowed by Us, will be computed on an
actuarially equivalent basis.
ACTUARIAL BASIS
Installments shown in these tables are based on the 1983 Table a (20/80
Male/Female) and with compound interest at the effective rate of 3% per year.
OPTIONS A AND B
---------- ------------ --------------------- ---------------------
10 Year 20 Year
Age Life Only Period Period
Certain and Life Certain and Life
---------- ------------ --------------------- ---------------------
50 3.97 3.95 3.87
51 4.04 4.01 3.93
52 4.10 4.08 3.98
53 4.18 4.14 4.04
54 4.25 4.22 4.10
55 4.33 4.29 4.16
56 4.42 4.37 4.22
57 4.51 4.46 4.28
58 4.61 4.55 4.35
59 4.71 4.64 4.42
60 4.82 4.74 4.49
61 4.93 4.85 4.56
62 5.06 4.96 4.63
63 5.19 5.07 4.70
64 5.33 5.20 4.77
65 5.48 5.32 4.83
66 5.64 5.46 4.90
67 5.81 5.60 4.97
68 6.00 5.75 5.03
69 6.19 5.91 5.09
70 6.41 6.07 5.15
71 6.64 6.24 5.20
72 6.88 6.42 5.25
73 7.15 6.60 5.29
74 7.44 6.79 5.33
75 7.76 6.99 5.37
---------- ------------ --------------------- ---------------------
OPTION C
--------------------------------------------
JOINT ANNUITANT AGE
---------- --------- ----------- ----------- ------------ ----------- ---------
50 55 60 65 70
50 3.55 3.66 3.75 3.82 3.87
ANNUITANT 55 3.66 3.81 3.95 4.07 4.16
AGE 60 3.75 3.95 4.15 4.34 4.49
65 3.82 4.07 4.34 4.61 4.87
70 3.87 4.16 4.49 4.87 5.25
---------- --------- ----------- ----------- ------------ ----------- ---------
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FORTIS BENEFITS INSURANCE COMPANY
P.O. BOX 64272
ST. PAUL, MN 55164
ENHANCED DEATH BENEFIT RIDER
This rider is part of the contract or certificate to which it is attached.
(Hereafter, the term "contract" means the contract or certificate to which this
rider is attached). The measures of the amount of the death benefit payable
under the terms of the contract to which the rider is attached are replaced by
the following measures such that the amount of the death benefit payable under
the contract shall be as set forth below. Any provisions in the contract
providing for a limitation of the amount of the death benefit in excess of the
contract value continue to apply.
The amount of the death benefit will equal the greatest of the measures set
forth in the contract and (1) and (2) below:
(1) The sum of all Net Purchase Payments made, reduced by Pro Rata Adjustments
for each withdrawal. The Pro Rata Adjustment for a given withdrawal is
equal to:
(a) the withdrawn amount, divided by
(b) the Contract Value immediately before the amount was withdrawn, the
result multiplied by
(c) the aggregate amount of all prior Net Purchase Payments less Pro Rata
Adjustments for all prior withdrawals.
(2) The highest anniversary value of each of the contract's One-Year
Anniversaries prior to the earlier of: (a) the date of the decedent's
death, or (b) contract owner's attainment of age 80.
An anniversary value is determined for each applicable anniversary, and is
equal to:
(a) the Contract Value on the anniversary, plus
(b) any Net Purchase Payments made since the anniversary, reduced by
(c) Pro Rata Adjustments for any withdrawals made since the anniversary.
The Pro Rata Adjustment for a given withdrawal is equal to:
(a) the withdrawn amount, divided by
(b) the Contract Value immediately before the amount was withdrawn, the
result multiplied by
(c) the quantity equal to:
(i) the Contract Value on the anniversary, plus
(ii) Net Purchase Payments made since the anniversary and before the
given withdrawal, minus
(iii) Pro Rata Adjustments for withdrawals made since the anniversary
and before the given withdrawal.
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<PAGE> 17
Subsection (2) makes reference to the age of the contract owner. If the owner is
not a natural person, the relevant age will instead be that of the Annuitant.
Subsection(s) 1) and (2) make reference to "Pro Rata Adjustments". A Pro Rata
Adjustment is calculated separately for each withdrawal, creating a decrease in
the death benefit proportional to the decrease the withdrawal makes in the
Contract Value. Pro Rata Adjustments are made for amounts withdrawn for partial
surrenders (which shall be deemed to be an amount surrendered) but not for any
contract fee-related surrenders.
CHARGES
An asset charge will be assessed against the Separate Account for this rider. We
will determine the rider asset charge factor annually, but in no event may it
exceed the Maximum Enhanced Death Benefit Rider Asset Charge Factor as specified
on the contract data page.
TERMINATION OF RIDER
This rider terminates on the earlier of the following:
1. The date the contract to which it is attached terminates,
2. The date the Death Benefit is paid in full, or
3. On the written request of the contract owner to surrender the contract to
which it is attached.
Signed for the Company to take effect on the rider effective date.
DEAN C. KOPPERUD PEGGY ETTESTAD
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT
15
