Cova Financial Life Insurance Company
4100 Newport Place Drive, Suite 840
Newport Beach, CA 92600
GUARANTEED MINIMUM INCOME BENEFIT RIDER-- [LIVING BENEFIT]
This Rider forms a part of the Contract to which it is attached and is effective
upon issuance. In the case of a conflict with any provision of the Contract, the
provisions of this Rider will control. The "Annuity Provisions" section of the
Contract is amended as follows:
Guaranteed Minimum Income Benefit
This Rider guarantees you a minimum monthly Fixed Annuity Payment equal to the
Guaranteed Minimum Income Benefit (GMIB) Payment, as set forth below.
At the date you elect to begin receiving Annuity Payments as provided for in
this Rider, the GMIB Payment is determined by applying the Income Base to the
GMIB Annuity Table. If a higher Fixed Annuity Payment results from applying your
Adjusted Account Value on the date you exercise this Rider to the then-current
Fixed Annuity Option Table applicable to this class of contracts, then the
greater payment will be made.
Income Base
The Income Base is the greater of (a) or (b) below:
(a) Highest Anniversary Value: On the Issue Date, the Highest Anniversary Value
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is equal to your initial Purchase Payment. Thereafter, the Highest
Anniversary Value will be increased by subsequent Purchase Payments and
reduced proportionately by the percentage reduction in Account Value
attributable to each subsequent partial withdrawal. On each Contract
Anniversary prior to the Owner's 81st birthday, the Highest Anniversary
Value will be recalculated and set equal to the greater of the Highest
Anniversary Value before the recalculation or the Account Value on the date
of the recalculation.
(b) Annual Increase Amount: On the Issue Date, the Annual Increase Amount is
equal to your initial Purchase Payment. Thereafter, the Annual Increase
Amount is equal to (i) less (ii), where:
(i) is Purchase Payments accumulated at the Annual Increase Rate. The
Annual Increase Rate is 6% per year through the Contract
Anniversary immediately prior to the Owner's 81st birthday, and 0%
per year thereafter; and
(ii) is Withdrawal Adjustments accumulated at the Annual Increase Rate.
Withdrawal Adjustments in a Contract Year are determined according
to (1) or (2) as defined below:
(1) The Withdrawal Adjustment for each partial withdrawal in a
Contract Year is the value of the Annual Increase Amount
immediately prior to the withdrawal multiplied by the
percentage reduction in Account Value attributable to that
partial withdrawal; or
(2) If total partial withdrawals in a Contract Year are 6% or less
of the Annual Increase Amount on the previous Contract
Anniversary, the total Withdrawal Adjustments for that
Contract Year will be set equal to the dollar amount of total
partial withdrawals in that Contract Year. These Withdrawal
Adjustments will replace the Withdrawal Adjustments defined in
(1) above and be treated as though the corresponding partial
withdrawals occurred at the end of that Contract Year.
The Income Base is not available for cash withdrawals and is only used for
purposes of calculating the GMIB Payment.
Ownership
While this Rider is in effect, the Owner (or Joint Owners) and Annuitant (or
Joint Annuitants) must be the same. If a non-natural person owns the Contract,
then Annuitant shall mean Owner in determining the Income Base and GMIB Payment.
If Joint Owners are named, the age of the oldest will be used to determine the
Income Base.
GMIB Annuity Table
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The GMIB Annuity Table is calculated based on the Annuity 2000 Mortality Table
with a 7-year age setback with interest of 2.5% per year. The rate applied will
depend upon the Annuity Option elected and the Attained Age and sex of the
Annuitant and Joint Annuitant, if applicable.
Exercising the GMIB Rider
(a) You must elect to receive annuity payments under one of the following
Fixed Annuity Options:
(1) Life Annuity with 10 Years of Annuity Payments Guaranteed. For
annuitization ages over 79, the guaranteed component of the life
annuity is reduced as follows:
Age at Annuitization Guarantee Period
80 9
81 8
82 7
83 6
84 and 85 5
(2) Joint and Last Survivor Annuity with 10 Years of Annuity Payments
Guaranteed.
These Options are set forth in the Contract. Life Annuity with 10 Years
of Annuity Payments Guaranteed will be applied if no election is made
under this Rider.
(b) Partial annuitizations are not permitted under this Rider.
(c) You may only elect an Annuity Date under this Rider that is within 30
days following any Contract Anniversary and after the expiration of the
Waiting Period. The Waiting Period is ten (10) Contract Years from the
Issue Date.
(d) Applicable Withdrawal Charges on the date that you exercise this Rider
will be deducted from the Income Base. We also reserve the right to
reduce the Income Base for any Premium and Other Taxes that may apply.
(e) If you choose not to receive Annuity Payments as guaranteed under this
Rider, you may elect any of the Annuity Options available under the
Contract.
Rider Charge
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We deduct Rider charges as shown on the Contract Schedule. Rider charges are a
percentage of the Income Base at the time the Rider charge is assessed. The
charge is first assessed at the first Contract Anniversary and then at each
subsequent Contract Anniversary, up to and including the anniversary on or
immediately preceding the date the Rider is exercised. Upon full withdrawal or
annuitization, a prorata portion of the Rider charge will be assessed.
The Rider charge will result in the cancellation of Accumulation Units from each
applicable Subaccount of the Variable Account and/or a reduction in the Account
Value allocated to the Fixed Account in the ratio the Account Value in a
Subaccount and/or the Fixed Account bears to the total Account Value.
Termination Provisions
This Rider will terminate upon the earliest of:
(a) The date you elect to receive Annuity Payments either under this Rider or
the Contract;
(b) The 30th day following the Contract Anniversary immediately after your 85th
birthday;
(c) The date you make a complete withdrawal of your Account Value;
(d) Death of the Owner, or death of the Annuitant if a non-natural person owns
the Contract; or
(e) Change of the Owner, for any reason.
Unless terminated in accordance with the above provisions, this Rider is
irrevocable.
Cova Financial Life Insurance Company has caused this Rider to be signed by its
President and Secretary.
Form 7018 (11/00)
