NORTHBROOK LIFE
INSURANCE COMPANY
A STOCK COMPANY
HOME OFFICE: ALLSTATE PLAZA, NORTHBROOK, ILLINOIS 60062-7154
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CERTIFICATE
This Certificate is issued pursuant to the terms of Master Policy Number
64890019 issued by Northbrook Life Insurance Company to Dean Witter Reynolds
Inc., called the Master Policyholder. This Certificate is governed by Delaware
law.
Throughout this Certificate, "you" and "your" refer to the Certificate Owner(s).
"We", "us" and "our" refer to Northbrook Life Insurance Company.
Certificate Summary
This flexible premium deferred variable annuity provides a cash withdrawal
benefit and a death benefit during the Accumulation Phase and periodic income
payments beginning on the Payout Start Date during the Payout Phase.
The dollar amount of income payments or other values provided by this
Certificate, when based on the investment experience of the Variable Account,
will vary to reflect the performance of the Variable Account. This Certificate
does not pay dividends.
The tax status of this Certificate as it applies to the Owner should be reviewed
each year.
PLEASE READ YOUR CERTIFICATE CAREFULLY.
This is a legal contract between the Certificate Owner and Northbrook Life
Insurance Company.
Return Privilege
If you are not satisfied with this Certificate for any reason, you may return it
to us or our agent within 20 days after you receive it. We will refund any
purchase payments allocated to the Variable Account, adjusted to reflect
investment gain or loss from the date of allocation to the date of cancellation,
plus any purchase payments allocated to the Fixed Account. (Where required by
state law, we will refund any purchase payments.) If this Certificate is
qualified under Section 408 of the Internal Revenue Code, we will refund the
greater of any purchase payments or the Certificate Value.
If you have any questions about your Northbrook Life variable annuity, please
contact Northbrook Life at (800) 654-2397.
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Secretary Chairman and Chief Executive Officer
<PAGE>
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TABLE OF CONTENTS
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THE PERSONS INVOLVED.........................................................3
ACCUMULATION PHASE...........................................................4
PAYOUT PHASE................................................................10
INCOME PAYMENT TABLES.......................................................12
GENERAL PROVISIONS..........................................................13
<PAGE>
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ANNUITY DATA
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CERTIFICATE NUMBER:...................................................444444444
ISSUE DATE:....................................................January 15, 1998
INITIAL PURCHASE PAYMENT:............................................$20,000.00
IRA
INITIAL ALLOCATION OF PURCHASE PAYMENT:
ALLOCATED
AMOUNT (%)
VARIABLE SUB-ACCOUNTS
Sub-account A 20%
Sub-account B 20%
Sub-account C 20%
Sub-account D 10%
<TABLE>
<CAPTION>
RATE
ALLOCATED GUARANTEED GUARANTEED
AMOUNT (%) INTEREST RATE THROUGH
---------- ------------- -------
FIXED ACCOUNT OPTIONS
<S> <C> <C> <C> <C> <C>
1 Year Guarantee Period 10% 5.00% 01/15/1999
6 Year Guarantee Period 10% 7.20% 01/15/2004
1 Year Dollar Cost Averaging Account10% 5.00% 01/15/1999
</TABLE>
MINIMUM GUARANTEED RATE FOR FIXED ACCOUNT OPTIONS:......................3.00%
PAYOUT START DATE:...........................................January 15, 2053
(Latest date when income payments must begin.)
OWNER:...............................................................John Doe
.....................................................................Jane Doe
ANNUITANT:...........................................................John Doe
AGE AT ISSUE:......................................................35
SEX:.............................................................Male
BENEFICIARY RELATIONSHIP TO OWNER PERCENTAGE
----------- --------------------- ----------
Jane Doe Wife 100%
CONTINGENT BENEFICIARY RELATIONSHIP TO OWNER PERCENTAGE
---------------------- --------------------- ----------
June Doe Daughter 100%
<PAGE>
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THE PERSONS INVOLVED
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Owner The person named at the time of application is the owner of this
Certificate unless subsequently changed. As owner, you will receive any periodic
income payments, unless you have directed us to pay them to someone else.
You may exercise all rights stated in this Certificate, subject to the rights of
any irrevocable Beneficiary.
You may change the owner or Beneficiary at any time. If the Owner is a Natural
Person, you may change the Annuitant prior to the Payout Start Date. Once we
have received a satisfactory written request for an owner, Beneficiary, or
Annuitant change, the change will take effect as of the date you signed it. We
are not liable for any payment we make or other action we take before receiving
any written request for a change from you.
You may not assign an interest in this Certificate as collateral or security for
a loan. However, you may assign periodic income payments under this Certificate
prior to the Payout Start Date. We are bound by an assignment only if it is
signed by the assignor and filed with us. We are not responsible for the
validity of an assignment.
If the sole surviving Owner dies prior to the Payout Start Date, the Beneficiary
becomes the new Owner. If the sole surviving Owner dies after the Payout Start
Date, the Beneficiary becomes the new Owner and will receive any subsequent
guaranteed income payments.
If more than one person is designated as Owner:
|X| "Owner", as used in this Certificate, refers to all people named as Owners,
unless otherwise indicated;
|X| any request to exercise ownership rights must be signed by all Owners; and
|X| on the death of any person who is an Owner, the surviving person(s) named
as Owner will continue as Owner.
Annuitant The Annuitant is the person named on the Annuity Data Page, but may be
changed by the Owner, as described above. The Annuitant must be a living
individual. If the Annuitant dies prior to the Payout Start Date, the new
Annuitant will be:
|X| the youngest Owner; otherwise,
|X| the youngest Beneficiary.
Beneficiary The Beneficiary is the person(s) named on the Annuity Data Page, but
may be changed by the Owner, as described above. We will determine the
Beneficiary from the most recent written request we have received from you. If
you do not name a Beneficiary, or if the Beneficiary named is no longer living,
the Beneficiary will be:
|X| your spouse, if living; otherwise
|X| your living children, if any, equally; otherwise
|X| your estate.
The Beneficiary may become the Owner under the circumstances described in the
Owner provision above.
The Beneficiary may assign benefits under the Certificate, as described above,
once they are payable to the Beneficiary. We are bound by an assignment only if
it is signed by the assignor and filed with us. We are not responsible for the
validity of an assignment.
<PAGE>
Natural Person As used in this Certificate, "Natural Person" means a living
individual or trust entity that is treated as an individual for Federal Income
Tax purposes under the Internal Revenue Code.
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ACCUMULATION PHASE
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Accumulation Phase Defined The "Accumulation Phase" is the first of two phases
during your Certificate. The Accumulation Phase begins on the issue date of the
Certificate stated on the Annuity Data Page. This phase will continue until the
Payout Start Date unless the Certificate is terminated before that date.
Certificate Year "Certificate Year" is a one year period beginning on the issue
date of the Certificate and on each anniversary of the issue date.
Purchase Payments The initial purchase payment is shown on the Annuity Data
Page. You may make subsequent purchase payments during the Accumulation Phase.
The number of purchase payments is unlimited. The minimum subsequent purchase
payment amount is $500. We reserve the right to reduce the minimum purchase
payment amount. We may limit the maximum amount of purchase payments we will
accept.
We will invest the purchase payments in the Investment Alternatives you select.
You may allocate any portion of your purchase payment in whole percents from 0%
to 100% to any of the Investment Alternatives. The total allocation must equal
100%.
The allocation of the initial purchase payment is shown on the Annuity Data
Page. Allocation of each subsequent purchase payment will be the same as the
allocation for the most recent purchase payment unless you change the
allocation. You may change the allocation of subsequent purchase payments at any
time, without charge, simply by giving us written notice. Any change will be
effective at the time we receive the notice and will reflect the next computed
price.
Investment Alternatives The "Investment Alternatives" are the Sub-accounts of
the Variable Account, the Sub-accounts of the Fixed Account, and the Dollar Cost
Averaging Fixed Account shown on the application. We reserve the right to limit
the availability of the Investment Alternatives.
Variable Account The "Variable Account" for this Certificate is the Northbrook
Variable Annuity Account II. This account is a separate investment account to
which we allocate assets contributed under this and certain other certificates
and contracts. These assets will not be charged with liabilities arising from
any other business we may have.
Variable Sub-accounts The Variable Account is divided into Sub-accounts. Each
Sub-account invests solely in the shares of the mutual fund underlying that
Sub-account.
Fixed Account Options The Fixed Account options are the Dollar Cost Averaging
Fixed Account and the Sub-accounts of the Fixed Account.
<PAGE>
Dollar Cost Averaging Fixed Account Purchase payments may be allocated to the
Dollar Cost Averaging Fixed Account. Transfers are not allowed into the Dollar
Cost Averaging Fixed Account. Once purchase payments have been allocated to the
Dollar Cost Averaging Fixed Account, interest is earned for a one year period at
a current rate in effect at the time of allocation. After the one year period, a
renewal rate will be declared. Subsequent renewal dates will be every twelve
months for each purchase payment.
Sub-accounts of the Fixed Account The Fixed Account is divided into
Sub-accounts. A Sub-account is identified by the Guarantee Period and the date
the Guarantee Period begins. Guarantee Periods are offered at our discretion and
may range from one to ten years. You create a Sub-account when:
|X| you allocate a purchase payment to a Sub-account of the Fixed Account; or
|X| you select a new Guarantee Period after the prior Sub-account expires; or
|X| you transfer an amount to a Sub-account of the Fixed Account from an
existing Sub-account of the Variable Account, from another Sub-account of
the Fixed Account, or from the Dollar Cost Averaging Fixed Account.
A Sub-account continues until the end of the Guarantee Period.
Money in the Fixed Account will earn interest at the current rate for the
Guarantee Period in effect at the time of allocation of transfer to the Fixed
Account. After the Guarantee Period expires a renewal rate will be declared.
Subsequent renewal dates will be on anniversaries of the first renewal date.
Crediting Interest We credit interest daily to money allocated to the Fixed
Account options at a rate which compounds over one year to the interest rate we
guaranteed when the money was allocated. We will credit interest to the initial
purchase payment from the issue date. We will credit interest to subsequent
purchase payments from the date we receive them at a rate declared by us. We
will credit interest to transfers from the date the transfer is made. The
interest rate for each Fixed Account option will never be less than the minimum
guaranteed rate shown on the Annuity Data Page.
Transfers Prior to the Payout Start Date, you may transfer amounts among
Investment Alternatives. You may make 12 transfers during each Certificate Year
without charge. Each transfer after the 12th transfer in any Certificate Year
may be assessed a $10 transfer fee. Transfers are subject to the following
restrictions.
|X| The minimum amount that may be transferred from an investment alternative
is $100; if the total amount in an investment alternative is less than
$100, then the entire amount may be transferred.
|X| The minimum transfer to a Sub-account of the Fixed Account is $500.
|X| The maximum amount that may be transferred from the Fixed Account to the
Variable Account in any Certificate Year is limited to 25% of the value in
the Fixed Account on the most recent Certificate anniversary. However, if
25% of the most recent value is greater than zero but less than $1,000,
then up to $1,000 may be transferred.
|X| If the first renewal interest rate for a Sub-account of the Fixed Account
is less than the current rate that was in effect at the time money was
allocated or transferred to the Fixed Account, the 25% transfer restriction
for that money and the accumulated interest thereon will be waived during
the 60 day period following the first renewal date.
|X| No amount may be transferred into the Dollar Cost Averaging Fixed Account.
|X| Transfers from the Dollar Cost Averaging Fixed Account do not count toward
the 12 free transfers each year.
We reserve the right to waive the transfer fees and restrictions contained in
this Certificate.
<PAGE>
We reserve the right to limit transfer amounts among Sub-accounts of the
Variable Account if we determine, in our sole discretion, that the exercise of
that right by one or more Certificate Owners is, or would be, to the
disadvantage of other Certificate Owners. Transfer limitations could be applied
to transfers to or from some or all of the Sub-accounts and could include but
not be limited to:
o The requirement of a minimum time period between each transfer;
o Not accepting transfer requests of an agent acting under a
power-of-attorney on behalf of more than one
Certificate Owner; or,
o Limiting the dollar amount that may be transferred between the Sub-accounts
and the Fixed Account by a Certificate Owner at any one time.
Such restrictions may be applied in any manner reasonably designed to prevent
any use of the transfer right which is considered by us to be to the
disadvantage of other Certificate Owners.
Cash Value On the issue date of the Certificate, the "Cash Value" is equal to
the initial purchase payment. After the issue date, the "Cash Value" is equal to
the sum of:
|X| the number of Accumulation Units you hold in each Sub-account of the
Variable Account multiplied by the Accumulation Unit Value for that
Sub-account on the most recent Valuation Date; plus
|X| the total value you have in the Dollar Cost Averaging Fixed Account; plus
|X| the sum of Sub-account values in the Fixed Account.
If you withdraw the entire Cash Value, you may receive an amount less than the
Cash Value because an Early Withdrawal Charge, income tax withholding, and a
premium tax charge may apply.
Valuation Period and Valuation Date A "Valuation Period" is the time interval
between the closing of the New York Stock Exchange on consecutive Valuation
Dates. A "Valuation Date" is any date the New York Stock Exchange is open for
trading except for days in which there is insufficient trading in the Variable
Account's portfolio securities such that the value of accumulation or annuity
units might not be materially affected by changes in the value of the portfolio
securities.
Accumulation Units and Accumulation Unit Value Amounts which you allocate to a
Sub-account of the Variable Account are used to purchase Accumulation Units in
that Sub-account. The Accumulation Unit Value for each Sub-account at the end of
any Valuation Period is calculated by multiplying the Accumulation Unit Value at
the end of the immediately preceding Valuation Period by the Sub-account's Net
Investment Factor for the Valuation Period. The Accumulation Unit Values may go
up or down. Additions or transfers to a Sub-account of the Variable Account will
increase the number of Accumulation Units for that Sub-account. Withdrawals or
transfers from a Sub-account of the Variable Account will decrease the number of
Accumulation Units for that Sub-account.
Net Investment Factor For each Sub-account of the Variable Account, the "Net
Investment Factor" for a Valuation Period is (A) divided by (B), minus (C)
where:
(A) is the sum of:
(1) the net asset value per share of the mutual fund underlying the
Sub-account determined at the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or capital gain distributions
made by the mutual fund underlying the Sub-account during the current
Valuation Period.
<PAGE>
(B) is the net asset value per share of the mutual fund underlying the
Sub-account determined as of the end of the immediately preceding
Valuation Period.
(C) is the sum of the annualized Administrative Expense Charge and the
annualized Mortality and Expense Risk Charge divided by the number of
days in the current calendar year and then multiplied by the number of
calendar days in the current Valuation Period.
Charges The charges for this Certificate include Administrative Expense Charges,
Mortality and Expense Risk Charges, Certificate Maintenance Charges, transfer
fees, and taxes. If a withdrawal is made, the Certificate may also be subject to
an Early Withdrawal Charge.
Administrative Expense Charge The annualized Administrative Expense Charge will
never be greater than 0.10%. (See Net Investment Factor for a description of how
this charge is applied.)
Mortality and Expense Risk Charge The annualized Mortality and Expense Risk
Charge will never be greater than 1.35%. (See Net Investment Factor for a
description of how this charge is applied.)
Our actual mortality and expense experience will not adversely affect the dollar
amount of variable benefits or other contractual payments or values under this
Certificate.
Certificate Maintenance Charge Prior to the Payout Start Date, a Certificate
Maintenance Charge will be deducted from your Cash Value on each Certificate
anniversary. The charge is deducted only from the Sub-accounts of the Variable
Account. The charge will be deducted on a pro-rata basis from each Sub-account
of the Variable Account in the proportion that your value in each bears to your
total value in all Sub-accounts of the Variable Account. A full Certificate
Maintenance Charge will be deducted if the Certificate is terminated on any date
other than a Certificate anniversary. The annualized charge will never be
greater than $35 per Certificate Year. The Certificate Maintenance Charge will
be waived if total purchase payments are $50,000 or more or if all money is
allocated to the Fixed Account options on the Certificate anniversary.
After the Payout Start Date the Certificate Maintenance Charge will be deducted
in equal parts from each income payment. The Certificate Maintenance Charge will
be waived if the Cash Value on the Payout Start Date is $50,000 or more or if
all payments are Fixed Amount Income Payments.
Taxes Any premium tax or income tax withholding relating to this Certificate may
be deducted from purchase payments or the Cash Value when the tax is incurred or
at a later time.
Withdrawal You have the right to withdraw part or all of your Cash Value at any
time during the Accumulation Phase. A withdrawal must be at least $500. If any
withdrawal reduces the Cash Value to less than $1,000, we will treat the request
as a withdrawal of the entire Cash Value. If you withdraw the entire Cash Value,
the Certificate will terminate.
You must specify the Investment Alternative(s) from which you wish to make a
withdrawal. When you make a withdrawal, your Cash Value will be reduced by the
amount paid to you and any applicable Early Withdrawal Charge, and taxes. A
Certificate Maintenance Charge may also be deducted if the Certificate is
terminated. Any Early Withdrawal Charge will be waived on withdrawals taken to
satisfy IRS minimum distribution rules. This waiver is permitted only for
withdrawals which satisfy distributions resulting from this Certificate. This
waiver does not apply if this Certificate is owned by an Individual Retirement
Account.
<PAGE>
Free Withdrawal Amount Each Certificate Year the Free Withdrawal Amount is equal
to 15% of the amount of purchase payments as of the beginning of the Certificate
Year. Each Certificate Year you may withdraw the Free Withdrawal Amount without
any Early Withdrawal Charge. Any Free Withdrawal Amount which is not withdrawn
in a year may not be carried over to increase the Free Withdrawal Amount
available in a subsequent year.
Early Withdrawal Charge Withdrawals in excess of the Free Withdrawal Amount will
be subject to an Early Withdrawal Charge as follows:
Payment Year: 1 2 and Later
Percentage: 1% 0%
To determine the Early Withdrawal Charge, we assume that purchase payments are
withdrawn first, beginning with the oldest payment. When all purchase payments
have been withdrawn, additional withdrawals will not be assessed an Early
Withdrawal Charge.
For each purchase payment withdrawal, the "Payment Year" in the table is
measured from the date we received the purchase payment. The Early Withdrawal
Charge is determined by multiplying the percentage corresponding to the Payment
Year times that part of each purchase payment withdrawal that is in excess of
the Free Withdrawal Amount.
Death of Owner If you die prior to the Payout Start Date, the new Owner will be
the surviving Owner. If there is no surviving Owner, the new Owner will be the
Beneficiary(ies). The new Owner will have the options described below:
1. If the sole new Owner is your spouse:
a. Your spouse may elect, within 180 days of the date of your death,
to receive the Death Benefit described below in a lump sum.
b. Your spouse may elect, within 180 days of the date of your death,
to receive an amount equal to the Death Benefit paid out under
one of the Income Plans described in the Payout Phase section.
The Payout Start Date must be within one year of your date of
death. Income Payments must be:
i. over the life of your spouse; or
ii. for a guaranteed number of payments from 5 to 30 years
but not to exceed the life expectancy of your spouse.
c. If your spouse does not elect one of the options above, then the
Certificate continues as if the death had not occurred. On the date
the Certificate is continued, the Cash Value will equal the amount of
the Death Benefit as determined as of the Valuation Date on which we
receive Due Proof of Death (the next Valuation Date, if we received
Due Proof of Death after 3 p.m. Central Time). All ownership rights
under the Certificate are then available to your spouse as the new
Owner. Within one year of your death, your spouse may take one
withdrawal without incurring a Withdrawal Charge. The amount which may
be withdrawn is limited only by the amount of the available Death
benefit.
2. If the new Owner is not your spouse but is a natural person, then this new
Owner has the following options:
a. The new Owner may elect, within 180 days of the date of your death, to
receive the death benefit described below in a lump sum.
b. The new Owner may elect, within 180 days of the date of your death, to
receive an amount equal to the Death Benefit paid out under one of the
Income Plans described in the Payout Phase section. The Payout Start
Date must be within one year of your date of death. Income Payments
must be:
<PAGE>
i. over the life of the new Owner; or
ii. for a guaranteed number of payments from 5 to 30 years but
not to exceed the life expectancy of the new Owner.
c. The new Owner may elect to receive the Settlement Value payable in a
lump sum within 5 years of your date of death.
3. If the new Owner is a corporation, trust, or other non-Natural Person:
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a. The non-natural Owner may elect, within 180 days of your death, to
receive the Death Benefit in a lump sum.
b. The non-natural Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of your date of death.
If the new Owner who is not your spouse does not make one of the above described
elections, the Settlement Value must be withdrawn by the new Owner on or before
the mandatory distribution date 5 years after your date of death. Under any of
these options, all ownership rights are available to the new Owner from the date
of your death to the date on which the Death Benefit or Settlement Value is
paid. We reserve the right to extend beyond 180 days the period when we will pay
the Death Benefit.
Death of Annuitant If any Annuitant who is not also the Owner dies prior to the
Payout Start Date, the Owner must elect an applicable option listed below. If
the option selected is 1(a) or 1(b)(ii) below, the new Annuitant will be the
youngest Owner, unless the Owner names a different Annuitant.
1. If the Owner is a Natural Person:
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a. The Owner may choose to continue this Certificate as if the death had
not occurred; or
b. If we receive due proof of death within 180 days of the date of the
Annuitant's death, then the Owner may alternatively choose to:
i. Receive the Death Benefit in a lump sum; or
ii. Apply the Death Benefit to an Income Plan which must
begin within one year of the date of death and must
be for a guaranteed number of payments for a period
from 5 to 30 years but not to exceed the life
expectancy of the Owner.
2. If the Owner is a non-Natural Person:
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a. The non-natural Owner may elect, within 180 days of the Annuitant's
date of death, to receive the Death Benefit in a lump sum; or
b. The non-natural Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of the Annuitant's date of death.
If the non-natural Owner does not make one of the above described elections, the
Settlement Value must be withdrawn by the non-natural Owner on or before the
mandatory distribution date 5 years after the Annuitant's death.
Under any of these options, all ownership rights are available to the Owner from
the date of the Annuitant's death to the date on which the Death Benefit or
Settlement Value is paid. We reserve the right to extend beyond 180 days the
period when we will pay the Death Benefit.
<PAGE>
Death Benefit Prior to the Payout Start Date, the Death Benefit is equal to the
greatest of the following Death Benefit alternatives:
|X| the sum of all purchase payments less any withdrawals; or
|X| the Cash Value on the date we determine the Death Benefit; or
|X| the Cash Value on the most recent Death Benefit Anniversary prior to
the date we determine the Death Benefit, increased by any purchase
payments and reduced by any withdrawals made since that Death Benefit
Anniversary.
Death Benefit Anniversaries are those Certificate anniversaries that are
multiples of 6 Certificate Years, beginning with the 6th Certificate
anniversary. For example, the 6th, 12th, and 18th Certificate anniversaries are
the first three Death Benefit Anniversaries.
We will determine the value of the Death Benefit as of the end of the Valuation
Period during which we receive a complete request for payment of the Death
Benefit. A complete request includes due proof of death.
Settlement Value The Settlement Value is the same amount that would be paid in
the event of a full withdrawal of the Cash Value. We will calculate the
Settlement Value at the end of the Valuation Period coinciding with the
requested distribution date for payment or on the mandatory distribution date 5
years after the date of death, whichever is earlier.
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PAYOUT PHASE
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Payout Phase Defined The "Payout Phase" is the second of the two phases during
your Certificate. During this phase the Cash Value less any applicable taxes is
applied to the Income Plan you choose and is paid out as provided in that plan.
The Payout Phase begins on the Payout Start Date. It continues until we make the
last payment as provided by the Income Plan chosen.
Payout Start Date The "Payout Start Date" is the date the Cash Value less any
applicable taxes is applied to an Income Plan. The anticipated Payout Start Date
is shown on the Annuity Data Page. You may change the Payout Start Date by
writing to us at least 30 days prior to this date.
The Payout Start Date must be on or before the later of:
|X| the Annuitant's 90th birthday; or
|X| the 10th anniversary of the Certificate's issue date.
Income Plans An "Income Plan" is a series of payments on a scheduled basis to
you or to another person designated by you. The Cash Value on the Payout Start
Date, less any applicable taxes, will be applied to your Income Plan choice from
the following list:
1. LIFE INCOME WITH GUARANTEED PAYMENTS. We will make payments for as long as
the Annuitant lives. If the Annuitant dies before the selected number of
guaranteed payments have been made, we will continue to pay the remainder
of the guaranteed payments.
<PAGE>
2. JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS. We will make
payments for as long as either the Annuitant or joint Annuitant, named at
the time of Income Plan selection, lives. If both the Annuitant and the
joint Annuitant die before the selected number of guaranteed payments have
been made, we will continue to pay the remainder of the guaranteed
payments.
3. GUARANTEED NUMBER OF PAYMENTS. We will make payments for a specified number
of months beginning on the Payout Start Date. These payments do not depend
on the Annuitant's life. The number of months guaranteed may be from 60 to
360.
We reserve the right to make available other Income Plans.
Income Payments Income payment amounts may vary based on any Sub-account of the
Variable Account ("Variable Amount Income Payments"), may be fixed for the
duration of the Income Plan ("Fixed Amount Income Payments"), or both. The
method of calculating the initial payment is different for the two accounts. The
Certificate Maintenance Charge will be deducted in equal payments from each
income payment. The Certificate Maintenance Charge will be waived if the Cash
Value on the Payout Start Date is $50,000 or more or if all payments are Fixed
Amount Income Payments.
Variable Amount Income Payments Variable Amount Income Payments will vary to
reflect the performance of the Variable Account. The portion of the initial
income payment based upon a particular Variable Sub-account is determined by
applying the amount of the Cash Value in that Sub-account on the Payout Start
Date, less any applicable premium tax, to the appropriate value from the Income
Payment Table. This portion of the initial income payment is divided by the
Annuity Unit Value on the Payout Start Date for that Variable Sub-account to
determine the number of Annuity Units from that Sub-account which will be used
to determine subsequent income payments. Unless transfers are made among
Sub-accounts of the Variable Account, each subsequent income payment from that
Sub-account will be that number of Annuity Units times the Annuity Unit Value
for the Sub-account for the Valuation Date on which the income payment is made.
Annuity Unit Value The Annuity Unit Value for each Sub-account of the Variable
Account at the end of any Valuation Period is calculated by:
|X| multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Sub-account's
Net Investment Factor during the period; and then
|X| dividing the result by 1.000 plus the assumed investment rate for the
period. The assumed investment rate is an effective annual rate of 3%. We
reserve the right to offer an assumed investment rate greater than 3%.
Fixed Amount Income Payments The income payment amount derived from any money
allocated to the Fixed Account options during the Accumulation Phase are fixed
for the duration of the Income Plan. The Fixed Amount Income Payment is
calculated by applying the portion of the Cash Value in the Fixed Account
options on the Payout Start Date, less any applicable premium tax, to the
greater of the appropriate value from the Income Payment Table selected or such
other value as we are offering at that time.
Annuity Transfers After the Payout Start Date, no transfers may be made from the
Fixed Amount Income Payment. Transfers between Sub-accounts of the Variable
Account, or from the Variable Amount Income Payment to the Fixed Amount Income
Payment, may not be made for six months after the Payout Start Date. Transfers
may be made once every six months thereafter.
Payout Terms and Conditions The income payments are subject to the following
terms and conditions:
|X| If the Cash Value is less than $2,000, or not enough to provide an initial
payment of at least $20, we reserve the right to:
<PAGE>
|X| change the payment frequency to make the payment at least $20; or
|X| terminate the Certificate and pay you the Cash Value, less any applicable
taxes, in a lump sum.
|X| If we do not receive a written choice of an Income Plan from you at least
30 days before the Payout Start Date, the Income Plan will be Life Income
with Guaranteed Payments for 120 months.
|X| If you choose an Income Plan which depends on any person's life, we may
require: |X| proof of age and sex before income payments begin; and |X|
proof that the Annuitant or joint Annuitant is still alive before we make
each payment.
|X| After the Payout Start Date, the Income Plan cannot be changed and
withdrawals cannot be made unless income payments are being made from the
Variable Account under Income Plan 3. You may terminate the income payments
being made from the Variable Account under Income Plan 3 at any time and
withdraw their value, subject to Early Withdrawal Charges.
|X| If any Owner dies during the Payout Phase, the remaining income payments
will be paid to the successor Owner as scheduled.
-------------------------------------------------------------------------------
INCOME PAYMENT TABLES
-------------------------------------------------------------------------------
The initial income payment will be at least the amount based on the adjusted age
of the Annuitant(s) and the tables below, less any federal income taxes which
are withheld. The adjusted age is the actual age on the Payout Start Date
reduced by one year for each six full years between January 1, 1983 and the
Payout Start Date. Income payments for ages and guaranteed payment periods not
shown below will be determined on a basis consistent with that used to determine
those that are shown. The Income Payment Tables are based on 3.0% interest and
the 1983a Annuity Mortality Tables.
<TABLE>
<CAPTION>
Income Plan 1 - Life Income with Guaranteed Payments for 120 Months
============================================================================================================================
Monthly Income Payment for each $1,000 Applied to this Income Plan
----------------------------------------------------------------------------------------------------------------------------
------------------- ---------------------- ---------------- ---------------------- ---------------- ------------------------
Annuitant's Annuitant's Age Annuitant's
Age Male Female Male Female Age Male Female
------------------- ---------------------- ---------------- ---------------------- ---------------- ------------------------
------------------- ---------------------- ---------------- ---------------------- ---------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97
36 3.47 3.28 50 4.22 3.88 64 5.66 5.09
37 3.51 3.31 51 4.29 3.94 65 5.80 5.22
38 3.55 3.34 52 4.37 4.01 66 5.95 5.35
39 3.60 3.38 53 4.45 4.07 67 6.11 5.49
40 3.64 3.41 54 4.53 4.14 68 6.27 5.64
41 3.69 3.45 55 4.62 4.22 69 6.44 5.80
42 3.74 3.49 56 4.71 4.29 70 6.61 5.96
43 3.79 3.53 57 4.81 4.38 71 6.78 6.13
44 3.84 3.58 58 4.92 4.46 72 6.96 6.31
45 3.90 3.62 59 5.02 4.55 73 7.13 6.50
46 3.96 3.67 60 5.14 4.65 74 7.31 6.69
47 4.02 3.72 61 5.26 4.75 75 7.49 6.88
48 4.08 3.77 62 5.39 4.86
=================== ====================== ================ ====================== ================ ========================
</TABLE>
<PAGE>
Income Plan 2 - Joint and Survivor Life Income with Guaranteed Payments for
120 Months
================================================================================
<TABLE>
<CAPTION>
Monthly Income Payment for each $1,000 Applied to this Income Plan
------------------------------------------------------------------------------------------------------------------------------
-------------------- ---------------------------------------------------------------------------------------------------------
Female Annuitant's Age
-------------------- ---------------------------------------------------------------------------------------------------------
-------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ---------------
Male
Annuitant's 35 40 45 50 55 60 65 70 75
Age
-------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ---------------
-------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
==================== ========== ========== ========== ========== =========== ========== ============ =========== =============
Income Plan 3 - Guaranteed Number of Payments
================================= =============================================
Monthly Income Payment for each
Specified Period $1,000 Applied to this Income Plan
--------------------------------- ---------------------------------------------
--------------------------------- ---------------------------------------------
10 Years $9.61
11 Years 8.86
12 Years 8.24
13 Years 7.71
14 Years 7.26
15 Years 6.87
16 Years 6.53
17 Years 6.23
18 Years 5.96
19 Years 5.73
20 Years 5.51
================================= ==============================================
</TABLE>
<PAGE>
-------------------------------------------------------------------------------
GENERAL PROVISIONS
-------------------------------------------------------------------------------
The Entire Contract The entire contract consists of this Certificate, any
written application, and any Certificate amendments and riders.
All statements made in a written application are representations and not
warranties. No statement will be used by us in defense of a claim or to void the
Certificate unless it is included in a written application.
We may not modify this Certificate without your consent, except to make it
comply with any changes in the Internal Revenue Code or as required by any other
applicable law. Only our officers may change the Certificate. No other
individual may do this.
Master Policy Amendment or Termination The Master Policy may be amended by us,
terminated by us, or terminated by the Master Policyholder without the consent
of any other person. No termination completed after the issue date of this
Certificate will adversely affect your rights under this Certificate.
<PAGE>
Incontestability We will not contest the validity of this Certificate after the
issue date.
Misstatement of Age or Sex If any age or sex has been misstated, we will pay the
amounts which would have been paid at the correct age and sex.
If we find the misstatement of age or sex after the income payments begin, we
will:
|X| pay all amounts underpaid including interest calculated at an effective
annual rate of 6%; or
|X| stop payments until the total payments are equal to the corrected amount.
Annual Statement At least once a year, prior to the Payout Start Date, we will
send you a statement containing Cash Value information. We will provide you with
Cash Value information at any time upon request. The information presented will
comply with any applicable law.
Settlements We may require that this Certificate be returned to us prior to any
settlement. We must receive due proof of death of the Owner or Annuitant prior
to settlement of a death claim. Due proof of death is one of the following:
|X| a certified copy of a death certificate; or
|X| a certified copy of a decree of a court of competent jurisdiction as to a
finding of death; or
|X| any other proof acceptable to us.
Any full withdrawal or Death Benefit under this Certificate will not be less
than the minimum benefits required by any statute of the state in which the
Certificate is delivered.
Deferment of Payments We will pay any amounts due from the Variable Account
under this Certificate within seven days, unless:
|X| the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on such Exchange is restricted;
|X| an emergency exists as defined by the Securities and Exchange Commission;
or
|X| the Securities and Exchange Commission permits delay for the protection of
Certificate holders.
We reserve the right to postpone payments or transfers from the Fixed Account
options for up to six months. If we elect to postpone payments from the Fixed
Account options for 30 days or more, we will pay interest as required by
applicable law. Any interest would be payable from the date the withdrawal
request is received by us to the date the payment is made.
Variable Account Modifications We reserve the right, subject to applicable law,
to make additions to, deletions from, or substitutions for the mutual fund
shares underlying the Sub-accounts of the Variable Account. We will not
substitute any shares attributable to your interest in a Sub-account of the
Variable Account without notice to you and prior approval of the Securities and
Exchange Commission, to the extent required by the Investment Company Act of
1940, as amended.
We reserve the right to establish additional Sub-accounts of the Variable
Account, each of which would invest in shares of another mutual fund. You may
then instruct us to allocate purchase payments or transfers to such
Sub-accounts, subject to any terms set by us or the mutual fund.
<PAGE>
In the event of any such substitution or change, we may by endorsement make such
changes as may be necessary or appropriate to reflect such substitution or
change.
If we deem it to be in the best interests of persons having voting rights under
the certificates, the Variable Account may be operated as a management company
under the Investment Company Act of 1940, as amended, or it may be deregistered
under such Act in the event such registration is no longer required.
