SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. (File No. ) [ ]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 1 (File No. 811-7195) [X]
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(Check appropriate box or boxes)
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
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(Exact Name of Registrant)
American Enterprise Life Insurance Company
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(Name of Depositor)
80 South 8th Street, P.O. Box 534, Minneapolis, MN 55440-0534
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(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-3678
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Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective: As soon as practicable
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to Section 8(a) may
determine.
<PAGE>
Prospectus
__________________________, 1999
Asset Allocation Variable Annuity
A flexible premium deferred combination fixed/variable annuity.
American Enterprise Variable Annuity Account
Issued by: American Enterprise Life Insurance Company
Administrative Offices: 80 South Eighth Street, P.O. Box 534,
Minneapolis, MN 55440-0534
Telephone: 800-333-3437
This prospectus contains information that you should know before investing. You
also will receive the prospectus for the variable insurance trust. Please read
both prospectuses carefully and keep them for future reference.
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
An investment in this annuity is not a deposit of the bank or financial
institution and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. An investment in this annuity
involves investment risk including the possible loss of principal.
A Statement of Additional Information (SAI), dated ________, 1999, incorporated
by reference into this prospectus and filed with the Securities and Exchange
Commission (SEC), is available without charge by contacting American Enterprise
Life at the telephone number above or by completing and sending the order form
on the last page of this prospectus. The table of contents of the SAI is on the
last page of this prospectus.
<PAGE>
Table of contents
Key terms..................................................................
The annuity in brief.......................................................
Expense summary............................................................
Financial statements.......................................................
Performance information....................................................
The variable account.......................................................
The funds..................................................................
[To be filed by amendment]............................................
The fixed account..........................................................
Buying your annuity........................................................
The retirement date...................................................
Beneficiary...........................................................
Purchase payment amounts..............................................
How to make payments..................................................
Charges....................................................................
Contract administrative charge........................................
Variable account administrative charge................................
Mortality and expense risk fee........................................
Withdrawal charge.....................................................
Waiver of withdrawal charge...........................................
Premium taxes.........................................................
Valuing your investment....................................................
Number of units.......................................................
Accumulation unit value...............................................
Net investment factor.................................................
Factors that affect variable subaccount accumulation units............
Making the most of your annuity............................................
Automated dollar-cost averaging.......................................
Transferring money between subaccounts................................
Transfer policies.....................................................
Two ways to request a transfer or a withdrawal........................
Withdrawals from your contract.............................................
Withdrawal policies...................................................
Receiving payment when you request a withdrawal.......................
Changing ownership.........................................................
Benefits in case of death..................................................
The annuity payout period..................................................
Annuity payout plans..................................................
Death after annuity payouts begin.....................................
<PAGE>
Taxes......................................................................
Tax qualification.....................................................
Voting rights..............................................................
Substitution of investments................................................
Distribution of the contract...............................................
About American Enterprise Life.............................................
Legal proceedings.....................................................
Year 2000 .................................................................
Regular and special reports................................................
Services..............................................................
Appendix A - Example of Dollar Cost Averaging .............................
Table of contents of the Statement of Additional Information...............
<PAGE>
Key terms
These terms can help you understand details about your annuity.
Accumulation unit - An accounting unit of measure used to calculate the variable
account contract value before annuity payouts begin.
American Enterprise Life - In this prospectus, "we," "us," "our" and "American
Enterprise Life" refer to American Enterprise Life Insurance Company.
Annuitant - The person on whose life or life expectancy the annuity payouts are
based.
Annuity payouts - An amount paid at regular intervals under one of several plans
available to the owner and/or any other payee. This amount may be paid on a
variable or fixed basis.
Annuity unit - An accounting unit of measure used to calculate the value of
annuity payments from the variable account on or after annuity payouts begin.
Beneficiary - The person designated to receive benefits in case of the owner's
or annuitant's death while the contract is in force and before annuity payouts
begin.
Close of business - When the New York Stock Exchange (NYSE) closes, normally 3
p.m. Central time.
Contract value - The total value of your annuity before any applicable
withdrawal charge and any contract administrative charge have been deducted.
Contract year - A period of 12 months, starting on the effective date of your
contract and on each anniversary of the effective date.
Fixed account - An account to which you may allocate purchase payments. Amounts
allocated to this account earn interest at rates that are declared periodically
by American Enterprise Life.
Funds- Funds and portfolios that are investment options under your annuity. Each
asset allocation fund seeks to achieve its objectives by investing in a
combination of underlying mutual funds. Each other fund seeks to achieve its
objectives by investing primarily in fixed income or money market securities, in
equity securities or in a combination of both. You may allocate your purchase
payments into variable subaccounts investing in shares of any or all of these
funds (See "The funds").
<PAGE>
Owner (you, your) - The person who controls the annuity (decides on investment
allocations, transfers, payout options, etc.). Usually, but not always, the
owner is also the annuitant. The owner is responsible for taxes, regardless of
whether he or she receives the annuity's benefits.
Qualified annuity - An annuity that you purchase for one of the following
retirement plans that is subject to applicable federal law and any rules of the
plan itself:
o Individual Retirement Annuities (IRAs), including Roth IRAs
o Simplified Employee Pension Plans (SEPs)
All other annuities are considered nonqualified annuities.
Retirement date - The date when annuity payouts are scheduled to begin.
Valuation date - Any normal business day, Monday through Friday, that the NYSE
is open. The value of each variable subaccount is calculated at the close of
business on each valuation date.
Variable account - Consists of separate subaccounts to which you may allocate
purchase payments; each subaccount invests in shares of one fund (See "The
variable account"). The value of your investment in each variable subaccount
changes with the performance of the fund.
Withdrawal value - The amount you are entitled to receive if you make a full
withdrawal from your annuity. It is the contract value minus any applicable
withdrawal charge and contract administrative charge.
<PAGE>
The annuity in brief
Purpose: The purpose of the annuity is to allow you to accumulate money for
retirement. You do this by making one or more investments (purchase payments)
that may earn returns that increase the value of the annuity. The annuity
provides lifetime or other forms of payouts to you or to anyone you designate
beginning at a specified date (the retirement date). As in the case of other
annuities, it may not be advantageous for you to purchase this annuity as a
replacement for, or in addition to an existing annuity.
Issuer: American Enterprise Life Insurance Company, the issuer of the annuity,
is a subsidiary of IDS Life Insurance Company (IDS Life), which is a subsidiary
of American Express Financial Corporation (AEFC).
Free look period: You may return your annuity to your sales representative or to
our Minneapolis administrative offices within the time stated on the first page
of your contract and receive a full refund of the contract value. No charges
will be deducted. However, you bear the investment risk from the time of
purchase until you return the contract; the refund amount may be more or less
than the payment you made. (Exception: If the law so requires, we will refund
all of your purchase payments.)
Accounts: Currently, you may allocate your purchase payments among any or all
of:
o the subaccounts of the variable account, each of which invests in a fund
with a particular investment objective. The value of each variable
subaccount varies with the performance of the particular fund in which it
invests. We cannot guarantee that the value at the retirement date will
equal or exceed the total of purchase payments allocated to the variable
subaccounts. (p. )
o the fixed account, which earns interest at a rate that is adjusted
periodically by American Enterprise Life. (p. )
Buying the annuity: Your sales representative will help you complete and submit
an application. Applications are subject to acceptance at our Minneapolis
administrative offices. You may buy a nonqualified annuity or a qualified
annuity. You must make an initial lump-sum payment. You have the option of
making additional payments in the future. Some states have time limitations for
making additional payments. (p. )
o Minimum initial purchase payment - $1,000
o Minimum additional purchase payment - $100
o Maximum first-year purchase payments (without prior approval) -
$2,000,000 (for issue ages 0 to 85)
$50,000 (for issue ages 86 to 90)
o Maximum additional annual purchase payments (without prior approval) -
$50,000
Transfers: Subject to certain restrictions you currently may redistribute your
money among accounts without charge at any time until annuity payouts begin, and
once per contract year among the variable subaccounts thereafter. You may
establish automated transfers among the fixed account and variable
subaccount(s). Fixed account transfers are subject to special restrictions.(p.)
Withdrawals: You may withdraw all or part of your contract value at any time
before the retirement date. You also may establish automated partial
withdrawals. Withdrawals may be subject to charges and tax penalties (including
a 10% IRS penalty if withdrawals are made prior to your reaching age 59 1/2) and
may have other tax consequences; also, certain restrictions apply. (p. )
Changing ownership: You may change ownership of a nonqualified annuity by
written instruction, but this may have federal income tax consequences.
Restrictions apply to changes of ownership of a qualified annuity. (p. )
Payment in case of death: If you or the annuitant die before annuity payouts
begin, we will pay the beneficiary an amount at least equal to the contract
value. (p. )
Annuity payouts: You can apply the contract value to an annuity payout plan that
begins on the retirement date. You may choose from a variety of plans to make
sure that payouts continue as long as you like. If you purchased a qualified
annuity, the payout schedule must meet the requirements of the qualified plan.
Payouts may be made on a fixed or variable basis, or both. Total monthly payouts
may include amounts from each variable subaccount and the fixed account. (p. )
Taxes: Generally, your annuity grows tax-deferred until you make withdrawals
from it or begin to receive payouts. (Under certain circumstances, IRS penalty
taxes may apply.) Even if you direct payouts to someone else, you will be taxed
on the income if you are the owner. Roth IRAs, however, may grow tax free if you
meet certain distribution requirements. (p.)
Charges: Your annuity is subject to a:
o $30 annual contract administrative charge;
o 0.15% variable account administrative charge;
o 1.25% mortality and expense risk fee;
o withdrawal charge; and
o any premium taxes that may be imposed on us by state or local governments.
Currently, we deduct any applicable premium tax when you make a total
withdrawal or when annuity payouts begin, but we reserve the right to
deduct this tax at other times such as when you make purchase payments.(p.)
<PAGE>
Expense summary
The purpose of this table is to help you understand the various costs and
expenses associated with your annuity.
You pay no sales charge when you purchase your annuity. All costs that you bear
directly or indirectly for the variable subaccounts and funds are shown below.
Some expenses may vary as explained under "Charges."
Contract owner expenses:
Withdrawal charge (contingent deferred sales charge as a percentage of purchase
payment withdrawn)
Years from Withdrawal charge
payment receipt percentage
1 6%
2 6%
3 5%
4 5%
5 4%
6 3%
7 2%
Thereafter 0%
Annual contract administrative charge $30
Variable account annual expenses
Variable account administrative charge
(as a percentage of average daily net assets) .............0.15%
Mortality and expense risk fee
(as a percentage of average daily net assets ..............1.25%
Total variable account annual expenses..............................1.40%
<PAGE>
Annual operating expenses of underlying mutual funds
(management fees and other expenses deducted as a percentage of average net
assets as follows:)
[Expense information to be filed by amendment]
<TABLE>
<CAPTION>
Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Fund 7 Fund 8
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Other expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%* 0.00%
Fund 9 Fund 10 Fund 11 Fund 12 Fund 13 Fund 14 Fund 15 Fund 16
Management fees 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Other expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
</TABLE>
Example:*
<TABLE>
<CAPTION>
Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Fund 7 Fund 8
You would pay the following expenses on a $1,000 investment, assuming 5% annual
return and full withdrawal at the end of each time period:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00
3 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
5 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
10 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
You would pay the following expenses on the same investment assuming no
withdrawal or selection of an annuity payout plan at the end of each time
period:
1 year $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00
3 years 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00
5 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
10 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
Fund 9 Fund 10 Fund 11 Fund 12 Fund 13 Fund 14 Fund 15 Fund 16
You would pay the following expenses on a $1,000 investment, assuming 5% annual
return and full withdrawal at the end of each time period:
1 year $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00
3 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
5 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
10 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
<PAGE>
You would pay the following expenses on the same investment assuming no
withdrawal or selection of an annuity payout plan at the end of each time
period:
1 year $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00 $ 00.00
3 years 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00
5 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
10 years 000.00 000.00 000.00 000.00 000.00 000.00 000.00 000.00
* In this example, the $30 annual contract administrative charge is
approximated as a .000% charge based on the average estimated contract
size.
</TABLE>
This example should not be considered a representation of past or future
expenses. Actual expenses may be more or less than those shown
Financial statements
The SAI contains the audited financial statements of American Enterprise Life
including:
- - [To be filed by amendment]
The SAI does not include financial statements of the subaccounts because they
are new and do not have any assets.
Performance information
Performance information for the variable subaccounts may appear from time to
time in advertisements or sales literature. In all cases, this information
reflects the performance of a hypothetical investment in a particular subaccount
during a particular time period. We show performance from the commencement date
of the funds as if the annuity had existed at that time. Past performance does
not guarantee future results. Currently, we do not provide any performance
information for the subaccounts because they are new and have not had any
activity to date.
Calculations are performed as follows:
Yield - for subaccounts investing in income funds: Net investment income (income
less expenses) per accumulation unit during a given 30-day period is divided by
the value of the unit on the last day of the period. The result is converted to
an annual percentage.
Average annual total return: Expressed as an average annual compounded rate of
return of a hypothetical investment over a period of one, five and 10 years (or
up to the life of the subaccount if it is less than 10 years old). This figure
reflects deduction of all applicable charges, including: the contract
administrative charge; variable account administrative charge; mortality and
expense risk fee; and withdrawal charge (assuming a full withdrawal at the end
of the illustrated period). Optional average annual total return quotations may
be made that do not reflect a withdrawal charge deduction (assuming no
withdrawal). Average annual total return may be shown by means of schedules,
charts or graphs.
Cumulative total return: Represents the cumulative change in the value of an
investment over a specified period of time (reflecting change in a subaccount's
accumulation unit value). The calculation assumes reinvestment of investment
earnings and reflects the deduction of all applicable charges, including: the
contract administrative charge; mortality and expense risk fee; variable account
administrative charge; and withdrawal charge (assuming a withdrawal at the end
of the illustrated period). Optional cumulative total return quotations may be
made that do not reflect a withdrawal charge deduction (assuming no withdrawal).
Cumulative total return may be shown by means of schedules, charts or graphs.
You should consider performance information in light of the investment
objectives and policies, characteristics and quality of the fund in which the
subaccount invests and the market conditions during the given time period. Such
information is not intended to indicate future performance. Because advertised
yields and total return figures include all annuity charges that have the effect
of decreasing advertised performance, you should not compare subaccount
performance to that of mutual funds that sell their shares directly to the
public. (See the SAI for a further description of methods used to determine
total return for the subaccounts.)
If you would like additional information about actual performance, contact
American Enterprise Life at the address or telephone number on the cover.
The variable account
You may allocate purchase payments to any or all of the subaccounts of the
variable account that invest in shares of the following funds:
Subaccount
[To be filed by amendment]
We reserve the right to limit the maximum number of subaccounts to which you can
allocate purchase payments or contract value at any time.
The variable account also includes other subaccounts that are available under
annuities not described in this prospectus. The variable account meets the
definition of a separate account under federal securities laws. Income, capital
gains and capital losses of each subaccount are credited or charged to that
subaccount. State insurance law provides that we will not charge a variable
subaccount with liabilities of any other variable subaccount or of our general
business.
The U.S. Treasury and the IRS have indicated that they may provide additional
guidance on investment control. This concerns how many variable subaccounts an
insurance company may offer and how many exchanges among variable subaccounts it
may allow before the owner would be currently taxed on income earned within
variable subaccount assets. At this time, we do not know what the additional
guidance will be or when action will be taken. We reserve the right to modify
the annuity, as necessary, so that the owner will not be subject to current
taxation as the owner of the variable subaccount assets.
We intend to comply with all federal tax laws so that each annuity continues to
qualify as an annuity for federal income tax purposes. We reserve the right to
modify the annuity as necessary to comply with any new tax laws.
The variable account was established under Indiana law on July 15, 1987, and the
subaccounts are registered together as a single unit investment trust under the
Investment Company Act of 1940 (the 1940 Act). This registration does not
involve any supervision of our management or investment practices and policies
by the SEC. All obligations arising under the contracts are general obligations
of American Enterprise Life.
The funds
[To be filed by amendment]
The assets of each asset allocation fund are invested in underlying mutual
funds. For this reason, the investment performance of each asset allocation fund
is directly related to the investment performance of the underlying mutual funds
in which it invests. Each asset allocation fund's ability to meet its investment
objectives is directly related to the ability of the underlying mutual funds to
meet their objectives as well as to the allocation among those underlying mutual
funds.
The investment adviser cannot guarantee that the asset allocation funds, the
underlying mutual funds or the other funds will meet their investment objectives
nor is there any guarantee that your contract value will equal or exceed the
total purchase payments you made. Please read the variable insurance trust
prospectus for complete information on investment risks, deductions, expenses
and other facts you should know before investing. You should consider carefully,
and on a continuing basis, which funds are best suited to your long-term
investment needs. Some funds involve more risk than others, so please monitor
your investment. The variable insurance trust prospectus is available by
contacting American Enterprise Life at the administrative offices address or
telephone number on the front of this prospectus.
The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other funds that the investment adviser or
its affiliates manage. Although the objectives and policies may be similar, the
investment results of one fund may be higher or lower than the results of the
other fund. The investment adviser cannot guarantee, and makes no
representation, that the investment results of similar funds will be comparable
even if the funds have the same investment adviser, manager or sponsor.
All funds are available to serve as investment options under variable annuities,
variable life insurance contracts and qualified plans. It is conceivable that in
the future it may be disadvantageous for variable annuity accounts, variable
life insurance accounts and/or qualified plans to invest in the available funds
simultaneously. Although American Enterprise Life and the funds currently do not
foresee any such disadvantages, the Trust Board of the funds will monitor events
in order to identify any material conflicts between such annuity owners, policy
owners and qualified plans and to determine what action, if any, should be taken
in response to a conflict. If the Board were to conclude that it should
establish separate funds for the variable annuity, variable life insurance and
qualified plan accounts, the variable annuity contract holders would not bear
any expenses associated with establishing separate funds. Please refer to the
variable insurance trust prospectus for risk disclosure regarding mixed and
shared funding.
The Internal Revenue Service (IRS) has issued final regulations relating to the
diversification requirements under Section 817(h) of the Internal Revenue Code
of 1986, as amended (Code). Each fund intends to comply with these requirements.
The fixed account
You also may allocate purchase payments to the fixed account. American
Enterprise Life backs the principal and interest guarantees relating to the
fixed account. The value of the fixed account increases as interest is credited
to the account. Purchase payments and transfers to the fixed account become part
of the general account of American Enterprise Life, the company's main portfolio
of investments. We credit and compound interest daily to produce an effective
annual interest rate. We may change the interest rate from time to time.
However, we guarantee that the rate will not be less than a 3% effective annual
interest rate and that we will not change the rate we credit to any portion of
the fixed account contract value more than once each year.
Because of exemptive and exclusionary provisions, interests in the fixed account
have not been registered under the Securities Act of 1933 (1933 Act), nor is the
fixed account registered as an investment company under the 1940 Act.
Accordingly, neither the fixed account nor any interests in it are generally
subject to the provisions of the 1933 or 1940 Acts. We have been advised that
the staff of the SEC has not reviewed the disclosures in this prospectus that
relate to the fixed account. Disclosures regarding the fixed account, however,
may be subject to certain generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of statements made in
prospectuses. (See "Transfer policies" for restrictions on transfers involving
the fixed account).
<PAGE>
Buying your annuity
Your sales representative will help you prepare and submit your application, and
send it along with your initial purchase payment to our Minneapolis
administrative office. As the owner, you have all rights and may receive all
benefits under the contract. Your nonqualified annuity can be owned in joint
tenancy only in spousal situations. A qualified annuity cannot be owned in joint
tenancy. You can buy an annuity or become an annuitant if you are 90 or younger
(63 or younger for qualified annuities purchased in Maryland and Washington).
When you apply, you may select:
o the fixed account and/or subaccount(s) in which you want to invest;
o how you want to make purchase payments;
o the date you want to start receiving annuity payouts (the retirement date);
and
o a beneficiary.
If your application is complete, we will process it and apply your purchase
payment to the fixed account and subaccount(s) you selected within two business
days after we receive it at our Minneapolis administrative offices. If we accept
your application, we will send you a contract. If we cannot accept your
application within five business days, we will decline it and return your
payment. We will credit additional purchase payments to your account(s) at the
next close of business after we receive your payments at our Minneapolis
administrative offices.
You may make monthly payments to your annuity under a Systematic Investment Plan
(SIP). To begin the SIP, you will complete and send a form and your first
payment along with your application. There is no charge for SIP. You can stop
your SIP payments at any time.
In most states, additional purchase payments may be made to nonqualified and
qualified annuities until the retirement date.
The retirement date
Annuity payouts are scheduled to begin on the retirement date. This date can be
aligned with your actual retirement from a job, or it can be a different future
date, depending on your needs and goals and on certain restrictions. You can
also change the date, provided you send us written instructions at least 30 days
before annuity payouts begin.
For nonqualified annuities and Roth IRAs, the retirement date must be:
o no earlier than the 60th day after the contract's effective date; and
o no later than the annuitant's 85th birthday (or the 10th contract
anniversary, if later).
For qualified annuities (except Roth IRAs), to avoid IRS penalty taxes, the
retirement date generally must be:
o on or after the annuitant reaches age 59 1/2; and
o by April 1 of the year following the calendar year when the annuitant
reaches age 70 1/2.
If you are taking the minimum IRA distribution as required by the Code from
another tax-qualified investment, or in the form of partial withdrawals from
this annuity, annuity payouts can start as late as the annuitant's 85th birthday
or the 10th contract anniversary, if later.
Beneficiary
If death benefits become payable before the retirement date while the contract
is in force and before annuity payouts begin, your named beneficiary will
receive all or part of the contract value. If there is no named beneficiary,
then you or your estate will be the beneficiary. (See "Benefits in case of
death" for more about beneficiaries.)
Purchase payment amounts
Minimum initial purchase payment (includes SIPs): $1,000
Minimum additional purchase payment (includes SIPs): $100
Maximum first-year purchase payments:
$2,000,000 (for issue ages 0 to 85 without prior approval)
$50,000 (for issue ages 86 to 90 without prior approval)
Maximum annual purchase payments after the first year:
$50,000 (without prior approval)
How to make payments
By letter
Send your check along with your name and contract number to:
Regular mail:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
<PAGE>
Express mail:
American Enterprise Life Insurance Company
Attention: Unit 829
733 Marquette Avenue
Minneapolis, MN 55402
By SIP:
Contact your sales representative to complete the necessary SIP
paperwork.
Charges
Contract administrative charge
We charge this fee for establishing and maintaining your records. We deduct $30
from the contract value on your contract anniversary at the end of each contract
year. This charge is prorated among the subaccounts and the fixed account in the
same proportion your interest in each account bears to your total contract
value. We will waive this charge when the contract value is $50,000 or more on
the current contract anniversary. If you take a full withdrawal from your
contract, we will deduct the $30 annual charge at the time of withdrawal
regardless of contract value. We cannot increase the annual contract charge and
it does not apply after annuity payouts begin or when we pay death benefits.
Variable account administrative charge
We apply this charge daily to the variable subaccounts. It is reflected in the
unit values of the subaccounts and it totals 0.15% of their average daily net
assets on an annual basis. It covers certain administrative and operating
expenses of the subaccounts such as accounting, legal and data processing fees
and expenses involved in the preparation and distribution of reports and
prospectuses. We cannot increase the variable account administrative charge.
Mortality and expense risk fee
We apply this charge daily to the variable subaccounts. It is reflected in the
unit values of the subaccounts and it totals 1.25% of their average daily net
assets on an annual basis. This fee covers the mortality and expense risk that
we assume. Approximately two-thirds of this amount is for our assumption of
mortality risk, and one-third is for our assumption of expense risk. This fee
does not apply to the fixed account.
Mortality risk arises because of our guarantee to pay a death benefit and our
guarantee to make annuity payouts according to the terms of the contract, no
matter how long a specific annuitant lives and no matter how long the entire
group of American Enterprise Life annuitants live. If, as a group, American
Enterprise Life annuitants outlive the life expectancy we have assumed in our
actuarial tables, then we must take money from our general assets to meet our
obligations. If, as a group, American Enterprise Life annuitants do not live as
long as expected, we could profit from the mortality risk fee. Expense risk
arises because we cannot increase the contract administrative charge and
variable account administrative charge and these charges may not cover our
expenses. We would have to make up any deficit from our general assets.
We may use any profits realized from the mortality and expense risk fee for any
proper corporate purpose, including, among others, payment of distribution
(selling) expenses. We do not expect that the withdrawal charge, discussed in
the following paragraphs, will cover sales and distribution expenses.
Withdrawal charge
If you withdraw part or all of your contract, you may be subject to a withdrawal
charge. The withdrawal amount you request is determined by drawing from your
total contract value in the following order:
1. First, we withdraw up to 10% of your prior anniversary contract value that
you have not yet withdrawn during this contract year. There is no withdrawal
charge on this amount.
2. Next, we withdraw contract earnings, if any, that are greater than the annual
10% free withdrawal amount described in number 1 above. Contract earnings are
contract value minus all purchase payments received and not previously
withdrawn. There is no withdrawal charge on this amount.
3. Next, we withdraw purchase payments received eight or more years before the
withdrawal and not previously withdrawn. There is no withdrawal charge on
purchase payments received eight or more years before withdrawal.
4. Finally, if necessary, we withdraw purchase payments received in the seven
years before the withdrawal on a "first-in, first-out" (FIFO) basis. There is a
withdrawal charge on these payments. We determine your withdrawal charge by
multiplying each of these payments by the applicable withdrawal charge
percentage, and then totaling the withdrawal charges.
<PAGE>
The withdrawal charge percentage depends on the number of years since you made
the payment(s) withdrawn.
Years from Withdrawal charge
payment receipt percentage
1 6%
2 6%
3 5%
4 5%
5 4%
6 3%
7 2%
Thereafter 0%
Withdrawal charge calculation example
The following is an example of the calculation we would make to determine the
withdrawal charge on a contract with this history:
o The contract date is July 1, 1999 with a contract year of July 1 through
June 30 and with an anniversary date of July 1 each year; and
o We received these payments - $10,000 July 1, 1999, $8,000 Dec. 31, 2005 and
$6,000 Feb. 20, 2007; and
o The owner withdraws the contract for its total withdrawal value of $38,101
on Aug. 5, 2009 and had not made any other withdrawals during that contract
year; and
o The prior anniversary July 1, 2008 contract value was $38,488.
<PAGE>
<TABLE>
<CAPTION>
Withdrawal charge Explanation
<S> <C> <C>
$0 $3,848.80 is 10% of the prior anniversary contract value withdrawn
without withdrawal charge; and
0 $10,252.20 is contract earnings in excess of the 10% free withdrawal
amount withdrawn without withdrawal charge; and
0 $10,000 July 1, 1999 payment was received
eight or more years before withdrawal and
is withdrawn without withdrawal charge;
and
400 $8,000 Dec. 31, 2005 payment is in its fourth year from receipt,
withdrawn with a 5% withdrawal charge; and
300 $6,000 Feb. 20, 2007 payment is in its third year from receipt
withdrawn with a 5% withdrawal charge.
- -------------------------------------
$700
</TABLE>
For a partial withdrawal that is subject to a withdrawal charge, the amount we
actually withdraw from your contract value will be the amount you request plus
any applicable withdrawal charge. The withdrawal charge is applied to this total
amount. We pay you the amount you requested. If you take a full withdrawal from
your contract, the $30 contract charge also will be deducted.
Waiver of withdrawal charge There are no withdrawal charges for:
o withdrawals during the year totaling the greater of 10% of your prior
contract anniversary contract value or contract earnings;
o required minimum distributions from a qualified annuity (for those amounts
required to be distributed from the annuity described in this prospectus);
o contracts settled using an annuity payout plan;
o death benefits.
o withdrawals you make under your contract's "Waiver of Withdrawal Charges"
provision. To the extent permitted by state law, your contract will include
this provision when the owner and annuitant are under age 76 on the date we
issue the contract. We will waive withdrawal charges that are normally
assessed upon full or partial withdrawal if you provide proof satisfactory
to us that, as of the date you request the withdrawal, you or the annuitant
are confined to a hospital or nursing home and have been for the prior 60
days. (See your annuity contract for additional conditions and restrictions
on this waiver.)
o withdrawals you make if you or the annuitant are diagnosed in the second or
later contract years as disabled with a medical condition that with
reasonable medical certainty will result in death within 12 months or less
from the date of the licensed physician's statement. You must provide us
with a licensed physician's statement containing the terminal illness
diagnosis and the date the terminal illness was initially diagnosed.
Possible group reductions: In some cases, lower sales and administrative
expenses may be incurred due to the size of the group, the average contribution
and the use of group enrollment procedures. In such cases, we may be able to
reduce or eliminate the contract administrative and withdrawal charges.
However, we expect this to occur infrequently.
Premium taxes
Certain state and local governments impose premium taxes (up to 3.5%). These
taxes depend upon your state of residence or the state in which the contract was
sold. Currently, we deduct any applicable premium tax when you make a full
withdrawal from your contract or when annuity payouts begin, but we reserve the
right to deduct this tax at other times such as when you make purchase payments.
Valuing your investment
Here is how we value your fixed account and variable subaccounts:
Fixed account: We value the amounts allocated to the fixed account directly in
dollars. The fixed account value equals:
o the sum of your purchase payments and transfer amounts allocated to the
fixed account; plus
o interest credited; minus
o the sum of amounts withdrawn (including any applicable withdrawal charges)
and amounts transferred out; and minus
o any prorated contract administrative charge.
Variable subaccounts: We convert amounts allocated to the variable subaccounts
into accumulation units. Each time you make a purchase payment or transfer
amounts into one of the variable subaccounts, we credit a certain number of
accumulation units to your contract for that subaccount. Conversely, each time
you take a partial withdrawal, transfer amounts out of a variable subaccount or
are assessed a contract administrative charge, we subtract a certain number of
accumulation units from your contract.
The accumulation units are the true measure of investment value in each
subaccount during the accumulation period. They are related to, but not the same
as, the net asset value of the underlying fund. The dollar value of each
accumulation unit can rise or fall daily depending on the variable account
expenses, performance of the underlying fund and on certain fund expenses. Here
is how accumulation unit values are calculated:
Number of units
To calculate the number of accumulation units for a particular subaccount, we
divide your investment by the current accumulation unit value.
Accumulation unit value
The current accumulation unit value for each variable subaccount equals the last
value times the subaccount's current net investment factor.
Net investment factor
The net investment factor is determined by:
o adding the underlying fund's current net asset value per share plus
per-share amount of any current dividend or capital gain distribution; then
o dividing that sum by the previous net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee and the variable account administrative charge from the result.
Because the net asset value of the underlying fund may fluctuate, the unit value
may increase or decrease. You bear all the investment risk in a variable
subaccount.
Factors that affect variable subaccount accumulation units
Accumulation units may change in two ways; in number and in value. Here are the
factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments allocated to the variable subaccount(s);
o transfers into or out of the variable subaccount(s);
o partial withdrawals;
o withdrawal charges; and/or
o prorated portions of the contract administrative charge.
Accumulation unit values will fluctuate due to:
o changes in net asset value of underlying fund(s);
o dividends distributed to the variable subaccount(s);
o capital gains or losses of underlying fund(s);
o fund operating expenses;
o mortality and expense risk fees; and/or
o variable account administrative charges.
<PAGE>
Making the most of your annuity
Automated dollar-cost averaging
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might have a set amount transferred monthly from a relatively conservative
variable subaccount to a more aggressive one, or to several others, or from the
fixed account to one or more variable subaccounts. You also can obtain the
benefits of dollar-cost averaging by setting up regular automatic SIP payments.
There is no charge for dollar-cost averaging.
This systematic approach can help you benefit from fluctuations in accumulation
unit values caused by fluctuations in the market values of the underlying funds.
Since you invest the same amount each period, you automatically acquire more
units when the market value falls and fewer units when it rises. The potential
effect is to lower your average cost per unit.
Dollar-cost averaging does not guarantee that any variable subaccount will gain
in value nor will it protect against a decline in value if market prices fall.
Because this strategy involves continuous investing, your success with
dollar-cost averaging will depend upon your willingness to continue to invest
regularly through periods of low price levels. Dollar-cost averaging can be an
effective way to help meet your long-term goals. For specific features contact
your sales representative. Some restrictions apply. (See Appendix A for an
example of how dollar cost averaging works.)
Transferring money between subaccounts
You may transfer money from any one subaccount, or the fixed account, to another
before annuity payouts begin. (Certain restrictions apply to transfers involving
the fixed account.) We will process your transfer request at the next close of
business after we receive it. There is no charge for transfers. Before making a
transfer, you should consider the risks involved in switching investments.
We may suspend or modify transfer privileges at any time. In addition, we may
modify or restrict the right to transfer contract values between the subaccounts
if we determine, in our sole discretion, that the exercise of that right by one
or more contract owners is, or would be, to the disadvantage of other contract
owners. Any modification could be applied to transfers to or from some or all of
the subaccounts. These modifications could include, but not be limited to: the
requirement of a minimum time period between each transfer, not accepting
transfer requests of a sales representative acting under a power of attorney on
behalf of more than one contract owner; or limiting the dollar amount that may
be transferred between the subaccounts and the fixed account by a contract owner
at any one time. We may apply these modifications or restrictions in any
reasonable manner to prevent transfers we consider to be to the disadvantage of
other contract owners. (For information on transfers after annuity payouts
begin, see "Transfer policies.")
Transfer policies
o You may transfer contract values between the variable subaccounts or from
the subaccount(s) to the fixed account at any time. However, if you have
made a transfer from the fixed account to the subaccount(s), you may not
make a transfer from any subaccount back to the fixed account for six
months following that transfer.
o You may transfer contract values from the fixed account to the variable
subaccount(s) on or within 30 days before or after the contract anniversary
(except for automated transfers, which can be set up for certain transfer
periods subject to certain minimums).
o If we receive your request on or within 30 days before or after the
contract anniversary date, the transfer from the fixed account to the
variable subaccount(s) will be effective on the day we receive it.
o We will not accept requests for transfers from the fixed account at any
other time.
o Once annuity payouts begin, you may not make transfers to or from the fixed
account, but you may make transfers once per contract year among the
variable subaccounts. During the annuity payout period, we reserve the
right to limit the number of subaccounts in which you may invest.
Two ways to request a transfer or a withdrawal
1 By letter
Send your name, contract number, Social Security number or taxpayer
identification number and signed request for a transfer or withdrawal to:
Regular mail:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
Express mail:
American Enterprise Life Insurance Company
Attention: Unit 829
733 Marquette Avenue
Minneapolis, MN 55402
Minimum amount
Transfers or withdrawals: $100 or entire variable subaccount or fixed
account balance
<PAGE>
Maximum amount
Transfers or withdrawals: Contract value or the entire variable
subaccount or fixed account balance
2 By automated transfers and automated partial withdrawals
Your sales representative can help you set up automated transfers among your
subaccount(s) or fixed account or partial withdrawals from the accounts.
You can start or stop this service by written request or other method acceptable
to American Enterprise Life. You must allow 30 days for American Enterprise Life
to change any instructions that are currently in place.
o Automated transfers may not exceed an amount that, if continued, would
deplete the fixed account or subaccount(s) from which you are
transferring within 12 months unless we agree otherwise.
o Automated transfers and automated partial withdrawals are subject to
all of the contract provisions and terms, including transfer of
contract values between accounts. Automated withdrawals may be
restricted by applicable law under some contracts.
o Automated partial withdrawals may result in IRS taxes and penalties on
all or part of the amount withdrawn.
Minimum amount
Automated transfers or withdrawals: $100 monthly/$250 quarterly,
semiannually or annually
Maximum amount
Automated transfers or withdrawals: Contract value (except for
automated transfers from the
fixed account)
Withdrawals from your contract
As owner, you may withdraw all or part of your contract at any time before
annuity payouts begin by sending a written request to American Enterprise Life.
For total withdrawals we will compute the value of the withdrawal at the next
close of business after we receive your request. We may ask you to return the
contract. You may have to pay withdrawal charges (see "Withdrawal charge") and
IRS taxes and penalties (see "Taxes"). You cannot make withdrawals after annuity
payouts begin.
<PAGE>
Withdrawal policies
If you have a balance in more than one account and request a partial withdrawal,
we will withdraw money from all your subaccounts and/or the fixed account in the
same proportion as your value in each correlates to your total contract value,
unless you request otherwise.
Receiving payment when you request a withdrawal By regular or express mail:
o Payable to owner.
o Normally mailed to address of record within seven days after receiving
your request. However, we may postpone the payment if:
-the withdrawal amount includes a purchase payment check that has not
cleared;
-the NYSE is closed, except for normal holiday and weekend closings;
-trading on the NYSE is restricted, according to SEC rules;
-an emergency, as defined by SEC rules, makes it impractical to sell
securities or value the net assets of the accounts; or
-the SEC permits us to delay payment for the protection of security
holders.
NOTE: You will be charged a fee if you request express mail delivery.
Changing ownership
You may change ownership of your nonqualified annuity at any time by filing a
change of ownership on a form approved by us and sent to our Minneapolis
administrative offices. The change will become binding upon us when we receive
and record it. We will honor any change of ownership request believed to be
authentic and will use reasonable procedures to confirm authenticity. If these
procedures are followed, we take no responsibility for the validity of the
change.
If you have a nonqualified annuity, you may incur income tax liability by
transferring, assigning or pledging any part of it. (See "Taxes.")
If you have a qualified annuity, you may not sell, assign, transfer, discount or
pledge your contract as collateral for a loan, or as security for the
performance of an obligation or for any other purpose except as required or
permitted by the Code.
<PAGE>
Benefits in case of death
If you or the annuitant die before annuity payouts begin while this contract is
in force, we will pay the beneficiary the greatest of:
1. the contract value; or
2. the total purchase payments paid less any "adjustments for partial
withdrawals;" or
3. the "maximum anniversary value" immediately preceding the date of death
increased by the dollar amount of any payments since that anniversary and
reduced by any adjustments for partial withdrawals since that anniversary.
We calculate "adjustments for partial withdrawals" for each partial withdrawal
as the product of (a) times (b) where:
(a) is the ratio of the amount of the partial withdrawal (including any
applicable withdrawal charge) to the contract value on the date of
(but prior to) the partial withdrawal; and
(b) is the death benefit on the date of (but prior to) the partial
withdrawal.
Each contract anniversary prior to the earlier of your or the annuitant's 81st
birthday, we calculate the anniversary value which is the greater of:
(a) the contract value on that anniversary; or
(b) total payments made to the contract minus adjustments for partial
withdrawals.
The "maximum anniversary value" is equal to the greatest of these anniversary
values.
Example:
o The contract is purchased with a payment of $20,000 on January 1, 1999.
o On January 1, 2000 (the first contract anniversary) the contract value has
grown to $24,000.
o On March 1, 2000 the contract value has fallen to $22,000, at which point
the owner takes a $1,500 partial withdrawal, leaving a contract value of
$20,500.
The death benefit on March 1, 2000 is calculated as follows:
The "maximum anniversary value:" $24,000.00
(the greatest of the anniversary values which was the
contract value on January 1, 2000)
plus any purchase payments paid since that anniversary: + 0.00
less any "adjusted partial withdrawal" taken since that anniversary,
calculated as: 1,500 x 24,000 = - 1,636.36
----- -------------
22,000
for a death benefit of: $22,363.64
If your spouse is sole beneficiary under a nonqualified annuity and you die
before the retirement date, your spouse may keep the annuity as owner. To do
this your spouse must, within 60 days after we receive proof of death, give us
written instructions to keep the contract in force.
Under a qualified annuity, if the annuitant dies before the Code requires
distributions to begin, and the spouse is the only beneficiary, the spouse may
keep the annuity as owner until the date on which the spouse reaches age 70 1/2
or any other date permitted by the Code. To do this, the spouse must give us
written instructions within 60 days after we receive proof of death.
Payments: We will pay the beneficiary in a single sum unless you have given us
other written instructions, or the beneficiary may receive payouts under any
annuity payout plan available under this contract if:
o the beneficiary asks us in writing within 60 days after we receive proof of
death; and o payouts begin no later than one year after death, or other date as
permitted by the Code; and o the payout period does not extend beyond the
beneficiary's life or life expectancy.
When paying the beneficiary, we will determine the contract's value at the next
close of business after our death claim requirements are fulfilled. Interest, if
any, will be paid from the date of death at a rate no less than required by law.
We will mail payment to the beneficiary within seven days after our death claim
requirements are fulfilled. (See "Taxes.")
The annuity payout period
As owner of the contract, you have the right to decide how and to whom annuity
payouts will be made starting at the retirement date. You may select one of the
annuity payout plans outlined below, or we may mutually agree on other payout
arrangements. No withdrawal charges are deducted under the payout plans listed
below.
You also decide whether annuity payouts are to be made on a fixed or variable
basis, or a combination of fixed and variable. The amount available to purchase
payouts under the plan you select is the contract value on your retirement date
(less any applicable premium tax). You may reallocate this contract value to the
fixed account to provide fixed dollar payouts and/or among the subaccounts to
provide variable annuity payouts. During the annuity payout period, we reserve
the right to limit the number of subaccounts in which you may invest.
Amounts of fixed and variable payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract; and
o the amounts you allocated to the account(s) at settlement.
In addition, for variable payouts only, amounts depend on the investment
performance of the subaccount(s) you select. These payouts will vary from month
to month because the performance of the underlying funds will fluctuate. (In the
case of fixed annuities, payouts remain the same from month to month.) For
information with respect to transfers between accounts after annuity payouts
begin, see "Transfer policies."
Annuity payout plans
You may choose any one of these annuity payout plans by giving us written
instructions at least 30 days before contract values are to be used to purchase
the payout plan:
o Plan A - Life annuity - no refund: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death; no further payouts will be made. This means that if the annuitant dies
after only one monthly payout has been made, we will not make any more payouts.
o Plan B - Life annuity with five, 10 or 15 years certain: We make monthly
payouts for a guaranteed payout period of five, 10 or 15 years that you elect.
This election will determine the length of the payout period to the beneficiary
if the annuitant should die before the elected period has expired. We calculate
the guaranteed payout period from the retirement date. If the annuitant outlives
the elected guaranteed payout period, we will continue to make payouts until the
annuitant's death.
o Plan C - Life annuity - installment refund: We make monthly payouts until the
annuitant's death, with our guarantee that payouts will continue for some period
of time. We will make payouts for at least the number of months determined by
dividing the amount applied under this option by the first monthly payout,
whether or not the annuitant is living.
o Plan D - Joint and last survivor life annuity - no refund: We make monthly
payouts while both the annuitant and a joint annuitant are living. If either
annuitant dies, we will continue to make monthly payouts at the full amount
until the death of the surviving annuitant. Payouts end with the death of the
second annuitant.
o Plan E - Payouts for a specified period: We make monthly payouts for a
specific payout period of 10 to 30 years that you elect. We will make payouts
only for the number of years specified whether the annuitant is living or not.
Depending on the selected time period, it is foreseeable that an annuitant can
outlive the payout period selected. In addition, a 10% IRS penalty tax could
apply under this payout plan. (See "Taxes.")
Restrictions for some qualified plans: If you purchased a qualified annuity, you
must select a payout plan that provides for payouts:
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated beneficiary;
o for a period not exceeding the life expectancy of the annuitant; or
o for a period not exceeding the joint life expectancies of the annuitant
and a designated beneficiary.
You have the responsibility for electing a payout plan the complies with your
contract and with applicable law.
If we do not receive instructions: You must give us written instructions for the
annuity payouts at least 30 days before the annuitant's retirement date. If you
do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed.
Contract values that you have allocated to the fixed account will provide fixed
dollar payouts and contract values that you have allocated among the subaccounts
will provide variable annuity payouts.
If monthly payouts would be less than $20: We will calculate the amount of
monthly payouts at the time the contract value is used to purchase a payout
plan. If the calculations show that monthly payouts would be less than $20, we
have the right to pay the contract value to the owner in a lump sum or to change
the frequency of the payouts.
Death after annuity payouts begin
If you or the annuitant die after annuity payouts begin, we will pay any amount
payable to the beneficiary as provided in the annuity payout plan in effect.
Taxes
Generally, under current law, any increase in your contract value is taxable to
you only when you receive a payout or withdrawal. (However, see detailed
discussion below.) Any portion of the annuity payouts and any withdrawals you
request that represent ordinary income are normally taxable. We will send you a
tax information reporting form for any year in which we made a taxable
distribution according to our records. Roth IRAs may grow tax free if you meet
certain distribution requirements.
Annuity payouts under nonqualified annuities: A portion of each payout will be
ordinary income and subject to tax, and a portion of each payout will be
considered a return of part of your investment and will not be taxed. All
amounts received after your investment in the annuity is fully recovered will be
subject to tax.
Tax law requires that all nonqualified deferred annuity contracts issued by the
same company to the same owner during a calendar year be taxed as a single,
unified contract when distributions are taken from any one of those contracts.
Annuity payouts under qualified annuities (except Roth IRAs): Under a qualified
annuity, the entire payout generally is includable as ordinary income and
subject to tax except to the extent that contributions were made with after-tax
dollars. If you or your employer invested in your contract with pre-tax dollars
as part of a qualified retirement plan, such amounts are not considered to be
part of your investment in the contract and will be taxed when paid to you.
Withdrawals: If you withdraw part or all of your contract before your annuity
payouts begin, your withdrawal payment will be taxed to the extent that the
value of your contract immediately before the withdrawal exceeds your
investment. You also may have to pay a 10% IRS penalty for withdrawals you make
prior to age 59 1/2. For qualified annuities, other penalties may apply if you
make withdrawals from your annuity before your plan specifies that you can
receive payouts.
Death benefits to beneficiaries: The death benefit under an annuity (except a
Roth IRA) is not tax exempt. Any amount received by the beneficiary that
represents previously deferred earnings within the contract is taxable as
ordinary income to the beneficiary in the year(s) he or she receives the
payments. The death benefit under a Roth IRA generally is not taxable as
ordinary income to the beneficiary.
Annuities owned by corporations, partnerships or trusts: For nonqualified
annuities any annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that year. This
provision is effective for purchase payments made after Feb. 28, 1986. However,
if the trust was set up for the benefit of a natural person only, the income
will remain tax deferred.
Penalties: If you receive amounts from your contract before reaching age 59 1/2,
you may have to pay a 10% IRS penalty on the amount includable in your ordinary
income. However, this penalty will not apply to any amount received by you or
your beneficiary:
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal periodic
payments, made at least annually, over your life or life expectancy (or
joint lives or life expectancies of you and your beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except for
qualified annuities).
For a qualified annuity, other penalties or exceptions may apply if you make
withdrawals from your annuity before your plan specifies that payouts can be
made.
Withholding, generally: If you receive all or part of the contract value from an
annuity, we may deduct withholding against the taxable income portion of the
payment. Any withholding represents a prepayment of your tax due for the year.
You take credit for such amounts on your annual tax return.
If the payment is part of an annuity payout plan, we generally compute the
amount of withholding using payroll tables. You may provide us with a statement
of how many exemptions to use in calculating the withholding. As long as you've
provided us with a valid Social Security number or taxpayer identification
number, you may elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial or full
withdrawal) we compute withholding using 10% of the taxable portion. Similar to
above, as long as you have provided us with a valid Social Security number or
taxpayer identification number, you may elect not to have this withholding
occur.
Some states also may impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment outside the United States.
Transfer of ownership of a nonqualified annuity: If you make such a transfer
without receiving adequate consideration, the transfer is a gift, and also may
be a withdrawal for federal income tax purposes. If the gift is a currently
taxable event for income tax purposes, the original owner will be taxed on the
amount of deferred earnings at the time of the transfer and also may be subject
to the 10% IRS penalty discussed earlier. In this case, the new owner's
investment in the annuity will be the value of the annuity at the time of the
transfer.
Collateral assignment of a nonqualified annuity: If you collaterally assign or
pledge your contract, earnings on purchase payments you made after Aug. 13, 1982
will be taxed to you like a withdrawal.
Important: Our discussion of federal tax laws is based upon our understanding of
current interpretations of these laws. Federal tax laws or current
interpretations of them may change. For this reason and because tax consequences
are complex and highly individual and cannot always be anticipated, you should
consult a tax adviser if you have any questions about taxation of your contract.
Tax qualification
We intend that the contract qualify as an annuity for federal income tax
purposes. To that end, the provisions of the contract are to be interpreted to
ensure or maintain such tax qualification, notwithstanding any other provisions
of the contract. We reserve the right to amend the contract to reflect any
clarifications that may be needed or are appropriate to maintain such
qualification or to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such amendments.
Voting rights
As a contract owner with investments in the variable subaccount(s), you may vote
on important fund policies until annuity payouts begin. Once they begin, the
person receiving them has voting rights. We will vote fund shares according to
the instructions of the person with voting rights.
Before annuity payouts begin, the number of votes you have is determined by
applying your percentage interest in each variable subaccount to the total
number of votes allowed to the subaccount.
After annuity payouts begin, the number of votes you have is equal to:
o the reserve held in each subaccount for your contract; divided by o the net
asset value of one share of the applicable fund.
As we make annuity payouts, the reserve for the contract decreases; therefore,
the number of votes also will decrease.
We calculate votes separately for each account. We will send notice of these
meetings, proxy materials and a statement of the number of votes to which the
voter is entitled. We will vote shares for which we have not received
instructions in the same proportion as the votes for which we have received
instructions. We also will vote the shares for which we have voting rights in
the same proportion as the votes for which we have received instructions.
Substitution of investments
We may change the funds from which the subaccounts buy shares if: laws or
regulations change; the existing funds become unavailable; or, in the judgment
of American Enterprise Life, the funds no longer are suitable for the
subaccounts. If any of these situations occur, we have the right to substitute
the funds held in the subaccounts for other registered open-end management
investment companies when American Enterprise Life believes it would be in the
best interest of persons having voting rights under the contracts.
We may also:
o add new subaccounts;
o combine any two or more subaccounts;
o make additional subaccounts investing in additional funds;
o transfer assets to and from the subaccounts or the variable account;
and
o eliminate or close any subaccounts.
In the event of substitution or any of these changes, American Enterprise Life,
without the consent or approval of the owners, may amend the contract and take
whatever action is necessary and appropriate. However, we will not make any
substitution or change without the necessary approval of the SEC and state
insurance departments. American Enterprise Life will notify owners of any
substitution or change.
Distribution of the contract
[To be filed by amendment]
About American Enterprise Life
American Enterprise Life issues the annuities. American Enterprise Life is a
wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of AEFC.
AEFC is a wholly-owned subsidiary of American Express Company. American Express
Company is a financial services company principally engaged through subsidiaries
(in addition to AEFC) in travel related services, investment services and
international banking services.
American Enterprise Life is a stock life insurance company organized in 1981
under the laws of the state of Indiana. Its administrative offices are located
at 80 South Eighth Street, Minneapolis, MN 55402. Its statutory address is 100
Capitol Center South, 201 North Illinois Street, Indianapolis, IN 46204.
American Enterprise Life is licensed in the state of Indiana and it conducts a
conventional life insurance business.
Legal Proceedings
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which American Enterprise Life and AEFC do business involving
insurers' sales practices, alleged agent misconduct, failure to properly
supervise agents and other matters. American Enterprise Life and AEFC, like
other life and health insurers, from time to time are involved in such
litigation. On October 13, 1998, an action entitled Richard W. And Elizabeth J.
Thoresen vs. American Express Financial Corporation, American Centurion Life
Assurance Company, American Enterprise Life Insurance Company, American Partners
Life Insurance Company, IDS Life Insurance Company and IDS Life Insurance
Company of New York was commenced in Minnesota State Court. The action was
brought by individuals who purchased an annuity in a qualified plan. They allege
that the sale of annuities in tax-deferred contributory retirement investment
plans (e.g., IRAs) is never appropriate. The plaintiffs purport to represent a
class consisting of all persons who made similar purchases. The plaintiffs seek
damages in an unspecified amount.
American Enterprise Life is an defendant in various other lawsuits, none of
which, in American Enterprise Life's opinion, will result in a material
liability.
Year 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of the variable account.
The variable account has no computer systems of its own but is dependent upon
the systems maintained by AEFC and certain other third parties.
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps are being taken to resolve any potential problems including
modification to existing software and the purchase of new software. These
measures are scheduled to be completed and tested on a timely basis. AEFC's goal
is to complete internal remediation and testing of each system by the end of
1998 and to continue compliance efforts through 1999. The Year 2000 readiness of
unaffiliated investment managers and other third parties whose system failures
could have an impact on the variable account's operations currently is being
evaluated. The potential materiality of any such impact is not known at this
time.
Regular and special reports
Services
To help you track and evaluate the performance of your annuity, American
Enterprise Life provides:
Quarterly statements showing the value of your investment.
Annual reports containing required information on the annuity and its underlying
investments.
<PAGE>
<TABLE>
<CAPTION>
Appendix A
Example of Dollar Cost Averaging
How dollar-cost averaging works
Month Amount Accumulation Number of units
invested unit value purchased
<S> <C> <C> <C> <C>
By investing an Jan $100 $20 5.00
equal number of
dollars each month... Feb 100 18 5.56
Mar 100 17 5.88
you automatically Apr 100 15 6.67
buy more units
when the per unit May 100 16 6.25
market price is low...
Jun 100 18 5.56
Jul 100 17 5.88
Aug 100 19 5.26
and fewer units Sep 100 21 4.76
when the per unit
market price is high Oct 100 20 5.00
</TABLE>
You have paid an average price of only $17.91 per unit over the 10 months, while
the average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any variable subaccount will gain
in value nor will it protect against a decline in value if market prices fall.
Because this strategy involves continuous investing, your success with
dollar-cost averaging will depend upon your willingness to continue to invest
regularly through periods of low price levels. Dollar-cost averaging can be an
effective way to help meet your long-term goals.
<PAGE>
Table of contents of the Statement of Additional Information
Performance Information................................................
Calculating Annuity Payouts............................................
Rating Agencies........................................................
Principal Underwriter..................................................
Independent Auditors...................................................
Saving for Retirement..................................................
Prospectus.............................................................
Financial Statements -
American Enterprise Life Insurance Company
- --------------------------------------------------------------------------------
Please check the appropriate box to receive a copy of the Statement of
Additional Information for:
Asset Allocation Variable Annuity
Variable Insurance Trust
Mail your request to:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
800-333-3437
American Enterprise Life will mail your request to:
Your name_______________________________________________________________________
Address_________________________________________________________________________
City_____________________________State____________________Zip___________________
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
ASSET ALLOCATION VARIABLE ANNUITY
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
__________, 1999
American Enterprise Variable Annuity Account is a separate account established
and maintained by American Enterprise Life Insurance Company (American
Enterprise Life).
This Statement of Additional Information (SAI), dated , 1999, is not a
prospectus. It should be read together with the prospectus dated , 1999, which
you can obtain from your sales representative, or by writing or calling American
Enterprise Life at the address or telephone number below.
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
800-333-3437
<PAGE>
TABLE OF CONTENTS
Performance Information.........................................................
Calculating Annuity Payouts.....................................................
Rating Agencies.................................................................
Principal Underwriter...........................................................
Independent Auditors............................................................
Prospectus......................................................................
Financial Statements -
.........American Enterprise Life Insurance Company
<PAGE>
PERFORMANCE INFORMATION
Calculation of yield for the subaccounts investing in income funds
For the subaccounts investing in income funds, we base quotations of yield on
all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it by dividing net
investment income per accumulation unit by the value of an accumulation unit on
the last day of the period, according to the following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units
outstanding during the period that were entitled to
receive dividends
d = the maximum offering price per accumulation unit on the
last day of the period
The subaccount earns yield from the increase in the net asset value of shares of
the fund in which the subaccount invests and from dividends declared and paid by
the fund, which are automatically invested in shares of the fund.
Calculation of Average Annual Total Return
We will express quotations of average annual total return for a subaccount in
terms of the average annual compounded rate of return of a hypothetical
investment in the annuity over a period of one, five and 10 years (or, if less,
up to the life of the account), calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
EVR = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one-, five-, or
10-year (or other) period at the end of the one-,
five-, or 10-year (or other) period (or fractional
portion thereof)
<PAGE>
We calculated the following performance figure on the basis of historical
performance of each fund. We show performance from the commencement date of the
funds as if the annuity had existed at that time. Past performance does not
guarantee future results. We did not provide any performance information for the
subaccounts because they are new and have not had any activity to date.
Average Annual Total Return For Period Ended , 1998
Average Annual Total Return with Withdrawal
Performance Since Commencement of the Fund*
Since
Commencement
Subaccount investing in: 1 Year 5 Year 10 Year (Fund)
- -----------------------
Fund 1 (date/date)**
Fund 2 (date/date)
Fund 3 (date/date)
Fund 4 (date/date)
Fund 5 (date/date)
Fund 6 (date/date)
Fund 7 (date/date)
Fund 8 (date/date)
Fund 9 (date/date)
Fund 10 (date/date)
Fund 11 (date/date)
Fund 12 (date/date)
Fund 13 (date/date)
Fund 14 (date/date)
Fund 15 (date/date)
Fund 16 (date/date)
* Current applicable annual charges deducted from fund performance include a
mortality and expense risk fee of 1.25% (as a percentage of average daily net
assets), a variable account administrative charge of 0.15% (as a percentage of
average daily net assets) and a $30 contract administrative charge. **
(Commencement date of the subaccount; Commencement date of the fund)
<PAGE>
Average Annual Total Return without Withdrawal
Performance Since Commencement of the Fund*
Since
Commencement
Subaccount investing in: 1 Year 5 Year 10 Year (Fund)
- -----------------------
Fund 1 (date/date)**
Fund 2 (date/date)
Fund 3 (date/date)
Fund 4 (date/date)
Fund 5 (date/date)
Fund 6 (date/date)
Fund 7 (date/date)
Fund 8 (date/date)
Fund 9 (date/date)
Fund 10 (date/date)
Fund 11 (date/date)
Fund 12 (date/date)
Fund 13 (date/date)
Fund 14 (date/date)
Fund 15 (date/date)
Fund 16 (date/date)
* Current applicable annual charges deducted from fund performance include a
mortality and expense risk fee of 1.25% (as a percentage of average daily net
assets), a variable account administrative charge of 0.15% (as a percentage of
average daily net assets) and a $30 contract administrative charge. **
(Commencement date of the subaccount; Commencement date of the fund)
Aggregate Total Return
Aggregate total return represents the cumulative change in value of an
investment for a given period (reflecting change in a subaccount's accumulation
unit value). We compute aggregate total return using the following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the one-, five-, or 10- year (or
other) period at the end of the one-, five-, or 10- year (or
other) period (or fractional portion thereof)
When we calculate average annual or aggregate total return, the Securities and
Exchange Commission (SEC) requires that we make an assumption that the contract
owner withdraws the entire contract at the end of the one-, five- and 10- year
periods (or, if less, up to the life of the subaccount). In addition, we may
show performance figures without the deduction of a withdrawal charge. All total
return figures reflect the deduction of all applicable charges including the
contract administrative charge, the variable account administrative charge and
the mortality and expense risk fee.
Independent rating or statistical services or publishers or publications such as
The Bank Rate Monitor National Index, Barron's, Business Week, CDA Technologies,
Donoghue's Money Market Fund Report, Financial Services Week, Financial Times,
Financial World, Forbes, Fortune, Global Investor, Institutional Investor,
Investor's Daily, Kiplinger's Personal Finance, Lipper Analytical Services,
Money, Morningstar, Mutual Fund Forecaster, Newsweek, The New York Times,
Personal Investor, Stanger Report, Sylvia Porter's Personal Finance, USA Today,
U.S. News & World Report, The Wall Street Journal and Wiesenberger Investment
Companies Service may quote subaccount performance, compare it to rankings,
yields or returns, or use it in variable annuity accumulation or settlement
illustrations they publish or prepare.
CALCULATING ANNUITY PAYOUTS
The Variable Account
We do the following calculations separately for each of the subaccounts of the
variable account. The separate monthly payouts, added together, make up your
total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your annuity as of the valuation date on
(or next day preceding) the seventh calendar day before the retirement
date and then deduct any applicable premium tax; then
o apply the result to the annuity table contained in the contract or
another table at least as favorable. The annuity table shows the amount
of the first monthly payment for each $1,000 of value which depends on
factors built into the table, as described below.
Annuity Units: We then convert the value of your subaccount to annuity units. To
compute the number of units credited to you, we divide the first monthly payment
by the annuity unit value (see below) on the valuation date on (or next day
preceding) the seventh calendar day before the retirement date. The number of
units in your subaccount is fixed. The value of the units fluctuates with the
performance of the underlying fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date on (or next day preceding) the
seventh calendar day before the payout is due; by
o the fixed number of annuity units credited to you.
Annuity Table: The table shows the amount of the first monthly payment for each
$1,000 of contract value according to the age and, when applicable, the sex of
the annuitant. (Where required by law, we will use a unisex table of settlement
rates.) The table assumes that the contract value is invested at the beginning
of the annuity payout period and earns a 4% rate of return, which is reinvested
and helps to support future payouts.
Annuity Unit Values: This value originally was set at $1 for each subaccount. To
calculate later value we multiply the last annuity value by the product of:
o the net investment factor; and
o the neutralizing factor. The purpose of the neutralizing factor is to
offset the effect of the assumed investment rate built into the annuity
table. With an assumed investment rate of 4%, the neutralizing factor is
0.999893 for a one day valuation period.
Net Investment Factor: We determine this value by:
o adding the underlying fund's current net asset value per share plus
per-share amount of any current dividend or capital gain distribution; then
o dividing that sum by the previous net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee and the variable account administrative charge from the result.
Because the net asset value of the underlying fund may fluctuate, the net
investment factor may be greater or less than one, and the annuity unit value
may increase or decrease. You bear this investment risk in a variable
subaccount.
The Fixed Account
Your fixed annuity payout amounts are guaranteed by American Enterprise Life.
Once calculated, your payout will remain the same and never change. To calculate
your annuity payouts we:
o take the value of your fixed account at the retirement date or the date you
have selected to begin receiving your annuity payouts; then
o using an annuity table, we apply the value according to the annuity payout
plan you select.
The annuity payout table we use will be the one in effect at the time you choose
to begin your annuity payouts. The values in the table will be equal to or
greater than the table in your contract.
<PAGE>
RATING AGENCIES
The following chart reflects the ratings given to American Enterprise Life by
independent rating agencies. These agencies evaluate the financial soundness and
claims-paying ability of insurance companies based on a number of different
factors. This information does not relate to the management or performance of
the variable subaccounts of the annuity. This information relates only to the
fixed account and reflects American Enterprise Life's ability to make annuity
payouts and to pay death benefits and other distributions from the annuities.
Rating agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the variable accounts is __________ which offers
the variable contracts on a continuous basis.
INDEPENDENT AUDITORS
[To be filed by amendment]
PROSPECTUS
The prospectus, dated ________, 1999, is hereby incorporated in this SAI by
reference.
[Financial statements to be filed by amendment]
<PAGE>
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration
Statement:
To be filed by amendment
(b) Exhibits:
1. Resolution of the Executive Committee of the Board of Directors of
American Enterprise Life establishing the American Enterprise Variable
Annuity Account dated July 15, 1987, filed electronically as Exhibit 1
to the Initial Registration Statement No. 33-54471, filed on or about
July 5, 1994, is incorporated herein by reference.
2. Not applicable.
3.1 Form of Master General Agent Agreement to be filed by amendment.
3.2 Form of General Agent Agreement to be filed by amendment.
4.1 Form of Deferred Annuity Contract (form 43350) is filed electronically
herewith.
4.2 Form of Roth IRA Endorsement (form 43353) is filed electronically
herewith.
4.3 Form of SEP-IRA Endorsement (form 43352) is filed electronically
herewith.
5. Form of Variable Annuity Application (form 43351) is filed
electronically herewith.
6.1 Amendment and Restatement of Articles of Incorporation of American
Enterprise Life dated July 29, 1986, filed electronically as Exhibit
6.1 to the Initial Registration Statement No. 33-54471, filed on or
about July 5, 1994, is incorporated herein by reference.
6.2 Amended By-Laws of American Enterprise Life, filed electronically as
Exhibit 6.2 to the Initial Registration Statement No. 33-54471, filed
on or about July 5, 1994, is incorporated herein by reference.
7. Not applicable.
8 Copy of Participation Agreement to be filed by amendment
9. Opinion of counsel and consent to its use as to the legality of the
securities being registered to be filed by amendment.
10. Consent of Independent Auditors to be filed by amendment.
11. Financial Statement Schedules and Report of Independent Auditors to be
filed by amendment.
12. Not applicable.
13. Copy of schedule for computation of each performance quotation
provided in the Registration Statement in response to Item 21, filed
electronically as Exhibit 13 to the Initial Registration Statement No.
33-54471, filed on or about July 5, 1994, is incorporated herein by
reference.
14. Not applicable.
15.1. Power of Attorney to sign this Registration Statement, dated March 28,
1997, filed electronically as Exhibit 15 to Post-Effective Amendment
No. 7 to Registration Statement No. 33-54471, is incorporated herein
by reference.
15.2. Power of Attorney to sign this Registration Statement, dated April 9,
1998, filed electronically as Exhibit 15.2 to Post-Effective Amendment
No. 10 to Registration Statement No. 33-54471, is incorporated herein
by reference.
<PAGE>
<TABLE>
<CAPTION>
Item 25. Directors and Officers of the Depositor (American Enterprise Life Insurance Company)
<S> <C> <C>
Name Principal Business Address Positions and Offices with Depositor
- ------------------------------------- -------------------------------------- --------------------------------------
James E. Choat IDS Tower 10 Director, President and Chief
Minneapolis, MN 55440 Executive Officer
Lorraine R. Hart IDS Tower 10 Vice President, Investments
Minneapolis, MN 55440
Jeffrey S. Horton IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
Richard W. Kling IDS Tower 10 Director and Chairman of the Board
Minneapolis, MN 55440
Bruce A. Kohn IDS Tower 10 Vice President, Group Counsel and
Minneapolis, MN 55440 Assistant Secretary
Paul S. Mannweiler Indianapolis Power and Light Director
One Monument Circle
P.O. Box 1595
Indianapolis, IN 46206-1595
Paula R. Meyer IDS Tower 10 Director and Executive Vice
Minneapolis, MN 55440 President, Assured Assets
Mary Ellyn Minenko IDS Tower 10 Vice President, Group Counsel and
Minneapolis, MN 55440 Assistant Secretary
Stuart A. Sedlacek IDS Tower 10 Executive Vice President
Minneapolis, MN 55440
F. Dale Simmons IDS Tower 10 Vice President, Real Estate Loan
Minneapolis, MN 55440 Management
William A. Stoltzmann IDS Tower 10 Director, Vice President, General
Minneapolis, MN 55440 Counsel and Secretary
Philip C. Wentzel IDS Tower 10 Vice President and Controller
Minneapolis, MN 55440
</TABLE>
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the Depositor
or Registrant
American Enterprise Life Insurance Company is a wholly-owned
subsidiary of IDS Life Insurance Company which is a
wholly-owned subsidiary of American Express Financial
Corporation. American Express Financial Corporation is a
wholly-owned subsidiary of American Express Company (American
Express).
The following list includes the names of major subsidiaries of
American Express.
<TABLE>
<CAPTION>
<S> <C>
Jurisdiction of
Name of Subsidiary Incorporation
I. Travel Related Services
American Express Travel Related Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
III. Companies engaged in Financial Services
Advisory Capital Strategies Group Inc. Minnesota
American Centurion Life Assurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Asset Management Group Inc. Minnesota
American Express Asset Management International Inc. Delaware
American Express Asset Management International (Japan) Ltd. Japan
American Express Asset Management Ltd. England
American Express Client Service Corporation Minnesota
American Express Corporation Delaware
American Express Financial Advisors Inc. Delaware
American Express Financial Corporation Delaware
American Express Insurance Agency of Arizona Inc. Arizona
American Express Insurance Agency of Idaho Inc. Idaho
American Express Insurance Agency of Nevada Inc. Nevada
American Express Insurance Agency of Oregon Inc. Oregon
American Express Minnesota Foundation Minnesota
American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky
American Express Property Casualty Insurance Agency of Maryland Inc. Maryland
American Express Property Casualty Insurance Agency of Pennsylvania Inc. Pennsylvania
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Futures Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc. Massachusetts
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
<PAGE>
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
IDS Securities Corporation Delaware
Investors Syndicate Development Corp. Nevada
Public Employee Payment Company Minnesota
</TABLE>
Item 27. Number of Contract owners
Not applicable.
Item 28. Indemnification
The By-Laws of the depositor provide that the Corporation shall have
the power to indemnify a director, officer, agent or employee of the
Corporation pursuant to the provisions of applicable statues or
pursuant to contract.
The Corporation may purchase and maintain insurance on behalf of any
director, officer, agent or employee of the Corporation against any
liability asserted against or incurred by the director, officer, agent
or employee in such capacity or arising out of the director's,
officer's, agent's or employee's status as such, whether or not the
Corporation would have the power to indemnify the director, officer,
agent or employee against such liability under the provisions of
applicable law.
The By-Laws of the depositor provide that it shall indemnify a
director, officer, agent or employee of the depositor pursuant to the
provisions of applicable statutes or pursuant to contract.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE>
Item 29. Principal Underwriters
To be filed by amendment
Item 30. Location of Accounts and Records
American Enterprise Life Insurance Company
IDS Tower 10
Minneapolis, MN 55402
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes that it will file a post-effective
amendment to this registration statement as frequently as is
necessary to ensure that the audited financial statements in
the registration statement are never more than 16 months old
for so long as payments under the variable annuity contracts
may be accepted.
(b) Registrant undertakes that it will include either (1) as part
of any application to purchase a contract offered by the
prospectus, a space that an applicant can check to request a
Statement of Additional Information, or (2) a post card or
similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a
Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made
available under this Form promptly upon written or oral
request to American Enterprise Life Contract Owner Service at
the address or phone number listed in the prospectus.
(d) The sponsoring insurance company represents that the fees and
charges deducted under the contract, in the aggregate, are
reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the
insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, American Enterprise Life Insurance Company, on behalf of the Registrant,
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Minneapolis, and State of
Minnesota, on the 19th day of November, 1998.
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
(Registrant)
By American Enterprise Life Insurance Company
(Sponsor)
By /s/ James E. Choat*
James E. Choat
President and Chief Executive Officer
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities indicated on the 20th day of
November, 1998.
Signature Title
/s/ James E. Choat* Director, President and
James E. Choat Chief Executive Officer
/s/ Jeffrey S. Horton** Vice President and Treasurer
Jeffrey S. Horton
/s/ Richard W. Kling* Chairman of the Board
Richard W. Kling
/s/ Paul S. Mannweiler* Director
Paul S. Mannweiler
__________________________ Director and Executive Vice
Paula R. Meyer President-Assured Assets
/s/ William A. Stoltzmann* Director, Vice President, General
William A. Stoltzmann Counsel and Secretary
/s/ Philip C. Wentzel** Vice President and Controller
Philip C. Wentzel
*Signed pursuant to Power of Attorney, dated March 28, 1997, filed
electronically as Exhibit 15 to Post-Effective Amendment No. 7 to Registration
Statement No. 33-54471, filed on or about April 23, 1997, incorporated herein by
reference.
**Signed pursuant to Power of Attorney, dated April 9, 1998, filed
electronically as Exhibit 15.2 to Post-Effective Amendment No. 10 to
Registration Statement No. 33-54471, filed on or about April 30, 1998,
incorporated herein by reference.
By:__________________________
Mary Ellyn Minenko
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement is comprised of the following papers and documents:
The Cover Page.
Cross-reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Part C.
Other Information.
The signatures.
Exhibits.
4.1 Form of Deferred Annuity Contract (form 43350).
4.2 Form of Roth IRA Endorsement (form 43353).
4.3 Form of SEP-IRA Endorsement (form 43352).
5. Form of Variable Annuity Application (form 43351).
Deferred Annuity Contract
AMERICAN
EXPRESS
American
Enterprise
Life
Administrative Offices:
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440
This is a deferred annuity contract. It is a legal contract between you, as the
owner, and us, American Enterprise Life Insurance Company, a Stock Company,
Indianapolis, Indiana. PLEASE READ YOUR CONTRACT CAREFULLY.
If the annuitant is living on the Retirement Date, we will begin to pay you
monthly annuity payments. Any payments made by us are subject to the terms of
this contract. The owner and beneficiary are as named in the application unless
they are changed as provided for in this contract.
We issue this contract in consideration of your application and the payment of
the purchase payments.
Signed for and issued by American Enterprise Life Insurance Company in
Indianapolis, Indiana, as of the contract date.
ACCUMULATION VALUES, WHEN BASED ON THE INVESTMENT RESULTS OF THE SEPARATE
ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. SEE PAGE 10
FOR VARIABLE PROVISIONS.
NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS. If for any reason you
are not satisfied with this contract, return it to us or our agent within 10
days after you receive it. We will then cancel this contract. Upon such
cancellation we will refund an amount equal to the sum of: (1) the contract
value; and (2) any premium tax charges paid. This contract will then be
considered void from its start.
/s/ William A. Stoltzmann
Secretary
/s/ James E. Choat
President
o Flexible Purchase Payments
o Optional Fixed Dollar or Variable Accumulation Values and Annuity Payments
o Annuity Payments to Begin on the Retirement Date
o This Contract in Nonparticipating - Dividends Are Not Payable
<PAGE>
<TABLE>
<CAPTION>
CONTRACT DATA
<S> <C> <C> <C>
Contract Number: 9920-SAMPLE Contract Date: September 8, 1999
Initial Purchase Payment: $10,000.00 Retirement Date: September 8, 2039
Annuitant: John Doe Contract Type: Non-qualified
Contract Owner: John Doe
</TABLE>
Upon issuance of this contract your initial purchase payment has been applied to
the fixed account and variable subaccounts as shown below. You may make
additional payments and change the purchase payment allocation as provided in
this contract. Refer to the purchase payments provision on Page 8.
Purchase Payment
Allocation Allocation Percentage
---------- ---------------------
AEL Fixed Account 20%
Fund 1 10%
Fund 2 0%
Fund 3 0%
Fund 4 10%
Fund 5 0%
Fund 6 10%
Fund 7 0%
Fund 8 0%
Fund 9 0%
Fund 10 10%
Fund 11 20%
Fund 12 0%
Fund 13 0%
Fund 14 0%
Fund 15 20%
Fund 16 0%
Withdrawal Charge: If you withdraw all or a portion of this contract, a
withdrawal charge may apply. A withdrawal charge applies if all or part of the
contract value withdrawn is from payments received during the seven years before
withdrawal.
Years From Payment Receipt Withdrawal Charge
1 6% of purchase payment withdrawn
2 6% of purchase payment withdrawn
3 5% of purchase payment withdrawn
4 5% of purchase payment withdrawn
5 4% of purchase payment withdrawn
6 3% of purchase payment withdrawn
7 2% of purchase payment withdrawn
Thereafter 0% of purchase payment withdrawn
You may withdraw the greater of 10 percent of your prior contact anniversary
contract value or contract earnings each contract year without incurring a
withdrawal charge. Refer to the withdrawal charge provision on Page 11 for
additional withdrawal charge information.
<PAGE>
<TABLE>
<CAPTION>
CONTRACT DATA - Continued
<S> <C> <C> <C>
Contract Number: 9920-SAMPLE Contract Date: September 8, 1999
</TABLE>
Contract Administrative Charge: See Page 10.
The Maximum Total Contract Purchase Payments (cumulative total all contract
years) is $2,000,000. We reserve the right to increase this maximum.
The Minimum Additional Payment is $100.
The Maximum Purchase Payments in the second or later contract year is $50,000
per year subject to maximum total contract purchase payment limit above.
The Guaranteed Minimum Effective Interest Rate to be credited to the Fixed
Account is 3%.
<PAGE>
<TABLE>
<CAPTION>
Guide to Contract Provisions
<S> <C>
Definitions Important words and meanings...................Page 3
General Provisions Entire contract; Annuity tax qualification; Contract
modification; Incontestability; Benefits based on
incorrect data; State laws; Reports to owner;
Evidence of survival; Protection of proceeds;
Payments by us; Voting rights..................Page 4
Ownership and Beneficiary Owner rights; Change of ownership; Beneficiary;
Change of Beneficiary; Assignment..............Page 5
Payments to Beneficiary Describes options and amounts payable upon deathPage 6
Purchase Payments Purchase payments amounts; Payment limits;
Allocations of purchase payments...............Page 8
Contract Value Describes the fixed and variable account contract
values; Interest to be credited; Contract
administrative charge; Premium taxes; transfers of
contract values...............................Page 11
Fixed and Variable Accounts Describes the fixed account; Describes the variable
subaccounts, accumulation units and values; Net
investment factor; Mortality and expense risk
charge; Variable account administrative charge;
Annuity unit value............................Page 13
Withdrawal Provisions Contract withdrawal for its withdrawal value; rules
or withdrawal.................................Page 13
Annuity Provisions When annuity payments begin; Different ways to
receive annuity payments; Determination of payment
amounts.......................................Page 15
Tables of Annuity Rates Tables showing the amount of the first variable
annuity payment and the guaranteed fixed annuity
payments for the various payment plans........Page 17
</TABLE>
<PAGE>
Definitions
The following words are used often in this contract. When we use these words,
this is what we mean:
Accumulation Unit
An accumulation unit is an accounting unit of measure. It is used to calculate
the variable account contract value prior to annuitization.
Annuitant
The person or persons on whose life monthly annuity payments depend.
Annuitization
The application of the contract value of this contract to provide annuity
payments.
Annuity Unit
An annuity unit is an accounting unit of measure. It is used to calculate the
value of annuity payments from the variable account on and after annuitization.
Code
The Internal Revenue Code of 1986, as amended.
Contract Anniversary
The same day and month as the contract date each year that the contract remains
in force.
Contract Date
It is the date from which contract anniversaries, contract years, and contract
months are determined. Your contract date is shown under Contract Data.
Contract Value
The sum of the: (1) fixed account contract value; and (2) variable account
contract value.
Fixed Account
The fixed account is made up of all our assets other than those in any separate
account.
Fixed Annuity
A fixed annuity is an annuity with payments which are guaranteed by us as to
dollar amount during the annuity payment period.
IRA Contract
A contract used in or under a retirement plan or program that is intended to
qualify as an Individual Retirement Annuity under Section 408(b) of the Code.
IRA Required Minimum Distributions
The minimum distributions Code Section 408(b)(3) requires to be distributed from
an IRA, beginning not later than the April 1 following the calendar year you
reach age 70 1/2 (Required Beginning Date).
Nonqualified Contract
A contract used primarily for retirement purposes that is not intended to
qualify as an IRA contract.
Retirement Date
The date shown under Contract data on which annuity payments are to begin. This
date may be changed as provided in this contract. You will be notified prior to
the retirement date in order to select an appropriate annuity payment plan.
Valuation Date
A valuation date is each day the New York Stock Exchange is open for trading.
Valuation Period
A valuation period is the interval of time commencing at the close of business
on each valuation date and ending at the close of business on the next valuation
date.
Variable Account
The variable account is a separate investment account of ours. It consists of
several subaccounts. Each subaccount is named under Contract Data.
Variable Annuity
A variable annuity is an annuity with payments which are not predetermined or
guaranteed as to dollar amount and vary in amount with the investment experience
of one or more of the variable subaccounts.
We, Us, Our
American Enterprise Life Insurance Company
Written Request
A request in writing signed by you and delivered to us at our administrative
office.
You, Your
The owner of this contract. In a non-qualified contract, the owner may be
someone other than the annuitant. The owner is shown in the application unless
the owner has been changed as provided in this contract.
<PAGE>
General Provisions
Entire Contract
This contract form, any endorsements and the copy of the application attached to
it are the entire contract between you and us.
No one except one of our corporate officers (President, Vice President,
Secretary or Assistant Secretary) can change or waive any of our rights or
requirements under this contract. That person must do so in writing. None of our
representatives or other persons has the authority to change or waive any of our
rights or requirements under this contract.
Annuity Tax Qualification
This contract is intended to qualify as an annuity contract under Section 72 of
the Code for federal income tax purposes. To that end, the provisions of this
contract are to be interpreted to ensure or maintain such tax-qualification,
notwithstanding any other provisions to the contrary.
Contract Modification
We reserve the right to modify this contract to the extent necessary to:
1. qualify this contract as an annuity contract under Section 72 of the Code
and all related laws and regulations which are in effect during the term of
this contract; and
2. if this contract is purchased as an IRA contract, to qualify this contract
as such an IRA contract under Section 408 of the Code and all related laws
and regulations which are in effect during the term of this contract.
We will obtain any necessary approval of any regulatory authority for the
modifications.
Incontestable
This contract is incontestable from its date of issue.
Benefits Based on Incorrect Data
Payments under the contract will be based on the annuitant's birthdate and sex.
If the annuitant's birthdate or sex or your birthdate has been misstated,
payments under this contract will be adjusted. They will be based on what would
have been provided at the correct birthdate and sex. Any underpayments made by
us will be made up immediately. Any overpayments made by us will be subtracted
from the future payments.
State Laws
This contract is governed by the law of the state in which it is delivered. The
values and benefits of this contract are at least equal to those required by
such state. Any paid up annuity, cash withdrawal or death benefits available
under the contract are not less than the minimum benefits required by any
statute of the state in which the contract is delivered.
Reports to Owner
At least once a year we will send you a statement showing the contract value and
the cash withdrawal value of this contract. This statement will be based on any
laws or regulations that apply to contracts of this type.
Evidence of Survival
Where any payments under this contract depend on the recipient or annuitant
being alive on a certain date, proof that such condition has been met may be
required by us. Such proof may be required prior to making the payments.
Protection of Proceeds
Payments under this contract are not assignable by any beneficiary prior to the
time they are due. To the extent allowed by law, payments are not subject to the
claims of creditors or to legal process.
Payments by Us
All sums payable by us are payable at our administrative office. Any payment or
withdrawal from a variable annuity is based on the variable contract value.
Voting Rights
So long as federal law requires, we will give certain voting rights to
contractowners. As contractowner, if you have voting rights we will send a
notice to you telling you the time and place of a shareholder meeting. The
notice will also explain matters to be voted upon and how many votes you get.
<PAGE>
Ownership and Beneficiary
Owner Rights
As long as the annuitant is living and unless otherwise provided in this
contract, you may exercise all rights and privileges provided in this contract
or allowed by us.
If this is an IRA contract, you shall be the annuitant, and during your life you
will have the sole and absolute power to receive and enjoy all rights under the
contract. Your entire interest in nonforfeitable. Joint ownership is not
permitted.
Change of Ownership
If this is an IRA contract, your right to change the ownership is restricted.
This contract may not be sold, assigned, transferred, discounted or pledged as
collateral for a loan or as security for the performance of an obligation or for
any other purpose to any person other than as may be required or permitted under
Section 408 of the Code, or under any other applicable section of the Code. Your
interest in this contract may be transferred to your former spouse, if any,
under a divorce decree or a written instrument incidental to such divorce.
If this is a nonqualified contract, you may change the ownership.
Any change of ownership as provided above must be made by written request on a
form approved by us. The change must be made while the annuitant is living. Once
the change is recorded by us, it will take effect as of the date of your
request, subject to any action taken or payment made by us before the recording.
Beneficiary
Beneficiaries are those you have named in the application or later changed as
provided below, to receive benefits of this contract if you or the annuitant die
while this contract is in force.
Only those beneficiaries who are living when death benefits become payable may
share in the benefits, if any. If no beneficiary is then living, we will pay the
benefits to you, if living, otherwise to your estate.
Change of Beneficiary
You may change the beneficiary anytime while the annuitant is living by
satisfactory written request to us. Once the change is recorded by us, it will
take effect as of the date of your request, subject to any action taken or
payment made by us before the recording.
Assignment
If this is an IRA contract, you may not assign this contract as collateral.
If this is a nonqualified contract, you can assign this contract or any interest
in it while the annuitant is living. Your interest and the interest of any
beneficiary is subject to the interest of the assignee. An assignment is not a
change of ownership and an assignee is not an owner as these terms are used in
this contract. Any amounts payable to the assignee will be paid in a single sum.
A copy of any assignment must be submitted to us at our administrative office.
Any assignment is subject to any action taken or payment made by us before the
assignment was recorded at our administrative office. We are not responsible for
the validity of any assignment.
<PAGE>
Payments to Beneficiary
Death Benefits Before Annuitization
If you or the annuitant die before annuitization while this contract is in
force, we will pay the beneficiary the greatest of the following amounts:
1. the contract value; or
2. the total payments made to the contract minus adjustments for partial
withdrawals; or
3. the Maximum Anniversary Value immediately preceding the date of death
increased by the dollar amount of any payments since that anniversary and
reduced by any adjustments for partial withdrawals since that anniversary.
The Maximum Anniversary Value is equal to the greatest Anniversary Value
attained as follows: Each contract anniversary prior to the earlier of your or
the annuitant's 81st birthday we calculate an Anniversary Value that is the
greater of (i) the contract value on such anniversary, or (ii) total payments
made to the contract minus adjustments for partial withdrawals.
Adjustments for partial withdrawals are calculated for each partial withdrawal
as the product of (a) times (b) where:
(a) is the ratio of the amount of the partial withdrawal (including any
withdrawal charges) to the contract value on the date of (but prior
to) the partial withdrawal; and
(b) is the death benefit on the date of (but prior to) the partial
withdrawal.
Any amounts payable or applied by us as described in the sections below will be
based on the contract values as of the valuation date on or next following the
date on which due proof of death is received at our administrative office.
Payment of Nonqualified Contract Death Benefit Before Annuitization
The above death benefit will be payable in a lump sum upon the receipt of due
proof of death of you or the annuitant, whichever first occurs. The beneficiary
may elect to receive payment any time within five years after the date of death.
The above death benefit will also be made upon the first to die if ownership is
in a joint tenancy except where spouses are joint owners with right of
survivorship and he surviving joint spouse elects to continue the contract.
In lieu of a lump sum, payments may be made under an Annuity Payment Plan,
provided:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. the plan provides payments over a period which does not exceed the life or
life expectancy of the beneficiary; and
3. payments must begin no later than one year after the date of death.
For annuity Payment Plans, the reference to "annuitant" in the Annuity
Provisions shall apply to the beneficiary.
Payment of IRA Contract Death Benefit Before Annuitization
The above death benefit will be payable in a lump sum upon the receipt of due
proof of death. Under tax law, distributions are considered to have begun if
they are made when you reach your IRA required beginning date or if you have
annuitized according to applicable Treasury Regulations.
<PAGE>
If distributions from your IRA have begun but you have not annuitized before
your death, your beneficiary must continue using the same method, or a faster
method, than you were using for your required minimum distributions, to receive
the death benefit.
If distributions from your IRA have not begun and you have not annuitized before
your death, your beneficiary may take one or more distributions so that the
entire death benefit is received within five years of the year in which your
death occurs. In lieu of taking payments within five years, payments may be made
under an Annuity Payment Plan, provided:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. the plan provides payments over a period which does not exceed the life or
life expectancy of the beneficiary; and
3. payments must begin no later than one year after the year your death
occurs, in the case of a non-spouse beneficiary, or by December 31 of the
year in which you would have turned age 70 1/2, in the case of a spouse
beneficiary.
Payment amounts, durations and life expectancy calculations must comply with
Section 401(a)(9) of the Code and regulations thereunder.
For purposes of the foregoing provisions, life expectancy and joint and last
survivor expectancy shall be determined by use of the expected return multiples
in Table V and VI of Treasury Regulation Section 1.72-9 in accordance with Code
Section 408(b)(3) and the regulations thereunder. Life expectancy will be
initially determined on the basis of your beneficiary's attained age in the year
distributions are required to commence. Unless you (or your spouse) elects
otherwise prior to the time distributions are required to commence, your life
expectancy and, if applicable, your spouse's life expectancy will be
recalculated annually based on your attained ages in the year for which the
required distribution is being determined. The life expectancy of a nonspouse
beneficiary will not be recalculated. Instead, life expectancy will be
calculated using the attained age of such beneficiary during the calendar year
in which the individual attains age 70 1/2, and payments for subsequent years
shall be calculated based on such life expectancy reduced by one for each
calendar year which has elapsed since the calendar year life expectancy was
first calculated.
You or your beneficiary, as applicable, shall have the sole responsibility for
requesting a distribution that complies with this Contract and applicable law.
For Annuity Payment Plans, the reference to "annuitant" in the Annuity
Provisions shall apply to the beneficiary.
Spouse's Option to Continue Contract
For nonqualified contracts: If you die prior to annuitization and your spouse is
the sole beneficiary or co-owner of the contract, your spouse may keep the
contract in force as owner and may make additional purchase payments to the
contract.
For IRA Contracts: If you die prior to your required beginning date and your
spouse is the sole beneficiary, your spouse may keep the contract in force as
his or her own IRA. As owner, your spouse may make additional payments to the
contract. As owner, your spouse's life will determine the IRA required beginning
date and minimum distribution amounts. If you die after your required beginning
date, spousal continuation of this contract is not available.
Death After Annuitization
If you or the annuitant die after annuitization, the amount payable to the
beneficiary, if any, will be provided in the Annuity Payment Plan then in
effect.
<PAGE>
Purchase Payments
Purchase Payments
Purchase payments are the payments you make for this contract and the benefits
it provides. Purchase payments must be paid or mailed to us at our
administrative office or to an authorized agent. If requested, we'll give you a
receipt for your purchase payments.
Net purchase payments are that part of your purchase payments applied to the
contract value. A net purchase payment is equal to the purchase payment less any
applicable premium tax charge.
Additional Purchase Payments
Additional purchase payments may be made until the earlier of:
1. the date this contract terminates by withdrawal or otherwise; or
2. the date on which annuity payments begin.
Additional purchase payments are subject to the "Payment Limits Provision"
below.
Payment Limits Provision
Maximum Purchase Payments - The maximum total contract purchase payments may not
exceed the amounts shown under Contract Data. We reserve the right to increase
the maximums.
Additional Purchase Payments - You may make additional purchase payments of at
least $100.
In addition, if this is an IRA contract, except as otherwise provided in this
paragraph, the total purchase payments for any taxable year may not exceed
$2,000 or as otherwise provided in the Code and all related laws and regulations
which are in effect during the term of this contract. In the case of a rollover
contribution described in Sections 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of
the Code, there is no limit on the amount of your purchase payment.
No contributions will be accepted under a SIMPLE plan established by any
employer pursuant to Code Section 408(p). No transfer or rollover of funds
attributable to contributions made by a particular employer under its SIMPLE
plan will be accepted from a SIMPLE IRA prior to the expiration of the two-year
period beginning on the date the individual first participated in that
employer's SIMPLE plan.
You shall have the sole responsibility for determining whether purchase payments
meet applicable income tax requirements.
All purchase payments must be made in cash. If you die before the entire
interest in this contract has been distributed to you, and your beneficiary is
other than your surviving spouse, no additional purchase payments will be
accepted from your beneficiary under this contract.
Allocation of Purchase Payments
You instruct us on how you want your purchase payments allocated among the fixed
account and variable subaccounts. Your choice for the fixed account and each
variable subaccount may be made in any whole percent from 0% to 100%. Your
allocation instructions as of the contract date are shown under Contract Data.
We reserve the right to limit the maximum number of accounts and/or subaccounts
to which you can allocate purchase payments or contract value at any time.
By written request, or by another method agreed to by us, you may change your
choice of accounts or percentages. The first net purchase payment will be
allocated as of the end of the valuation period during which we make an
affirmative decision to issue this contract. Net purchase payments after the
first will be allocated as of the end of the valuation period during which we
receive the payment at our administrative office.
<PAGE>
Contract Value
Contract Value
The contract value at any time is the sum of:
1. the fixed account contract value; and
2. the variable account contract value.
If:
1. part or all of the contract value is withdrawn; or
2. charges described herein are made against the contract value;
then a number of accumulation units from the variable subaccounts and an amount
from the fixed account will be deducted to equal such amount. For withdrawals,
deductions will be made from the fixed or variable subaccounts that you specify.
Otherwise, the number of units from the variable subaccounts and the amount from
the fixed account will be deducted in the same proportion that your interest in
each bears to the total contract value.
Variable Account Contract Value
The variable account contract value at any time will be:
1. the sum of the value of all variable subaccount accumulation units under
this contract resulting from purchase payments so allocated, or transfers
among the variable and fixed accounts; less
2. the value of any units deducted for charges or withdrawals.
Fixed Account Contract Value
The fixed account contract value at any time will be:
1. the sum of all purchase payments allocated to the fixed account, plus
interest credited; plus
2. any amounts transferred to fixed account from any variable subaccount, plus
interest credited; less
3. any amounts transferred from the fixed account to any variable subaccount;
less
4. any amounts deducted for charges or withdrawals.
Interest to be Credited
We will credit interest to the fixed account contract value. Interest will begin
to accrue daily on the date the purchase payments which are received in our
administrative office become available for us to use. Such interest will be
credited at rates that we determine from time to time. However, we guarantee
that the rate will not be less than a 3% effective annual interest rate, and
that the rate credited to any portion of the fixed account contract value will
be not be changed more frequently than once each year.
Table of Fixed Account Guaranteed Minimum Values
Per $2,000 Annual Payments
Allocated 100% to the Fixed Account
Based on the 3% Minimum Interest Rate
End of contract year Guaranteed Guaranteed
minimum fixed account minimum fixed account
contract values withdrawal values
1 $ 2,030.00 $ 1,920.20
2 4,120.90 3,885.83
3 6,274.53 5,942.78
4 8,492.76 8,060.84
5 10,777.55 10,261.85
6 13,130.87 12,550.87
7 15,554.80 14,934.80
8 18,051.44 17,431.44
9 20,622.99 20,002.99
10 23,271.68 22,651.68
11 25,999.83 25,379.83
12 28,809.82 28,189.82
13 31,704.11 31,084.11
14 34,685.24 34,065.24
15 37,755.80 37,135.80
16 40,918.47 40,298.47
17 44,176.02 43,556.02
18 47,531.30 46,911.30
19 50,987.24 50,367.24
20 54,546.86 53,926.86
If there are any additional payments, transfers to or from the variable
subaccounts, withdrawals or premium tax adjustments, the above values will be
adjusted as described in this contract.
Variable subaccount contract and withdrawal values are not guaranteed and cannot
be projected.
<PAGE>
Contract Administrative Charge
We charge a fee for establishing and maintaining our records for this contract.
The charge is $30 per year and is deducted from the contract value at the end of
each contract year. The charge deducted will be prorated among the variable
subaccounts and the fixed account in the same proportion your interest in each
bears to the total contract value.
We waive the annual contract administrative charge for any contract year where
the contract value immediately prior to the deduction of the contract
administrative charge is $50,000 or more.
If you make a full withdrawal of this contract, we deduct the full $30 contract
administrative charge at the time of full withdrawal regardless of contract
value.
The charge does not apply at or after annuitization of this contract or at the
time a death benefit is paid.
Premium Tax Charges
We reserve the right to assess a charge against the contract value of this
contract for any applicable premium tax assessed to us by a state or local
government. This charge could be deducted when you make purchase payments, or
make a full withdrawal of the contract value or at the time of annuitization.
Transfers of Contract Values
While this contract is in force prior to annuitization, transfers of contract
values may be made as outlined below.
1. You may transfer all or part of the values held in one or more of the
variable subaccounts to another one or more of the variable subaccounts.
Subject to Item 2, you may also transfer values held in one or more of the
variable subaccounts to the fixed account.
2. On or within the 30 days before or after a contract anniversary you may
transfer values from the fixed account to one or more of the variable
subaccounts. If such a transfer is made, no transfers from any variable
subaccount to the fixed account may be made for six months after such a
transfer.
You may make a transfer by written request. Telephone transfers may also be made
according to telephone procedures that are then currently in effect, if any.
There is no fee or charge for these transfers. However, the minimum transfer
amount is $100, or if less, the entire value in the subaccount or in the fixed
account from which the transfer is being made, or other such minimum amounts
agreed to by us.
We may suspend or modify transfer privileges at any time. The right to transfer
contract values between the subaccounts is also subject to modification if we
determine, in our sole discretion, that the exercise of that right by one or
more contract owners is, or would be, to the disadvantage of other contract
owners. Any modification could be applied to transfers to or from some or all of
the subaccounts. These modifications could include, but not be limited to, the
requirements of a minimum time period between each transfer, not accepting
transfer requests of an agent acting under a power of attorney on behalf of more
than one contract owner or limiting the dollar amount that may be transferred
between the subaccounts and the fixed account by a contract owner at any one
time. We may apply these modifications or restrictions in any manner reasonably
designed to prevent any use of the transfer right we consider to be to the
disadvantage of other contract owners.
<PAGE>
Fixed and Variable Accounts
The Fixed Account
The fixed account is our general account. It is made up of all our assets
other than
1. those in the variable account; and
2. those in any other segregated asset account.
The Variable Account
The variable account is a separate investment account of ours. It consists of
several subaccounts which are named under Contract Data. We have allocated a
part of out assets for this and certain other contracts to the variable account.
Such assets remain our property. However, they may not be charged with the
liabilities from any other business in which we may take part.
Investments of the Variable Account
Purchase payments applied to the variable account will be allocated as specified
by the owner. Each variable subaccount will buy, at net asset value, shares of
the fund shown for that subaccount under Contract Data or as later added or
changed.
We may change the funds the variable subaccounts buy shares from if laws or
regulations change, the existing funds become unavailable or, in the judgment of
American Enterprise Life, the funds are no longer suitable for the subaccounts.
We have the right to substitute any funds for those shown under Contract Data,
including funds other than those shown under Contract Data.
We may also:
o add new subaccounts,
o combine any two or more subaccounts,
o make additional subaccounts investing in additional funds,
o transfer assets to and from the subaccounts or the variable account, and
o eliminate or close any subaccounts.
We would first seek approval of the Securities and Exchange Commission if
necessary, and, where required, the insurance regulator of the state where this
contract is delivered.
Valuation of Assets
Fund shares in the variable subaccounts will be valued at their net asset value.
Variable Account Accumulation Units
The number of accumulation units for each of the variable subaccounts is found
by adding the number of accumulation units resulting from:
1. purchase payments allocated to the subaccount; and
2. transfers to the subaccount;
and subtracting the number of accumulation units resulting from:
1. transfers from the subaccount; and
2. withdrawals (including withdrawal charges) from the subaccount; and
3. contract administrative charge deductions from the subaccount.
The number of accumulation units added or subtracted for each of the above
transactions is found by dividing (1) by (2) where:
1. is the amount allocated to or deducted from the subaccount; and
2. is the accumulation unit value for the subaccount for the respective
valuation period during which we received the purchase payment or transfer
value, or during which we deducted transfers, withdrawals, withdrawal
charges or contract administrative charges.
<PAGE>
Variable Account Accumulation Unit Value
The value of an accumulation for each of the variable subaccounts was set $1
when the first fund shares were bought. The value for any later valuation period
is found as follows:
The accumulation unit value for each variable subaccount for the last prior
valuation period is multiplied by the net investment factor for the same
subaccount for the next following valuation period. The result is the
accumulation unit value. The value of an accumulation unit may increase or
decrease from one valuation period to the next.
Net Investment Factor
The net investment factor is an index applied to measure the investment
performance of a variable subaccount from one valuation period to the next. The
net investment factor may be greater or less than one; therefore, the value of
an accumulation or annuity unit may increase or decrease.
The net investment factor for any such subaccount for any valuation period is
determined by: dividing (1) by (2) and subtracting (3) and (4) from the result.
This is done where:
1. is the sum of:
a. the net asset value per share of the fund held in the variable
subaccount determined at the end of the current valuation period; plus
b. the per share amount of any divided or capital gain distribution made
by the fund held in the variable subaccount, if the "ex-dividend" date
occurs during the current valuation period; and
2. is the net asset value per share of the fund held in the variable
subaccount, determined at the end of the last prior valuation period; and
3. is a factor representing the mortality and expense risk charge; and
4. is a factor representing the variable account administrative charge.
Mortality and Expense Risk Charge
In calculating unit values we will deduct a mortality and expense risk charge
from the variable subaccounts equal, on an annual basis, to 1.25% of the daily
net asset value. This deduction is made to compensate us for assuming the
mortality and expense risks under contracts of this type. We estimate that
approximately 2/3 of this charge is for assumption of mortality risk and 1/3 is
for assumption of expense risk. The deduction will be:
1. made from each variable subaccount; and
2. computed on a daily basis.
Variable Account Administrative Charge
In calculating unit values, we will deduct a variable account administrative
charge from the variable subaccounts equal, on an annual basis, to 0.15% of the
daily net asset value. This deduction is made to compensate us for certain
administrative and operating expenses for contracts of this type. The deduction
will be:
1. made from each variable subaccount; and
2. computed on a daily basis.
Annuity Unit Value
The value of an annuity unit for each variable subaccount was arbitrarily set at
$1 when the first fund shares were bought. The value for any later valuation
period is found as follows:
1. the annuity unit value for each variable subaccount for the last prior
valuation period is multiplied by the net investment factor for the
subaccount for the valuation period for which the annuity unit value is
being calculated.
2. the result is multiplied by an interest factor. This is done to neutralize
the assumed investment rate which is built into the annuity tables on Page
17.
<PAGE>
Withdrawal Provisions
Withdrawal
By written request and subject to the rules below you may:
1. withdraw this contract for the total withdrawal value; or
2. partially withdraw this contract for a part of the withdrawal value.
Rules for Withdrawal
All withdrawals will have the following conditions.
1. You must apply by written request or other method agreed to by us:
a. while this contract is in force; and
b. prior to the earlier of beginning an annuity payment plan or the
death of the annuitant or owner.
2. You must withdraw an amount equal to at least $100. Each variable
subaccount value and the fixed account value after a partial withdrawal
must be either $0 or at least $100.
3. The amount withdrawn, less any charges, will normally be mailed to you
within seven days of the receipt of your written request and this contract,
if required.
For withdrawals from the fixed account, we have the right to defer payment
to you for up to six months from the date we receive your request.
4. For partial withdrawals, if you do not specify from which account the
withdrawal is to be made, the withdrawal will be made from the variable
subaccounts and the fixed account in the same proportion as your interest
in each bears to the contract value.
5. Any amounts withdrawn and charges which may apply cannot be repaid.
Upon withdrawal for the full withdrawal value this contract will terminate. We
may require that you return the contract to us before we pay the full withdrawal
value.
Withdrawal Value
The withdrawal value at any time will be:
1. the contract value;
2. minus the full $30 contract administrative charge;
3. minus any withdrawal charge.
Withdrawal Charge
If you withdraw all or a part of your contract, you may be subject to a
withdrawal charge. A withdrawal charge applies if all or a part of the contract
value you withdraw is from payments received during the seven years before
withdrawal. Refer to Waiver of Withdrawal Charges for situations when withdrawal
charges are not deducted.
We determine your withdrawal charge by multiplying each of your payments
withdrawn by the applicable withdrawal charge percentage, and then adding the
total withdrawal charges.
For a partial withdrawal that is subject to a withdrawal charge, the amount we
actually withdraw from your contract value will be the amount you request plus
any applicable withdrawal charge. The withdrawal charge is applied to this total
amount. We pay you the amount you requested.
The withdrawal charge percentage depends upon the number of years since you made
the payment(s) withdrawn:
Number of Years Withdrawal Charge
From Payment Receipt Percentage
1 6%
2 6%
3 5%
4 5%
5 4%
6 3%
7 2%
Thereafter 0%
<PAGE>
Waiver of Withdrawal Charges
Withdrawal charges are waived for all of the following:
1. The greater of:
a. Withdrawals during the year totaling up to 10% of your prior contract
anniversary contract value, or
b. Contract earnings. (Contract earnings is defined as the contract value
less purchase payments not previously withdrawn.)
2. Withdrawals made if both you and the annuitant were under age 76 on the
contract date, and you provide proof satisfactory to us that, as of the
date you request the withdrawal, you or the annuitant are confined to a
hospital or nursing home, and have been for the prior 60 days.
To qualify, the nursing home must:
a. be licensed by an appropriate licensing agency to provide nursing
services; and
b. provide 24-hour-a-day nursing services; and
c. have a doctor available for emergency situations; and
d. have a nurse on duty or call at all times; and
e. maintain clinical records; and
f. have appropriate methods for administering drugs.
3. Withdrawal charges are waived if you or the annuitant are diagnosed in the
second or later contract years as disabled with a medical condition that
with reasonable medical certainty will result in death within 12 months or
less from the date of the licensed physician's statement. You must provide
us with a licensed physician's statement containing the terminal illness
diagnosis and the date the terminal illness was initially diagnosed.
4. IRA required minimum distributions, for those amounts required to be
distributed from this contract only.
5. Annuity payment plan payments.
6. Payments made in the event of the death of the owner or annuitant.
Withdrawal Order
We use this order to determine withdrawal charges.
1. First, withdrawals up to 10% of your prior anniversary account value not
previously withdrawn during this contract year. (No withdrawal charge.)
2. Next, withdrawals are from contract earnings - if any - in excess of the
annual 10% free withdrawal amount. (No withdrawal charge.)
3. Next, withdrawals are from purchase payments received eight or more years
before the withdrawal and not previously withdrawn. (No withdrawal charge.)
4. Last, withdrawals are from purchase payments received in the seven contract
years before the withdrawal on a "first-in, first-out' (FIFO) basis. There
is a withdrawal charge on these payments.
Suspension or Delay in Payment of Withdrawal
We have the right to suspend or delay the date of any withdrawal payment from
the variable subaccounts for any period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which:
a. disposal of securities held in the variable subaccounts is not
reasonably practical; or
b. it is not reasonable practical to fairly determine the value of
the net assets of the variable subaccounts; or
4. during any other period when the Securities and Exchange Commission, by
order, so permits for the protection of security holders.
Rules and regulations of the Securities and Exchange Commission will govern as
to whether the conditions set forth in 2 and 3 exist.
<PAGE>
Annuity Provisions
Annuitization
When annuitization occurs, the contract value will be applied to make annuity
payments. The fist payment will be made as of the retirement date. This date is
shown under Contract Data. Before payments begin we will require satisfactory
proof that the annuitant is alive. We may also require that you exchange this
contract for a supplemental contract which provides the annuity payments.
Change of Retirement Date
You may change the retirement date shown for this contract. Tell us the new date
by written request. If you select a new date, it must be at least 30 days after
we receive your written request at our administrative office.
The maximum retirement date on an IRA contract is the later of:
1. the April 1 following the calendar year in which the annuitant attains age
70 1/2; or
2. such other date which satisfies the minimum distribution requirements under
the Code, its regulations and/or promulgations by the Internal Revenue
Service; or
3. such other date as agreed upon by us.
Notwithstanding the above, and for all nonqualified contracts, the maximum
retirement date is the later of:
1. the annuitant's 85th birthday; or
2. the 10th contract anniversary.
Annuity Payment Plans
Annuity payments may be made on a fixed dollar basis, a variable basis or a
combination of both. You can schedule receipt of annuity payments according to
one of the Plans A through E below or another plan agreed to by us.
If this is an IRA, payment amounts, durations and life expectancy calculations
must comply with Section 401(a)(9) of the Code and the regulations thereunder
and generally must:
1. provide for payments over your life or over your and your beneficiary's
lives; or
2. provide for payments over a period which does not exceed your life
expectancy and/or the life expectancy of you and your beneficiary; and
3. meet the minimum incidental death benefit requirements under the Code and
all related laws and regulations which are then in effect.
The rules described in the "Payment of IRA Contract Death Benefit Before
Annuitization" section for determining life expectancy will apply in determining
the amount of these distributions, except that the life expectancy of you and
your beneficiary will be initially determined on the basis of your attained ages
in the year you reach 70 1/2.
IRA annuity payments must be nonincreasing, or may increase only for a variable
life annuity as provided in Treasury Regulation Section 1.401(a)(9)-1, Q&A F-3.
An appropriate annuity payment plan is intended to satisfy the following
requirements that otherwise apply: the annual distribution required to be made
by your IRA required beginning date is for the calendar year in which you
reached age 70 1/2; annual payments for subsequent years, including the year in
which your IRA required beginning date occurs, must be made by December 31 of
that year.
You shall have the sole responsibility for electing an annuity payment plan that
complies with this Contract and applicable law.
Plan A - This provides monthly annuity payments during the lifetime of the
annuitant. No payments will be made after the annuitant dies.
Plan B - This provides monthly annuity payments during the lifetime of the
annuitant with a guarantee by us that payments will be made for a period of at
least five, 10 or 15 years. You must select the guaranteed period.
Plan C - This provides monthly annuity payments during the lifetime of the
annuitant with a guarantee by us that payments will be made for a certain number
of months. We determine the number of months by dividing the amount applied
under this plan by the amount of the first monthly annuity payment.
<PAGE>
Plan D - Monthly annuity payments will be paid during the lifetime of the
annuitant and joint annuitant. When either the annuitant or the joint annuitant
dies we will continue to make monthly payments during the lifetime of the
survivor. No payments will be made after the death of both the annuitant and
joint annuitant.
Plan E - This provides monthly annuity payments for a period of years. The
period of years may be no less than 10 nor more than 30.
You may select the plan by written request to us at least 30 days before the
retirement date. If at least 30 days before the retirement date we have not
received at our administrative office your written request to select a plan, we
will make payments according to Plan B with payments guaranteed for 10 years.
If the amount to be applied to a plan would not provide a monthly payment of at
least $20, we have the right to change the frequency of the payment or to make a
lump sum payment of the contract value.
Allocation of Contract Values at Annuitization
At the time of annuitization under an Annuity Payment Plan, you may reallocate
your contract value to the Fixed Account to provide fixed dollar payments and/or
among the variable subaccounts, to provide variable annuity payments. We reserve
the right to limit the number of variable subaccounts used at any one time
during annuitization.
Fixed Annuity
A fixed annuity is an annuity with payments that are guaranteed by us as to
dollar amount. Fixed annuity payments remain the same. At annuitization the
fixed account contract value will be applied to the applicable Annuity Table.
This will be done in accordance with the payment plan chosen. The minimum amount
payable for each $1,000 so applied is shown in Table B on Page 18.
Variable Annuity
A variable annuity is an annuity with payments which:
1. are not predetermined or guaranteed as to dollar amount; and
2. vary in amount with the investment experience of the variable subaccounts.
Determination of the First Variable Annuity Payment
At annuitization, the variable account contract value will be applied to the
applicable Annuity Table. This will be done:
1. on the valuation date on or next preceding the seventh calendar day before
the retirement date; and
2. in accordance with the payment plan chosen. The amount payable for the
first payment for each $1,000 so applied is shown in Table A on Page 17.
Variable Annuity Payments After the First Payment
Variable annuity payments after the first payment vary in amount. The amount
changes with the investment performance of the variable subaccounts. The dollar
amount of variable annuity payments after the first is not fixed. It may change
from month to month. The dollar amount of such payments is determined as
follows:
1. The dollar amount of the first annuity payment is divided by the value of
an annuity unit as of the valuation date on or next preceding the seventh
calendar day before the retirement date. This result establishes the number
of annuity units for each monthly annuity payment after the first payment.
This number of annuity units remains fixed during the annuity payment
period.
2. The fixed number of annuity units is multiplied by the annuity unit value
as of the valuation date on or next preceding the seventh calendar day
before the date the payment is due. The result establishes the dollar
amount of the payment.
We guarantee that the dollar amount of each payment after the first will not be
affected by variations in expenses or mortality experience.
Exchange of Annuity Units
After annuity payments begin, annuity units of any variable subaccount may be
exchanged for units of any of the other variable subaccounts. This may be done
no more than once a year. We reserve the right to limit the number of variable
subaccounts used at any one time. Once annuity payments start no exchanges may
be made to or from any fixed annuity.
<PAGE>
Tables of Annuity Rates
Table A below shows the amount of the first monthly variable annuity payment,
based on a 4% assumed investment return, for each $1,000 of value applied under
any payment plan. The amount of the first and all subsequent monthly fixed
dollar annuity payments for each $1,000 of value applied under any payment plan
will be based on our fixed dollar Table of Annuity Rates in effect at
annuitization. Such rates are guaranteed to be not less than those shown in
Table B. The amount of such annuity payments under Plans A, B and C will depend
upon the sex and age of the annuitant at annuitization. The amount of such
annuity payments under Plan D will depend upon the sex and the age of the
annuitant and the joint annuitant at annuitization.
<TABLE>
<CAPTION>
Table A - Dollar Amount of First Monthly Variable Annuity Payment Per $1,000 Applied
- ---------- ------- ---------------- ------- -------- --------------- -------- ------- ---------------- ---------------
Plan A Plan B Plan C Plan D
- ---------- ------- ---------------- ------- -------- --------------- -------- ------- ---------------- ---------------
Age Life Income Life Income Life Income Joint &
at Beginning Non-Refund Five Years with Fifteen Years Installment Survivor
Annui- In Certain Ten Years Certain Refund Non-Refund
Certain Male & Female
tization Year Male Female Male Female Male Female Male Female Male Female Same Age
- ---------- ------- -------- ------- ------- -------- ------- ------- -------- ------- ------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Age 65 2005 5.89 5.26 5.84 5.24 5.71 5.18 5.49 5.08 5.48 5.05 4.76
2010 5.80 5.19 5.76 5.17 5.63 5.12 5.44 5.03 5.42 4.99 4.71
2015 5.71 5.12 5.67 5.11 5.56 5.06 5.38 4.98 5.35 4.94 4.67
2020 5.62 5.06 5.59 5.05 5.49 5.01 5.32 4.94 5.29 4.90 4.63
2025 5.55 5.00 5.52 4.99 5.43 4.95 5.27 4.89 5.27 4.85 4.59
2030 5.47 4.95 5.45 4.94 5.36 4.91 5.22 4.85 5.18 4.81 4.55
Age 70 2005 6.80 5.95 6.70 5.92 6.41 5.79 6.00 5.59 6.12 5.59 5.28
2010 6.67 5.86 6.58 5.82 6.32 5.71 5.94 5.53 6.04 5.52 5.21
2015 6.55 5.77 6.47 5.73 6.23 5.64 5.88 5.47 5.96 5.46 5.15
2020 6.44 5.68 6.36 5.65 6.15 5.56 5.82 5.41 5.88 5.39 5.09
2025 6.33 5.60 6.26 5.58 6.06 5.50 5.76 5.36 5.80 5.34 5.04
2030 6.23 5.52 6.17 5.50 5.98 5.43 5.70 5.31 5.73 5.28 4.99
Age 75 2005 8.07 6.99 7.84 6.89 7.25 6.60 6.50 6.17 6.96 6.34 6.04
2010 7.88 6.85 7.68 6.76 7.14 6.50 6.45 6.10 6.84 6.25 5.94
2015 7.71 6.72 7.53 6.64 7.03 6.41 6.39 6.04 6.74 6.16 5.85
2020 7.75 6.59 7.38 6.52 6.93 6.31 6.34 5.98 6.64 6.07 5.76
2025 7.40 6.48 7.25 6.42 6.84 6.23 6.28 5.92 6.54 6.00 5.68
2030 7.26 6.37 7.12 6.31 6.74 6.14 6.23 5.86 6.45 5.92 5.61
Age 85 2005 12.39 10.84 11.17 10.14 8.98 8.60 7.20 7.11 9.51 8.76 8.77
2010 12.03 10.52 10.94 9.91 8.90 8.50 7.19 7.09 9.33 8.59 8.56
2015 11.70 10.23 10.71 9.69 8.82 8.40 7.17 7.06 9.16 8.43 8.36
2020 11.38 9.96 10.50 9.48 8.74 8.30 7.15 7.04 9.00 8.29 8.19
2025 11.09 9.71 10.29 9.28 8.66 8.21 7.14 7.02 8.85 8.15 8.02
2030 10.82 9.48 10.10 9.09 8.58 8.12 7.12 6.99 8.71 8.03 7.87
- ---------- ------- -------- ------- ------- -------- ------- ------- -------- ------- ------- -------- ---------------
Table A above is based on the "1983 Individual Annuitant Mortality Table A" with
100% Projection Scale G and a 4% assumed investment return. Annuity rates for
any year, age, or any combination of year, age and sex not shown above, will be
calculated on the same basis as those rates shown in the Table above. Such rates
will be furnished by us upon request. Amounts shown in the Table below are based
on a 4% assumed investment return.
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Plan E - Dollar Amount of First Monthly Variable Annuity Payment Per $1,000 Applied
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Years Payable Monthly Payment Years Payable Monthly Payment Years Payable Monthly Payment
<S> <C> <C> <C> <C> <C> <C>
10 10.06 17 6.71 24 5.35
11 9.31 18 6.44 25 5.22
12 8.69 19 6.21 26 5.10
13 8.17 20 6.00 27 5.00
14 7.72 21 5.81 28 4.90
15 7.34 22 5.64 29 4.80
16 7.00 23 5.49 30 4.72
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Table B - Dollar Amounts of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied
- ---------- ------- ---------------- ------- -------- --------------- -------- ------- ---------------- ---------------
Plan A Plan B Plan C Plan D
- ---------- ------- ---------------- ------- -------- --------------- -------- ------- ---------------- ---------------
SettlementLife Income Life Income Life Income Joint &
Beginning Non-Refund Five Years with Fifteen Years Installment Survivor
Settlement In Certain Ten Years Certain Refund Non-Refund
Certain Male & Female
Age Year Male Female Male Female Male Female Male Female Male Female Same Age
- ---------- ------- -------- ------- ------- -------- ------- ------- -------- ------- ------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Age 65 2005 5.30 4.68 5.26 4.66 5.15 4.62 4.95 4.53 4.84 4.43 4.20
2010 5.21 4.61 5.17 4.60 5.07 4.55 4.89 4.48 4.77 4.38 4.15
2015 5.12 4.55 5.09 4.53 4.99 4.49 4.83 4.42 4.71 4.34 4.11
2020 5.04 4.48 5.01 4.47 4.92 4.44 4.77 4.38 4.66 4.29 4.07
2025 4.96 4.43 4.94 4.42 4.86 4.39 4.72 4.33 4.60 4.25 4.03
2030 4.89 4.37 4.87 4.37 4.79 4.34 4.67 4.29 4.55 4.21 3.99
Age 70 2005 6.21 5.38 6.12 5.35 5.87 5.24 5.48 5.05 5.45 4.97 4.74
2010 6.08 5.29 6.01 5.26 5.77 5.16 5.41 4.99 5.37 4.90 4.67
2015 5.96 5.20 5.89 5.17 5.68 5.08 5.35 4.93 5.29 4.84 4.61
2020 5.85 5.11 5.79 5.09 5.59 5.01 5.29 4.87 5.22 4.78 4.55
2025 5.75 5.03 5.69 5.01 5.51 4.94 5.23 4.82 5.15 4.72 4.49
2030 5.64 4.96 5.59 4.94 5.43 4.88 5.17 4.76 5.08 4.67 4.44
Age 75 2005 7.47 6.42 7.27 6.33 6.72 6.07 6.00 5.65 6.24 5.68 5.50
2010 7.29 6.28 7.11 6.20 6.61 5.97 5.94 5.59 6.14 5.60 5.40
2015 7.12 6.15 6.96 6.08 6.50 5.87 5.88 5.52 6.04 5.51 5.31
2020 6.96 6.03 6.82 5.97 6.40 5.78 5.83 5.46 5.95 5.43 5.23
2025 6.81 5.91 6.68 5.86 6.30 5.69 5.77 5.40 5.86 5.36 5.15
2030 6.67 5.81 6.55 5.76 6.21 5.60 5.72 5.34 5.77 5.29 5.08
Age 85 2005 11.77 10.25 10.64 9.60 8.51 8.12 6.73 6.64 8.66 7.97 8.24
2010 11.42 9.94 10.40 9.37 8.42 8.02 6.71 6.61 8.50 7.82 8.03
2015 11.09 9.65 10.18 9.15 8.34 7.91 6.70 6.59 8.35 7.68 7.84
2020 10.78 9.38 9.96 8.94 8.26 7.81 6.68 6.56 8.20 7.55 7.66
2025 10.49 9.14 9.75 8.74 8.18 7.72 6.66 6.54 8.06 7.42 7.50
2030 10.22 8.91 9.56 8.56 8.09 7.62 6.65 6.51 7.94 7.31 7.35
- ---------- ------- -------- ------- ------- -------- ------- ------- -------- ------- ------- -------- ---------------
Table B above is based on the "1983 Individual Annuitant Mortality Table A" at
3.00% with 100% Projection Scale G. Settlement rates for any year, age, or any
combination of year, age and sex not shown above, will be calculated on the same
basis as those rates shown in the Table above. Such rates will be furnished by
us upon request. Amounts shown in the Table below are based on a 3% annual
effective interest rate.
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Plan E - Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Years Payable Monthly Payment Years Payable Monthly Payment Years Payable Monthly Payment
<S> <C> <C> <C> <C> <C> <C>
10 9.61 17 6.23 24 4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.95
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>
<PAGE>
Deferred Annuity Contract
AMERICAN
EXPRESS
American
Enterprise
Life
Administrative Offices:
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440
o Flexible Purchase Payments
o Optional Fixed Dollar or Variable Accumulation Values and Annuity Payments
o Annuity Payments to Begin on the Retirement Date
o This Contract is Nonparticipating - Dividends Are Not Payable
Roth IRA Endorsement
For purposes of qualifying this contract as an Individual Retirement Annuity
(IRA) maintained as a Roth IRA under Public Law 105-34, this endorsement is made
part of the annuity contract which it is attached. It modifies this contract by
adding the following Roth IRA provisions. All contract IRA provisions apply to
this Rith IRA contract, except as described in this endorsement. If there is any
conflict between contract and endorsement provisions, the endorsement provisions
take precedence.
Definitions
Here are some important definitions:
You, Your
The owner of this contract. At all times you (the owner) must be the annuitant.
You may not transfer the ownership of this Roth IRA contract except as provided
under "Change of Ownership" in the contract.
Code
The Internal Revenue Code of 1986, as amended, and all related laws and
regulations which are in effect and applicable during the term of this contract.
Roth IRA Contract
An annuity contract maintained as a Roth IRA as described in Code Section 408A.
IRA Required Minimum Distributions (Not Applicable)
The required minimum distributions at age 70 1/2 under Code Section 408(b)(3)
are not applicable to a Roth IRA.
General Provisions
Contract Modification
This contract is intended to qualify as a Roth IRA. We agree to and reserve the
right to modify this contract (and endorsement) to the extent necessary to
qualify it as a Roth IRA as described in Code Section 408A. We will obtain the
approval of any state regulatory authority for the modifications and send you a
copy of any such change.
Payments to Beneficiary
Payment of Roth IRA Death Benefit Before Annuitization
The death benefit will be payable in a lump sum upon the receipt of due proof of
your death. The beneficiary may elect to receive payments any time within five
years after the calendar year of death.
In lieu of a lump sum, payments may be made under an Annuity Payment Plan,
provided:
1. the beneficiary elects the plan within 60 days after we receive due proof
of death; and
2. the plan provides payments over a period which does not exceed the life or
life expectancy of the beneficiary; and
3. payments must begin no later than:
a. one year after the calendar year of death in the case of a non-spouse
beneficiary; or
b. by December 31 of the year in which you would have turned age 70 1/2
in the case of a spouse beneficiary.
Your beneficiary has the sole responsibility for requesting a distribution that
complies with applicable laws and this endorsement.
Spouse's Option to Continue Contract
If you die prior to annuitization and your spouse is the sole beneficiary of
this contract, your spouse may keep this contract in force as his or her own
Roth IRA. As owner, your spouse may make additional purchase payments to this
contract.
Purchase Payments
Purchase Payments
All purchase payments to a Roth IRA must be in cash and may be made even after
you are age 70 1/2.
Payment Limits Provision
Except as otherwise provided in this paragraph, total purchase payments for any
taxable year may not exceed $2,000. In the case of a rollover contribution or a
conversion of an IRA (other than a Roth IRA) to a Roth IRA as described in Code
Sections 408A(c)(6) and 408A(d)(3)(C), there is no limit on the amount of your
purchase payment.
The $2,000 limit is gradually reduced to $0 between certain levels of adjusted
gross income ("AGI"). In accordance with Code Section 408A(c)(3):
o if you are single, the $2,000 limit is phased out between AGI of
$95,000 and $110,000;
o if you are married and file a joint federal income tax return, it is
phased out between $150,000 and $160,000; and
o if you are married and file a separate federal income tax return, it
is phased out between $0 and $10,000.
Also, a rollover or transfer from an individual retirement account or annuity
will not be permitted if your AGI for the tax year exceeds $100,000 or if you
are married and file a separate federal income tax return. Adjusted gross income
is defined in Code Section 408A(c)(3) and does not include amounts transferred
or roled over to individual retirement annuities or accounts or Roth IRAs.
You have the sole responsibility for determining whether purchase payments meet
applicable income tax requirements.
Annuity Provisions
Change of Retirement Date
You may change the retirement date shown for this contract. Tell us the new date
by written request. If you select a new date, it must be at least 30 days after
we receive your written request at our administrative office.
The maximum retirement date on this Roth IRA contract is the latest of:
1. the annuitant's 85th birthday; or
2. the 10th contract anniversary; or
3. such other date as agreed upon by us.
Annuity Payment Plans
Any Roth IRA annuity payment plan selected must meet the Roth IRA minimum death
distribution requirements under Code Section 401(a)(9)(B).
This endorsement is effective as of the contract date of this contract
American Enterprise Life Insurance Company
/s/ William A. Stoltzmann
Secretary
SEP-IRA Endorsement
This endorsement is made part of the annuity contract to which it is attached.
It changes certain contract terms by adding the following provisions to the
annuity contract. In the event of any conflict between contract and endorsement
provisions, the endorsement provisions take precedence over the contract
provisions.
This contract is intended to qualify as a SEP-IRA annuity contract. A SEP-IRA is
an Individual Retirement Annuity (IRA) with special features and requirements.
All contract IRA provisions apply to this SEP-IRA contract, except as described
in this endorsement.
Here are some important definitions:
Code
The Internal Revenue Code of 1986, as amended, and all related laws and
regulations which are in effect during the term of this contract.
SEP-IRA Contract
A Simplified Employee Pensions under Public Law 99-514. It is used in or under a
retirement plan or program described in Code Sections 408(b) and (k).
General Provisions
Unisex Basis
Since SEP-IRA Plans are employer-sponsored retirement plans, this contract is on
a unisex basis. All sex-distinct references in the contract are hereby deleted
and replaced with unisex references.
Refer to the unisex Tables of Annuity Rates in this endorsement. These unisex
tables replace the sex-distinct tables in the contract.
Contract Modification
We reserve the right to modify this contract to the extent necessary to qualify
this contract as a SEP-IRA contract as described in Code Sections 408(b) and
(k), and all related laws and regulations which are in effect during the term of
this contract.
We will obtain any necessary regulatory approvals for the modifications.
Benefits Based on Incorrect Data
Payments under the contract will be based on the annuitant's birthdate. If the
annuitant's birthdate has been misstated, payments under this contract will be
adjusted. They will be based on what would have been provided at the correct
birthdate. Any underpayments made by us will be made up immediately. Any
overpayments made by us will be subtracted from the future payments.
Purchase Payments
Payment Limits Provision
Employer purchase payments for any taxable year may not exceed the applicable
contribution limits described in section 408(k) of the Code (generally, the
lesser than 15% of your compensation or $30,000 as adjusted for cost of living
increases).
Employer purchase payments made in connection with a simplified employee pension
plan [SEP] may be made with respect to the taxable year in which the annuitant
attains age 70 1/2 or any later year.
<PAGE>
Tables of Annuity Rates
Table A below shows the amount of the first monthly variable annuity payment,
based on 4% assumed investment return, for each $1,000 of value applied under
any payment plan. The amount of the first and all subsequent monthly fixed
dollar annuity payments for each $1,000 of value applied under any payment plan
will be based on our fixed dollar Table of Annuity Rates in effect at
annuitization. Such rates are guaranteed to be not less than those shown in
Table B. The amount of such annuity payments under Plans A, B and C will depend
upon the age of the annuitant(s) at annuitization. The amount of such annuity
payments under Plan D will depend upon the ages of the annuitant and the joint
annuitant at annuitization.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Table A - Dollar Amount of First Monthly Variable Annuity Payment Per $1,000 Applied
- ----------------------------------------------------------------------------------------------------------------------
PLAN A PLAN B PLAN C PLAN D
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Age Beginning Life Income with Life Income Joint &
-------------------------------------------
at in Life Income Five Years Ten Years Fifteen Installment Survivor
Annuitization Year Non-Refund Certain Certain Years Certain Refund Non-Refund
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Age 65 2005 5.26 5.24 5.18 5.08 5.05 4.76
2010 5.19 5.17 5.12 5.03 4.99 4.71
2015 5.12 5.11 5.06 4.98 4.94 4.67
2020 5.06 5.05 5.01 4.94 4.90 4.63
2025 5.00 4.99 4.95 4.89 4.85 4.59
2030 4.95 4.94 4.91 4.85 4.81 4.55
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Age 70 2005 5.95 5.92 5.79 5.59 5.59 5.28
2010 5.86 5.82 5.71 5.53 5.52 5.21
2015 5.77 5.73 5.64 5.47 5.46 5.15
2020 5.68 5.65 5.56 5.41 5.39 5.09
2025 5.60 5.58 5.50 5.36 5.34 5.04
2030 5.52 5.50 5.43 5.31 5.28 4.99
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Age 75 2005 6.99 6.89 6.60 6.17 6.34 6.04
2010 6.85 6.76 6.50 6.10 6.25 5.94
2015 6.72 6.64 6.41 6.04 6.16 5.85
2020 6.59 6.52 6.31 5.98 6.07 5.76
2025 6.48 6.42 6.23 5.92 6.00 5.68
2030 6.37 6.31 6.14 5.86 5.92 5.61
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Age 85 2005 10.84 10.14 8.60 7.11 8.76 8.77
2010 10.52 9.91 8.50 7.09 8.59 8.56
2015 10.23 9.69 8.40 7.06 8.43 8.36
2020 9.96 9.48 8.30 7.04 8.29 8.19
2025 8.71 9.28 8.21 7.02 8.15 8.02
2030 9.48 9.09 8.12 6.99 8.03 7.87
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Table A above is based on the "1983 Individual Annuitant Mortality Table A" with
100% Projection Scale G
and a 4% assumed investment return. Annuity rates for any year, age, or any combination of year and age
not shown above, will be calculated on the same basis as those rates shown in the Table above. Such
rates will be furnished by us upon request. Amounts shown in the Table below are
based on a 4% assumed investment return.
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Plan E - Dollar Amount of First Monthly Variable Annuity Payment Per $1,000 Applied
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Years Monthly Years Monthly Years Monthly
Payable Payments Payable Payments Payable Payments
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
10 10.06 17 6.71 24 5.35
11 9.31 18 6.44 25 5.22
12 8.69 19 6.21 26 5.10
13 8.17 20 6.00 27 5.00
14 7.72 21 5.81 28 4.90
15 7.34 22 5.64 29 4.80
16 7.00 23 5.49 30 4.72
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Table B - Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied
- ----------------------------------------------------------------------------------------------------------------------
PLAN A PLAN B PLAN C PLAN D
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Age Beginning Life Income with Life Income Joint &
-------------------------------------------
at in Life Income Five Years Ten Years Fifteen Installment Survivor
Annuitization Year Non-Refund Certain Certain Years Certain Refund Non-Refund
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Age 65 2005 4.68 4.66 4.62 4.53 4.43 4.20
2010 4.61 4.60 4.55 4.48 4.38 4.15
2015 4.55 4.53 4.49 4.42 4.34 4.11
2020 4.48 4.47 4.44 4.38 4.29 4.07
2025 4.43 4.42 4.39 4.33 4.25 4.03
2030 4.37 4.37 4.34 4.29 4.21 3.99
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Age 70 2005 5.38 5.35 5.24 5.05 4.97 4.74
2010 5.29 5.26 5.16 4.99 4.90 4.67
2015 5.20 5.17 5.08 4.93 4.84 4.61
2020 5.11 5.09 5.01 4.87 4.78 4.55
2025 5.03 5.01 4.94 4.82 4.72 4.49
2030 4.96 4.94 4.88 4.76 4.67 4.44
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Age 75 2005 6.42 6.33 6.07 5.65 5.68 5.50
2010 6.28 6.20 5.97 5.59 5.60 5.40
2015 6.15 6.08 5.87 5.52 5.51 5.31
2020 6.03 5.97 5.78 5.46 5.43 5.23
2025 5.91 5.86 5.69 5.40 5.36 5.15
2030 5.81 5.76 5.60 5.34 5.29 5.08
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Age 85 2005 10.25 9.60 8.12 6.64 7.97 8.24
2010 9.94 9.37 8.02 6.61 7.82 8.03
2015 9.65 9.15 7.91 6.59 7.68 7.84
2020 9.38 8.94 7.81 6.56 7.55 7.66
2025 9.14 8.74 7.72 6.54 7.42 7.50
2030 8.91 8.56 7.62 6.51 7.31 7.35
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
Table B above is based on the "1983 Individual Annuitant Mortality Table A" @
3.00% with 100% Projection Scale G. Annuity rates for any year, age, or any
combination of year and age not shown above, will be calculated on the same
basis as those rates shown in the Table above. Such rates will be furnished by
us upon request. Amounts shown in the Table below are based on a 3% annual
effective interest rate.
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Plan E - Dollar Amount of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Years Monthly Years Monthly Years Monthly
Payable Payments Payable Payments Payable Payments
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
10 9.61 17 6.23 24 4.84
11 8.86 18 5.96 25 4.71
12 8.24 19 5.73 26 4.59
13 7.71 20 5.51 27 4.47
14 7.26 21 5.32 28 4.37
15 6.87 22 5.15 29 4.27
16 6.53 23 4.99 30 4.18
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>
This endorsement is effective as of the contract date of this contract.
American Enterprise Life Insurance Company
/s/ William A. Stoltzmann
Secretary
The XYZ Asset Allocation Annuity
AMERICAN
EXPRESS
American
Enterprise
Life
Variable Annuity Application
Administrative Offices:
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440
1 Annuitant Full Name (First, Middle Initial, Last)____________________________
Address (Street Address or P.O. Box, City, State, Zip)__________________________
Phone Number (___)______________________________________________________________
Sex M__ F__ Date of Birth (Month/Day/Year) __/__/__
Social Security Number (Tax Identification Number)______________________________
2 Owner (check one)
__ Same as Annuitant (do not complete owner information below) __ Joint with
Annuitant (Spouse only) - Not available for IRA __ Other
Full Name (First, Middle Initial, Last)_________________________________________
Address (Street Address or P.O. Box, City, State, Zip)__________________________
Relationship to the annuitant___________________________________________________
Phone Number (___)______________________________________________________________
Sex M__ F__ Date of Birth (Month/Day/Year) __/__/__
Social Security Number (Tax Identification Number)______________________________
For joint spousal owners, the annuitant's Social Security number will be
used for tax reporting purposes unless you specify otherwise under Remarks.
3 Primary Beneficiary (Name, relationship to the Annuitant; if unrelated,
include Social Security number and date of birth)
______________________________________________________
Contingent Beneficiary (Name, relationship to the Annuitant, if unrelated,
include Social Security number and date of birth)
______________________________________________________
4 Annuity Plan (check one) __ Nonqualified Annuity
__ Individual Retirement Annuity (IRA)
__ Roth IRA
If IRA or Roth IRA (Check and complete applicable types)
__ Regular/Contributory: Amount $_____ for _____ (year)
__ Regular/Contributory: Amount $_____ for _____ (year)
__ SEP-IRA: Amount $_____ for _____ (year)
__ SEP-IRA: Amount $_____ for _____ (year)
__ Rollover: Amount $_____
__ Trustee to Trustee: Amount $_____
__ Roth IRA Conversion: Amount $_____
5 Purchase Payments
Initial Purchase Payment $______________________________________________________
Payment Allocation*:
___%AEL Fixed Account
Asset Allocation VIT Funds:
___% Fund 1 ___% Fund 4
___% Fund 2 ___% Fund 5
___% Fund 3
VIT Funds:
___% Fund 6 ___% Fund 11 ___% Fund 16
___% Fund 7 ___% Fund 12 ___% Fund 17
___% Fund 8 ___% Fund 13 ___% Fund 18
___% Fund 9 ___% Fund 14
___% Fund 10 ___% Fund 15
*Must be whole numbers. Your above payment allocation instructions will remain
in effect for any future payments you make until you change your instructions.
6 Replacement Will the annuity applied for replace any existing insurance or
annuity? __ Yes __ No If yes, provide details - company, contract number,
amount, reason - under Remarks.
7 Remarks and Special Instructions (Including special mailing instructions)
- --------------------------------------------------------------------------------
8 It is Agreed That:
1. All statements and answers given above are true and complete to the best of
my/our knowledge.
2. Only an officer of American Enterprise Life Insurance Company can modify
any annuity contract or waive any requirement in this application.
3. If joint spousal owners are named, ownership will be in joint tenancy with
right of survivorship unless prohibited by state of settlement or specified
otherwise in Remarks above.
4. I/we acknowledge receipt of current prospectuses for the variable annuity
and any funds involved.
5. I/we understand that earning and values, when based on the investment
experience of a variable fund, portfolio, account or subaccount, are not
guaranteed and may both increase and decrease.
<TABLE>
<CAPTION>
<S> <C> <C>
Signatures
______________________________ X_________________________ X_____________________________
Location (City/State) Annuitant Signature Owner Signature (if other
than annuitant)
______________________________ X_________________________ X_____________________________
Date Licensed Agent Signature Joint Owner (if any) Signature
</TABLE>
