EXHIBIT 1.A.(5)(a)
SURVIVORSHIP FLEXIBLE PREMIUM
VARIABLE LIFE
INSURANCE POLICY
--------------------------------------
Variable and/or Fixed
Accumulation Values
Flexible Premiums Payable During
Lifetime of Surviving Joint Insured
Adjustable Face Amount
Death Benefit Guarantee
Death Benefit Options
Nonparticipating
--------------------------------------
NOTICE
Right to Return Policy
Please read this policy carefully. If you do not want it, you may
return it to us or the agent who sold it to you and ask us to cancel it. If you
return it by midnight of the 10th day after you receive it, we will consider it
void from the start and refund all premiums you paid. If you return it later
than 10 days after you receive it, the Total Surrender provision of the policy
will apply.
The Death Benefit is payable on the death of the Surviving Joint Insured. We
will pay the proceeds according to the Death Benefits portion of the Summary of
Benefits on page 3, if we receive written proof that the Surviving Joint Insured
died while this policy was in force. However, you must give us written proof of
the first death of a Joint Insured as soon as it occurs. This policy also
provides other benefits and rights. We issue this policy in consideration of the
application and payment of the initial premium.
THE AMOUNT OF THE PROCEEDS PAYABLE AT THE SURVIVING JOINT INSURED'S DEATH PRIOR
TO AGE 100 OF THE YOUNGER JOINT INSURED WILL BE AT LEAST EQUAL TO THE FACE
AMOUNT OF THE POLICY AS LONG AS THIS POLICY IS IN FORCE AND THERE IS NO LOAN
AMOUNT OR UNPAID MONTHLY DEDUCTIONS AND THERE HAVE BEEN NO PARTIAL WITHDRAWALS.
THE PERIOD OF TIME THIS LIFE INSURANCE STAYS IN FORCE WILL DEPEND ON THE
INVESTMENT PERFORMANCE OF THE VARIABLE ACCOUNT, INTEREST CREDITED TO THE NET
PREMIUMS ALLOCATED TO THE FIXED ACCOUNT, THE AMOUNT OF PREMIUMS YOU PAY, ANY
PARTIAL WITHDRAWALS, LOANS, AND CHARGES MADE AGAINST THIS POLICY. IF YOU PAY
PREMIUMS SUFFICIENT TO MAINTAIN THE DEATH BENEFIT GUARANTEE, WE GUARANTEE THIS
POLICY WILL STAY IN FORCE DURING THE DEATH BENEFIT GUARANTEE PERIOD SHOWN ON THE
POLICY DATA PAGE.
THE VARIABLE ACCUMULATION VALUE WILL INCREASE OR DECREASE REFLECTING THE
INVESTMENT PERFORMANCE OF THE VARIABLE ACCOUNT.
<PAGE>
RELIASTAR RELIASTAR LIFE INSURANCE COMPANY Executed at our Home Office
Box 20 Robert C. Salipante President
Minneapolis /s/ Robert C. Salipante
Minnesota 55440
Susan M. Bergen Secretary
/s/ Susan M. Bergen
Page 1 85-911
<PAGE>
INDEX
PAGE
Accumulation Value 10
Age and Sex 25
Allocation of Premiums 8
Amendment 26
Annual Statement 26
Beneficiary 18
Cash Surrender Value 15
Cash Value 15
Changes in Face Amount 6
Changes in Death Benefit Option 7
Claims 27
Contract 3
Control of Policy 18
Conversion Right 25
Death Benefit 5
Definitions 3
Death Benefit Guarantee 9
Fixed Accumulation Value 10
General Provisions 23
Grace Period 9
Incontestability 25
Insureds 1
Monthly Deduction 12
Net Premium 7
Nonforfeiture Provision 14
Ownership 18
Partial Withdrawal 15
Payment of Proceeds 24
Policy Data Page A
Policy Loans 16
Premiums 7
Reinstatement 9
Right to Return Policy 1
Settlement Options 19
Suicide 25
Summary of Benefits 3
Termination 25
Total Surrender 15
Transfers 14
Variable Accumulation Value 11
Voting of Mutual Fund Shares 23
Additional benefits and restrictions, if any, are listed on the Policy
Data Page.
READ YOUR POLICY CAREFULLY! THIS POLICY IS A LEGAL CONTRACT BETWEEN YOU AND
RELIASTAR LIFE INSURANCE COMPANY.
Page 2 5698
<PAGE>
POLICY INFORMATION OWNER John Doe
----------------------------------------------------------
POLICY DATE January 1, 2000
ISSUE DATE January 1, 2000
EFFECTIVE DATE January 1, 2000
----------------------------------------------------------
JOINT INSURED James Doe
SEX, ISSUE AGE Male, 35
RATE CLASS, RATING FACTOR Preferred No Tobacco, 100%
----------------------------------------------------------
JOINT INSURED Jane Doe
SEX, ISSUE AGE Female, 35
RATE CLASS, RATING FACTOR Preferred No Tobacco, 100%
--------------------------------------------------------------------------------
DEATH BENEFITS INITIAL FACE AMOUNT $250,000
CURRENT FACE AMOUNT $250,000
Additional coverage is
provided by the attached
Survivorship Term Rider
(STR)
Face Amount of $250,000.
MINIMUM FACE AMOUNT $250,000
DEATH BENEFIT QUALIFICATION
TEST Guideline Premium Test
DEATH BENEFIT OPTION Level Amount Option (A)
----------------------------------------------------------
CORRIDOR PERCENTAGE TABLE
Attained Corridor Attained Corridor
Age Percent Age Percent
-------- -------- -------- --------
0-40 250% 65 120
45 215 70 115
50 185 75-90 105
55 150 95 and above 100
60 130
For ages not listed, the progression of
percentages is linear between listed ages.
--------------------------------------------------------------------------------
PREMIUMS INITIAL PREMIUM $1,155.00
PLANNED PREMIUM AMOUNT $1,155.00
PLANNED PREMIUM FREQUENCY Annual
MINIMUM MONTHLY PREMIUM $96.25
DEATH BENEFIT GUARANTEE PERIOD 47 Years
--------------------------------------------------------------------------------
PREMIUM ALLOCATION
<TABLE>
16% Fixed Account
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3% Alger American Growth Portfolio (AGP) 3% Neuberger Limited Maturity Bond Portfolio (NLM)
3% Alger American Leveraged AllCap Portfolio (ALA) 3% Neuberger Partners Portfolio (NPP)
3% Alger American MidCap Growth Portfolio (AMG) 3% Neuberger Socially Responsive Portfolio (NSR)
3% Alger American Small Capitalization Portfolio (ASC) --------------------------------------------------
-------------------------------------------------------------- 3% Pilgrim Growth Opportunities Portfolio (PGO)
3% Fidelity Contrafund Portfolio (FCF) 3% Pilgrim Growth + Value Portfolio (NGF)
3% Fidelity Equity-Income Portfolio (FEI) 3% Pilgrim High Yield Bond Portfolio (NHY)
3% Fidelity Growth Portfolio (FGP) 3% Pilgrim International Value Portfolio (NIF)
3% Fidelity High Income Portfolio (FHI) 3% Pilgrim MagnaCap Portfolio (PMP)
3% Fidelity Index 500 Portfolio (FIN) 3% Pilgrim MidCap Opportunities Portfolio (PMO)
3% Fidelity Investment Grade Bond Portfolio (FIG) 3% Pilgrim Research Enhanced Index Portfolio (NMS)
3% Fidelity Money Market Portfolio (FMM) 3% Pilgrim SmallCap Opportunities Portfolio (NIG)
-------------------------------------------------------------- 3% OCC Equity Portfolio (OEP)
3% Janus Aggressive Growth Portfolio (JAG) 3% OCC Global Equity Portfolio (OGE)
3% Janus Growth Portfolio (JGP) 3% OCC Managed Portfolio (OMP)
3% Janus International Growth Portfolio (JIG) 3% OCC Small Cap Portfolio (OSC)
3% Janus Worldwide Growth Portfolio (JWG) 3% Putnam VT Diversified Income (PDI)
3% Putnam VT Growth and Income (PGI)
3% Putnam VT Voyager (PVY)
</TABLE>
INITIAL PREMIUM SUB-ACCOUNT: FIDELITY MONEY MARKET PORTFOLIO (FMM)
INITIAL PREMIUM TRANSFER DATE JANUARY 1, 2000
<PAGE>
FIXED ACCOUNT INTEREST MINIMUM ANNUAL
INTEREST RATES INTEREST RATE 3.00%
MINIMUM MONTHLY
INTEREST RATE 0.246627%
LOAN INTEREST RATE 4.76190% payable in advance
PREFERRED LOAN INTEREST RATE 3.38164% payable in advance
--------------------------------------------------------------------------------
DEDUCTIONS AND MAXIMUM PERCENT PREMIUM
CHARGES CHARGE 6.25%
MONTHLY EXPENSE CHARGE
----------------------
MAXIMUM MONTHLY $12.00 Per Month
ADMINISTRATIVE CHARGE
DEATH BENEFIT GUARANTEE
CHARGE Zero
MONTHLY POLICY CHARGE Zero
MONTHLY AMOUNT CHARGE
PER $1,000 $.079
TERM 20 Years
MAXIMUM MORTALITY AND 1.20%
EXPENSE RISK CHARGE RATE
--------------------------------------------------------
TABLE OF SURRENDER CHARGES AT END OF POLICY YEAR
-------------------------------------------------
0 $2,500.00
1 $2,500.00 6 $2,250.00 11 $1,000.00
2 $2,500.00 7 $2,000.00 12 $750.00
3 $2,500.00 8 $1,750.00 13 $500.00
4 $2,500.00 9 $1,500.00 14 $250.00
5 $2,500.00 10 $1,250.00 15 $0.00
Surrender Charges grade uniformly by policy month
between the consecutive years shown above.
--------------------------------------------------------------------------------
NONFORFEITURE ITEMS CSO TABLES
1980 COMMISSIONER'S STANDARD ORDINARY MORTALITY TABLE
FOR NONSMOKERS, AGE LAST BIRTHDAY, MALES
1980 COMMISSIONER'S STANDARD ORDINARY MORTALITY TABLE
FOR NONSMOKERS, AGE LAST BIRTHDAY, FEMALES
----------------------------------------------------------
NONFORFEITURE INTEREST RATE 4.00%
MAXIMUM PARTIAL WITHDRAWAL
PERCENT 0% in policy year 1;
20% per policy year in
policy years 2-15;
100% thereafter
----------------------------------------------------------
IMPORTANT NOTICE: It is possible that coverage will
expire where either no premiums are paid following the
initial premium, or subsequent premiums are insufficient
to continue coverage.
----------------------------------------------------------
<PAGE>
SETTLEMENT OPTIONS SETTLEMENT OPTION MORTALITY TABLE:
---------------------------------
1983 TABLE A WITH
PROJECTION SCALE G
SETTLEMENT OPTION INTEREST
RATE 2.00% for Options 1-5
----------------------------------------------------------
OPTION 3 SAMPLE RATES
NUMBER OF YEARS MONTHLY PAYMENTS
OF MONTHLY PER $1,000 OF
PAYMENTS PROCEEDS
-------- --------
5 $17.49
10 9.18
15 6.42
20 5.04
25 4.22
<PAGE>
OPTIONAL BENEFITS
--------------------------------------------------------------------------------
SURVIVORSHIP TERM RIDER EFFECTIVE DATE January 1, 2000
RIDER (STR) RIDER ISSUE DATE January 1, 2000
RIDER EXPIRY DATE January 1, 2062
EARLIEST TRANSFER DATE January 1, 2010
STR FACE AMOUNT $250,000
STR COST OF INSURANCE RATE See STR Table of Monthly
Guaranteed COI Rates
STR MONTHLY AMOUNT CHARGE None
<PAGE>
BASE POLICY
TABLE OF MONTHLY GUARANTEED COST OF INSURANCE RATES
<TABLE>
<CAPTION>
JOINT RATE JOINT RATE JOINT RATE
INSURED PER INSURED PER INSURED PER
AGES $1,000 AGES $1,000 AGES $1,000
----- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
35/35 0.0002177 65/65 0.4378273 95/95 28.4788772
36/36 0.0007038 66/66 0.5194404 96/96 34.5195729
37/37 0.0012898 67/67 0.6115630 97/97 44.7758719
38/38 0.0019936 68/68 0.7180893 98/98 61.9954056
39/39 0.0028347 69/69 0.8413375 99/99 83.3333333
40/40 0.0038721 70/70 0.9878700 Thereafter 0.0000000
41/41 0.0051149 71/71 1.1651985
42/42 0.0065772 72/72 1.3820904
43/43 0.0082948 73/73 1.6446550
44/44 0.0102984 74/74 1.9551877
45/45 0.0126844 75/75 2.3139899
46/46 0.0154729 76/76 2.7198214
47/47 0.0187432 77/77 3.1723952
48/48 0.0225596 78/78 3.6759437
49/49 0.0270627 79/79 4.2427613
50/50 0.0324275 80/80 4.8901840
51/51 0.0388347 81/81 5.6354560
52/52 0.0465910 82/82 6.4950042
53/53 0.0559325 83/83 7.4695778
54/54 0.0669051 84/84 8.5491913
55/55 0.0798923 85/85 9.7186184
56/56 0.0949125 86/86 10.9650189
57/57 0.1119688 87/87 12.2768024
58/58 0.1316152 88/88 13.6476368
59/59 0.1547928 89/89 15.0844490
60/60 0.1823659 90/90 16.5962806
61/61 0.2156079 91/91 18.2119381
62/62 0.2565242 92/92 19.9858942
63/63 0.3068295 93/93 22.0471782
64/64 0.3670462 94/94 24.6879636
</TABLE>
The above Monthly Guaranteed Cost of Insurance Rates reflect the Premium Class
and Rating Factor of each Joint Insured, as well as any applicable flat extra
mortality ratings. This Table applies to the Face Amount with an effective date
of [March 1, 2000].
<PAGE>
SURVIVORSHIP TERM RIDER (STR)
TABLE OF MONTHLY GUARANTEED COST OF INSURANCE RATES
<TABLE>
<CAPTION>
JOINT RATE JOINT RATE JOINT RATE
INSURED PER INSURED PER INSURED PER
AGES $1,000 AGES $1,000 AGES $1,000
----- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
35/35 0.0208333 65/65 0.4378273 95/95 28.4788772
36/36 0.0208333 66/66 0.5194404 96/96 34.5195729
37/37 0.0208333 67/67 0.6115630 97/97 44.7758719
38/38 0.0208333 68/68 0.7180893 98/98 61.9954056
39/39 0.0208333 69/69 0.8413375 99/99 83.3333333
40/40 0.0208333 70/70 0.9878700 Thereafter 0.0000000
41/41 0.0208333 71/71 1.1651985
42/42 0.0208333 72/72 1.3820904
43/43 0.0208333 73/73 1.6446550
44/44 0.0208333 74/74 1.9551877
45/45 0.0208333 75/75 2.3139899
46/46 0.0208333 76/76 2.7198214
47/47 0.0208333 77/77 3.1723952
48/48 0.0225596 78/78 3.6759437
49/49 0.0270627 79/79 4.2427613
50/50 0.0324275 80/80 4.8901840
51/51 0.0388347 81/81 5.6354560
52/52 0.0465910 82/82 6.4950042
53/53 0.0559325 83/83 7.4695778
54/54 0.0669051 84/84 8.5491913
55/55 0.0798923 85/85 9.7186184
56/56 0.0949125 86/86 10.9650189
57/57 0.1119688 87/87 12.2768024
58/58 0.1316152 88/88 13.6476368
59/59 0.1547928 89/89 15.0844490
60/60 0.1823659 90/90 16.5962806
61/61 0.2156079 91/91 18.2119381
62/62 0.2565242 92/92 19.9858942
63/63 0.3068295 93/93 22.0471782
64/64 0.3670462 94/94 24.6879636
</TABLE>
The above Monthly Guaranteed Cost of Insurance Rates reflect the Premium Class
and Rating Factor of each Joint Insured, as well as any applicable flat extra
mortality ratings. This Table applies to the STR Face Amount with an effective
date of [March 1, 2000].
<PAGE>
SUMMARY OF BENEFITS
LIVING BENEFITS
While both Joint Insureds are alive, subject to this policy's provisions, you
may:
1. Change the amount and frequency of your premium payments;
2. Change the allocation of your premiums;
3. Make transfers between accounts;
4. Surrender this policy for its Cash Surrender Value;
5. Make a Partial Withdrawal;
6. Take a Policy Loan;
7. Assign this policy as collateral;
8. Change the beneficiary;
9. Transfer ownership; and
10. Exercise any other rights this policy provides.
While both Joint Insureds are alive, subject to this policy's provisions, you
may:
1. Change the Face Amount; and
2. Change the Death Benefit Option.
--------------------------------------------------------------------------------
DEATH BENEFITS
At the Surviving Joint Insured's death, the proceeds payable include the Death
Benefit then in force:
Plus any additional amounts provided by rider;
Plus a refund of any policy loan interest we have charged but not earned;
Minus any Loan Amount; and
Minus any unpaid Monthly Deductions.
The Death Benefit is defined in the Death Benefit Option provision. All values
are determined as of the Valuation Date on or next following the date of the
Surviving Joint Insured's death.
--------------------------------------------------------------------------------
THE CONTRACT
This policy is a legal contract. Read your policy carefully! You
rely on us to provide its benefits; we rely on you to pay its premiums. The
entire contract is this policy and all applications, Policy Data Pages, riders,
and amendments attached at time of issue or agreed upon later.
Unless fraudulent, all statements made by or on behalf of anyone covered by this
policy are representations and not warranties. No statement can be used to
cancel this policy or can be used in our defense if we refuse to pay a claim,
unless it is found in an application, rider, or amendment.
--------------------------------------------------------------------------------
CHANGES
Policy changes must be in writing and signed by our President or Secretary, or
one of our Vice Presidents or Assistant Secretaries. No agent or any other
person may alter or change the terms and conditions of this policy.
--------------------------------------------------------------------------------
GENERAL DEFINITIONS
IN FORCE
This policy is in effect.
--------------------------------------------------------------------------------
JOINT INSUREDS
The persons upon whose lives this policy is issued. The Policy Data Page lists
the Joint Insureds.
--------------------------------------------------------------------------------
SURVIVING JOINT INSURED
The Joint Insured who remains alive after the other Joint Insured dies.
--------------------------------------------------------------------------------
PROCEEDS
The amount we pay when the Surviving Joint Insured dies or when this policy is
surrendered.
--------------------------------------------------------------------------------
WE, US, OUR
ReliaStar Life Insurance Company at our Home Office in Minneapolis, Minnesota.
--------------------------------------------------------------------------------
3
<PAGE>
GENERAL DEFINITIONS
(CONTINUED)
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.
--------------------------------------------------------------------------------
YOU, YOUR
The owner of this policy, as shown on the Policy Data Page, unless changed as
allowed in this policy. The Joint Insureds own this policy as joint tenants with
right of surviviorship, unless another owner is named. We reserve the right to
require all owners to sign any request to exercise rights under this policy.
--------------------------------------------------------------------------------
POLICY DEFINITIONS
ACCUMULATION UNIT
A unit of measure used to determine the Variable Accumulation Value.
--------------------------------------------------------------------------------
ACCUMULATION VALUE
The total amount that this policy provides for investment at any time. The
Accumulation Value is the total of the Fixed Accumulation Value and the Variable
Accumulation Value.
--------------------------------------------------------------------------------
AGE
The younger Joint Insured's age on his or her last birthday.
--------------------------------------------------------------------------------
CASH VALUE
The Accumulation Value minus any Surrender Charge.
--------------------------------------------------------------------------------
CASH SURRENDER VALUE
The amount payable to you if you surrender this policy. It is the Cash Value
minus any Loan Amount and unpaid Monthly Deductions.
--------------------------------------------------------------------------------
THE CODE
The Internal Revenue Code of 1986, as amended.
--------------------------------------------------------------------------------
FIXED ACCOUNT
All our assets other than those allocated to the Variable Account or any other
separate account. We have complete ownership and control of the assets in the
Fixed Account.
--------------------------------------------------------------------------------
LOAN AMOUNT
The sum of all unpaid policy loans including preferred loans.
--------------------------------------------------------------------------------
MONTHLY ANNIVERSARY
The same date in each succeeding month as your Policy Date. Whenever your
Monthly Anniversary falls on a date other than a Valuation Date, the Monthly
Anniversary will be the next Valuation Date. The first Monthly Anniversary is on
the Policy Date.
--------------------------------------------------------------------------------
POLICY DATE
The Policy Date is shown on the Policy Data Page. We use the Policy Date to
determine policy years, policy months, Monthly Anniversaries, and policy
anniversaries.
--------------------------------------------------------------------------------
4
<PAGE>
POLICY DEFINITIONS
(CONTINUED)
SUBACCOUNT
A subdivision of the Variable Account. Each Subaccount invests exclusively in
the shares of specified mutual funds.
--------------------------------------------------------------------------------
VALUATION DATE
The close of business each day that the New York Stock Exchange is open for
trading and valuations have not been suspended by the Securities and Exchange
Commission. A Valuation Date may be any other day on which there is sufficient
trading in the mutual funds' portfolio to materially affect the Accumulation
Unit Value in the corresponding Subaccount.
--------------------------------------------------------------------------------
VALUATION PERIOD
The period of time between a Valuation Date and the next Valuation Date.
--------------------------------------------------------------------------------
VARIABLE ACCOUNT
SelectLife Variable Account, a separate investment account of ours. The Variable
Account is used only to receive and invest Net Premiums paid under our variable
life insurance policies. The assets of the Variable Account will be valued on
each Valuation Date. We have complete ownership and control of the assets in the
Variable Account.
Assets of the Variable Account equal to its liabilities will not be charged with
liabilities arising out of any other business we conduct. However, we may
transfer any assets which exceed the liabilities of the Variable Account to our
Fixed Account.
The Variable Account is treated as a unit investment trust under federal
securities laws. It is registered with the Securities and Exchange Commission
according to the Investment Company Act of 1940. It was established under the
State of Minnesota's insurance laws. Any change in the investment policy of the
Variable Account must be approved by the Department of Commerce of the State of
Minnesota according to the approval process on file with the State.
--------------------------------------------------------------------------------
5
<PAGE>
DEATH BENEFIT OPTIONS
The Death Benefit Option is shown on the Policy Data Page. This policy has the
following Death Benefit Options:
OPTION A (LEVEL AMOUNT OPTION) - The Death Benefit prior to age 100 of the
younger Joint Insured is the greater of:
1. The Face Amount; or
2. The Accumulation Value multiplied by the Corridor Percentage, as shown on
the Policy Data Page, according to the younger Joint Insured's attained
age.
OPTION B (VARIABLE AMOUNT OPTION) - The Death Benefit prior to age 100 of the
younger Joint Insured is the greater of:
1. The Face Amount plus the Accumulation Value; or
2. The Accumulation Value multiplied by the Corridor Percentage, as shown
on the Policy Data, according to the younger Joint Insured's attained
age.
OPTION C (FACE AMOUNT PLUS PREMIUM AMOUNT OPTION) - The Death Benefit prior to
age 100 of the younger Joint Insured is the greater of:
1. The Face Amount plus the total premiums paid less the total partial
withdrawals made; or
2. The Accumulation Value multiplied by the Corridor percentage, as shown
on the Policy Data Page, according to the younger Joint Insured's
attained age.
The Death Benefit after the younger Joint Insured reaches age 100, for all Death
Benefit Options, is the Accumulation Value multiplied by the Corridor Percentage
shown on the Policy Data Page.
--------------------------------------------------------------------------------
REQUESTED CHANGES IN FACE AMOUNT
After the fourth policy year, you may request an increase or decrease in your
Face Amount by notifying us in writing. Changes in Death Benefit Option also
change the Face Amount. (See Changes in Death Benefit Option.)
--------------------------------------------------------------------------------
INCREASES
Increases in Face Amount must be at least $5,000. You cannot increase the Face
Amount after any Joint Insured's age exceeds our maximum issue age. You cannot
increase the Face Amount more often than once every two years.
We may require written proof that each Joint Insured is still insurable before
making an increase. An approved increase goes into effect on the Monthly
Anniversary on or next following the date of the approval.
An increase is subject to a free look period during which you have the right to
request us to cancel the increase and receive a refund. The request must be made
by midnight of the 10th day after you receive the new Policy Data Page for the
increase.
If you cancel an increase during this period, we will refund all additional
premiums you paid with the increase, or if none, then we will restore the
Accumulation Value by refunding the amount of any deductions and charges
associated with the increase.
--------------------------------------------------------------------------------
DECREASES
You cannot decrease the Face Amount below the Minimum Face Amount shown on the
Policy Data Page. You cannot decrease the Face Amount if any Survivorship Term
Rider (STR) is attached. You cannot decrease the Face Amount more often than
once every six months. You cannot decrease the Face Amount below the minimum
that would qualify the policy as life insurance under federal law.
Changes go into effect on the Monthly Anniversary on or next following the date
we receive your request.
For the purpose of determining the cost of insurance when more than one Rate
Class applies to the current Face Amount, the Face Amount will be reduced in the
following order:
1. The Face Amount provided by the most recent increase;
2. The next most recent increases successively; and
3. The Initial Face Amount.
--------------------------------------------------------------------------------
6
<PAGE>
REQUESTED CHANGES IN FACE AMOUNT
(CONTINUED)
EFFECT OF REQUESTED CHANGES IN FACE AMOUNT
A change in Face Amount will affect the Monthly Deduction because the cost of
insurance and the Monthly Expense Charge are based on the Face Amount. The cost
of certain rider benefits may also be affected.
If the Death Benefit Guarantee is in effect, we will calculate a new Minimum
Monthly Premium for the Death Benefit Guarantee from the effective date of the
change in Face Amount. Additional premium payments may be required to maintain
the Death Benefit Guarantee. A decrease in Face Amount will reduce the Minimum
Monthly Premium. We will send you a new Policy Data Page with the new Minimum
Monthly Premium.
An increase in Face Amount will increase Surrender Charges and the Monthly
Amount Charges. We will send you a new Policy Data Page showing the amount and
duration of the new Surrender Charges and the Monthly Amount Charges for the
increase. Decreases in Face Amount do not reduce the Surrender Charge or the
Monthly Amount Charge.
--------------------------------------------------------------------------------
CHANGES IN DEATH
After the fourth policy year and at least two years BENEFIT OPTION after any
increase in Face Amount, you may request in writing to change Option A or Option
B. You may not change to or from Option C. A change in Death Benefit Option
changes the Face Amount. We may require proof of insurability for a change to
Option B.
If you change from Option A to Option B the Face Amount is decreased by an
amount equal to the Accumulation Value on the effective date of the change. The
change is effective on the Monthly Anniversary on or next following the date we
receive your request. You cannot change the Death Benefit Option if the
resulting Face Amount would fall below the Minimum Face Amount shown on the
Policy Data Page.
If you change from Option B to Option A, the Face Amount is increased by an
amount equal to the Accumulation Value on the effective date of the change. The
change is effective on the Monthly Anniversary on or next following the date we
receive your request.
A change in Face Amount due to a change in Death Benefit Option will affect the
Monthly Deduction because the cost of insurance and the Monthly Expense Charge
depend on the Face Amount. The cost of certain rider benefits may also be
affected.
The Surrender Charges and the Monthly Amount Charge will not be affected by a
change in the Death Benefit Option.
--------------------------------------------------------------------------------
PREMIUMS
There is no insurance under this policy until the initial premium is paid. The
initial premium is shown on the Policy Data Page. All premiums are payable in
advance of the period to which they apply.
--------------------------------------------------------------------------------
NET PREMIUM
When you pay a premium, we deduct the Premium Expense Charge. The Premium
Expense Charge is equal to the premium multiplied by the Percent Premium Charge.
The Percent Premium Charge is subject to change, but will not exceed the Maximum
Percent Premium Charge shown on the Policy Data Page.
The amount remaining after we have deducted the Premium Expense Charge from a
premium is the Net Premium. The Net Premium is credited to the Fixed Account and
the Subaccounts of the Variable Account according to your allocation.
The portion of the Net Premium allocated to the Fixed Account earns interest as
described in the Fixed Accumulation Value provision of the policy.
The portion of the Net Premium allocated to a Subaccount is invested at net
asset value in shares of a specified mutual fund. As of the Policy Date, the
mutual funds in which the Subaccounts invest are listed on the Policy Data Page.
A Subaccount may be added later or deleted according to the "Substitution of
Mutual Fund Shares" provision of this policy.
--------------------------------------------------------------------------------
7
<PAGE>
PREMIUMS
(CONTINUED)
Premiums received prior to the Initial Premium Transfer Date, as shown on the
Policy Data Page, will be allocated to the Initial Premium Sub-Account, as shown
on the Policy Data Page, on the later of the Policy Date or the date we received
your premium. On the Valuation Date on or next following the Initial Premium
Transfer Date, the initial premium in the Initial Premium Sub-Account will be
transferred to the Fixed Account and the Sub-accounts of the Variable Account as
shown on the Policy Data Page. This allocation will also be used to allocate
premiums received on or after the Initial Premium Transfer Date. You may change
the allocation at any time by notifying us in writing. Changes will not be
effective until the date we receive your notice, and will only affect premiums
we receive on or after that date. You may allocate 100% to any account or divide
your allocation in whole percentage points totaling 100%. We reserve the right
to adjust your allocations to eliminate fractional percentages.
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AMOUNT AND TIMING OF PREMIUM PAYMENTS
The amount and frequency of premium payments will affect the Accumulation Value,
the Cash Surrender Value, and how long the life insurance provided by this
policy will remain in force.
After the initial premium payment you may determine the amount and timing of
premium payments, within the following restrictions:
1. We may require proof which satisfies us that each Joint Insured is
still insurable if any premium payment, planned or unscheduled, would
increase the difference between the Death Benefit and the Accumulation
Value;
2. We reserve the right to refuse to accept any premium payment which
would disqualify your policy for favorable tax treatment under the
Code. If premiums paid exceed the maximum permitted under the Code, we
will return the excess premiums with interest to you within 60 days
after the end of the policy year. However, you have the right to keep
this policy in force to the end of the policy year;
3. We may refuse to accept any premium payment less than $25; and
4. We will not accept premium payments after age 100 of the younger Joint
insured.
You may pay premiums by sending them to the address shown below. Please
include your policy number. The current address for payment is:
ReliaStar Life Insurance Company
P.O. Box 1880
Minneapolis, Minnesota 55480-1880
Upon request, we will send you a receipt signed by one of our officers.
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PLANNED PERIODIC PREMIUMS
You may pay planned periodic premiums annually, semiannually, quarterly, or, if
you choose, we can also deduct planned periodic premiums from your bank account
monthly. We will notify you of your planned periodic premium at least once a
year.
The amount and frequency of the initial planned periodic premiums are shown on
the Policy Data Page. You may change the frequency and amount of planned
periodic premiums by notifying us in writing of the change. We reserve the right
to limit the amount of any increase.
We may send you periodic premium notices depending on the frequency and method
of premium payment you have chosen.
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UNSCHEDULED ADDITIONAL PREMIUMS
Premiums, other than planned periodic premiums, may be paid at any time. We may
limit the number and amount of these additional payments. (See "Amount and
Timing of Premium Payments" above.)
8
<PAGE>
DEATH BENEFIT GUARANTEE
If the Death Benefit Guarantee is in effect, we guarantee that we will not lapse
your policy, even if the Cash Surrender Value is not sufficient to pay the
Monthly Deduction that is due. The Death Benefit Guarantee is in effect during
the Death Benefit Guarantee Period if, on each Monthly Anniversary since the
Policy Date, 1 is equal to or greater than 2, where:
1. Is the sum of all premiums paid minus any partial withdrawals and any
Loan Amount; and
2. Is the sum of Minimum Monthly Premiums since the Policy Date, including
the Minimum Monthly Premium for the current Monthly Anniversary.
The Death Benefit Guarantee Period is shown on the Policy Data Page and begins
on the Policy Date.
If, on any Monthly Anniversary you have not paid sufficient premiums to maintain
the Death Benefit Guarantee, we will send you notice of the required payment. If
we do not receive the required payment within 61 days following the date we mail
you written notice, the Death Benefit Guarantee is no longer in effect. Although
we determine each month whether or not you have made sufficient premium payments
to maintain the Death Benefit Guarantee, you do not have to pay premiums
monthly. During the first five years after the Policy Date, the Death Benefit
Guarantee may be reinstated by payment of additional premiums equal to 2 minus
1, (2-1), as defined above. After the first five years, the Death Benefit
Guarantee may not be reinstated.
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POLICY CHANGES AFFECTING THE MINIMUM MONTHLY PREMIUM AND THE DEATH BENEFIT
GUARANTEE PERIOD
The Minimum Monthly Premium may be affected by requested changes in Face Amount,
changes in the Death Benefit Option, and may also be changed when a rider is
added or terminated. The new Minimum Monthly Premium and Death Benefit Guarantee
Period will be shown on a new Policy Data Page and apply from the date of the
change.
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GRACE PERIOD AND POLICY LAPSE
If the Death Benefit Guarantee is not in effect, the policy will lapse only if
the Cash Surrender Value is less than the Monthly Deduction due. When a policy
has lapsed, it is not in force.
We will only lapse this policy at the end of a 61-day grace period if sufficient
payment is not received. The grace period begins on the date we send you written
notice of the required payment.
If the Surviving Joint Insured dies during the grace period, we deduct any Loan
Amount and any unpaid Monthly Deductions from the proceeds.
If the Death Benefit Guarantee is in effect, we will not lapse the policy.
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REINSTATEMENT
Reinstatement means putting a lapsed policy back in force. You may reinstate
this policy by written request any time within five years after it has lapsed,
as long as it has not been surrendered for its Cash Surrender Value.
To reinstate this policy and any riders:
1. You must submit proof which satisfies us that each Joint Insured, or
Surviving Joint Insured, is still insurable. You must also submit due
proof that any Joint Insured not living when you apply for
reinstatement died while the policy was in force.
2. You must pay a premium large enough to keep the policy and any riders
in force for at least two months.
This policy will be reinstated only as of a Monthly Anniversary. If you have met
the above conditions, and the Surviving Joint Insured dies before the Monthly
Anniversary on which the policy would be reinstated, we will pay the Death
Benefit as of that Monthly Anniversary.
The Accumulation Value on the date of reinstatement will be the amount provided
by the Net Premium paid to reinstate this policy. Subsequent Accumulation Values
will be calculated as shown in the Accumulation Value provision of this policy.
The Surrender Charges will also be reinstated.
The Death Benefit Guarantee may be reinstated during the first five years after
the Policy Date. After the first five years a lapsed Death Benefit Guarantee may
not be reinstated.
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9
<PAGE>
ACCUMULATION VALUE
The Accumulation Value of this policy is equal to the sum of the Fixed
Accumulation Value plus the Variable Accumulation Value.
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FIXED ACCUMULATION VALUE
The Fixed Accumulation Value on the Policy Date is your Net Premium credited to
the Fixed Account on that date minus the Monthly Deduction applicable to the
Fixed Accumulation Value for the first policy month.
After the Policy Date, the Fixed Accumulation Value is calculated as
1 + 2 + 3 + 4 - 5 - 6, where:
1. Is the Fixed Accumulation Value on the preceding Monthly Anniversary,
plus interest from the Monthly Anniversary to the date of the
calculation;
2. Is the total of your Net Premiums credited to the Fixed Account since
the preceding Monthly Anniversary, plus interest from the date premiums
are credited to the date of the calculation;
3. Is the total of your transfers from the Variable Account to the Fixed
Account since the preceding Monthly Anniversary, plus interest from the
date of transfer to the date of the calculation;
4. Is the total of your Loan Amount transferred from the Variable Account
since the preceding Monthly Anniversary;
5. Is the total of your transfers to the Variable Account from the Fixed
Account since the preceding Monthly Anniversary, plus interest from the
date of transfer to the date of the calculation; and
6. Is the total of your partial withdrawals from the Fixed Account since
the preceding Monthly Anniversary, plus interest from the date of
withdrawal to the date of the calculation.
If the date of the calculation is a Monthly Anniversary, we also reduce the
Fixed Accumulation Value by the applicable Monthly Deduction for the policy
month following the Monthly Anniversary.
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INTEREST RATE ON THE FIXED ACCUMULATION VALUE
The interest rate applied in the calculation of the Fixed Accumulation Value
will not be less than the Minimum Annual Interest Rate shown on the Policy Data
Page. This rate is an effective annual interest rate compounded yearly. Interest
in excess of the Minimum Annual Interest Rate may be applied in the calculation
of your Fixed Accumulation Value in a manner which our Board of Directors
determines.
The interest rate applied to any portion of the Accumulation Value which
represents the Loan Amount may be less than the interest rate applied to the
rest of the Accumulation Value, but not less than the Minimum Annual Interest
Rate. Interest credited on the loaned Accumulation Value is credited annually on
the Policy Anniversary to the Fixed Account and the Variable Account according
to your premium allocation.
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10
<PAGE>
ACCUMULATION VALUE
(CONTINUED)
VARIABLE ACCUMULATION VALUE
The Variable Accumulation Value is the total of your values in each Subaccount.
The value for each Subaccount is equal to 1 multiplied by 2, (1 x 2), where:
1. Is your current number of Accumulation Units; and
2. Is the current Unit Value.
The Variable Accumulation Value will vary from Valuation Date to Valuation Date
reflecting changes in 1 and 2 above.
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ACCUMULATION UNITS
When transactions are made which affect the Variable Accumulation Value, dollar
amounts are converted to Accumulation Units. The number of Accumulation Units
for a transaction is found by dividing the dollar amount of the transaction by
the current Unit Value.
The number of Accumulation Units for a Subaccount increases when:
1. Net Premiums are credited to that Subaccount; or
2. Transfers from the Fixed Account or other Subaccounts are credited to that
Sub-account.
The number of Accumulation Units for a Subaccount decreases when:
1. You take out a Policy Loan from that Subaccount;
2. You take a partial withdrawal from that Subaccount;
3. We take a portion of the Monthly Deduction from that Subaccount; or
4. Transfers are made from that Subaccount to the Fixed Account or other
Sub-accounts.
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Unit Value
The Unit Value for a Subaccount on any Valuation Date is equal to the previous
Unit Value multiplied by the Net Investment Factor for that Subaccount for the
Valuation Period ending on that Valuation Date.
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11
<PAGE>
ACCUMULATION VALUE
(CONTINUED)
NET INVESTMENT FACTOR
The Net Investment Factor is a number that reflects charges to this policy and
the investment performance during a Valuation Period of the mutual fund in which
a Subaccount is invested. If the Net Investment Factor is greater than one, the
Unit Value is increased. If the Net Investment Factor is less than one, the Unit
Value is decreased. The Net Investment Factor for a Sub-account is determined by
dividing 1 by 2, ( 1 / 2 ), where:
1. Is the result of:
a. The net asset value per share of the mutual fund shares in
which the Subaccount invests, 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 mutual fund shares in which the
Sub-account invests during the current Valuation Period; and
c. Plus or minus a per share charge or credit for any taxes
reserved on account of the investment operations of the
Sub-account applicable to this policy.
2. Is the result of:
a. The net asset value per share of the mutual fund shares held
in the Subaccount, determined at the end of the last prior
Valuation Period; and
b. Plus or minus a per share charge or credit for any taxes
reserved for the last prior Valuation Period on account of the
investment operations of the Subaccount applicable to this
policy.
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MONTHLY DEDUCTION
The Monthly Deduction is a charge made monthly against the Accumulation Value.
The Monthly Deduction for a policy month will be calculated as
1, plus 2, plus 3, plus 4, plus 5, (1 + 2 + 3 + 4 + 5), where:
1. Is the cost of any rider benefits, other than any Waiver of Monthly
Deduction rider, for the policy month;
2. Is the cost of insurance for this policy for the policy month;
3. Is the Monthly Mortality and Expense Risk Charge for the policy month;
4. Is the Monthly Expense Charge for the policy month; and
5. Is the cost of any Waiver of Monthly Deduction rider for the policy month.
The Monthly Deduction is taken from the Fixed Accumulation Value and the
Variable Accumulation Value on a proportionate basis as of each Monthly
Anniversary. For the purpose of determining the proportion of the deduction, the
Fixed Accumulation Value is reduced by the Loan Amount.
We deduct the portion of the Monthly Deduction from each Subaccount of the
Variable Account by an automatic surrender of Accumulation Units. We make the
deduction based on each Subaccount's proportionate percentage of the
Accumulation Value.
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12
<PAGE>
MONTHLY DEDUCTION
(CONTINUED)
MONTHLY MORTALITY AND EXPENSE RISK CHARGE
The Monthly Mortality and Expense Risk Charge for a policy month will be
calculated as 1 multiplied by 2, ( 1 x 2 ), where:
1. Is the Mortality and Expense Risk Charge, which will not exceed the
Maximum Mortality and Expense Risk Charge Rate shown on the Policy Data
Page, divided by 12; and
2. Is the Variable Accumulation Value before the Monthly Deduction, minus
the portion of the following charges taken from the Variable
Accumulation Value:
a. The cost of any rider benefits other than any Waiver of
Monthly Deduction rider;
b. The Cost of Insurance; and
c. The Monthly Expense Charge.
--------------------------------------------------------------------------------
MONTHLY EXPENSE CHARGE
The Monthly Expense Charge for a policy month will be calculated as 1 plus 2
plus 3 plus 4, (1 + 2 + 3 + 4), where:
1. Is the Monthly Administrative Charge. The Monthly Administrative Charge
is subject to change, but will not exceed the Maximum Monthly
Administrative Charge shown on the Policy Data Page;
2. Is the Death Benefit Guarantee Charge and the term shown on the Policy
Data Page;
3. Is the Monthly Policy Charge. This charge and the term during which it
is applied are shown on the Policy Data Page; and
4. Is the Monthly Amount Charge. This charge is equal to the Monthly
Amount Charge Per $1,000, as shown on the Policy Data Page, multiplied
by the Face Amount divided by $1,000. This charge begins on the Policy
Date Page and applies during the term shown on the Policy Data Page. An
additional Monthly Amount Charge Per $1,000 will apply to any increases
in Face Amount from the effective date of the increase. We will send
you written notice of the Monthly Amount Charge Per $1,000 and term for
any increase. Any change in Face Amount due to a change of Death
Benefit Option or to a Face Amount decrease does not affect the charge.
--------------------------------------------------------------------------------
COST OF INSURANCE
We determine the cost of insurance on a monthly basis. The cost of insurance for
a policy month is calculated as 1 multiplied by the result of 2 minus 3, 1 x (2
3)., where:
1. Is the cost of insurance rate as described in the Cost of Insurance
Rates provision of this policy;
2. Is the Death Benefit at the beginning of the policy month, divided by
the sum of 1.000000 plus the Minimum Monthly Interest Rate shown on the
Policy Data Page; and
3. Is the Accumulation Value immediately before the Monthly Deduction
minus the cost for any rider benefits other than the Waiver of Monthly
Deduction rider, for the policy month.
The cost of insurance is determined separately for the Initial Face Amount and
any increases made later. If the Rate Class for the Initial Face Amount is
different from that of an increase, the Accumulation Value used in 3 above will
first be considered a part of the Initial Face Amount. If the Accumulation Value
on the Monthly Anniversary exceeds the Initial Face Amount, it will be
considered to be part of any increase in the Face Amount in order of the
increases. The cost of insurance is never less than zero.
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13
<PAGE>
MONTHLY DEDUCTION
(CONTINUED)
COST OF INSURANCE RATES
The monthly cost of insurance rate for this policy is based on the sex, issue
age, and rate class for each Joint Insured as shown on the Policy Data Page, and
the policy year. If the Death Benefit is a percentage of the Accumulation Value
as described in the Death Benefit Option provision, the rate class with the most
recent effective date will apply.
Issue age means age last birthday on the effective date of coverage.
The cost of insurance rates can never be greater than those shown in the Table
of Monthly Guaranteed Cost of Insurance Rates. This table is based on the
Commissioners Standard Ordinary Mortality (CSO) Tables shown on the Policy Data
Page.
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ADJUSTMENTS TO POLICY COST FACTORS
Adjustments to the monthly cost of insurance rates, other expense charges, or to
the interest rate we credit to the Fixed Accumulation Value will be based upon
our expectations of the following future cost factors: mortality, expenses
including taxes, persistency, investment earnings, and reinsurance. Any change
will apply to all policies in the same insurance class which have been in force
for the same period of time. We will not adjust cost of insurance rates, other
expense charges, or the interest rate we credit to the Fixed Accumulation Value,
to recover past losses.
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NONFORFEITURE PROVISION
BASIS OF COMPUTATIONS
Minimum cash values are based on the Commissioners Standard Ordinary Mortality
(CSO) Table and the Nonforfeiture Interest Rate as shown on the Policy Data
Page. Where required, a detailed statement of the method of computation of cash
values under this policy has been filed with the insurance department of the
state in which this policy was delivered. Cash values under this policy are not
less than the minimums required by the state in which this policy was delivered.
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CONTINUATION OF INSURANCE (EXTENDED INSURANCE)
Even if you do not make additional premium payments, your insurance coverage
under this policy, and any benefits provided by rider, will stay in force as
long as the Cash Surrender Value is large enough to cover the Monthly Deduction.
If the Cash Surrender Value is less than the Monthly Deduction due, we will use
the Cash Surrender Value to continue the insurance during the grace period.
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TRANSFERS
You may request in writing the transfer of all or part of your Accumulation
Value between the Fixed Account and the Sub-accounts of the Variable Account. We
only allow twelve transfers in a policy year. We consider all transfers received
in the same request and made on the same Valuation Date as one transfer. We make
a transfer on the first Valuation Date after we receive your written request.
We may make a charge for each transfer, but the charge may not exceed $25.00.
All transfers are also subject to any charges and conditions imposed by the
mutual fund whose shares are involved.
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TRANSFERS FROM THE FIXED ACCOUNT
To transfer all or part of your Fixed Accumulation Value, you must meet the
following conditions:
1. The request to transfer must be postmarked no earlier than 30 days
before the policy anniversary, and no later than 30 days after the
policy anniversary. Only one transfer is allowed during this period;
2. The Fixed Accumulation Value after the transfer must be at least equal to
the Loan Amount;
3. No more than 50% of the Fixed Accumulation Value (minus any Loan Amount)
may be transferred unless the balance, after the transfer, would be less
than $1,000. If the balance would fall below $1,000, the full Fixed
Accumulation Value (minus any Loan Amount) may be transferred; and
4. You must transfer at least;
a. $500; or
b. The total Fixed Accumulation Value (minus any Loan Amount) if
less than $500.
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14
<PAGE>
TRANSFERS
(CONTINUED)
TRANSFERS FROM A SUB-ACCOUNT
To transfer from a Sub-account, Accumulation Units are redeemed on the next
Valuation Date after we receive your request and their value is reinvested in
other Sub-accounts, or the Fixed Account, as directed in your request.
--------------------------------------------------------------------------------
CASH VALUE, CASH SURRENDER VALUE, TOTAL SURRENDER, AND PARTIAL WITHDRAWAL
BENEFITS
CASH VALUE
The Cash Value of this policy is the Accumulation Value minus any Surrender
Charge.
The Cash Value is never less than zero.
--------------------------------------------------------------------------------
CASH SURRENDER VALUE
The Cash Surrender Value of this policy is the Cash Value minus the Loan Amount
and any unpaid Monthly Deductions.
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SURRENDER CHARGE
We make a Surrender Charge if you surrender this policy or it lapses. The amount
and duration of this charge is shown on the Policy Data Page.
Additional Surrender Charges will apply to any increase in Face Amount. We will
send you written notice of the amount and duration of the additional Surrender
Charge.
If Surrender Charges are shown on an annual basis, they grade uniformly by
policy month between the consecutive years shown.
Any increases or decreases in Face Amount resulting from changes in the Death
Benefit Option, and any requested decreases in Face Amount, do not affect the
Surrender Charges.
--------------------------------------------------------------------------------
TOTAL SURRENDER
You may surrender this policy for its Cash Surrender Value by sending us a
written request.
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PARTIAL WITHDRAWAL
After the first policy year, you may withdraw part of your Cash Surrender Value
by sending us a written request. The amount of any partial withdrawal must be at
least equal to $500.00. The amount of any partial withdrawal cannot exceed the
result of the Cash Surrender Value multiplied by the Maximum Partial Withdrawal
Percent shown on the Policy Data Page. Only one partial withdrawal is allowed in
any policy year. We may make a charge for each partial withdrawal, but the
charge will not exceed $25.00.
Unless you specify, we make partial withdrawals from the Fixed Accumulation
Value and the Variable Accumulation Value on a proportionate basis. For the
purpose of calculating the proportion, the Loan Amount is subtracted from the
Fixed Accumulation Value. (See Monthly Deduction for an example of how we
calculate this proportion.) We make partial withdrawals from a Subaccount by the
automatic surrender of Accumulation Units.
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15
<PAGE>
CASH VALUE, CASH SURRENDER VALUE, TOTAL SURRENDER, AND PARTIAL WITHDRAWAL
BENEFITS
(CONTINUED)
THE EFFECT OF PARTIAL WITHDRAWALS
The Accumulation Value will be reduced by the amount of any partial withdrawal.
The Death Benefit will also be reduced by the amount of the withdrawal, or, if
the Death Benefit is based on the Corridor Percentage of Accumulation Value, by
an amount equal to the Corridor Percentage times the amount of the withdrawal.
The Face Amount will be reduced by the amount of the partial withdrawal if
Option A (Level Amount Option) is in effect. We do not allow a partial
withdrawal if the Face Amount after a partial withdrawal would be less than the
Minimum Face Amount shown on the Policy Data Page. If more than one rate class
applies to the current Face Amount, for the purpose of determining the cost of
insurance, the Face Amount will be reduced in the following order:
1. The Face Amount provided by the most recent increase;
2. The next most recent increases successively; and
3. The Initial Face Amount.
If Death Benefit Option B (Variable Amount Option) or Death Benefit Option C
(Face Amount Plus Premium Amount Option) is in effect, a partial withdrawal does
not affect the Face Amount.
A partial withdrawal may cause the Death Benefit Guarantee to terminate. The
amount of the partial withdrawal is deducted from the total premium paid in
calculating whether sufficient premiums have been paid to maintain the Death
Benefit Guarantee.
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POLICY LOANS
After the first policy year, if this policy has a Loan Value, you may take out a
loan from us by written request. We use this policy as security for the loan.
Each loan must be at least $500.
We will not lend you more than the Loan Value. The Loan Value is 1, minus 2,
(1 - 2), where:
1. Is 90% of the Cash Value; and
2. Is the existing Loan Amount.
When we make a policy loan, the amount of the policy loan will be segregated
within the Fixed Accumulation Value of your policy as security for the loan.
Unless you specify, amounts held as security for the loan will come from the
Fixed Accumulation Value and the Variable Accumulation Value on a proportionate
basis. For the purpose of determining the proportion, we subtract any existing
Loan Amount from the Fixed Accumulation Value. (See Monthly Deduction for an
example of how we calculate this proportion.) Amounts equal to the portion of
the policy loans coming from the Subaccounts of the Variable Account are
transferred to the Fixed Account, reducing the Variable Accumulation Value.
These transfers are not treated as transfers for the purpose of the transfer
charge or the limit on the number of transfers in a policy year.
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16
<PAGE>
POLICY LOANS
(CONTINUED)
EFFECT OF THE POLICY LOANS
If not repaid, we deduct any unpaid policy loans before paying the proceeds. If,
at any time, the Loan Amount exceeds the Cash Value, the grace period goes into
effect and we may lapse this policy. A loan may cause the Death Benefit
Guarantee to terminate. The Loan Amount is deducted from the total premiums paid
in calculating whether you have paid premiums sufficient to maintain the Death
Benefit Guarantee.
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LOAN INTEREST
We charge interest on the Loan Amount at the Loan Interest Rate shown on the
Policy Data Page, unless we charge a lower rate. We will let you know in writing
of any change in the interest rate. We will also notify all collateral assignees
we have on record of the change. If you have an existing loan, we will give
notice of any increase in the Loan Interest Rate at least 30 days before the
increase goes into effect. We will never increase the Loan Interest Rate beyond
that shown on the Policy Data Page. After the tenth policy year, we charge
interest at the Preferred Loan Interest Rate shown on the Policy Data Page on
the portion of your Loan Amount that is not greater than the result of
1, minus 2, plus 3, ( 1 2 + 3 ), where:
1. Is the Accumulation Value;
2. Is the sum of all premiums paid; and
3. Is the sum of all partial withdrawals.
This result is called the Preferred Loan Amount.
The Preferred Loan Amount is calculated on the date of any loan and on each
policy anniversary thereafter. Policy loan repayments received will be applied
first to reduce the portion of your policy loan that is not the Preferred Loan
Amount, and then to reduce the Preferred Loan Amount.
On the date of any policy loan, interest is due in advance for the remainder of
the policy year. On each policy anniversary thereafter, interest is due in
advance for the next full policy year. Any unpaid interest is added to the Loan
Amount, and we charge interest on it.
--------------------------------------------------------------------------------
REPAYMENT
You may repay all or part of any policy loan during any Joint Insured's
lifetime. If not repaid during the Surviving Joint Insured's lifetime, we deduct
the Loan Amount from the proceeds. We generally consider any payments we
receive, planned or unscheduled, as premium payments. Therefore, when you make a
payment on a policy loan, to avoid a Premium Expense Charge, you must tell us
that you are making a loan payment. We reserve the right to consider any payment
we receive as a loan repayment at our discretion.
Loan repayments reduce the Loan Amount. We will transfer from the Fixed Account
to each Subaccount of the Variable Account, 1 multiplied by 2, ( 1 x 2 ), where:
1. Is the amount of the loan repayment; and
2. Is the current proportion used to allocate premiums to that Subaccount.
These transfers are not treated as transfers for the purpose of the transfer
charge or the limit on the number of transfers in a policy year.
--------------------------------------------------------------------------------
DELAY OF PAYMENT ON SURRENDER, PARTIAL WITHDRAWALS AND LOANS
The amount surrendered, withdrawn, or loaned will normally be paid to you within
seven days of:
1. Receipt of your written request; and
2. Receipt of your policy, if required.
We may delay making the payment when we are not able to determine the Variable
Accumulation Value because:
1. The New York Stock Exchange is closed for trading; or
2. The Securities and Exchange Commission determines that a state of emergency
exists.
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17
<PAGE>
DELAY OF PAYMENT ON SURRENDER, PARTIAL WITHDRAWALS AND LOANS
(CONTINUED)
We have the right to delay making a surrender, partial withdrawal, or loan from
the Fixed Account for up to six months from the date we receive your request. If
we delay payment for 30 days or more, we pay interest at an effective annual
rate of 3-1/2% from the date of the surrender, partial withdrawal, or loan
request to the date of payment. We will not delay making a loan if it is for a
premium payment.
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BENEFICIARY
The beneficiary is named to receive the proceeds to be paid at the Surviving
Joint Insured's death. You may name one or more beneficiaries on the
application. Later, you may name, add, or change beneficiaries by written
request as described below. You may also choose to name a beneficiary whom you
cannot change without his or her consent. This is an irrevocable beneficiary.
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NAMING, ADDING, OR CHANGING BENEFICIARIES
You can name, add, or change beneficiaries by written request if all of these
are true:
1. This policy is in force;
2. The Surviving Joint Insured is alive; and
3. We have the written consent of all irrevocable beneficiaries.
A change will take effect as of the date it is signed but will not affect any
payment we make or action we take before receiving your request.
--------------------------------------------------------------------------------
PAYING PROCEEDS
We pay death proceeds in the following order:
1. Collateral assignees, if any, have first priority;
2. The beneficiary, if any, receives any proceeds that remain. If there is
more than one beneficiary, each receives an equal share, unless you
have requested another method in writing. To receive proceeds, a
beneficiary must be living on the 10th day after the Surviving Joint
Insured's death; then
3. If there are no beneficiaries, you receive any proceeds that remain.
--------------------------------------------------------------------------------
CONTROL OF POLICY
OWNERSHIP
As owner, you have the rights and duties outlined in this policy. However, we
need the written consent of all irrevocable beneficiaries and collateral
assignees, if you wish to:
1. Surrender this policy or make a partial withdrawal;
2. Take out a policy loan;
3. Change the owner;
4. Name or change a contingent owner;
5. Add or delete a term insurance rider;
6. Change the Face Amount; or
7. Change the Death Benefit Option.
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18
<PAGE>
CONTROL OF POLICY
(CONTINUED)
We need the written consent of all irrevocable beneficiaries, if you wish to:
1. Change a beneficiary;
2. Choose or change a Settlement Option; or
3. Assign this policy or any of its benefits as collateral.
Your rights, as outlined in this policy, end at the Surviving Joint Insured's
death.
--------------------------------------------------------------------------------
COLLATERAL ASSIGNMENT
You may assign the benefits of this policy as collateral for a debt. This limits
your rights to the Cash Surrender Value and the beneficiary's rights to the
proceeds. A collateral assignment does not change the owner. A collateral
assignee does not have ownership rights.
An assignment is not binding on us until we receive written notice of it. We
assume no responsibility as to the validity of any assignment. When we pay
proceeds, we may rely on what the collateral assignee states as the debt due.
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CHANGING OWNERSHIP
You can change the owner of this policy by sending us a written request. This is
called an "absolute assignment." You transfer all your rights and duties as
owner to a new owner. The new owner can then make any change the policy allows.
You can also name a contingent owner who will own this policy at your death. You
may name, change, or withdraw a contingent owner by sending us a written
request.
An absolute assignment or contingent owner request:
1. Does not change the coverage or the beneficiary;
2. Applies only if we receive your request;
3. Takes effect from the date signed;
4. Does not affect any payment we make or action we take before receiving
your request; and
5. Is not a collateral assignment.
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SETTLEMENT OPTIONS
Settlement Options are ways of paying the proceeds of this policy. These options
apply to:
1. Payment of proceeds at death; and
2. Proceeds payable upon full surrender of this policy for its Cash Surrender
Value.
Proceeds applied under a settlement option no longer earn interest at the rate
applied to the Fixed Account or participate in the investment experience of the
Variable Account.
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<PAGE>
SETTLEMENT OPTIONS
(CONTINUED)
CHOOSING OPTIONS
Settlement Options are chosen or withdrawn by making a written agreement with us
or by sending us written notice. Our approval is needed for an option to be
chosen or withdrawn. Before the Surviving Joint Insured's death, only you can
choose or withdraw an option. After the Surviving Joint Insured's death, a
beneficiary may choose an option depending on prior restrictions made by you or
a collateral assignee. A change of beneficiary or owner withdraws all chosen
options; you must choose again any options you want.
We issue a supplemental contract for proceeds applied under any option. We need
not accept an option where less than $2,500 will be applied for each payee. In
this case, we may pay a payee's proceeds in one sum. Under an installment
option, each payment must be at least $25. If needed, we may increase the time
between payments to three months, six months, or a year to make each payment at
least $25.
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PAYING PROCEEDS
A payee is one to whom we may pay part or all of the proceeds or interest. The
primary payee is the first person to whom benefits are payable. If the primary
payee dies before we have made all payments under Options 2, 3, or 4, we pay the
remaining payments to any contingent payee. We pay the proceeds in one sum,
unless one or more of the following options are requested and we agree to it. We
will also use any other method of payment that is acceptable to you and to us.
Under Options 2, 3, 4, and 5, we pay the first installment as of the date we
issue a supplemental contract to pay the proceeds.
OPTION 1
The proceeds are left with us to earn interest. The withdrawal rights, the
length of time we will hold the proceeds, and any future change of option are
subject to our approval. The effective annual interest rate will never be less
than the Settlement Option Interest Rate as shown on the Policy Data Page.
OPTION 2
We pay the proceeds with interest in equal installments for the amount you
choose at equal intervals until the proceeds and interest are all paid. The
effective annual interest rate will never be less than the Settlement Option
Interest Rate as shown on the Policy Data Page. The interval you choose may be a
month, three months, six months, or a year. The amount chosen for each
installment must be such that the total installments payable in any 12 month
period is at least 7% of the total amount of the proceeds.
The last installment will be for the remaining proceeds and interest, and might
not be equal to the other installments.
OPTION 3
We pay the proceeds with interest in equal installments at equal intervals for
the number of years you choose. The interval may be a month, three months, six
months, or a year. The effective annual interest rate will never be less than
the Settlement Option Interest Rate as shown on the Policy Data Page. Sample
payment amounts are shown in the Option 3 Table on the Policy Data Page.
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<PAGE>
SETTLEMENT OPTIONS
(CONTINUED)
OPTION 4
The proceeds are used to provide an annuity with 60, 120, 180, or 240 months
certain. This means that we continue paying the primary payee in equal monthly
installments for as long as the primary payee lives with a number of months
certain. Certain means that we make payments for at least as long as the period
you choose (either 60, 120, 180, or 240 months), no matter when the primary
payee dies. If the primary payee dies before the certain period ends, the
remaining payments are payable to the contingent payee.
We compute the installments using the calendar year in which the proceeds are
applied and the payee's sex and age at that time. We require written proof of
the payee's sex and age. If you ask, we will tell you payment amounts for this
option. The amount of the installments will be no less than those computed using
the Settlement Option Mortality Table and Settlement Option Interest Rate as
shown on the Policy Data Page.
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<PAGE>
SETTLEMENT OPTIONS
(CONTINUED)
OPTION 5
The proceeds are used to provide a joint and two-thirds to survivor life income
for two payees. We make monthly payments jointly to the two payees as long as
they both live. When one payee dies, the other receives two-thirds of the amount
of the joint monthly payment for life. Payments stop when both payees have died.
We compute the payment amounts using the calendar year in which the proceeds are
applied and the payees' sexes and ages when the proceeds are applied. We require
written proof of the payees' sexes and ages. If you ask us, we will tell you any
of these amounts. The amount of the installments will be no less than those
computed using the Settlement Option Mortality Table and Settlement Option
Interest Rate as shown on the Policy Data Page.
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DEATH OF PAYEE
Unless we have agreed otherwise, if a payee dies after we have paid or credited
proceeds under Option 1, we will pay the proceeds and any unpaid interest in one
sum to the payee's estate. Unless we have agreed otherwise, if a payee dies
after we have paid or credited proceeds under Options 2, 3, or 4, we will pay
the remaining payments to any contingent payees. If there are no contingent
payees, we pay the following amounts to the primary payee's estate.
1. Under Option 2, we will pay any unpaid sum left with us plus any unpaid
interest on that sum.
2. Under Option 3, we will pay the commuted value of any unpaid
installments. The commuted value will be calculated using the same rate
used to determine payments.
3. Under Option 4, we will pay the commuted value of any unpaid
installments remaining in the certain period. The commuted value will
be calculated using the same rates used to determine payments.
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<PAGE>
SETTLEMENT OPTIONS
(CONTINUED)
PROTECTION OF PROCEEDS
Unless we agree to it, a payee may not do any of the following:
1. Withdraw any part of the proceeds or interest;
2. Change the fixed payment intervals or the length of the payment period;
3. Change the settlement option;
4. Change the amount of payment;
5. Surrender the supplemental contract for cash;
6. Borrow against the supplemental contract; or
7. Assign the supplemental contract.
If the payee chooses Options 1, 2, or 3, the payee may change the option and
transfer the funds that remain to a new option. This applies unless prevented by
a written agreement with us.
A payee's creditors may not claim any of the proceeds or interest. This
provision applies unless altered by federal or state law.
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GENERAL PROVISIONS
VOTING OF MUTUAL FUND SHARES
While this policy is in force, you have the right to instruct us how to vote the
mutual fund shares attributable to this policy. All fund proxy material and
forms used to give voting instructions will be sent to persons having voting
interests.
We will vote the mutual fund shares held in Subaccounts according to the
instructions received, as long as:
1. The Variable Account is registered as a unit investment trust under the
Investment Company Act of 1940; and
2. The assets of the Variable Account are allocated to Subaccounts that
are invested in mutual funds shares.
We may vote the mutual fund shares held in the Subaccounts at our discretion if
we determine that, because of applicable law or regulation, we do not have to
vote the mutual fund shares according to the voting instructions received.
If we do not receive timely voting instructions from you, we will vote the
applicable mutual fund shares in proportion to the instructions which are
received with respect to the other policies providing benefits related to the
applicable Sub-account.
The persons entitled to give voting instructions and the number of votes
affected by their instructions will be determined as of a record date selected
by us, not more than 90 days before the meeting of the applicable mutual fund.
This policy does not give you the right to vote at meetings of our stockholders
and/or policyholders.
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<PAGE>
GENERAL PROVISIONS
(CONTINUED)
SUBSTITUTION OF MUTUAL FUND SHARES
We reserve the right, if permitted by law, to:
1. Create new variable accounts;
2. Combine variable accounts, including the Select*Life Variable Account;
3. Delete, add, or combine Sub-accounts and make the new Sub-accounts
available to you at our discretion;
4. Substitute shares of other investment funds or series thereof for those of
the investment funds and series made available under the policy;
5. Transfer assets of the Select*Life Variable Account which we determine to
be associated with the class of contracts to which this policy belongs, to
another variable account (if this type of transfer is made, the term
"Select*Life Variable Account" as used in this policy will then mean the
variable account to which the assets were transferred);
6. Deregister the Select*Life Variable Account under the Investment Company
Act, of 1940, if registration is no longer required;
7. Make any changes required by the Investment Company Act of 1940;
8. Operate the Select*Life Variable Account as a managed company under the
Investment Company Act of 1940, or any other form permitted by law; and
9. Restrict or eliminate any voting privileges you or other persons may have
as to the Select*Life Variable Account.
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PAYMENT OF PROCEEDS
We pay all proceeds of this policy from our Home Office in Minneapolis,
Minnesota. Before paying the proceeds, we may require that you send us this
policy. We make payments under Settlement Options 4, 5, and 6 only to a natural
person in that person's own right. We adjust the proceeds payable on the death
of the Surviving Joint Insured as follows:
1. We refund any policy loan interest charged but not earned;
2. We deduct any Loan Amount; and
3. We deduct any unpaid Monthly Deductions due on or before the Surviving
Joint Insured's death.
As of the date of death, the proceeds no longer earn interest at the rate
applied to the Fixed Account or participate in the investment experience of the
Variable Account. If payment is delayed more than 30 days, we pay interest on
the proceeds at death for the time between the Surviving Joint Insured's death
and the earlier of the following:
1. The date we pay proceeds; or
2. The date we issue a supplemental contract.
Interest on these funds is never less than an effective annual rate of 3-1/2%.
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SIMULTANEOUS DEATH
If the Joint Insureds die simultaneously or in circumstances making it uncertain
who is the Surviving Joint Insured, the older Joint Insured will be deemed to
have been the Surviving Joint Insured, and no payment will be made for the
death of the younger Joint Insured.
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<PAGE>
GENERAL PROVISIONS
(CONTINUED)
INCONTESTABILITY
This policy has a two-year contestable period running from the Issue Date shown
on the Policy Data Page. After this policy has been in force during both Joint
Insured's lifetimes for two years from the Issue Date, we cannot claim your
policy is void or refuse to pay any proceeds unless the policy has lapsed.
If you make a Face Amount increase or premium payment which requires proof of
insurability, the corresponding Death Benefit increase has its own two-year
contestable period measured from the date of the increase in Death Benefit.
If this policy is reinstated, this provision will be measured from the date of
reinstatement and will apply only to those statements made in the application
for reinstatement.
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AGE AND SEX
If any Joint Insured's age or sex is misstated, the Death Benefit will be the
amount that the most recent cost of insurance would purchase using the current
cost of insurance rate for the correct age and sex.
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SUICIDE
If any Joint Insured commits suicide, while sane or insane, within two years of
the Issue Date, we do not pay the Death Benefit. Instead, we refund all premiums
paid on this policy and any attached riders, minus any Loan Amounts and partial
withdrawals.
If you make a Face Amount increase or premium payment which requires proof of
insurability, the corresponding Death Benefit increase has its own two-year
suicide limitation for the proceeds associated with that increase. If any Joint
Insured commits suicide, while sane or insane, within two years of the effective
date of the increase, we pay the Death Benefit prior to the increase and refund
the cost of insurance for that increase.
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TERMINATION
This policy terminates when any of the following occur:
1. The required payment is not paid by the end of the grace period;
2. The Surviving Joint Insured dies;
3. The policy is surrendered for its full Cash Surrender Value; or
4. The policy is amended according to the Amendment provision of this
policy and you do not accept the amendment.
If we make a Monthly Deduction from the Accumulation Value after this policy
terminates, the deduction is not considered a reinstatement of the policy or a
waiver of the termination.
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CONVERSION RIGHT
During the first two policy years and the first 24 months following the
effective date of an increase in Face Amount, you may, by written request,
convert this policy to a policy in which the benefits do not vary with the
investment performance of the Variable Account. This conversion is done by
transferring all or part of your Variable Accumulation Value to your Fixed
Accumulation Value. You must tell us you are exercising your conversion rights
when requesting the transfer. We will then waive the transfer charge and that
transfer is not counted against the limit on the number of transfers in a policy
year. You are allowed only one such transfer in each of these 24-month periods.
If you exercise this conversion right, we will automatically credit all future
premium payments to the Fixed Account, until you specify a change in allocation.
At the time of the transfer, there is no effect on the policy's Death Benefit,
Accumulation Value, Face Amount, net amount at risk, rate class, or issue age.
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<PAGE>
Annual Statement
Each year we will send you an annual statement, free of charge, showing the
following:
1. Face Amount;
2. Cash Surrender Values;
3. Accumulation Values;
4. Premiums paid;
5. Planned periodic premiums;
6. Interest credits;
7. Death Benefit;
8. Loan Amounts;
9. Partial withdrawals;
10. Transfers; and
11. Charges since the last statement.
We will make a charge not to exceed $50 for any additional statements you
request.
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PROJECTION REPORT
After the first policy year, if you ask, we will provide a report projecting
future results. The report will be based on the following:
1. Planned periodic premiums you specify;
2. The Accumulation Value at the end of the prior policy year; and
3. Any other assumptions specified by you or us, subject to any
limitations imposed by the Securities and Exchange Commission.
We will make a charge not to exceed $50 for each report you request
after the first report in any policy year.
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NONPARTICIPATING
This contract does not entitle you to participate in our surplus.
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AMENDMENT
We reserve the right to amend this policy to include any future changes relating
to the following:
1. Any Securities and Exchange Commission rulings and regulations;
2. This policy's qualification for treatment as a life insurance policy
under the following:
* The Code;
* Internal Revenue Service rulings and regulations; and
* Any requirements imposed by the Internal Revenue Service.
We will send you any amendments promptly.
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DISCLAIMER
We are not liable for any tax or tax penalty you owe resulting from failure to
comply with the requirements of the Code, regulations and rulings imposed on
this policy.
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