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PRUCO LIFE INSURANCE COMPANY
Phoenix, Arizona 85014
A STOCK COMPANY SUBSIDIARY OF
The Prudential Insurance Company of America
ANNUITANT(s) [John Doe] [12345] CONTRACT NUMBER
[Mary Doe] [September 1, 2000] CONTRACT DATE
ANNUITY DATE [September 1, 2055]
AGENCY HUSX
This is an annuity contract. Subject to the provisions of the contract, and in
consideration of any purchase payment you make and we accept, we will make
annuity payments starting on the Annuity Date we show above. Please read the
contract carefully; it is a legal contract between you and Pruco Life Insurance
Company. Expense charges applicable to the contract are shown on a Contract Data
page. If you have a question about the contract, or a claim, see one of our
representatives or get in touch with one of our offices.
BENEFITS AND VALUES UNDER THIS CONTRACT MAY BE ON A VARIABLE BASIS. AMOUNTS
DIRECTED INTO ONE OR MORE OF THE VARIABLE INVESTMENT OPTIONS WILL REFLECT THE
INVESTMENT EXPERIENCE OF THOSE INVESTMENT OPTIONS. THEY ARE SUBJECT TO CHANGE
BOTH UP AND DOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. AMOUNTS DIRECTED
INTO THE MARKET-VALUE-ADJUSTMENT OPTION(S) MAY BE ADJUSTED UPWARD OR DOWNWARD BY
THE APPLICATION OF A MARKET-VALUE-ADJUSTMENT FORMULA. SEE THE MARKET-VALUE
ADJUSTMENT (MVA) PROVISION FOR A DESCRIPTION OF THE FORMULA, AND THE VALUES
AVAILABLE WITHOUT AN ADJUSTMENT.
10 DAY RIGHT TO CANCEL CONTRACT.-- If you return this contract to us not later
than 10 days after you receive it, we will return your money in accordance with
applicable law and the contract will be canceled. All you have to do is take it
or mail it to one of our offices or to the representative who sold it to you.
Signed for Pruco Life Insurance Company,
an Arizona Corporation.
VARIABLE ANNUITY CONTRACT WITH FLEXIBLE PURCHASE PAYMENTS. ANNUITY PAYMENTS
STARTING ON ANNUITY DATE. BENEFIT PAYABLE AS STATED UPON DEATH BEFORE ANNUITY
DATE. CONTRACT VALUES REFLECT INVESTMENT RESULTS. MARKET-VALUE-ADJUSTMENT
OPTION(S) SUBJECT TO MARKET-VALUE ADJUSTMENTS. ELIGIBLE FOR ANNUAL DIVIDENDS AS
STATED UNDER PARTICIPATION.
VFM--96
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GUIDE TO CONTENTS
PAGE
CONTRACT DATA 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic Contract Data, Including Individuals Covered by the Contract, Contract
Minimums, Charges, Available Investment Options, and Initial Allocations
DEFINITIONS 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PURCHASE PAYMENTS 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
When Permitted; Invested Purchase Payments; Allocations
INTEREST-RATE INVESTMENT OPTIONS 6 . . . . . . . . . . . . . . . . . . . . . . .
Options Available; Interest Rates; Interest Cell
VARIABLE INVESTMENT OPTIONS 7 . . . . . . . . . . . . . . . . . . . . . . . . .
Variable Separate Account; Separate Account Investments; Variable Investment
Options
CONTRACT FUND 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MARKET-VALUE ADJUSTMENT (MVA) 8 . . . . . . . . . . . . . . . . . . . . . . . .
Market-Value Adjustment (MVA); Market-Value Factor; Effect of Market-Value
Adjustment
TRANSFERS 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WITHDRAWALS 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount Available for Withdrawal; Withdrawal Charges; Allocation of Withdrawals;
Charge-Free Amounts; Waiver of Withdrawal Charges
BENEFICIARY 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DEATH OF ANNUITANT BEFORE ANNUITY DATE 12 . . . . . . . . . . . . . . . . . . .
DEATH OF ANNUITANT ON OR AFTER ANNUITY DATE 12 . . . . . . . . . . . . . . . . .
PAYOUT PROVISIONS 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Choosing an Option; Options Described; Other Payout Options; When No Option
Chosen; Interest Rate; Withdrawal Charges
ANNUITY SETTLEMENT TABLES 14 . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts Payable
GENERAL PROVISIONS 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quarterly Report; The Contract; Contract Modifications; Change of Annuity Date;
Ownership and Control; Currency; Misstatement of Age or Sex; Incontestability;
Proof of Life or Death; Assignment; Deferring Payment; Changes; Participation
(Dividends); Terminally Ill; Eligible Nursing Home; Eligible Hospital
(VFM--96) Page 2
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CONTRACT NUMBER: XXXXX
CONTRACT DATA
ANNUITANT(s)
First Annuitant
JOHN DOE Male, Issue Age 35
Co-Annuitant
MARY DOE Female,Issue Age 35
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BASIC CONTRACT INFORMATION
Contract Number XX XXX XXX
Contract Date September 1, 2001
Annuity Date September 1, 2056
Beneficiary Class 1 Robert Doe, son of Annuitant
Class 2 Susan Smith, sister of Mary Doe
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PURCHASE PAYMENTS
The purchase payment paid on the Contract Date is $10,000.00.
The minimum initial purchase payment is [$10,000.00].
The minimum subsequent purchase payment is [$1,000.00]; for payments
made by electronic funds transfer, such minimum is [$100.00], which may
be made on a monthly or quarterly basis.
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OTHER MINIMUMS
The minimum withdrawal amount is $500.00.
The minimum Interest Crediting Rate on Interest-Rate Investment Options
is 3%.
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(VFM-96) ED. 5/2001 Page 3
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CONTRACT NO. XX XXX XXX
CONTRACT DATA CONTINUED
EXPENSE CHARGES
The expense charges deducted from the contract fund (see the Contract Fund
provision for a complete description of the fund and how it increases and
decreases) are:
Daily Mortality and Expense Risk Charge - the maximum daily charge is
0.00380909%, which is equivalent to an annual rate of 1.40%.
Daily Administrative Charge - the maximum daily charge is .00041065%, which is
equivalent to an annual rate of .15%.
Annual Administrative Charge - the charge is $30.00. It is deducted on the
Contract Anniversary and when a surrender (i.e., full withdrawal) of the
contract occurs, if the contract fund at the time is then less than $50,000.00.
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TRANSACTION CHARGE
The transaction charge for each transfer after the first 12 in a
contract year is $25.00. We reserve the right to limit the number of
transfers in order to comply with federal, state or local law.
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WITHDRAWAL CHARGE
The withdrawal charge (see the Withdrawals provision for a full
discussion of how this charge is applied) is a percentage of the amount
withdrawn that is subject to the charge, and depends on the Contract
Year in which the withdrawal is made.
<TABLE>
<CAPTION>
Year of Withdrawal Withdrawal Charge
------------------ -----------------
<S> <C>
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 and later 0%
</TABLE>
(VFM-96) ED. 5/2001 Page 3A
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CONTRACT NO. XX XXX XXX
CONTRACT DATA CONTINUED
INVESTMENT OPTIONS
INTEREST-RATE INVESTMENT OPTIONS
As of the contract date, two interest-rate investment options are
available, a one-year fixed-interest-rate option (the Fixed-Rate option)
and a seven year market-value-adjustment option (the MVA option).
Interest is credited at declared rates to amounts held in each of these
options. For the MVA option, if money is withdrawn prior to the end of
the maturity date, there will be a market-value adjustment, which may
increase or decrease the value of amounts in that option.
VARIABLE INVESTMENT OPTIONS
The following variable investment options are available through
allocation to subaccounts of the Pruco Life Flexible Premium Variable
Annuity Account. We reserve the right to limit the availability of the
below options, if necessary, in order to comply with federal, state or
local law.
VARIABLE INVESTMENT OPTIONS (SUBACCOUNTS) AVAILABLE
[THE PRUDENTIAL SERIES FUND
Prudential Global Portfolio
Prudential Jennison Portfolio
Prudential Money Market Portfolio
Prudential Stock Index Portfolio
SP Aggressive Growth Asset Allocation Portfolio
SP AIM Aggressive Growth Portfolio
SP AIM Growth and Income Portfolio
SP Alliance Large Cap Growth Portfolio
SP Alliance Technology Portfolio
SP Balanced Asset Allocation Portfolio
SP Conservative Asset Allocation Portfolio
SP Davis Value Portfolio
SP Deutsche International Equity Portfolio
SP Growth Asset Allocation Portfolio
SP INVESCO Small Company Growth Portfolio
SP Jennison International Growth Portfolio
SP Large Cap Value Portfolio
SP MFS Capital Opportunities Portfolio
SP MFS Mid-Cap Growth Portfolio
SP PIMCO High Yield Portfolio
SP PIMCO Total Return Portfolio
SP Prudential U.S. Emerging Growth Portfolio
SP Small/Mid Cap Value Portfolio
SP Strategic Partners Focused Growth Portfolio
JANUS ASPEN SERIES
Janus Aspen Series Growth Portfolio - Service Shares]
(VFM-96) ED. 5/2001 Page 3B
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CONTRACT NO. XX XXX XXX
CONTRACT DATA CONTINUED
INITIAL ALLOCATION OF INVESTED PREMIUM ACCOUNTS
Prudential Global Portfolio 40%
SP AIM Aggressive Growth Portfolio 30%
One-Year Fixed-Rate Option 15%
Seven-Year MVA Option 15%
For any portion of the purchase payment allocated on the Contract
Date to an interest-rate investment option, the interest rates are:
One-year Fixed Rate Option 6%
Seven-Year MVA Option 8%
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END OF CONTRACT DATA
(VFM-96) ED. 5/2001 Page 3C
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ENDORSEMENTS
(Only we can endorse this contract)
(VFM--96) Page 4
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DEFINITIONS
We, Our, and Us.--Pruco Life Insurance Company, an Arizona corporation, or any
affiliated company.
You and Your.--The owner of the contract.
Annuitant(s).--The person or persons named on the first page. If two persons are
named, one of the two is named on page 3 as First Annuitant, the other as
Co-Annuitant. In that case, the Beneficiary provision of the contract will be
based on the death of the last survivor of the persons so named.
Payee.--A beneficiary who has a right to receive a settlement under this
contract.
SEC.--The Securities and Exchange Commission.
Contract Date.--The date we receive the initial purchase payment. We show the
Contract Date on page 3.
Contract Anniversary.--The same day and month as the Contract Date in each later
year.
Contract Year.--A year which starts on the Contract Date or on a Contract
Anniversary.
Business Day.--Any day the New York Stock Exchange is open for business.
Annuity Date.--The date our first annuity payment to you is due. We show the
Annuity Date on page 3.
PURCHASE PAYMENTS
WHEN PERMITTED The initial purchase payment must be paid on the Contract Date.
Subsequent purchase payments may be made at any time before the Annuity Date.
Minimum purchase payment amounts are shown on a Contract Data page; we reserve
the right to establish a maximum amount.
INVESTED PURCHASE
PAYMENTS
Corresponding to each purchase payment, there is an " invested purchase
payment." This is the balance of the purchase payment after we make any
applicable deduction for: (1) state and local premium taxes; and (2) any other
type of tax (or component thereof) measured by or based upon the amount of the
purchase payment we receive.
ALLOCATIONS You may allocate all or a part of an invested purchase payment to
one or more of the investment options described below. The allocation of the
initial invested purchase payment is shown on a Contract Data page. You may
change the allocation of future invested purchase payments at any time. The
change will take effect on the date we receive your request. If, after the
initial purchase payment, we receive a purchase payment without allocation
instructions, we will allocate the corresponding invested purchase payment in
the same proportion as the most recent purchase payment you made (unless that
was a purchase payment you directed us to allocate on a one-time- only basis).
We reserve the right to establish minimum percentage and dollar amounts for
invested purchase payment allocations.
(VFM--96) Page 5
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INTEREST-RATE INVESTMENT OPTIONS
OPTIONS AVAILABLE As shown on a Contract Data page, two types of interest-rate
investment options were available on the Contract Date: fixed-interest-rate
option (Fixed-Rate option) and market-value adjustment option (MVA option). We
may add other options in the future. Each option may be divided into interest
cells (described below).
INTEREST RATES The annual interest rates applicable to the interest-rate
investment options on the Contract Date are shown on a Contract Data page. We
will credit interest each day on amounts allocated to any of these options at
the daily equivalent of the rate shown for that option. Interest rates for
future allocations or transfers to interest-rate investment options will be
declared when those allocations or transfers are made. The declared rates will
never be less than the Minimum Interest Crediting Rate shown on a Contract Data
page.
INTEREST CELL An interest cell is created whenever you allocate or transfer an
amount to an interest-rate investment option. We credit interest to the amount
in each interest cell daily at a specific rate declared for that interest cell
until the earliest of: the date it is withdrawn; the date it is transferred to
another investment option; the maturity date (the date the cell was established
plus the number of years it is expected to remain in effect); and the date as of
which a death benefit is determined. An interest cell's declared rate is
guaranteed if the amount in that cell is held to maturity. Withdrawals and
transfers from an MVA interest cell are subject to market-value adjustments,
which may increase or decrease the cell's value. Withdrawals may also be subject
to a withdrawal charge, which is described in Withdrawals below.
At the maturity date of an interest cell, you may elect to transfer the amount
in the cell into any of the investment options available on that date. Once you
have made an election and we have received it, it may not be reversed. If you do
not make an election to transfer within 30 days following the maturity date, we
will transfer the amount in the interest cell on the maturity date to an
interest-rate investment option with the same duration to maturity as the
maturing interest cell.
Amounts that are transferred into the same interest-rate investment option
during the 30-day period will receive the appropriate rate for that option,
effective as of the maturity date. Amounts that you withdraw, or transfer into
any different investment option, during the 30-day period will receive interest
from the maturity date to the date of withdrawal or transfer at the rate that
would have applied to those amounts if you had taken no action within the 30-day
period.
(VFM--96) Page 6
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VARIABLE INVESTMENT OPTIONS
VARIABLE SEPARATE
ACCOUNT
"Variable Separate Account" refers to the Pruco Life Flexible Premium Variable
Annuity Account, its successors, if any, and any other variable separate
accounts we add in the future. We established this account to hold and invest
the assets that support this contract and variable annuity contracts like this
one. The Variable Separate Account is divided into divisions called
"subaccounts," and the subaccounts available to you on the Contract Date are
listed on a Contract Data page. We may establish additional subaccounts.
Any income and realized or unrealized gains and losses in a subaccount are
credited to or charged against that subaccount. This is without regard to
income, gains, or losses in other investment options.
SEPARATE ACCOUNT
INVESTMENTS
We may invest the assets of different subaccounts in different ways than are
shown on a Contract Data page. We will do so only with the consent of the SEC
and, if required, of the insurance regulator where this contract is delivered.
We will always keep assets in the Variable Separate Account with a total value
at least equal to the amount credited to all the subaccounts under contracts
like this one. That portion of the assets of the Variable Separate Account equal
to the reserves and other contract liabilities with respect to the Variable
Separate Account shall not be chargeable with liabilities or obligations arising
out of any other business we conduct. To the extent that those assets exceed
that amount, we may use them in any way we choose.
VARIABLE INVESTMENT
OPTIONS
We show the options available on the Contract Date on a Contract Data page. We
may offer additional options.
CONTRACT FUND
The term "contract fund" refers to the total of all amounts credited to your
contract as of any date as a result of your initial purchase payment and the
increases and decreases described below. Note that this is not the same as the
"cash value" of the contract, which is described under Withdrawals below.
On the contract date, the contract fund is equal to the initial invested
purchase payment. After that, the fund as of any day is determined by starting
with the fund at the end of the previous day and adjusting it for items that
increase it or decrease it.
Items that increase the contract fund are: invested purchase payments; positive
investment results in a variable investment option; interest credited to an
interest-rate investment option; and any positive market-value adjustment
associated with a transfer or withdrawal.
Items that decrease the contract fund are: withdrawals and the charges
associated with them; negative investment results in a variable investment
option; mortality and expense risk charges; administration charges; any
applicable federal, state, or local taxes charged to the contract; and any
negative market-value adjustment associated with a transfer or withdrawal.
Investment results are credited daily. Mortality and expense risk charges are
deducted daily. There are two administration charges: one is deducted daily, and
one is deducted on the Contract Anniversary and at the time of a surrender.
Other charges may be assessed only if the appropriate event occurs. The maximum
charges we may deduct are shown on a Contract Data page
(VFM--96) Page 7
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MARKET-VALUE ADJUSTMENT (MVA)
MARKET-VALUE
ADJUSTMENT (MVA)
The market-value adjustment (MVA) is made when a withdrawal or transfer is
requested from an MVA option. It is used to calculate the amount available for
withdrawal or transfer, and the amount remaining after the withdrawal or
transfer. It applies only to the interest cell from which the withdrawal or
transfer is made (no market-value adjustment will apply to an interest cell in
the event of a withdrawal or transfer within the 30-day period following the
cell's maturity). We determine the amount available for withdrawal from a cell
in two steps. We first determine a "market-value factor." This is based on the
time remaining to maturity of the interest cell and the difference between the
declared interest rate for that cell and a current rate that we establish. We
then multiply that interest cell's portion of the contract fund by the sum of 1
plus the market-value factor. The formula for the market-value factor is shown
below. To calculate the interest cell's portion of the contract fund after the
withdrawal or transfer, we first subtract the amount withdrawn or transferred
(including any charges) from the interest cell's original portion of the
contract fund. The remaining amount, divided by the sum of 1 plus the
market-value factor, is the interest cell's portion of the contract fund after
the withdrawal or transfer.
MARKET-VALUE FACTOR The market-value factor is determined as: (M/12)x(R-C),
where:
(M) is the number of whole months (not less than one) to the interest cell's
maturity date;
(R) is the interest cell's declared interest rate expressed as a decimal; for
example, 5 percent = .05; and
(C) is the current rate referred to above, in effect on the date of the
withdrawal or transfer, for a period to maturity one year longer than the number
of whole years remaining until the interest cell's maturity date as of the date
we receive your request.
This rate is also expressed as a decimal.
The market-value factor will never be greater than 0.4 or less than minus 0.4.
EFFECT OF MARKET-VALUE
ADJUSTMENT
If the current interest rate is higher than the interest cell's declared
interest rate, the market-value factor will be negative, and we will reduce the
contract fund by more than the sum of the withdrawal and the withdrawal charge.
If the current rate is lower, the market-value factor will be positive, and we
will reduce the contract fund by less than the sum of the withdrawal and the
withdrawal charge.
(VFM--96) Page 8
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TRANSFERS
You may transfer amounts into or out of investment options, subject to the
following restrictions:
1. We impose a transaction charge, shown on a Contract Data page, if you make
more than 12 transfers in a Contract Year. The charge is taken pro-rata from the
investment options from which the transfer is made.
2. You may not make a transfer from an interest cell in the Fixed-Rate option,
except during the 30-day period following the cell's maturity date, or under a
plan for periodic transfers that we make available to all owners of contracts
like this one.
3. You may not make a transfer from an investment option to the same investment
option. The transfer will take effect as of the end of the valuation period on
the date we receive valid notification from you, if that is a Business Day.
Otherwise, it will take effect on the next Business Day. A valuation period is
the period of time from one determination of the value of the amount invested in
a subaccount to the next such determination. Such determinations are made once
each Business Day, generally at 4:15 p.m., New York City time.
Any amount transferred from an MVA cell is subject to a market-value adjustment,
unless the transfer is made in the 30-day period following the maturity date of
the interest cell. If you do not direct us otherwise, when we transfer money
from a Fixed-Rate option or MVA option, we will take the money first from the
oldest eligible interest cell in the option.
(VFM--96) Page 9
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WITHDRAWALS
AMOUNT AVAILABLE FOR
WITHDRAWAL
You may make a withdrawal at any time prior to the Annuity Date while at least
one Annuitant is living (the minimum withdrawal amount is shown on a Contract
Data page). The total amount available for withdrawal at any time is the "cash
value" of the contract. The cash value is equal to the contract fund, plus or
minus the market-value adjustment of all amounts in MVA options, minus the
withdrawal charge and the administrative charge that may apply for a surrender
of the contract.
WITHDRAWAL CHARGES A withdrawal charge may apply if you make a withdrawal during
the first seven Contract Years. The amount of the charge is a percentage, shown
on a Contract Data page, of any amount to be withdrawn in excess of the
applicable charge-free amount described below. If you ask for a withdrawal of a
specific dollar amount, we will deduct enough from the contract fund to provide
the withdrawal charge and provide you the amount you asked for. If you request a
percentage withdrawal, unless you direct otherwise, we will apply that
withdrawal pro-rata across all investment options. The requested percentage will
be applied to each investment option in determining the gross amount withdrawn.
In this instance, any applicable withdrawal charge, in addition to the
withdrawal, will be applied pro-rata across all investment options. The
withdrawal charge will never be greater than that permitted by any applicable
law or regulation.
ALLOCATION OF
WITHDRAWALS
You may direct that a withdrawal be made from either an
interest-rate investment option, a variable investment option, or both. If you
direct that some or all of a withdrawal be made from an interest-rate investment
option, you may direct that the withdrawal be made from a specific interest cell
or cells.
If you do not specify the investment option or options from which the withdrawal
is to be made, here is how we will allocate the withdrawal. We will take the
withdrawal (and the withdrawal charge) on a pro-rata basis from all investment
options. Within the interest-rate investment options, we will take the
withdrawal first from the oldest eligible interest cell or cells in those
options.
CHARGE-FREE AMOUNTS Certain amounts (the charge-free amounts) may be withdrawn
without incurring a withdrawal charge. The charge-free amount available in any
current Contract Year is equal to:
(a) 10% of any portion of total purchase payments made in the current and all
prior Contract Years in excess of total purchase payments withdrawn in prior
Contract Years; plus
(b) any charge-free amount available in the prior Contract Year that has not
been withdrawn; plus
(c) any portion of the withdrawal amount in excess of: the sum of all purchase
payments made reduced by the amount of all prior withdrawals.
For purposes of determining withdrawal charges and charge-free amounts,
withdrawals are always assumed to come first from purchase payments.
WAIVER OF WITHDRAWAL
CHARGES
We will waive all withdrawal charges upon receipt of due proof that a sole or
last surviving Annuitant is Terminally Ill, or has been confined to an Eligible
Nursing Home or Hospital continuously for at least three months. See the General
Provisions for definitions of these terms. This waiver is not available if the
contract has been assigned
(VFM--96) Page 10.
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BENEFICIARY
You may designate or change a beneficiary to receive any amount due if the sole
or last surviving Annuitant dies before the Annuity Date. You may initiate a
change to the beneficiary designation by completing a change form, which you can
obtain from us or from your representative. We may also ask you to send us the
contract. The change will take effect only when we process the request. Then any
previous beneficiary's interest will end as of the date of the request, even if
no Annuitant is living when we process the request. Any beneficiary's interest
is subject to the rights of any assignee we know of.
When a beneficiary is designated, any relationship shown is to the Annuitant
(First Annuitant if two Annuitants are named on page 3) unless otherwise
specified. To show priority among beneficiaries, we will use numbered classes,
so that the class with first priority is called class 1, the class with next
priority is called class 2, and so on. If two Annuitants are named on page 3,
the term "Annuitant" refers to the last surviving Annuitant. The following
statements apply to beneficiaries unless a Contract Data page, contract
endorsement or change request that we have processed specifies otherwise:
1. One who survives the Annuitant will have the right to be paid only if no one
in a prior class survives the Annuitant.
2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Annuitant.
3. Two or more in the same class who have the right to be paid will be paid in
equal shares.
4. If none survives the Annuitant, we will pay in one sum to the Annuitant's
estate. Before we make a payment, we have the right to decide what proof we need
of the identity, age or any other facts about any persons designated as
beneficiaries. If beneficiaries are not designated by name and we make
payment(s) based on that proof, we will not have to make the payment(s) again.
(VFM--96) Page 11
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DEATH OF ANNUITANT BEFORE ANNUITY DATE
If a sole or last surviving Annuitant dies before the Annuity Date, then, when
we receive due proof of death and any other documentation we need, the
beneficiary is entitled to receive a death benefit equal to the greatest of:
(a) the contract fund as of the date we receive due proof of death and any other
documentation we need;
(b) the total invested purchase payments made less the total withdrawals made
(including withdrawal charges); and
(c) The minimum guaranteed death benefit less certain withdrawals described
below. On the third Contract Anniversary, we set the minimum guaranteed death
benefit equal to the contract fund. On each subsequent triennial Contract
Anniversary, the minimum guaranteed death benefit is reset to the greater of:
(1) the previous minimum guaranteed death benefit less total withdrawals made in
the prior three Contract Years; and (2) the contract fund as of that Contract
Anniversary. For death occurring between triennial Contract Anniversaries, we
subtract from the minimum guaranteed death benefit any withdrawals made since
the latest triennial Contract Anniversary.
DEATH OF ANNUITANT ON OR AFTER ANNUITY DATE
If an Annuitant dies on or after the Annuity Date, the payout provision then in
effect will govern whether and to whom we will make any payment.
(VFM--96) Page 12
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PAYOUT PROVISIONS
CHOOSING AN OPTION You may use the contract fund as of the Annuity Date, plus or
minus any market-value adjustment, to provide an income to the Annuitant(s) by
choosing one or more of the options we describe below at any time before the
Annuity Date. But, for any annuity option, we will first deduct any charge for
taxes attributable to premiums, and any applicable withdrawal charges, described
below. We offer the same annuity options to the Payee that we offer to an
Annuitant. And we determine monthly payments for the Payee in the same way we do
for an Annuitant. Your right to choose an option is subject to all these
conditions: (1) You must ask for the option in writing and in a form which meets
our needs. (2) You must send the contract to us to be endorsed. (3) If we
require it, you must give us due proof of the date of birth of the person on
whose life an annuity payment is based. (4) We must have your request, the
contract and any required due proof(s) of the date(s) of birth before the
Annuity Date.
The option you choose will take effect on the Annuity Date if: (1) the person on
whose life the annuity is to be based is living on that date; (2) the first
payment under the option will be at least $50; and (3) you do not void the
choice by making a later choice before the Annuity Date. If two Annuitants are
named in the contract and both are living, payment will be based on the life of
the First Annuitant, as named on page 3.
OPTIONS DESCRIBED When we use the word Annuitant in the following paragraphs we
mean the Annuitant for whom the annuity described was chosen and who is to
receive payment under the annuity. For an Annuitant, the first payment under
these options will be made on the Annuity Date. For a Payee, unless a later date
is requested, the first payment will be made on the first day of the earliest
calendar month on or after the day we have received the request for the payout
and due proof of the Annuitant's death and such claim forms and other evidence
as may be satisfactory to us.
Here are the options we offer. We may also consent to other arrangements.
OPTION 1 (INSTALLMENTS
FOR A FIXED PERIOD)
We will make equal payments for up to 25 years. The Option 1 Table shows the
minimum amounts we will pay.
OPTION 2 (LIFE INCOME) We will make monthly payments for as long as the person
on whose life the payout is based lives, with payments certain for 120 months.
The Option 2 Table shows the minimum amounts we will pay.
OPTION 3 (INTEREST
PAYMENT)
We will hold an amount at interest at the rate indicated below. At your choice,
we will pay the interest annually, semi-annually, quarterly, or monthly.
OTHER PAYOUT OPTIONS We may offer other payout options. Contact one of our
representatives or one of our offices for information.
WHEN NO OPTION CHOSEN If no choice takes effect on the Annuity Date, payout
under Option 3 (Interest Payment Option) will become effective.
INTEREST RATE Payments under any of the options will be calculated assuming an
effective interest rate of at least 3% a year. We may include more interest.
WITHDRAWAL CHARGES If you choose Option 1 or Option 3, we will apply a
withdrawal charge in the same way as we would if you had made a withdrawal (see
Withdrawals). Any amount used to provide income under Option 2 may be withdrawn
without charge. If you choose any other method of payment not described in this
contract, we will tell you if it is subject to a withdrawal charge.
(VFM--96) Page 13
<PAGE> 17
ANNUITY SETTLEMENT TABLES
AMOUNTS PAYABLE For Options 1 and 2, we will use the table below to compute the
minimum amount of the annuity payment.
If the Annuity Date is not a Contract Anniversary, we will adjust the amounts
accordingly. When we computed the amounts we show in the Option 2 Table, we
adjusted the 1983 Table a to an age last birthday basis, less three years; we
used an interest rate of 3 1/2% per year. If the age is over 80, the rate for
age 80 will be used.
<TABLE>
<CAPTION>
OPTION 1 TABLE
MINIMUM AMOUNT OF
MONTHLY PAYMENT FOR
EACH $1,000, THE FIRST OPTION 2 TABLE
PAYABLE IMMEDIATELY Amount of Annuity Payment for
Number Monthly each $1,000 applied on the Annuity Date
of Years Payment Age Male Female Age Male Female
<S> <C> <C> <C> <C> <C> <C> <C>
1 $84.65 41 $3.88 $3.67 61 $5.25 $4.79
2 43.05 42 3.92 3.70 62 5.36 4.89
3 2919 43 3.97 3.74 63 5.48 4.98
4 22.27 44 4.01 3.78 64 5.60 5.09
5 45 4.06 3.82 65 5.73 5.20
46 4.12 3.86 66 5.87 5.31
6 15.35 47 4.17 3.90 67 6.01 5.43
7 13.38 48 4.23 3.94 68 6.15 5.56
8 11.90 49 4.28 3.99 69 6.30 5.70
9 10.75 50 4.35 4.04 70 6.46 5.84
10 9.83 51 4.41 4.09 71 6.62 5.99
52 4.48 4.15 72 6.79 6.15
11 9.09 53 4.55 4.21 73 6.96 6.31
12 8.46 54 4.62 4.27 74 7.13 6.49
13 7.94 55 4.70 4.33 75 7.30 6.67
14 7.49 56 4.78 4.40 76 7.48 6.85
15 7.10 57 4.86 4.47 77 7.66 7.04
58 4.95 4.54 78 7.83 7.24
16 6.76 59 5.05 4.62 79 8.00 7.44
17 6.47 60 5.15 4.71 80 8.17 7.64
18 6.20
19 5.97
20 5.75
21 5.56
22 5.39
23 5.24
24 5.09
25 4.96
</TABLE>
Multiply the monthly amount
by 2.989 for quarterly,
5.952 for semi-annual or
11.804 for annual
VFM--96) Page 14
<PAGE> 18
GENERAL PROVISIONS
QUARTERLY REPORT We will send you a report four times each calendar year until
the Annuity Date. It will show the contract fund, the cash value, the death
benefit as of the report date, the guaranteed minimum death benefit as of the
report date, interest and any other credits applied during the period covered by
the report, and charges and withdrawals during the period covered by the report.
The report will include any other data that may be required where this contract
is delivered. You may ask for a report like this at any time. But, except for
the four reports we send you during the year, we have the right to charge a fee
for each report.
THE CONTRACT This document forms the whole contract.
CONTRACT MODIFICATIONS Only one of our officers with the rank or title of vice
president or above may agree to modify this contract, and then only in writing.
CHANGE OF ANNUITY DATE You may change your Annuity Date if we consent. Any such
change will be subject to conditions that we then determine.
OWNERSHIP AND CONTROL Unless we endorse this contract to say otherwise: (1) the
Annuitant (the First Annuitant, if two are named) is the owner of the contract;
(2) while any Annuitant is living the owner alone is entitled to any contract
benefit and value, and the exercise of any right or privilege granted by the
contract or by us; (3) if two Annuitants are named and the First Annuitant dies
while the Co-Annuitant is living, the Co-Annuitant will become the owner; and
(4) if there is no Co-Annuitant and no contingent owner has been named, on the
death of the owner, the beneficiary becomes the owner for purposes of Section 72
(s) of the Internal Revenue Code of 1986, as amended, or any successor
provision.
CURRENCY Any money we pay, or which is paid to us, must be in United States
currency.
MISSTATEMENT OF AGE OR
SEX
If any Annuitant's stated sex or date of birth or both are not correct, we will
change each benefit and the amount of each annuity payment to that which the
total purchase payment amounts would have bought for the correct sex and date of
birth. Also, we will adjust the amount of any payments we have already made.
Here is how we will do it: (1) We will deduct any overpayments, with interest at
5% a year, from any payment(s) due then or later. (2) We will add any
underpayments, with interest at 5% a year, to the next payment we make after we
receive proof of the correct sex and date of birth.
INCONTESTABILITY We will not contest this contract. We consider all statements
made in the application for this contract to be representations, not warranties.
PROOF OF LIFE OR DEATH Before we make a payment, we have the right to require
proof of continued life or proof of death, and any other documentation we need
to make the payment, for any person whose life or death determines whether or to
whom we must make the payment.
(VFM--96) Page 15
<PAGE> 19
ASSIGNMENT We are under no obligation to comply with or honor an assignment
unless we receive it, or a copy of it. We are not obliged to see that an
assignment is valid or sufficient. If any Annuitant is living on the Annuity
Date and an assignment is in effect on that date, we have the right to pay the
cash value in one sum to the assignee.
This contract may not be assigned to a tax-qualified retirement plan or program
without our approval.
DEFERRING PAYMENT We will usually pay any death benefit or withdrawal promptly.
If the death benefit or withdrawal is to be paid from a variable investment
option, we have the right to defer that payment for any period during which the
New York Stock Exchange is closed for trading (except for normal holiday
closing) or when the Securities and Exchange Commission has determined that a
state of emergency exists which may make payment of the death benefit or
withdrawal impractical.
CHANGES We reserve the right, upon 90 days
notice to you to:
1. restrict or refuse to accept any purchase payment;
2. establish minimum percentage and dollar amounts for invested purchase payment
allocations;
3. change any or all terms and provisions of the Annuity Settlement Tables, but
only with respect to any portion of an annuity settlement deriving from purchase
payments made on or after the effective date of the change and from earnings on
those purchase payments; and
4. make any changes required by law.
PARTICIPATION (DIVIDENDS) This contract is eligible to participate in our
divisible surplus. We do not expect that any dividends will be payable on or
before the Annuity Date. While any payout provision or arrangement is in effect,
the contract will share in our surplus to the extent and in the way we decide.
(VFM--96) Page 16
<PAGE> 20
TERMINALLY ILL We consider someone terminally ill who has a life expectancy of
six months or less. Proof of Terminal Illness must include a certification by a
licensed physician.
ELIGIBLE NURSING HOME An institution or special nursing unit of a hospital that
meets at least one of the following requirements:
1. It is Medicare approved as a provider of skilled nursing care services;
2. It is licensed as a skilled nursing home or as an intermediate care facility
by the state it is located in; or
3. It meets all the following requirements:
(a) It is licensed as a nursing home by the state it is located in;
(b) Its main function is to provide skilled, intermediate, or custodial nursing
care;
(c) It is engaged in providing continuous room and board accommodations to 3 or
more persons;
(d) It is under the supervision of a registered nurse (RN) or licensed practical
nurse (LPN);
(e) It maintains a daily medical record of each patient; and
( f) It maintains control and records for all medications dispensed.
Institutions that primarily provide residential facilities are not eligible
nursing homes.
ELIGIBLE HOSPITAL An institution that meets either of the
following requirements:
1. It is accredited as a hospital under the Hospital Accreditation Program of
the Joint Commission on Accreditation of Healthcare Organizations; or
2. It is legally operated, has 24-hour a day supervision by a staff of doctors,
has 24-hour a day nursing service by registered graduate nurses, and either:
(a) It mainly provides general inpatient medical care and treatment of sick and
injured persons by the use of medical, diagnostic and major surgical facilities.
All such facilities are located in it or are under its control; or
(b) It mainly provides specialized inpatient medical care and treatment of sick
or injured persons by the use of medical and diagnostic facilities ( including
x-ray and laboratory). All such facilities are located in it, are under its
control, or are available to it under a written agreement with a hospital ( as
defined above) or with a specialized provider of these facilities.
An eligible hospital is not an institution, or part of one, that: (a) furnishes
mainly homelike or custodial care, or training in the routines of daily living;
or (b) is mainly a school.
(VFM--96) Page 17
<PAGE> 21
VARIABLE ANNUITY CONTRACT WITH FLEXIBLE PURCHASE PAYMENTS. ANNUITY PAYMENTS
STARTING ON ANNUITY DATE. BENEFIT PAYABLE AS STATED UPON DEATH BEFORE ANNUITY
DATE. CONTRACT VALUES REFLECT INVESTMENT RESULTS. MARKET-VALUE-ADJUSTMENT OPTION
SUBJECT TO MARKET-VALUE ADJUSTMENTS. ELIGIBLE FOR ANNUAL DIVIDENDS AS STATED
UNDER PARTICIPATION.
VFM--96 Page 18
