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Exhibit 10.2
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The Northwestern Mutual Life Insurance Company agrees to pay the benefits
provided in this contract, subject to its terms and conditions.
Signed at Milwaukee, Wisconsin on the Issue Date.
/s/ Edward J. Zore /s/ Robert J. Berdan
---------------------- ---------------------
President and CEO Secretary
FLEXIBLE PAYMENT VARIABLE ANNUITY - ACCOUNT A
Net Purchase Payments accumulated in a Separate Account, assets of
which are invested in shares of one or more mutual funds, or
Guaranteed Interest Fund.
Contract benefits payable in one sum or as
variable or guaranteed monthly income.
Variable Payment Plan benefits described in Section 11.
Participating.
AMOUNTS ALLOCATED TO THE SEPARATE ACCOUNT DIVISIONS AND VARIABLE PAYMENTS
PROVIDED BY THIS CONTRACT ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT BUT ARE
VARIABLE AND MAY INCREASE OR DECREASE TO REFLECT THE INVESTMENT EXPERIENCE OF
THE SEPARATE ACCOUNT.
Right To Return Contract. Please read this contract carefully. The Owner may
return the contract for any reason within ten days after receiving it. Return of
the contract is effective on the date written notice of the return is delivered,
mailed or sent by telegram to either The Northwestern Mutual Life Insurance
Company, 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 or the agent who
sold the contract. If returned, the contract will be cancelled and the Company
will refund the sum of (a) the difference between the Purchase Payments paid and
the amounts, if any, allocated to the Separate Account plus (b) the value of the
Accumulation Units of the Separate Account on the effective date of return.
RR.V.A.(0803)
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[LOGO] Northwestern Mutual(TM)
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CONTRACT NUMBER 00 000 000
PRIMARY ANNUITANT John J. Doe
ISSUE DATE July 31, 2003
RR.V.A.BK.(0803)
SEX NEUTRAL BACK
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TABLE OF CONTENTS
CONTRACT INFORMATION, INVESTMENT ACCOUNTS
CHARGES AND FEES
MINIMUM PURCHASE PAYMENTS, ACCUMULATION VALUE, PAYMENT PLANS
SECTION 1. GENERAL TERMS AND DEFINITIONS
SECTION 2. SEPARATE ACCOUNT
. Separate Account
. Accumulation Units
. Net Investment Factor
. Substitution and Change
SECTION 3. GUARANTEED INTEREST FUND
. Guaranteed Interest Fund
. Accumulation Value
. Transfer Restrictions
. Maximum Guaranteed Interest Fund Accumulation Value
. Table of Guaranteed Values
SECTION 4. PURCHASE PAYMENTS, TRANSFERS, WITHDRAWALS
. Payment of Purchase Payments
. Application of Purchase Payments
. Selection of Investment Account for Purchase Payments
. Transfer of Accumulation Value
. Withdrawals and Full Surrender
. Effective Date
SECTION 5. BENEFITS
. Maturity Benefit
. Death Benefit if Annuitant is an Owner
. Death Benefit if Annuitant is not an Owner
SECTION 6. BENEFICIARIES AND CONTINGENT ANNUITANTS
. Naming and Changing of Beneficiaries
. Succession in Interest of Beneficiaries
. Trustee as Beneficiary
. General
. Naming and Changing a Contingent Annuitant
SECTION 7. CHARGES, FEES AND CONVERSION
. Premium Taxes
. Contract Fee
. Conversion of Investment Accounts
. Withdrawal Charge
SECTION 8. OWNERSHIP
. The Owner
. Transfer of Ownership
. Naming and Changing a Successor Owner
. Collateral Assignment
. Reports to Owners
. Transferability Restrictions
RR.V.A.BK.(0803)
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SECTION 9. THE CONTRACT
. Guarantees
. Valuation of Separate Account Assets
. Determination of Separate Account Values
. Deferment of Benefit Payments
. Dividends
. Incontestability
. Misstatements
. Entire Contract; Changes
. Termination of Contract
SECTION 10. PAYMENT OF CONTRACT BENEFITS
. Payment of Benefits
. Death Benefit
. Effective Date for Payment Plan
. Payment Plan Elections
SECTION 11. PAYMENT PLANS
. Description of Payment Plans
. Allocation of Benefits
. Annuity Units under Variable Payment Plans
. Payments under Variable Payment Plans
. Transfers Involving Variable Payment Plans
. Withdrawal under Payment Plans
. Naming and Changing of Beneficiaries under Payment Plans
. Succession in Interest of Beneficiaries under Payment Plans
. Payment Plan Rates
ADDITIONAL BENEFITS (if any)
APPLICATION
ENDORSEMENTS
to be made only by the Company at the Home Office
RR.V.A.BK.(0803)
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CONTRACT INFORMATION
CONTRACT NUMBER 00 000 000
PLAN Flexible Payment Variable Annuity
ADDITIONAL BENEFITS Enhanced Death Benefit
TAX REPORTING CATEGORY Pension Annuity
PRIMARY ANNUITANT John J. Doe
AGE AND SEX 35 Male
OWNER John J. Doe, the Annuitant
ISSUE DATE July 31, 2003
CONTRACT ANNIVERSARY July 31, 2004 and each July 31
thereafter
MATURITY DATE July 31, 2053
DIRECT BENEFICIARY Jane K. Doe, Wife of the Annuitant
INVESTMENT ACCOUNTS
On the Issue Date, Purchase Payments and contract values may be allocated among
the following Investment Accounts. Available Separate Account Divisions are
subject to change. See Section 2.1.
Divisions of Separate Account A:
Select Bond Division
Franklin Templeton International Equity Division
Money Market Division
Balanced Division
Index 500 Stock Division
Aggressive Growth Stock Division
High Yield Bond Division
Growth Stock Division
Large Cap Core Stock Division
Index 400 Stock Division
Small Cap Growth Stock Division
Russell Multi-Style Equity Division
Russell Aggressive Equity Division
Russell Non-US Division
Russell Real Estate Securities Division
Russell Core Bond Division
Asset Allocation Division
International Growth Stock Division
T. Rowe Price Small Cap Value Division
Capital Guardian Domestic Equity Division
AllianceBernstein Mid Cap Value Division
Janus Capital Appreciation Division
T. Rowe Price Equity Income Division
Fidelity VIP Mid Cap Division
Guaranteed Accounts:
Guaranteed Interest Fund
RR.V.A.BK.(0803) Page 3 (GTY.1.5)
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CONTRACT NUMBER 00 000 000
CHARGES AND FEES
DEDUCTION FROM PURCHASE PAYMENTS:
PREMIUM TAX(See Section 7.1):
For the first Contract Year, Premium Taxes are not deducted from
Purchase Payments. After the first Contract Year, the Company may
deduct Premium Taxes from Purchase Payments received or benefits paid.
ANNUAL MORTALITY AND EXPENSE RISK CHARGES (See Section 2.3):
Class A Annuity and Accumulation Units:
0.50% at Issue; 0.75% Maximum
Class B Annuity and Accumulation Units:
1.25% at Issue; 1.50% Maximum
ANNUAL CONTRACT FEE (See Section 7.2):
$30 charged on the contract anniversary. The contract fee will be waived if
the Accumulation Value of the contract equals or exceeds $25,000 on the
contract anniversary.
ENHANCED DEATH BENEFIT CHARGE:
0.10% of the Enhanced Death Benefit on each contract anniversary.
TRANSFER FEE (See Sections 4.4 and 11.5):
$25 beginning with the thirteenth transfer in any Contract Year.
CONTINUED ON PAGE 4-1
RR.V.A.BK.(0803) Page 4 (GTY.1.5)
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CONTINUED FROM PAGE 4
CHARGES AND FEES
WITHDRAWAL CHARGE: (See Section 7.4)
The first $100,000 of Net Purchase Payments paid under the contract start in
Category Eight. The next $400,000 start in Category Four. All additional Net
Purchase Payments start in Category Two. On each contract anniversary, any
amount in a category moves to the next lower category until that amount reaches
Category Zero. On the date on which proof of death of the Primary Annuitant is
received at the Home Office, Net Purchase Payments paid prior to the date of
death move to Category Zero.
Withdrawal Withdrawal
Charge Charge
Category Percentage
---------- ----------
Eight 6%
Seven 6%
Six 6%
Five 5%
Four 4%
Three 3%
Two 2%
One 1%
Zero 0%
MINIMUM PURCHASE PAYMENTS, ACCUMULATION VALUE, PAYMENT PLANS
MINIMUM PURCHASE PAYMENT (See Section 4.1): $25
MINIMUM ACCUMULATION VALUE (See Sections 5.2 and 9.9): $2,000
MINIMUM PAYMENT UNDER PAYMENT PLAN (See Sections 9.9 and 10.1): $50 Monthly
Income.
GUARANTEED INTEREST FUND
GUARANTEED ANNUAL EFFECTIVE INTEREST RATE (See Section 3.2): 1.5%
MAXIMUM GUARANTEED INTEREST FUND ACCUMULATION VALUE (See Section 3.4): $100,000
RR.V.A.BK.(0803) Page 4-1 (GTY.1.5)
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CONTRACT NUMBER 00 000 000
GUARANTEED INTEREST FUND - TABLE OF GUARANTEED VALUES
The table shows minimum guaranteed values and assumes a $5,000 Purchase Payment
made at the time of issue followed by subsequent $500 Purchase Payments made
annually thereafter on each contract anniversary. The values are based on the
assumption that 100% of all net Purchase Payments are allocated to, and remain
in, the Guaranteed Interest Fund.
End of
Contract Accumulation Cash
Year July 31 Value Value
-------- ------- ------------ -------
1 2003 $ 5,075 $ 4,775
2 2004 5,628 5,298
3 2005 6,189 5,879
4 2006 6,759 6,474
5 2007 7,337 7,082
6 2008 7,925 7,705
7 2009 8,521 8,341
8 2010 9,125 8,990
9 2011 9,739 9,604
10 2012 10,362 10,227
11 2013 10,995 10,860
12 2014 11,637 11,502
13 2015 12,289 12,154
14 2016 12,950 12,815
15 2017 13,621 13,486
16 2018 14,303 14,168
17 2019 14,994 14,859
18 2020 15,696 15,561
19 2021 16,409 16,274
20 2022 17,132 16,997
Age 60 2027 20,914 20,779
Age 65 2032 24,988 24,853
Age 70 2037 29,502 29,367
This table is based on the guaranteed annual effective interest rate of 1.5%.
Higher declared rates of interest will increase values. Values shown at the end
of contract years do not reflect any Purchase Payments paid on that contract
anniversary. The actual guaranteed values may differ from those shown above,
depending on the amount and frequency of Purchase Payments.
RR.V.A.BK. (0803) Page 4A (GTY.1.5)
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SECTION 1. GENERAL TERMS AND DEFINITIONS
ACCUMULATION UNIT. A unit of measure used to determine the value of the interest
of this contract in the Separate Account prior to the date on which amounts are
placed under a payment plan. Accumulation Units may be Class A Accumulation
Units or Class B Accumulation Units.
ACCUMULATION VALUE. The Accumulation Value of a Separate Account Division is the
total value of all Accumulation Units in that Division. The Accumulation Value
of the Guaranteed Interest Fund is the sum of amounts applied to the fund, plus
credited interest, less amounts withdrawn or transferred from the fund. The
Accumulation Value of the contract is the sum of the Accumulation Values of all
Investment Accounts.
ANNUITANT. The Primary Annuitant and, upon the death of the Primary Annuitant,
the Contingent Annuitant.
ANNUITY UNIT. A unit of measure used to determine the amount of variable
payments under a variable payment plan and the value of the interest of a
variable payment plan in the Separate Account. Annuity Units may be Class A
Annuity Units or Class B Annuity Units.
BENEFICIARIES. The term "Beneficiaries" as used in this contract includes direct
beneficiaries, contingent beneficiaries and further payees.
COMPANY. The Northwestern Mutual Life Insurance Company.
CONTINGENT ANNUITANT. The person who becomes the Annuitant upon the death of an
Annuitant.
CONTRACT FEE. An annual charge for administration expenses made on each contract
anniversary prior to the Maturity Date.
CONTRACT YEAR. The first Contract Year is the period of time ending on the first
contract anniversary. Subsequent Contract Years are the annual periods between
contract anniversaries.
DIVISION. A component of the Separate Account to which the Owner may allocate
Net Purchase Payments and contract values.
GUARANTEED INTEREST FUND. The portion of the contract that is credited with a
guaranteed interest rate and which is held as part of the general assets of the
Company. The Guaranteed Interest Fund may consist of a Class A Guaranteed
Interest Fund and a Class B Guaranteed Interest Fund.
HOME OFFICE. The office of The Northwestern Mutual Life Insurance Company
located at 720 East Wisconsin Avenue, Milwaukee, WI 53202.
INVESTMENT ACCOUNT. The Guaranteed Interest Fund and Separate Account Divisions
available for allocation of Net Purchase Payments and contract values. The
available Investment Accounts are listed on page 3.
ISSUE DATE. The date this contract is issued and becomes effective.
MATURITY DATE. The date upon which contract benefits will become payable. If the
contract is continued in force under the Optional Maturity Date provision, the
Optional Maturity Date will become the Maturity Date.
NET PURCHASE PAYMENT. A Purchase Payment less all applicable deductions.
Deductions may include a Premium Tax.
OPTIONAL MATURITY DATE. The contract anniversary nearest the Annuitant's 90th
birthday. Upon reaching the Maturity Date shown on page 3, the Owner may elect
to continue the contract in force until this Optional Maturity Date.
OWNER. The person possessing the ownership rights stated in this contract.
RP.V.A.BK.(0803) 5
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PORTFOLIOS. Mutual funds or portfolios of mutual funds in which the assets of
the Separate Account are invested.
PREMIUM TAX. A tax imposed by a governmental entity when Purchase Payments are
received or benefits are paid.
PRIMARY ANNUITANT. The person whose life this contract is initially issued.
PURCHASE PAYMENT. A payment made by or on behalf of the Owner with respect to
this contract.
SEPARATE ACCOUNT. NML Variable Annuity Account A. The Separate Account consists
of assets set aside by the Company, the investment performance of which is kept
separate from that of the general assets and all other separate account assets
of the Company.
SUCCESSOR OWNER. The person designated to become the Owner upon the death of the
Owner, provided the Owner was not the Annuitant at the time of the Owner's
death.
TRANSFER FEE. A deduction that is made from the amount transferred between
Investment Accounts.
VALUATION DATE. Any day on which the assets of the Separate Account are valued.
Assets are valued as of the close of trading on the New York Stock Exchange for
each day the Exchange is open.
WITHDRAWAL CHARGE. A deduction that is made from maturity benefits and
withdrawal amounts.
WITHDRAWAL CHARGE FREE AMOUNT. For a withdrawal, the amount that can be
withdrawn without a Withdrawal Charge prior to the withdrawal of Net Purchase
Payments.
SECTION 2. SEPARATE ACCOUNT
2.1 SEPARATE ACCOUNT
The Separate Account (NML Variable Annuity Account A) has been established
by the Company. The Separate Account consists of assets set aside by the
Company, the investment performance of which is kept separate from that of the
general assets and all other separate account assets of the Company. The assets
of the Separate Account will not be charged with liabilities arising out of any
other business the Company may conduct. Interests in the Separate Account are
represented by Accumulation Units and Annuity Units, described in Sections 2.2
and 11.3, respectively.
The Separate Account is comprised of the Divisions listed on page 3. The
assets allocated to these Divisions are invested in shares of the corresponding
Portfolios. Shares of the Portfolios are purchased for the Separate Account at
their net asset value.
The Company reserves the right to eliminate or add additional Divisions and
Portfolios.
2.2 ACCUMULATION UNITS
The interest of this contract in the Separate Account, prior to the date on
which amounts become payable under a payment plan, is represented by
Accumulation Units. The dollar value of Accumulation Units for each Division
will increase or decrease to reflect the investment experience of the Division.
The value of an Accumulation Unit on any Valuation Date is the product of:
. the value on the immediately preceding Valuation Date; and
. the Net Investment Factor for the period from the immediately
preceding Valuation Date up to and including the current Valuation
Date (the current period).
There may be Class A and Class B Accumulation Units. The Mortality and
Expense Risk Charge for each class is shown on page 4. Net Purchase Payments
applied to the Separate Account and transfers from the Class B Guaranteed
Interest Fund purchase Class B Accumulation Units until conversion takes place
as described in Section 7.3.
RP.V.A.BK.(0803) 6
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2.3 NET INVESTMENT FACTOR
For each Division of the Separate Account the Net Investment Factor for the
current period is one plus the net investment rate for that Division. The net
investment rate for the current period is equal to the gross investment rate for
the Division reduced on each Valuation Date by a Mortality and Expense Risk
Charge. The charge for these risks on the Issue Date is shown on page 4. The
Company may increase or decrease the charge after the Issue Date, but the
Company may not increase the charges to exceed the maximum charges shown on page
4.
The gross investment rate for the current period for each Division is equal to
a. divided by b. where:
a. is:
. the investment income of the Division for the current period;
plus
. capital gains for the period, whether realized or unrealized, on
the assets of the Division; less
. capital losses for the period, whether realized or unrealized, on
the assets of the Division; less
. deduction for any tax liability paid or reserved for by the
Company resulting from the maintenance or operation of the
Division; and less
. any reasonable expenses paid or reserved for by the Company which
result from a substitution of other securities for shares of the
Portfolio(s) as set forth in Section 2.4; and
b. is the value of the assets in the Division on the immediately
preceding Valuation Date.
The gross investment rate may be positive or negative. The deduction for
any tax liability may be charged proportionately against those contracts to
which the liability is attributable by a reduction in the gross investment rate
for those contracts.
2.4 SUBSTITUTION AND CHANGE
Pursuant to the authority of the Board of Trustees of the Company:
. the assets of the Division may be invested in securities other than
shares of the Portfolio(s) as a substitute for those shares already
purchased or as the securities to be purchased in the future; and
. the provisions of the contracts may be modified to comply with any
other applicable federal or state laws.
In the event of a substitution or change, the Company may make appropriate
endorsement on this and other contracts having an interest in the Separate
Account and take other actions as may be necessary to effect the substitution or
change. Any such substitution or change will be subject to any required approval
of the Commissioner of Insurance for the state of Wisconsin, and filing with the
state in which this contract is issued.
RP.V.A.BK.(0803) 7
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SECTION 3. GUARANTEED INTEREST FUND
3.1 GUARANTEED INTEREST FUND
Net Purchase Payments (see Section 4.2) and amounts transferred from other
Investment Accounts under this contract (see Section 4.4) may be applied to the
Guaranteed Interest Fund. Contract benefits placed under a variable payment plan
may not be applied to the Guaranteed Interest Fund. Amounts applied to the
Guaranteed Interest Fund become part of the general assets of the Company.
3.2 ACCUMULATION VALUE
The Accumulation Value of the Guaranteed Interest Fund is the sum of the
amounts applied to it, plus credited interest, less any amounts withdrawn or
transferred from the fund. Interest begins to accrue on the effective date of
the Purchase Payment or transfer (see Section 4.6).
There may be Class A and Class B Guaranteed Interest Funds. Net Purchase
Payments applied to the Guaranteed Interest Fund and amounts transferred from
Class B Accumulation Units into the Guaranteed Interest Fund are applied to the
Class B Guaranteed Interest Fund until conversion takes place as described in
Section 7.3. Amounts transferred from Class A Accumulation Units into the
Guaranteed Interest Fund are applied to the Class A Guaranteed Interest Fund.
Interest will be credited at an annual effective interest rate of not less
than the guaranteed annual effective interest rate stated on page 4. A higher
rate may be declared by the Company from time to time for a period set by the
Company. The declared rate for the Class A Guaranteed Interest Fund will always
equal or exceed the declared rate for the Class B Guaranteed Interest Fund.
3.3 TRANSFER RESTRICTIONS
Transfers of Accumulation Value from the Guaranteed Interest Fund will not
be allowed for a period of 365 days following the most recent transfer of
Accumulation Value from the Guaranteed Interest Fund.
The maximum amount of the Accumulation Value that may be transferred from
the Guaranteed Interest Fund in one transfer is limited to the greater of:
. 25% of the Accumulation Value of the Guaranteed Interest Fund on the
last contract anniversary preceding the transfer; and
. the amount of the most recent transfer from the Guaranteed Interest
Fund.
However, in no event will this maximum transfer amount be less than $1,000 or
greater than $50,000.
Transfers of Accumulation Value into the Guaranteed Interest Fund will not
be allowed for a period of 90 days following the most recent transfer of
Accumulation Value from the Guaranteed Interest Fund.
3.4 MAXIMUM GUARANTEED INTEREST FUND ACCUMULATION VALUE
The Accumulation Value of the Guaranteed Interest Fund may not exceed the
maximum Guaranteed Interest Fund accumulation value shown on page 4 without
prior consent of the Company, except when the maximum is exceeded because of
interest accruing to the Guaranteed Interest Fund.
3.5 TABLE OF GUARANTEED VALUES
Accumulation and cash values are shown on page 4A. The values are based on
the assumptions stated on page 4A and are for the end of the contract years
shown. Values for contract years not shown are calculated on the same basis as
those shown on page 4A. Guaranteed values are at least as great as those
required by the state in which this contract is delivered.
RP.V.A.BK.(0803) 8
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SECTION 4. PURCHASE PAYMENTS, TRANSFERS, WITHDRAWALS
4.1 PAYMENT OF PURCHASE PAYMENTS
All Purchase Payments are payable at the Home Office or to an authorized
agent. A receipt signed by an officer of the Company will be furnished on
request.
Purchase Payments may be made at any time prior to the death of an Owner
and prior to the Maturity Date. Purchase Payments may be made after the death of
an Owner only if the new Owner of the contract is the surviving spouse of the
deceased Owner. The Owner may vary the amount of Purchase Payments, but no
Purchase Payment may be less than the Minimum Purchase Payment shown on page 4.
Total Purchase Payments may not exceed $5,000,000 without the consent of the
Company.
The Company will not accept any Purchase Payment under Section 4 unless it
is a contribution under a pension or profit sharing plan which meets the
requirements of Section 401 of the Internal Revenue Code of 1954, as amended, or
the requirements for deduction of the employer's contribution under Section
404(a)(2) of such code.
4.2 APPLICATION OF PURCHASE PAYMENTS
Each Purchase Payment, net of Premium Taxes, will be applied to one or more
Investment Accounts. Net Purchase Payments applied to the Guaranteed Interest
Fund will accrue interest from the effective date of the Purchase Payment. Net
Purchase Payments purchase Class B Accumulation Units or are applied to the
Class B Guaranteed Interest Fund. Accumulation Units are credited as of the
effective date of the Net Purchase Payment.
The number of Accumulation Units will be determined by dividing the Net
Purchase Payment by the value of an Accumulation Unit on the effective date.
This number of Accumulation Units will not be changed by any subsequent change
in the dollar value of Accumulation Units.
4.3 SELECTION OF INVESTMENT ACCOUNT FOR PURCHASE PAYMENTS
The Owner may change the allocation of Net Purchase Payments among the
Investment Accounts by written notice to the Company. Net Purchase Payments
received at the Home Office on or after the date on which notice is received
will be applied to the designated Investment Accounts on the basis of the new
allocation.
4.4 TRANSFER OF ACCUMULATION VALUE
Before the Maturity Date the Owner may, on request satisfactory to the
Company, transfer amounts from one Investment Account to another, subject to the
transfer restrictions described in Section 3.3.
For transfers among the Separate Account Divisions, the number of
Accumulation Units to be applied or deducted will be adjusted to reflect the
respective value of the Accumulation Units in each of the Divisions on the date
the transfer is effective.
For transfers from the Guaranteed Interest Fund, amounts closest to
expiration of an interest rate guarantee will be removed first. In the event
that two amounts are equally close to expiration, the one which was applied to
the Guaranteed Interest Fund earlier will be removed first.
Any transfers of Class A Accumulation Value purchase Class A Accumulation
Units or are applied to the Class A Guaranteed Interest Fund. Any transfers of
Class B Accumulation Value purchase Class B Accumulation Units or are applied to
the Class B Guaranteed Interest Fund.
A Transfer Fee may be deducted from the amount transferred. The maximum
amount of the Transfer Fee is shown on page 4. The minimum amount that may be
transferred is the lesser of $100 or the entire Accumulation Value of the
Investment Account from which the transfer is being made.
A transfer request is subject to limitation or modification if the Company
determines that the transfer would be to the disadvantage of other contract
owners with interests in the Separate Account Divisions or if required by
applicable laws or regulations. The limitation or modification may be applied to
transfers to and/or from the Separate Account Divisions and could include but
not be limited to:
. the requirement of a minimum time period between each transfer;
. limiting the dollar amount that may be transferred between or among
the Separate Account Divisions in any one day;
. requiring that a transfer request be submitted in a particular form
and/or by a specific process.
The Company reserves the right to modify or eliminate any transfer request
process (including without limitation transfer requests via the Internet, via
facsimile, or by telephone) for some or all contract owners as the Company deems
appropriate.
RP.V.A.BK.(0803) 9
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4.5 WITHDRAWALS AND FULL SURRENDER
Before the Maturity Date the Owner may, on request satisfactory to the
Company, withdraw all or a portion of the Accumulation Value of the contract.
The Company may require that the Minimum Accumulation Value shown on page 4
remain after a partial withdrawal. Withdrawal of the entire value of the
contract constitutes a full surrender, and receipt of the contract at the Home
Office will terminate this contract. Receipt of the contract may be waived by
the Company.
The cash value of the amount withdrawn will be the Accumulation Value
withdrawn determined as of the date the withdrawal is effective, less any
applicable Withdrawal Charge. The Withdrawal Charge is described in Section 7.4.
The term "withdrawal amounts" as used in this contract includes amounts
paid as full surrenders and withdrawals of a portion of the Accumulation Value
of the contract.
Withdrawals from the Guaranteed Interest Fund will be withdrawn in
accordance with the Order of Withdrawal provisions of Section 7.4. Subject to
that order of withdrawal, the first amounts withdrawn from the Class A
Guaranteed Interest Fund or the Class B Guaranteed Interest Fund, whichever are
applicable, will be those amounts closest to expiration of an interest rate
guarantee. In the event that two amounts are equally close to expiration, the
one which was applied to the Guaranteed Interest Fund earlier will be removed
first.
4.6 EFFECTIVE DATE
The effective date of a Purchase Payment, transfer, or withdrawal is the
Valuation Date on which the Purchase Payment or the request for transfer or
withdrawal is received at the Home Office. However, the Purchase Payment,
transfer, or withdrawal will be effective on the following Valuation Date if the
Purchase Payment, request for transfer or withdrawal is received at the Home
Office either:
. on a Valuation Date after the close of trading on the New York Stock
Exchange; or
. on a day on which the New York Stock Exchange is closed.
SECTION 5. BENEFITS
5.1 MATURITY BENEFIT
Maturity Options. If the Annuitant is living on the Maturity Date shown on page
3, and that Maturity Date is earlier than the contract anniversary nearest the
Annuitant's 90th birthday, the Owner may elect between the following maturity
options:
. payment of a monthly income under a payment plan chosen by the Owner;
or
. deferral of the maturity benefit and continuation of this contract to
the Optional Maturity Date. The contract will continue under this
option if a written election for this purpose is received by the
Company or if on the Maturity Date shown on page 3, the Owner has not
chosen a payment plan.
If the Annuitant is living on the Maturity Date and that Maturity Date is on or
after the contract anniversary nearest the Annuitant's 90th birthday, the
Company will pay a monthly income under a payment form chosen by the Owner.
Payment of Maturity Benefit. The amount of the monthly income paid as the
maturity benefit will depend on the payment plan chosen (see Section 11) and the
maturity value. The maturity value of this contract will be the Accumulation
Value of the contract on the effective date of the maturity benefit, less any
applicable Withdrawal Charge (see Section 7.4). The maturity benefit will be
effective on the Maturity Date. However, if the New York Stock Exchange is
closed on the Maturity Date, the effective date will be the Valuation Date next
preceding the Maturity Date.
If no payment form is chosen at the time a monthly income becomes payable,
payments will be made under the variable payment form of Life Income Plan
(Option C), with installments certain for ten years, as described in Section
11.1.
RP.V.A.BK.(0803) 10
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Optional Maturity Date. The Optional Maturity Date is the contract anniversary
nearest the Annuitant's 90th birthday. If the contract is continued to the
Optional Maturity Date, all contract rights of the Owner will continue in effect
to the Optional Maturity Date. The Optional Maturity Date will become the
Maturity Date for all other purposes of this contract.
5.2 DEATH BENEFIT IF ANNUITANT IS AN OWNER
If the Annuitant is an Owner, the beneficiary becomes entitled to the Death
Benefit upon receipt at the Home Office of satisfactory proof of the death of
the Annuitant before the Maturity Date. The Death Benefit will be the
Accumulation Value of the contract determined on the effective date. The
effective date is the date on which proof of death is received at the Home
Office. However, the effective date will be the next following Valuation Date if
the proof of death is received at the Home Office either:
. on a Valuation Date after the close of trading on the New York Stock
Exchange; or
. on a day on which the New York Stock Exchange is closed.
If the beneficiary becomes entitled to the Death Benefit due to the death
of the Primary Annuitant prior to the Primary Annuitant's 75th birthday, the
Death Benefit will not be less than:
. total Net Purchase Payments paid under the contract; less
. an adjustment for every withdrawal made under Section 4.5. The
adjustment for each withdrawal equals (a) times (b), where:
(a) = the amount withdrawn from the Accumulation Value divided by the
Accumulation Value immediately before the withdrawal; and
(b) = total Net Purchase Payments paid under the contract prior to
the withdrawal less all adjustments for prior withdrawals.
As of the effective date, the Accumulation Value of the contract will be
set at an amount equal to the Death Benefit. Unless a payment plan was elected
by the Owner, the beneficiary automatically becomes the Owner and Annuitant of
the contract. However, if the beneficiary is not a natural person and no payment
plan was elected by the Owner, the beneficiary may select a natural person to be
the Annuitant. If a natural person is not selected to be the Annuitant within 60
days of the date on which proof of death of the Annuitant is received at the
Home Office, the Accumulation Value will be distributed to the beneficiary.
If a beneficiary becomes entitled to the Death Benefit in an amount less
than the Minimum Accumulation Value shown on page 4, the Accumulation Value will
be distributed to the beneficiary.
The cash value of any amount distributed will be the Accumulation Value
withdrawn as of the date of withdrawal as determined in Section 4.6.
5.3 DEATH BENEFIT IF ANNUITANT IS NOT AN OWNER
If the Annuitant is not an Owner, upon the death of the Annuitant the
contract continues with the Contingent Annuitant (Section 6.5) as the new
Annuitant. The Death Benefit will be the Accumulation Value of the contract
determined on the effective date. The effective date is the date on which proof
of death is received at the Home Office. However, the effective date will be the
next following Valuation Date if the proof of death is received at the Home
Office either:
. on a Valuation Date after the close of trading on the New York Stock
Exchange; or
. on a day on which the New York Stock Exchange is closed.
If the Primary Annuitant dies prior to the Primary Annuitant's 75th
birthday, the Death Benefit will not be less than:
. total Net Purchase Payments paid under the contract; less
. an adjustment for every withdrawal made under Section 4.5. The
adjustment for each withdrawal equals (a) times (b), where:
(a) = the amount withdrawn from the Accumulation Value divided by
the Accumulation Value immediately before the withdrawal; and
(b) = total Net Purchase Payments paid under the contract prior to
the withdrawal less all adjustments for prior withdrawals.
As of the effective date, the Accumulation Value of the contract will be
set at an amount equal to the Death Benefit.
RP.V.A.BK.(0803) 11
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SECTION 6. BENEFICIARIES AND CONTINGENT ANNUITANTS
6.1 NAMING AND CHANGING OF BENEFICIARIES
For Maturity Benefits or Withdrawals by Owner. The Owner may name and change the
beneficiaries of maturity benefits or withdrawal amounts before the Maturity
Date. If no beneficiary is named by the Owner, the Owner will be the direct
beneficiary.
For Death Benefits by Owner. The Owner may name and change the beneficiaries of
the Death Benefits while the Annuitant is living. If no such beneficiary is
named by the Owner, the Owner or the Owner's estate will be the direct
beneficiary.
For Maturity or Death Benefits or Withdrawal Amounts by Spouse (Marital
Deduction Provision).
. Power to Appoint. The spouse of the Annuitant will have the power
alone and in all events to appoint all amounts payable to the spouse
under the contract if:
a. just before the Annuitant's death, the Annuitant was the Owner;
and
b. the spouse is a direct beneficiary; and
c. the spouse survives the Annuitant.
. To Whom Spouse Can Appoint. Under this power, the spouse can appoint:
a. to the estate of the spouse; or
b. to any other person.
. Effect of Exercise. As to the amounts appointed, the exercise of this
power will:
a. revoke any other designation of beneficiaries;
b. revoke any election of payment plan as it applies to them; and
c. cause any provision to the contrary in Section 6 or 10 of this
contract to be of no effect.
Effective Date. A naming or changing of a beneficiary will be effective on
receipt at the Home Office of a written request that is acceptable to the
Company. The request will then take effect as of the date that it was signed.
The Company is not responsible for any payment or other action that is taken by
it before the receipt of the request. The Company may require that the contract
be sent to it to be endorsed to show the naming or change.
6.2 SUCCESSION IN INTEREST OF BENEFICIARIES
The rights and benefits that a beneficiary becomes entitled to under the
contract are shared equally among all surviving direct beneficiaries, if any,
otherwise equally among all surviving contingent beneficiaries, if any,
otherwise to the Owner or the Owner's Estate.
6.3 TRUSTEE AS BENEFICIARY
If a trustee is named as a beneficiary and no qualified trustee makes claim
to the proceeds, or to the present value of any unpaid payments under a payment
plan, within one year after payment becomes due to the trustee, or if
satisfactory evidence is furnished to the Company within that year showing that
no trustee can qualify to receive payment, payment will be made as though the
trustee had not been named.
The Company will be fully discharged of liability for any action taken by
the trustee and for all amounts paid to, or at the direction of, the trustee and
will have no obligation as to the use of the amounts. In all dealings with the
trustee the Company will be fully protected against the claims of every other
person. The Company will not be charged with notice of a change of trustee
unless written evidence of the change is received at the Home Office.
6.4 GENERAL
Transfer of Ownership. A transfer of ownership of itself will not change the
interest of a beneficiary.
Claims of Creditors. So far as allowed by law, no amount payable under this
contract will be subject to the claims of creditors of a beneficiary.
RP.V.A.BK.(0803) 12
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6.5 NAMING AND CHANGING A CONTINGENT ANNUITANT
The Owner may name and change a Contingent Annuitant while the Annuitant is
living.
If the Annuitant was not the Owner immediately prior to the Annuitant's
death, the Owner may name and change a Contingent Annuitant during the first 60
days after the date on which proof of death of the Annuitant is received at the
Home Office. A change made during this 60 days cannot be revoked. If no one is
named as Contingent Annuitant by the end of the 60 day time period, the Company
will pay the Accumulation Value to the Owner. The cash value of any amount
distributed will be the Accumulation Value withdrawn as of the date of
withdrawal as determined in Section 4.6.
A naming or changing of a Contingent Annuitant will be effective on receipt
at the Home Office of a written request that is acceptable to the Company.
SECTION 7. CHARGES, AND FEES AND CONVERSION
7.1 PREMIUM TAXES
The Company may deduct Premium Taxes incurred from Purchase Payments
received.
7.2 CONTRACT FEE
On each contract anniversary prior to the Maturity Date, a Contract Fee
will be charged for administrative expenses. The amount of the Contract Fee is
shown on page 4. The Contract Fee will be deducted from the Investment Accounts
in proportion to the Accumulation Value of the Investment Accounts.
The Contract Fee deducted from the Guaranteed Interest Fund will not exceed
the sum of:
. 10% of the gross purchase payments applied to the Guaranteed Interest
Fund during the contract year; and
. interest in excess of the guaranteed annual effective interest rate
shown on page 4 credited to the Guaranteed Interest Fund during the
contract year.
The effective date of the Contract Fee will be the contract anniversary.
However, if the New York Stock Exchange is closed on the contract anniversary,
the effective date will be the next following Valuation Date.
7.3 CONVERSION OF INVESTMENT ACCOUNTS
On a policy anniversary some Class B Accumulation Units may convert to
Class A Accumulation Units and a portion of the Class B Guaranteed Interest Fund
may convert to the Class A Guaranteed Interest Fund. The amounts that will be
converted are dependent on the conversion of Net Purchase Payments.
On a policy anniversary, a Net Purchase Payment converts if:
. the total Accumulation Value of the contract exceeds $25,000;
. the Net Purchase Payment has not previously converted; and
. the Net Purchase Payment is in the zero Withdrawal Charge category.
If a Net Purchase Payment converts, a conversion percentage is calculated.
The conversion percentage equals the greater of:
. the Net Purchase Payments converting divided by all Net Purchase
Payments not already converted; and
. the Net Purchase Payments converting divided by the value of all Class
B Accumulation Units and the Class B Guaranteed Interest Fund, but in
no event more than 100%.
RP.V.A.BK.(0803) 13
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A percentage of Class B Accumulation Units in each Division(s), equal to
the conversion percentage, will convert to Class A Accumulation Units in the
same Division(s). The number of Accumulation Units will be adjusted to reflect
the respective value of the Accumulation Units on the date of the conversion.
A percentage of the Class B Guaranteed Interest Fund, equal to the
conversion percentage, will convert to the Class A Guaranteed Interest Fund
beginning with the amounts closest to expiration of an interest rate declaration
period. For the remainder of the declared interest rate period, such amounts
will be credited with interest at the rates applicable to amounts in the Class A
Guaranteed Interest Fund as of the date the interest rate was declared.
7.4 WITHDRAWAL CHARGE
Conditions. Maturity benefits and withdrawals are subject to a Withdrawal Charge
described on page 4. There is no Withdrawal Charge on benefits that are paid
under a variable Installment Income or variable Life Income Payment Plan.
However, the withdrawal of the present value of any unpaid installments under a
variable Installment Income Plan (Option B) will be subject to a withdrawal
charge if the withdrawal is made less than five years after the date that the
payment plan takes effect.
Calculations. The amount of the Withdrawal Charge on the contract is equal to
the sum of the Withdrawal Charges on all Net Purchase Payments. The Withdrawal
Charge on a Net Purchase Payment is equal to the Withdrawal Charge percentage on
the date the Withdrawal Charge is determined, multiplied by the amount of the
Net Purchase Payment. The Withdrawal Charge percentages are shown on page 4. The
excess of the Accumulation Value of the contract over the total of Net Purchase
Payments paid is not subject to a Withdrawal Charge.
Withdrawal Charges are determined:
. for maturity benefits, as of the Maturity Date.
. for withdrawals under Section 4.5, as of the effective date of the
withdrawal.
. for withdrawals from payment plans, as of the effective date of the
withdrawal.
Withdrawal Charge Free Amount. If the Accumulation Value of the contract is at
least $10,000 on the most recent contract anniversary preceding a withdrawal
under Section 4.5, then the amount withdrawn will be taken first from the
withdrawal charge free amount. For each Contract Year, the amount eligible for
the Withdrawal Charge Free Amount is 10% of the Class B Accumulation Value of
the contract on the most recent contract anniversary preceding the withdrawal.
Order of Withdrawal. A withdrawal will be taken from the contract in the
following order:
. first, from the Withdrawal Charge Free Amount, if any;
.