-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, No8wKp6Yf2lVnGeSI6PrUyn3YX7d+RJ7hBr1YfkjVUN6p50Yp6O/NJUwj007WKuv YsuZsovMijGZjpbkPPMmqA== 0000820027-99-000424.txt : 19990624 0000820027-99-000424.hdr.sgml : 19990624 ACCESSION NUMBER: 0000820027-99-000424 CONFORMED SUBMISSION TYPE: N-4 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19990526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS LIFE VARIABLE ACCOUNT 10 CENTRAL INDEX KEY: 0001000191 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-4 SEC ACT: SEC FILE NUMBER: 333-79311 FILM NUMBER: 99635122 FILING VALUES: FORM TYPE: N-4 SEC ACT: SEC FILE NUMBER: 811-07355 FILM NUMBER: 99635123 BUSINESS ADDRESS: STREET 1: IDS TOWER 10 STREET 2: T 27152 CITY: MINNEAPOLIS STATE: MN ZIP: 55440-0010 BUSINESS PHONE: 6126712345 MAIL ADDRESS: STREET 1: IDS TOWER 10 T27152 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 N-4 1 IDS LIFE VARIABLE ACCOUNT 10 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. [ ] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 1 (File No. 811-07355) [X] --------- (Check appropriate box or boxes) IDS LIFE VARIABLE ACCOUNT 10 - -------------------------------------------------------------------------------- (Exact Name of Registrant) IDS Life Insurance Company - -------------------------------------------------------------------------------- (Name of Depositor) IDS Tower 10, Minneapolis, MN 55440-0010 - -------------------------------------------------------------------------------- (Address of Depositor's Principal Executive Offices) (Zip Code) Depositor's Telephone Number, including Area Code (612) 671-3678 - -------------------------------------------------------------------------------- Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010 - -------------------------------------------------------------------------------- (Name and Address of Agent for Service) It is proposed that this filing will become effective: as soon as possible. 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. Prospectus [_____], 1999 AXP Retirement Advisor Variable Annuity Individual flexible premium deferred combination fixed/variable annuity. IDS Life Variable Account 10 Issued by: IDS Life Insurance Company (IDS Life) IDS Tower 10 Minneapolis, MN 55440-0010 Telephone: 800-437-0602 http://www.americanexpress.com/advisors This prospectus contains information that you should know before investing. You also will receive the following prospectuses: o IDS Life Retirement Annuity Mutual Funds; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; and o New Fund Please read the prospectuses carefully and keep them for future reference. This contract is available for qualified and nonqualified plans. The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. An investment in this contract is not a deposit of a 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 contract involves investment risk including the possible loss of principal. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS 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. Table of Contents Key Terms The Contract in Brief Expense Summary Condensed Financial Information (Unaudited) Financial Statements Performance Information The Variable Account and The Funds The Fixed Account Buying Your Contract Charges Valuing Your Investment Making the Most of Your Contract Surrenders TSA -- Special Surrender Provisions Changing Ownership Benefits in Case of Death The Annuity Payout Period Taxes Voting Rights Substitution of Investments About the Service Providers Year 2000 Table of Contents of the Statement of Additional Information Key Terms These terms can help you understand details about your contract. Accumulation unit -- A measure of the value of each subaccount before annuity payouts begin. 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. Beneficiary -- The person you designate to receive annuity 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 4 p.m. Eastern time. Contract value -- The total value of your contract before we deduct any applicable charges. 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 you allocate to this account earn interest at rates that we declare periodically. Funds -- Mutual funds and/or portfolios that are investment options under your contract, each with a different investment objective. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. Owner (you, your) -- The person who controls the contract (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 contract's benefits. Qualified annuity -- A contract 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) o Simplified Employee Pension (SEP) plans o Section 401(k) plans o Custodial and trusteed pension and profit sharing plans o Tax-Sheltered Annuities (TSAs) All other contracts are considered nonqualified annuities. Settlement date -- The date when annuity payouts are scheduled to begin. Surrender value -- The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. Valuation date -- Any normal business day, Monday through Friday, that the NYSE is open. Each valuation date ends at the close of business. We calculate the value of each subaccount at the close of business on each valuation date. Variable account -- Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. The Contract in Brief Purpose: The purpose of the contract 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 contract. The contract provides lifetime or other forms of payouts beginning at a specified date (the settlement date). Free look period: You may return your contract to our office within 10 days after it is delivered to you and receive a full refund of the contract value, less any purchase payment credits up to the maximum surrender charge. (See "Valuing Your Investment - Purchase payment credits.") We will not deduct any other charges. 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 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, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. __) o the fixed account, which earns interest at a rate that we adjust periodically. (p. __) Buying your contract: We will help you complete and submit an application. Applications are subject to acceptance at our office. You may buy a nonqualified annuity or a qualified annuity. After your initial purchase payment, you have the option of making additional purchase payments in the future. o Minimum initial purchase payment -- $2,000 ($1,000 for qualified annuities) unless you pay in installments by means of a bank authorization or under a group billing arrangement such as a payroll deduction. o Minimum additional purchase payment -- $50. o Minimum installment purchase payment -- $50 monthly; $23.08 biweekly (scheduled payment plan billing). o Maximum first-year purchase payments -- $100,000 to $1,000,000 depending on your age. o Maximum purchase payment for each subsequent year -- $50,000 to $100,000 depending upon your age. (p. __) Transfers: Subject to certain restrictions you currently may redistribute your money among the subaccounts and the fixed account without charge at any time until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the fixed account and subaccounts. Fixed account transfers are subject to special restrictions. (p. __) Surrenders: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and tax penalties (including a 10% IRS penalty if you surrender 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 changing ownership of a qualified annuity. (p. __) Benefits 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 your contract value to an annuity payout plan that begins on the settlement 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. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. __) Taxes: Generally, your contract grows tax-deferred until you surrender 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. (p. __) Charges: o $30 annual contract administrative charge; o for nonqualified annuities a 0.95% mortality and expense risk fee; o for qualified annuities a 0.75% mortality and expense risk fee; o surrender charge; 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 full surrender or when annuity payouts begin); and o the operating expenses of the funds. Expense Summary The purpose of the following information is to help you understand the various costs and expenses associated with your contract. You pay no sales charge when you purchase your contract. We show all costs that you bear directly or indirectly for the subaccounts and funds below. Some expenses may vary as we explain under "Charges." Contract owner expenses: Surrender charge: contingent deferred sales charge as a percentage of purchase payment surrendered. The owner selects either a seven year or ten year surrender charge schedule at the time of application.
Seven year schedule Ten year schedule Years from purchase payment Years from purchase receipt Surrender charge percentage payment receipt Surrender charge percentage 1 7% 1 8% 2 7 2 8 3 7 3 8 4 6 4 7 5 5 4 7 6 4 6 6 7 2 7 5 Thereafter 0 8 4 9 3 10 2 Thereafter 0 Annual contract administrative charge $30* * We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary.
Annual subaccount expenses (as a percentage of average subaccount value): Mortality and expense risk fee 0.95% for nonqualified annuities 0.75% for qualified annuities
Annual operating expenses of the funds (as a percentage of average daily net assets) Management 12b-1 Other Fees Fees Expenses Total IDS Life Aggressive Growth Fund IDS Life Capital Resource Fund IDS Life Global Yield Fund IDS Life Growth Dimensions Fund IDS Life Income Advantage Fund IDS Life International Equity Fund IDS Life Managed Fund IDS Life Moneyshare Fund IDS Life Special Income Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund
Examples:* You would pay the following expenses on a $1,000 investment in a nonqualified annuity with a seven year surrender charge schedule and a 0.95% mortality and expense risk fee assuming a 5% annual return and.... no surrender or selection a full surrender at the end of an annuity payout plan at the of each time period end each time period 1 year 3 years 1 year 3 years IDS Life Aggressive Growth Fund IDS Life Capital Resource Fund IDS Life Global Yield Fund IDS Life Growth Dimensions Fund IDS Life Income Advantage Fund IDS Life International Equity Fund IDS Life Managed Fund IDS Life Moneyshare Fund IDS Life Special Income Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund
You would pay the following expenses on a $1,000 investment in a nonqualified annuity with a ten year surrender charge schedule and a 0.95% mortality and expense risk fee assuming a 5% annual return and.... no surrender or selection a full surrender at the end of an annuity payout plan at the of each time period end of each time period 1 year 3 years 1 year 3 years IDS Life Aggressive Growth Fund IDS Life Capital Resource Fund IDS Life Global Yield Fund IDS Life Growth Dimensions Fund IDS Life Income Advantage Fund IDS Life International Equity Fund IDS Life Managed Fund IDS Life Moneyshare Fund IDS Life Special Income Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund
You would pay the following expenses on a $1,000 investment in a qualified annuity with a seven year surrender charge schedule and a 0.75% mortality and expense risk fee assuming a 5% annual return and.... no surrender or selection a full surrender at the end of an annuity payout plan at the end of of each time period each time period 1 year 3 years 1 year 3 years IDS Life Aggressive Growth Fund IDS Life Capital Resource Fund IDS Life Global Yield Fund IDS Life Growth Dimensions Fund IDS Life Income Advantage Fund IDS Life International Equity Fund IDS Life Managed Fund IDS Life Moneyshare Fund IDS Life Special Income Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund
You would pay the following expenses on a $1,000 investment in a qualified annuity with a ten year surrender charge schedule and a 0.75% mortality and expense risk fee assuming a 5% annual return and.... no surrender or selection a full surrender at the end of an annuity payout plan at the end of of each time period each time period 1 year 3 years 1 year 3 years IDS Life Aggressive Growth Fund IDS Life Capital Resource Fund IDS Life Global Yield Fund IDS Life Growth Dimensions Fund IDS Life Income Advantage Fund IDS Life International Equity Fund IDS Life Managed Fund IDS Life Moneyshare Fund IDS Life Special Income Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund * In these examples, the $30 contract administrative charge is approximated as a [___]% charge based on our estimated average contract size. Premium taxes imposed by some state and local governments are not reflected in this table. We entered into certain arrangements under which we are compensated by the funds' advisors and/or distributors for the administrative services we provide to the funds.
You should not consider these examples as representations of past or future expenses. Actual expenses may be more or less than those shown. Condensed Financial Information (Unaudited) The following tables give per-unit information about the financial history of each subaccount. We have not provided this information for the subaccounts because they are new and do not have any history. [To be inserted by accounting.] Financial Statements You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. Performance Information Performance information for the subaccounts may appear from time to time in advertisements or sales literature. This information reflects the performance of a hypothetical investment in a particular subaccount during a specified time period. Currently, we do not provide any performance information for the subaccounts because they are new and have not had any activity to date. However, we show performance from the commencement date of the funds as if the contract existed at that time. Although we base performance figures on historical earnings, past performance does not guarantee future results. We include non-recurring charges (such as surrender charges) in total return figures, but not in yield quotations. Excluding non-recurring charges in yield calculations increases the reported value. Total return figures reflect deduction of all applicable charges, including: o the contract administrative charge, o mortality and expense risk fee, and o surrender charge (assuming a surrender at the end of the illustrated period). We also may make optional total return quotations that do not reflect a surrender charge deduction (assuming no surrender). Total return quotations may be shown by means of schedules, charts or graphs. Average annual total return is the average annual compounded rate of return of the investment over a period of one, five and ten years (or up to the life of the subaccount if it is less than ten years old). Cumulative total return is the cumulative change in the value of an investment over a specified time period. We assume that income earned by the investment is reinvested. Cumulative total return generally will be higher than average annual total return. Annualized simple yield (for subaccounts investing in money market funds) "annualizes" the income generated by the investment over a given seven-day period. That is, we assume the amount of income generated by the investment during the period will be generated each seven-day period for a year. We show this as a percentage of the investment. Annualized compound yield (for subaccounts investing in money market funds) is calculated like simple yield except that we assume the income is reinvested when we annualize it. Compound yield will be higher than the simple yield because of the compounding effect of the assumed reinvestment. Annualized yield (for subaccounts investing in income funds) divides the net investment income (income less expenses) for each accumulation unit during a given 30-day period by the value of the unit on the last day of the period. We then convert the result to an annual percentage. You should consider performance information in light of the investment objectives, policies, characteristics and quality of the fund in which the subaccount invests and the market conditions during the specified time period. Advertised yields and total return figures include charges that reduce advertised performance. Therefore, 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 and yield.) If you would like additional information about actual performance, please contact us. The Variable Account and The Funds
You may allocate payments to any or all the subaccounts of the variable account that invest in shares of the following funds: - ------------------------------------------------------------------------------------------------------------------------------ Investment Advisor or Subaccount Investing in Investment Objectives and Policies: Manager - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Aggressive Growth Objective: capital appreciation. Invests primarily IDS Life, investment ?? Fund in common stocks of small-and medium-size companies. manager; American Express Financial Corporation (AEFC) investment advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Capital Resource Objective: capital appreciation. Invests primarily IDS Life, investment ?? Fund in U.S. common stocks. manager; AEFC investment advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Global Yield Fund Objective: high total return through income and IDS Life, investment ?? growth of capital. Invests primarily in debt manager; AEFC investment securities of U.S. and foreign issuers. advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Growth Dimensions Objective: long-term growth of capital. Invests IDS Life, investment ?? Fund primarily in common stocks of U.S. and foreign manager; AEFC investment companies showing potential for significant growth. advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Income Advantage Objective: high current income, with capital growth IDS Life, investment ?? Fund as a secondary objective. Invests primarily in manager; AEFC investment long-term, high-yielding, high-risk debt securities advisor. below investment grade issued by U.S. and foreign corporations. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life International Objective: capital appreciation. Invests primarily IDS Life, investment ?? Equity Fund in common stock of foreign issuers. manager; AEFC investment advisor.1 - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Managed Fund Objective: maximum total investment return through IDS Life, investment ?? a combination of capital growth and current income. manager; AEFC investment Invests primarily in stocks, convertible advisor. securities, bonds and money market instruments. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Moneyshare Fund Objective: maximum current income consistent with IDS Life, investment ?? liquidity and conservation of capital. Invests in manager; AEFC investment money market securities. advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Special Income Objective: high level of current income while IDS Life, investment ?? Fund conserving the value of the investment for the manager; AEFC investment longest time period. Invests primarily in advisor. investment-grade bonds. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ 1 American Express Asset Management International, Inc., a wholly-owned subsidiary of AEFC, is the sub-investment advisor for IDS Life International Equity Fund.
[Managers for the new funds to be filed by amendment.] The investment objectives and policies of some of the funds are similar to the investment objectives and policies of other mutual funds that the investment advisor or its affiliates manage. Although the objectives and policies may be similar, each fund will have its own portfolio holdings and its own fees and expenses. Accordingly, each fund will have its own investment results. The investment managers and advisors cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. All funds are available to serve as the underlying investments for variable annuities. Some funds also are available to serve as investment options for variable life insurance policies and qualified plans. It is possible that in the future, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or qualified plans to invest in the available funds simultaneously. Although the insurance company and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of the appropriate funds will monitor events in order to identify any material conflicts between annuity owners, policy owners and qualified plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and qualified plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the fund prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and qualified plan accounts. The IRS issued final regulations relating to the diversification requirements under Section 817(h) of the Internal Revenue Code of 1986, as amended (the Code). Each fund intends to comply with these requirements. The variable account was established under Minnesota law on Aug. 23, 1995 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 IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. The U.S. Treasury and the Internal Revenue Service (IRS) 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 subaccounts it may allow before the contract owner would be currently taxed on income earned within 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 contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. The Fixed Account You also may allocate purchase payments to the fixed account. We back the principal and interest guarantees relating to the fixed account. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. We credit interest daily and compound it annually. We will change the interest rates from time to time at our discretion. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on 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 "Making the Most of Your Contract -- Transfer policies" for restrictions on transfers involving the fixed account.) Buying Your Contract You can fill out an application and send it along with your initial purchase payment to our office. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can buy a contract or become an annuitant if you are 90 or younger. When you apply, you may select: o the length of the surrender charge period (seven or ten years); o the fixed account and/or subaccounts in which you want to invest; o how you want to make purchase payments; and o a beneficiary. The contract provides for allocation of purchase payments to the subaccounts of the variable account and/or to the fixed account in even 1% increments. If your application is complete, we will process it and apply your purchase payment to the fixed account and subaccounts you selected within two business days after we receive it at our office. 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 you make to your accounts on the valuation date we receive them. We will value the additional payments at the next accumulation unit value calculated after we receive your payments at our office. The settlement date Annuity payouts are scheduled to begin on the settlement date. When we process your application, we will establish the settlement date to the maximum age or date described below. You can also select a date within the maximum limits. You can align this date 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 also can change the date, provided you send us written instructions at least 30 days before annuity payouts begin. For nonqualified annuities, the settlement 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 purchased after age 75. (In Pennsylvania, the maximum settlement date ranges from age 85 to 96 based on the annuitant's age when we issue the contract. See contract for details.) For qualified annuities, to avoid IRS penalty taxes, the settlement date generally must be: o on or after the date the annuitant reaches age 59 1/2; and o for IRAs and SEPs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or o for all other qualified annuities by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). If you take the minimum IRA or TSA distributions as required by the Code from another tax-qualified investment, or in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the 10th contract anniversary, if later. (In Pennsylvania, the annuity payout ranges from age 85 to 96 based on the annuitant's age when the contract is issued. See contract for details.) Beneficiary If death benefits become payable before the settlement date (while the contract is in force and before annuity payouts begin), we will pay your named beneficiary 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 payments Minimum allowable purchase payments If paying by installments* If paying by any other method: under a scheduled payment plan: $1,000 initial payment for qualified plans $23.08 biweekly, or $2,000 initial payment for nonqualified plans $50 per month $50 for any additional payments * Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts sold to New Jersey residents. Maximum allowable purchase payments** based on the age of you or the annuitant, whoever is older, on the effective date of the contract: For the first year: For each subsequent year: $100,000 for ages 86 to 90 $50,000 for ages 86-90 $1,000,000 up to age 85 $100,000 up to age 85 **These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the qualified plan's limits on annual contributions also apply. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. How to make purchase payments 1 By letter Send your check along with your name and contract number to: Regular mail: IDS Life Insurance Company Box 74 Minneapolis, MN 55440-0074 Express mail: IDS Life Insurance Company 733 Marquette Avenue Minneapolis, MN 55402 2 We can help you set up: By Scheduled payment plan o an automatic payroll deduction, salary reduction or other group billing arrangement; or o a bank authorization. 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. We prorate this charge 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 your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. Mortality and expense risk fee We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee. For nonqualified annuities the fee totals 0.95% of the average daily net assets on an annual basis. For qualified annuities the fee totals 0.75% of the 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 our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, then we must take money from our general assets to meet our obligations. If, as a group, 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 this charge may not cover our expenses. We would have to make up any deficit from our general assets. The subaccounts pay us the mortality and expense risk fee they accrued as follows: o first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; o then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of 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 surrender charge, discussed in the following paragraphs, will cover sales and distribution expenses. Surrender charge If you surrender all or part of your contract, you may be subject to a surrender charge. A surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven (7) or ten (10) years before surrender. You select the surrender charge period at the time of your application for the contract. The surrender charge percentages that apply to you are shown in your contract. For purposes of calculating any surrender charge, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender any contract earnings (contract value less purchase payments received and not previously surrendered). We do not assess a surrender charge on contract earnings. NOTE: We determine contract earnings by looking at the entire contract value, not the earnings of any particular subaccount or the fixed account. 2. Next, in each contract year, we surrender amounts totaling up to 10% of your prior contract anniversary contract value, but only to the extent not included and surrendered in Number 1 above. (Your initial purchase payment is considered the prior contract anniversary contract value during the first contract year.) We do not assess a surrender charge on this amount. 3. Next we surrender purchase payments received prior to the surrender charge period you selected and shown in your contract. We do not assess a surrender charge on these purchase payments. 4. Finally, if necessary, we surrender purchase payments received that are still within the surrender charge period you selected and shown in your contract. We surrender these payments on a first-in, first-out basis. We do assess a surrender charge on these payments. We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the total surrender charges.
The surrender charge percentage depends on the number of years since you made the payments that are surrendered, depending on the schedule you selected: Seven year schedule Ten year schedule Years from purchase payment Years from purchase receipt Surrender charge percentage payment receipt Surrender charge percentage 1 7% 1 8% 2 7 2 8 3 7 3 8 4 6 4 7 5 5 4 7 6 4 6 6 7 2 7 5 Thereafter 0 8 4 9 3 10 2 Thereafter 0 Surrender charge calculation example [To be filed by amendment.]
For a partial surrender that is subject to a surrender charge, the amount we actually surrender from your contract will be the amount you request plus any applicable surrender charge. We apply the surrender charge to this total amount. We pay you the amount you requested. If you make a full surrender of your contract, we also will deduct the $30 contract administrative charge. Waiver of surrender charges We do not assess surrender charges for: o surrenders of any contract earnings; o amounts totaling up to 10% of your prior contract anniversary contract value to the extent it exceeds contract earnings; o required minimum distributions from a qualified annuity (for those amounts required to be distributed from the contract described in this prospectus); o contracts settled using an annuity payout plan; o amounts we refund to you during the free look period*; o death benefits*; and o surrenders you make under your contract's "Waiver of Surrender Charges for Nursing Home Confinement" provision*. To the extent permitted by state law, this provision applies when you are under age 76 on the date that we issue the contract. We will waive surrender charges that we normally assess upon full or partial surrender if you provide proof satisfactory to us that, as of the date you request the surrender, you or the annuitant are confined to a nursing home and have been for the prior 90 days and the confinement began after the contract date. (See your contract for additional conditions and restrictions on this waiver.) * However, we will reverse certain purchase payment credits up to the maximum surrender charge. (See "Valuing Your Investment - Purchase payment credits.") Other information on charges: AEFC makes certain custodial services available to some custodial and trusteed pension and profit sharing plans and 401(k) plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. AEFC will charge a termination fee for owners under age 59 1/2 (fee waived in case of death or disability). Possible group reductions: In some cases we may incur lower sales and administrative expenses 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 surrender 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 the state of residence or the state in which the contract was sold. In some cases, we deduct premium taxes from your purchase payments before we allocate them. In other cases, we deduct them when you surrender your contract or when annuity payouts begin. Valuing Your Investment We value your fixed account and subaccounts as follows: Fixed account: We value the amounts you 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; o plus any purchase payment credits allocated to the fixed account; o plus interest credited; o minus the sum of amounts surrendered (including any applicable surrender charges) and amounts transferred out; and o minus any prorated contract administrative charge. Subaccounts: We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts or we apply any purchase payment credits to a subaccount, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, each time you take a partial surrender, transfer amounts out of a subaccount, or we assess 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 fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: Number of units To calculate the number of accumulation units for a particular subaccount, we divide your investment after deduction of any premium taxes, by the current accumulation unit value. Accumulation unit value The current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. Net investment factor We determine the net investment factor by: o adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then o dividing that sum by the previous adjusted net asset value per share; and o subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. Factors that affect subaccount accumulation units Accumulation units may change in two ways: in number and in value. Here are th factors that influence those changes: The number of accumulation units you own may fluctuate due to: o additional purchase payments you allocate to the subaccounts; o any purchase payment credits allocated to the subaccounts; o transfers into or out of the subaccounts; o partial surrenders; o surrender charges; and/or o prorated portions of the contract administrative charge. Accumulation unit values will fluctuate due to: o changes in funds' net asset value; o dividends distributed to the subaccounts; o capital gains or losses of funds; o fund operating expenses; and/or o mortality and expense risk fees. Purchase payment credits We add a credit to your contract in the amount of: o 1% of each purchase payment received if you elect the ten year surrender charge schedule for your contract or if your initial purchase payment to the contract is at least $100,000. o 2% of each purchase payment received if you elect the ten year surrender charge schedule for your contract and your initial purchase payment to the contract is at least $100,000. We fund the credit from our general account. We do not consider credits to be "investments" for income tax purposes. (See "Taxes.") We allocate each credit to your contract value when the applicable purchase payment is applied to your contract value. We allocate such credits to your contract value according to allocation instructions in effect for your purchase payments. We will reverse credits from the contract value for any purchase payment that is not honored. We will reverse from the contract value credits applied within twelve months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, if applicable. The amount returned to you under the free look provision will not include any credits applied to your contract. In those cases where we reverse purchase payment credits, we do not assess surrender charges. However, the amount of the reversal will not exceed the maximum surrender charge. Making the Most of Your Contract 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 transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. 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 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. How dollar-cost averaging works
How dollar-cost averaging works By investing an Amount Accumulation unit Number of units equal number of Month invested value purchased dollars each month... Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the Apr 100 15 6.67 per unit market price May 100 16 6.25 is low... Jun 100 18 5.56 Jul 100 17 5.88 and fewer units when Aug 100 19 5.26 the per unit market Sept 100 21 4.76 price is high. Oct 100 20 5.00
You 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 subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success with this strategy 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 us. Transferring money between accounts You may transfer money from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. (Certain restrictions apply to transfers involving the fixed account.) We will process your transfer on the valuation date we receive your request. We will value your transfer at the next accumulation unit value calculated after we receive your request. 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. Excessive trading activity can disrupt fund management strategy and increase expenses, which are borne by all contract owners who allocated purchase payments to the fund regardless of their transfer activity. We may apply modifications or restrictions in any reasonable manner to prevent transfers we believe will disadvantage other contract owners. (For information on transfers after annuity payouts begin, see "Transfer policies.") Transfer policies o Before annuity payouts begin, you may transfer contract values between the subaccounts, or from the subaccounts to the fixed account at any time. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. o You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). o If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. o If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date 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 subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. How to request a transfer or surrender 1 By letter Send your name, contract number, Social Security Number or Taxpayer Identification Number and signed request for a transfer or surrender to: Regular mail: IDS Life Insurance Company IDS Tower 10 Minneapolis, MN 55440-0010 Express mail: IDS Life Insurance Company 733 Marquette Avenue Minneapolis, MN 55402 Minimum amount Transfers or surrenders: $250 or entire account balance Maximum amount Transfers or surrenders: Contract value 2 We can help you set up automated transfers among your By automated transfers subaccounts or fixed account or partial surrenders and automated partial from the accounts. surrenders You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. o Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. o Automated surrenders may be restricted by applicable law under some contracts. o You may not make additional purchase payments i automated partial surrenders are in effect. o Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. Minimum amount Transfers or surrenders: $50 3 Call between 7 a.m. and 6 p.m. Central time: By phone 800-437-0602 TTY service for the hearing impaired: 1-800-285-8846 (toll free) Minimum amount Transfers or surrenders: $250 or entire account balance Maximum amount Transfers: Contract value Surrenders: $50,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders not be authorized from your account by writing to us. Surrenders You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. For total surrenders, we will compute the value of your contract at the next accumulation unit value calculated after we receive your request. We may ask you to return the contract. You may have to pay surrender charges (see "Charges") and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin. Surrender policies If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. Receiving payment By regular or express mail: o payable to you; o mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. By wire: o request that payment be wired to your bank; o bank account must be in the same ownership as your contract; and o pre-authorization required. For instructions, contact us. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: - -- the surrender 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. TSA -- Special Surrender Provisions Participants in Tax-Sheltered Annuities: The Code imposes certain restrictions on your right to receive early distributions from a TSA: o Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: -- you are at least age 59 1/2; -- you are disabled as defined in the Code; -- you separated from the service of the employer who purchased the contract; or -- the distribution is because of your death. o If you encounter a financial hardship (as defined by the Code), you may receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. o Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). o The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. o The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. o If the contract has a loan provision, the right to receive a loan as described in detail in your contract. Changing Ownership You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our office. The change will become binding upon us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any 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. However, if the owner is a trust or custodian, or an employer acting in a similar capacity, ownership of a contract may be transferred to the annuitant. Benefits in Case of Death We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: o the contract value; o purchase payments, minus any "adjusted partial surrenders"; or o the contract value as of the most recent sixth contract anniversary, plus any purchase payments paid and minus any "adjusted partial surrenders" since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: o the contract value; or o purchase payments minus any "adjusted partial surrenders." Adjusted partial surrenders: We calculate an "adjusted partial surrender" for each partial surrender as the product of (a) times (b) where (a) is the ratio of the amount of the partial surrender (including any applicable surrender charge) to the contract value on the date of (but prior to) the partial surrender; and (b) is the death benefit on the date of (but prior to) the partial surrender. Example: [To be filed by amendment.] If your spouse is sole beneficiary under a nonqualified annuity and you die before the settlement date, your spouse may keep the contract 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 contract as owner until the date on which the annuitant would have reached 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: Under a nonqualified annuity we will pay the beneficiary in a single sum unless you give us other written instructions. We must fully distribute the death benefit within five years of your death. However, 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 your 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 process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value at the next accumulation unit value calculated after our death claim requirements are fulfilled. We pay interest, if any, 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 settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. The amount available for payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). We do not deduct any surrender charges under the payout plans listed below. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amounts available to purchase payouts under the plan you select is the contract value on your settlement 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, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. 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 accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the 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 "Making the Most of Your Contract -- Transfer policies." Annuity table The annuity table in your contract 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 5% rate of return, which is reinvested and helps to support future payouts. Substitution of 3.5% table If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% table in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. Using the 5% table results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. 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 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. We will not make any further payouts. This means that if the annuitant dies after we have made only one monthly payout, 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 expires. We calculate the guaranteed payout period from the settlement 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. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. 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 may be required to 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 that 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 settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you 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 you 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 surrender (see detailed discussion below). Any portion of the annuity payouts and any surrenders 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. Qualified annuities: We designed this contract for use with qualified retirement plans. Special rules apply to these retirement plans. Your rights to benefits may be subject to the terms and conditions of these retirement plans regardless of the terms of the contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions during your life and after your death. You should refer to your retirement plan or adoption agreement or consult a tax advisor for more information about your distribution rules. 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 you receive after your investment in the contract is fully recovered will be subject to tax. Tax law requires that all nonqualified deferred annuities issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. Annuity payouts under qualified annuities: Under a qualified annuity, the entire payout generally is includable as ordinary income and is 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 deductible or 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. Surrenders: If you surrender part or all of your contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the value of your contract immediately before the surrender exceeds your investment. You also may have to pay a 10% IRS penalty for surrenders you make before reaching age 59 1/2 unless certain exceptions apply. For qualified annuities, other penalties may apply if you surrender your contract before your plan specifies that you can receive payouts. Death benefits to beneficiaries: The death benefit under a contract is not tax-exempt. Any amount your beneficiary receives that represents previously deferred earnings within the contract is taxable as ordinary income to the beneficiary in the years he or she receives the payments. 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 surrender your contract before your plan specifies that payouts can be made. Withholding, generally: If you receive all or part of the contract value, 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 these 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 can elect not to have any withholding occur. If the distribution is any other type of payment (such as a partial or full surrender), 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 can elect not to have this withholding occur. Some states also 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. Withholding from qualified annuities: If you receive directly all or part of the contract value from a qualified annuity (except an IRA or SEP), mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time we make payout. This mandatory withholding is in place of the elective withholding discussed above. This mandatory withholding will not be imposed if: o instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; o the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; or o the payout is a minimum distribution required under the Code. Payments we make to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. Transfer of ownership of a nonqualified annuity: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be a surrender 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 contract will be the value of the contract 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 surrender. 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 advisor 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, in spite of 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 amendment. Voting Rights As a contract owner with investments in the subaccounts, 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 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 subaccount. We will send notice of shareholders' 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 received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. Substitution of Investments We may substitute the funds in which the subaccounts invest if: o laws or regulations change, o existing funds become unavailable, or o in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute funds other than those currently listed in this prospectus. We may also: o change the funds in which the subaccounts invest, and o add additional subaccounts investing in other funds. In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. We will notify you of any substitution or change. About the Service Providers Issuer and principal underwriter IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at IDS Tower 10, Minneapolis, MN 55440-0010. IDS Life conducts a conventional life insurance business. [Additional distribution and commission information to be filed by amendment.] Legal proceedings A number of lawsuits have been filed against life and health insurers in jurisdictions in which IDS Life and AEFC do business involving insurers' sales practices, alleged agent misconduct, failure to properly supervise agents and other matters. IDS Life and AEFC, like other life and health insurers, from time to time are involved in such litigation. On December 13, 1996, an action entitled Lesa Benacquisto and Daniel Benacquisto vs. IDS Life Insurance Company and American Express Financial Corporation was commenced in Minnesota state court. The action was brought by individuals who replaced an existing IDS Life insurance policy with a new IDS Life policy. The plaintiffs purport to represent a class consisting of all persons who replaced existing IDS Life policies with new policies from and after January 1, 1985. The complaint puts at issue various alleged sales practices and misrepresentations, alleged breaches of fiduciary duties and alleged violations of consumer fraud statutes. IDS Life and AEFC filed an answer to the complaint on February 18, 1997, denying the allegations. A second action, entitled Arnold Mork, Isabella Mork, Ronald Melchart and Susan Melchart vs. IDS Life Insurance Company and American Express Financial Corporation was commenced in the same court on March 21,1997. In addition to claims that are included in the Benacquisto lawsuit, the second action includes an allegation of improper replacement of an existing IDS Life annuity contract. A subsequent class action, Richard Thoresen and Elizabeth Thoresen vs. AEFC, American Partners Life Insurance Company, American Enterprise Life Insurance Company, American Centurion Life Assurance Company, IDS Life Insurance Company and IDS Life Insurance Company of New York, was filed in the same court on October 13, 1998 alleging that the sale of annuities in tax-deferred contributory retirement investment plans (e.g. IRAs) was done through deceptive marketing practices, which IDS Life denies. Plaintiffs in each of the above actions seek damages in an unspecified amount and also seek to establish a claims resolution facility for the determination of individual issues. IDS Life and AEFC believe they have meritorious defenses to the claims raised in the lawsuits. The outcome of any litigation cannot be predicted with certainty. In the opinion of management, however, the ultimate resolution of the above lawsuits and others filed against IDS Life should not have a material adverse effect on IDS Life's consolidated financial position. 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 IDS Life and the variable account. IDS Life and the variable account have no computer systems of their own but are dependent upon the systems of 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 target date for substantially completing corrective measures on business critical systems was Dec. 31, 1998. Substantial testing of these systems was targeted for completion early in 1999. AEFC currently is on track with this schedule and also is on track to finish the work on non-critical systems by June 30, 1999. The Year 2000 readiness of unaffiliated investment managers and other third parties whose system failures could have an impact on IDS Life's and the variable account's operations continues to be evaluated. The potential materiality of any such impact is not known at this time. AEFC's Year 2000 project includes establishing Year 2000 contingency plans for all key business units. Business continuation plans, which address business continuation in the event of a system disruption, are in place for all key business units. These plans are being amended to include specific Year 2000 considerations and will continue to be refined throughout 1999 as additional information related to potential Year 2000 exposure is gathered. [This information will be updated so that it is current as of the time the product becomes effective.] Table of Contents of the Statement of Additional Information IDS Life Preferred Retirement Account p. Performance Information p. Calculating Annuity Payouts p. Rating Agencies p. Principal Underwriter p. Independent Auditors p. Financial Statements Please check the box to receive a copy of the Statement of Additional Information for: - -- AXP Retirement Advisor Variable Annuity - -- IDS Life Retirement Annuity Mutual Funds - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund Mail your request to: IDS Life Insurance Company IDS Tower 10 Minneapolis, MN 55440-0010 We will mail your request to: Your name _____________________________________________ Address _______________________________________________ City _____________________ State _________ Zip ________ Prospectus [_____], 1999 AXP Retirement Advisor Variable Annuity - Band 3 Individual flexible premium deferred combination fixed/variable annuity for: o current or retired employees of American Express Financial Corporation or its subsidiaries and their spouses (employees), o current or retired American Express financial advisors and their spouses (advisors), and o individuals investing an initial payment of $1 million (otherindividuals). IDS Life Variable Account 10 Issued by: IDS Life Insurance Company (IDS Life) IDS Tower 10 Minneapolis, MN 55440-0010 Telephone: 800-437-0602 http://www.americanexpress.com/advisors This prospectus contains information that you should know before investing. You also will receive the following prospectuses: o IDS Life Retirement Annuity Mutual Funds; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; o New Fund; and o New Fund Please read the prospectuses carefully and keep them for future reference. This contract is available for qualified and nonqualified plans. The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. An investment in this contract is not a deposit of a 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 contract involves investment risk including the possible loss of principal. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS 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. Table of Contents Key Terms The Contract in Brief Expense Summary Condensed Financial Information (Unaudited) Financial Statements Performance Information The Variable Account and The Funds The Fixed Account Buying Your Contract Charges Valuing Your Investment Making the Most of Your Contract Surrenders TSA -- Special Surrender Provisions Changing Ownership Benefits in Case of Death The Annuity Payout Period Taxes Voting Rights Substitution of Investments About the Service Providers Year 2000 Table of Contents of the Statement of Additional Information Key Terms These terms can help you understand details about your contract. Accumulation unit -- A measure of the value of each subaccount before annuity payouts begin. 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. Beneficiary -- The person you designate to receive annuity 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 4 p.m. Eastern time. Contract value -- The total value of your contract before we deduct any applicable charges. 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 you allocate to this account earn interest at rates that we declare periodically. Funds -- Mutual funds and/or portfolios that are investment options under your contract, each with a different investment objective. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. Owner (you, your) -- The person who controls the contract (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 contract's benefits. Qualified annuity -- A contract 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) o Simplified Employee Pension (SEP) plans o Section 401(k) plans o Custodial and trusteed pension and profit sharing plans o Tax-Sheltered Annuities (TSAs) All other contracts are considered nonqualified annuities. Settlement date -- The date when annuity payouts are scheduled to begin. Surrender value -- The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. Valuation date -- Any normal business day, Monday through Friday, that the NYSE is open. Each valuation date ends at the close of business. We calculate the value of each subaccount at the close of business on each valuation date. Variable account -- Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. The Contract in Brief Purpose: The purpose of the contract 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 contract. The contract provides lifetime or other forms of payouts beginning at a specified date (the settlement date). Free look period: You may return your contract to our office within 10 days after it is delivered to you 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 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, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. __) o the fixed account, which earns interest at a rate that we adjust periodically. (p. __) Buying your contract: We will help you complete and submit an application. Applications are subject to acceptance at our office. You may buy a nonqualified annuity or a qualified annuity. After your initial purchase payment, you have the option of making additional purchase payments in the future. o Minimum initial purchase payment for employees/advisors -- $2,000 ($1,000 for qualified annuities) unless you pay in installments by means of a bank authorization or under a group billing arrangement such as a payroll deduction. o Minimum initial purchase payment for other individuals -- $1,000,000. o Minimum additional purchase payment -- $50. o Minimum installment purchase payment -- $50 monthly; $23.08 biweekly (scheduled payment plan billing). o Maximum first-year purchase payments for employees/advisors -- $100,000 to $2,000,000 depending on your age. o Maximum first-year purchase payments for other individuals -- $1,000,000 to $2,000,000 depending on your age. o Maximum purchase payment for each subsequent year for employees/advisors -- $50,000 to $100,000 depending upon your age. o Maximum purchase payment for each subsequent year for other individuals -- $100,000. (p.--) Transfers: Subject to certain restrictions you currently may redistribute your money among the subaccounts and the fixed account without charge at any time until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the fixed account and subaccounts. Fixed account transfers are subject to special restrictions. (p. __) Surrenders: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to tax penalties (including a 10% IRS penalty if you surrender 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 changing ownership of a qualified annuity. (p. __) Benefits 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 your contract value to an annuity payout plan that begins on the settlement 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. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. __) Taxes: Generally, your contract grows tax-deferred until you surrender 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. (p. __) Charges: o $30 annual contract administrative charge; o a 0.55% mortality and expense risk fee; 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 full surrender or when annuity payouts begin); and o the operating expenses of the funds. Expense Summary The purpose of the following information is to help you understand the various costs and expenses associated with your contract. You pay no sales charge when you purchase your contract. We show all costs that you bear directly or indirectly for the subaccounts and funds below. Some expenses may vary as we explain under "Charges." Contract owner expenses: Surrender charge 0% Annual contract administrative charge $30* * We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary.
Annual subaccount expenses (as a percentage of average subaccount value): Mortality and expense risk fee 0.55% Annual operating expenses of the funds (as a percentage of average daily net assets) Management 12b-1 Other Fees Fees Expenses Total IDS Life Aggressive Growth Fund IDS Life Capital Resource Fund IDS Life Global Yield Fund IDS Life Growth Dimensions Fund IDS Life Income Advantage Fund IDS Life International Equity Fund IDS Life Managed Fund IDS Life Moneyshare Fund IDS Life Special Income Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund
Example:* You would pay the following expenses on a $1,000 investment assuming a 5% annual return and full surrender, no surrender or selection of an annuity payout plan at the end of each time period 1 year 3 years IDS Life Aggressive Growth Fund IDS Life Capital Resource Fund IDS Life Global Yield Fund IDS Life Growth Dimensions Fund IDS Life Income Advantage Fund IDS Life International Equity Fund IDS Life Managed Fund IDS Life Moneyshare Fund IDS Life Special Income Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund New Fund * In this example, the $30 contract administrative charge is approximated as a [___]% charge based on our estimated average contract size. Premium taxes imposed by some state and local governments are not reflected in this table. We entered into certain arrangements under which we are compensated by the funds' advisors and/or distributors for the administrative services we provide to the funds. You should not consider this example as a representation of past or future expenses. Actual expenses may be more or less than those shown. Condensed Financial Information (Unaudited) The following tables give per-unit information about the financial history of each subaccount. We have not provided this information for the subaccounts because they are new and do not have any history. [To be inserted by accounting.] Financial Statements You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. Performance Information Performance information for the subaccounts may appear from time to time in advertisements or sales literature. This information reflects the performance of a hypothetical investment in a particular subaccount during a specified time period. Currently, we do not provide any performance information for the subaccounts because they are new and have not had any activity to date. However, we show performance from the commencement date of the funds as if the contract existed at that time. Although we base performance figures on historical earnings, past performance does not guarantee future results. Total return figures reflect deduction of all applicable charges, including: o the contract administrative charge, and o mortality and expense risk fee. Total return quotations may be shown by means of schedules, charts or graphs. Average annual total return is the average annual compounded rate of return of the investment over a period of one, five and ten years (or up to the life of the subaccount if it is less than ten years old). Cumulative total return is the cumulative change in the value of an investment over a specified time period. We assume that income earned by the investment is reinvested. Cumulative total return generally will be higher than average annual total return. Annualized simple yield (for subaccounts investing in money market funds) "annualizes" the income generated by the investment over a given seven-day period. That is, we assume the amount of income generated by the investment during the period will be generated each seven-day period for a year. We show this as a percentage of the investment. Annualized compound yield (for subaccounts investing in money market funds) is calculated like simple yield except that we assume the income is reinvested when we annualize it. Compound yield will be higher than the simple yield because of the compounding effect of the assumed reinvestment. Annualized yield (for subaccounts investing in income funds) divides the net investment income (income less expenses) for each accumulation unit during a given 30-day period by the value of the unit on the last day of the period. We then convert the result to an annual percentage. You should consider performance information in light of the investment objectives, policies, characteristics and quality of the fund in which the subaccount invests and the market conditions during the specified time period. Advertised yields and total return figures include charges that reduce advertised performance. Therefore, 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 and yield.) If you would like additional information about actual performance, please contact us. The Variable Account and The Funds
You may allocate payments to any or all the subaccounts of the variable account that invest in shares of the following funds: - ------------------------------------------------------------------------------------------------------------------------------ Investment Advisor or Subaccount Investing in Investment Objectives and Policies: Manager - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Aggressive Growth Objective: capital appreciation. Invests primarily IDS Life, investment ?? Fund in common stocks of small-and medium-size companies. manager; American Express Financial Corporation (AEFC) investment advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Capital Resource Objective: capital appreciation. Invests primarily IDS Life, investment ?? Fund in U.S. common stocks. manager; AEFC investment advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Global Yield Fund Objective: high total return through income and IDS Life, investment ?? growth of capital. Invests primarily in debt manager; AEFC investment securities of U.S. and foreign issuers. advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Growth Dimensions Objective: long-term growth of capital. Invests IDS Life, investment ?? Fund primarily in common stocks of U.S. and foreign manager; AEFC investment companies showing potential for significant growth. advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Income Advantage Objective: high current income, with capital growth IDS Life, investment ?? Fund as a secondary objective. Invests primarily in manager; AEFC investment long-term, high-yielding, high-risk debt securities advisor. below investment grade issued by U.S. and foreign corporations. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life International Objective: capital appreciation. Invests primarily IDS Life, investment ?? Equity Fund in common stock of foreign issuers. manager; AEFC investment advisor.1 - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Managed Fund Objective: maximum total investment return through IDS Life, investment ?? a combination of capital growth and current income. manager; AEFC investment Invests primarily in stocks, convertible advisor. securities, bonds and money market instruments. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Moneyshare Fund Objective: maximum current income consistent with IDS Life, investment ?? liquidity and conservation of capital. Invests in manager; AEFC investment money market securities. advisor. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? IDS Life Special Income Objective: high level of current income while IDS Life, investment ?? Fund conserving the value of the investment for the manager; AEFC investment longest time period. Invests primarily in advisor. investment-grade bonds. - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------ ?? New Fund ?? - ------------------------------------------------------------------------------------------------------------------------------ 1 American Express Asset management International, Inc., a wholly-owned subsidiary of AEFC, is the sub-investment advisor for IDS Life International Equity Fund.
[Managers for the new funds to be filed by amendment.] The investment objectives and policies of some of the funds are similar to the investment objectives and policies of other mutual funds that the investment advisor or its affiliates manage. Although the objectives and policies may be similar, each fund will have its own portfolio holdings and its own fees and expenses. Accordingly, each fund will have its own investment results. The investment managers and advisors cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. All funds are available to serve as the underlying investments for variable annuities. Some funds also are available to serve as investment options for variable life insurance policies and qualified plans. It is possible that in the future, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or qualified plans to invest in the available funds simultaneously. Although the insurance company and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of the appropriate funds will monitor events in order to identify any material conflicts between annuity owners, policy owners and qualified plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and qualified plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the fund prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and qualified plan accounts. The IRS issued final regulations relating to the diversification requirements under Section 817(h) of the Internal Revenue Code of 1986, as amended (the Code). Each fund intends to comply with these requirements. The variable account was established under Minnesota law on Aug. 23, 1995 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 IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. The U.S. Treasury and the Internal Revenue Service (IRS) 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 subaccounts it may allow before the contract owner would be currently taxed on income earned within 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 contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. The Fixed Account You also may allocate purchase payments to the fixed account. We back the principal and interest guarantees relating to the fixed account. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. We credit interest daily and compound it annually. We will change the interest rates from time to time at our discretion. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on 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 "Making the Most of Your Contract -- Transfer policies" for restrictions on transfers involving the fixed account.) Buying Your Contract You can fill out an application and send it along with your initial purchase payment to our office. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can buy a contract or become an annuitant if you are 90 or younger. When you apply, you may select: o the fixed account and/or subaccounts in which you want to invest; o how you want to make purchase payments; and o a beneficiary. The contract provides for allocation of purchase payments to the subaccounts of the variable account and/or to the fixed account in even 1% increments. If your application is complete, we will process it and apply your purchase payment to the fixed account and subaccounts you selected within two business days after we receive it at our office. 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 you make to your accounts on the valuation date we receive them. We will value the additional payments at the next accumulation unit value calculated after we receive your payments at our office. The settlement date Annuity payouts are scheduled to begin on the settlement date. When we process your application, we will establish the settlement date to the maximum age or date described below. You can also select a date within the maximum limits. You can align this date 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 also can change the date, provided you send us written instructions at least 30 days before annuity payouts begin. For nonqualified annuities, the settlement 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 purchased after age 75. (In Pennsylvania, the maximum settlement date ranges from age 85 to 96 based on the annuitant's age when we issue the contract. See contract for details.) For qualified annuities, to avoid IRS penalty taxes, the settlement date generally must be: o on or after the date the annuitant reaches age 59 1/2; and o for IRAs and SEPs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or o for all other qualified annuities by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). If you take the minimum IRA or TSA distributions as required by the Code from another tax-qualified investment, or in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the 10th contract anniversary, if later. (In Pennsylvania, the annuity payout ranges from age 85 to 96 based on the annuitant's age when the contract is issued. See contract for details.) Beneficiary If death benefits become payable before the settlement date (while the contract is in force and before annuity payouts begin), we will pay your named beneficiary 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 payments Minimum allowable purchase payments For employees/advisors: If paying by installments* If paying by any other method: under a scheduled payment plan: $1,000 initial payment for qualified plans $23.08 biweekly, or $2,000 initial payment for nonqualified plans $50 per month $50 for any additional payments For other individuals: $1 million * Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts sold to New Jersey residents. Maximum allowable purchase payments** based on the age of you or the annuitant, whoever is older, on the effective date of the contract: For employees/advisors: First year: Each subsequent year: $ 100,000 for ages 86 to 90 $ 50,000 for ages 86-90 $2,000,000 up to age 85 $100,000 up to age 85 For other individuals: First year: Each subsequent year: $1,000,000 for ages 86 to 90 $100,000 $2,000,000 up to age 85 **These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the qualified plan's limits on annual contributions also apply. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. How to make purchase payments 1 By letter Send your check along with your name and contract number to: Regular mail: IDS Life Insurance Company Box 74 Minneapolis, MN 55440-0074 Express mail: IDS Life Insurance Company 733 Marquette Avenue Minneapolis, MN 55402 2 For employees/advisors only By Scheduled We can help you set up: payment plan o an automatic payroll deduction, salary reduction or other group billing arrangement; or o a bank authorization. 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. We prorate this charge 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 your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. Mortality and expense risk fee We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee. The fee totals 0.55% of the 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 our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, then we must take money from our general assets to meet our obligations. If, as a group, 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 this charge may not cover our expenses. We would have to make up any deficit from our general assets. The subaccounts pay us the mortality and expense risk fee they accrued as follows: o first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; o then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. Other information on charges: AEFC makes certain custodial services available to some custodial and trusteed pension and profit sharing plans and 401(k) plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. AEFC will charge a termination fee for owners under age 59 1/2 (fee waived in case of death or disability). Possible group reductions: In some cases we may incur lower sales and administrative expenses 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 charge. 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 the state of residence or the state in which the contract was sold. In some cases, we deduct premium taxes from your purchase payments before we allocate them. In other cases, we deduct them when you surrender your contract or when annuity payouts begin. Valuing Your Investment We value your fixed account and subaccounts as follows: Fixed Account: We value the amounts you 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; o plus interest credited; o minus the sum of amounts surrendered and amounts transferred out; and o minus any prorated contract administrative charge. Subaccounts: We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, each time you take a partial surrender, transfer amounts out of a subaccount, or we assess 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 fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: Number of units To calculate the number of accumulation units for a particular subaccount, we divide your investment after deduction of any premium taxes, by the current accumulation unit value. Accumulation unit value The current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. Net investment factor We determine the net investment factor by: o adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then o dividing that sum by the previous adjusted net asset value per share; and o subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. Factors that affect 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 you allocate to the subaccounts; o transfers into or out of the subaccounts; o partial surrenders; and/or o prorated portions of the contract administrative charge. Accumulation unit values will fluctuate due to: o changes in funds' net asset value; o dividends distributed to the subaccounts; o capital gains or losses of funds; o fund operating expenses; and/or o mortality and expense risk fees. Making the Most of Your Contract 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 transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. 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 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.
How dollar-cost averaging works How dollar-cost averaging works By investing an Amount Accumulation unit Number of units equal number of Month invested value purchased dollars each month... Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the Apr 100 15 6.67 per unit market price May 100 16 6.25 is low... Jun 100 18 5.56 Jul 100 17 5.88 and fewer units when Aug 100 19 5.26 the per unit market Sept 100 21 4.76 price is high. Oct 100 20 5.00
You 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 subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success with this strategy 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 us. Transferring money between accounts You may transfer money from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. (Certain restrictions apply to transfers involving the fixed account.) We will process your transfer on the valuation date we receive your request. We will value your transfer at the next accumulation unit value calculated after we receive your request. 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. Excessive trading activity can disrupt fund management strategy and increase expenses, which are borne by all contract owners who allocated purchase payments to the fund regardless of their transfer activity. We may apply modifications or restrictions in any reasonable manner to prevent transfers we believe will disadvantage other contract owners. (For information on transfers after annuity payouts begin, see "Transfer policies.") Transfer policies o Before annuity payouts begin, you may transfer contract values between the subaccounts, or from the subaccounts to the fixed account at any time. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. o You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). o If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. o If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date 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 subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. How to request a transfer or surrender 1 Send your name, contract number, Social Security By letter Number or Taxpayer Identification Number and signed request for a transfer or surrender to: Regular mail: IDS Life Insurance Company IDS Tower 10 Minneapolis, MN 55440-0010 Express mail: IDS Life Insurance Company 733 Marquette Avenue Minneapolis, MN 55402 Minimum amount Transfers or surrenders: $250 or entire account balance Maximum amount Transfers or surrenders: Contract value 2 We can help you set up automated transfers among your By automated subaccounts or fixed account or partial surrenders transfers and from the accounts. automated partial surrenders You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. o Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. o Automated surrenders may be restricted by applicable law under some contracts. o You may not make additional purchase payments if automated partial surrenders are in effect. o Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. Minimum amount Transfers or surrenders: $50 3 Call between 7 a.m. and 6 p.m. Central time: By phone 800-437-0602 TTY service for the hearing impaired: 1-800-285-8846 (toll free) Minimum amount Transfers or surrenders: $250 or entire account balance Maximum amount Transfers: Contract value Surrenders: $50,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders not be authorized from your account by writing to us. Surrenders You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. For total surrenders, we will compute the value of your contract at the next accumulation unit value calculated after we receive your request. We may ask you to return the contract. You may have to pay IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin. Surrender policies If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. Receiving payment By regular or express mail: o payable to you; o mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. By wire: o request that payment be wired to your bank; o bank account must be in the same ownership as your contract; and o pre-authorization required. For instructions, contact us. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: - -- the surrender 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. TSA -- Special Surrender Provisions Participants in Tax-Sheltered Annuities: The Code imposes certain restrictions on your right to receive early distributions from a TSA: o Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: -- you are at least age 59 1/2; -- you are disabled as defined in the Code; -- you separated from the service of the employer who purchased the contract; or -- the distribution is because of your death. o If you encounter a financial hardship (as defined by the Code), you may receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. o Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). o The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. o The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. o If the contract has a loan provision, the right to receive a loan as described in detail in your contract. Changing Ownership You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our office. The change will become binding upon us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any 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. However, if the owner is a trust or custodian, or an employer acting in a similar capacity, ownership of a contract may be transferred to the annuitant. Benefits in Case of Death We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: o the contract value; o purchase payments, minus any "adjusted partial surrenders"; or o the contract value as of the most recent sixth contract anniversary, plus any purchase payments paid and minus any "adjusted partial surrenders" since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: o the contract value; or o purchase payments minus any "adjusted partial surrenders." Adjusted partial surrenders: We calculate an "adjusted partial surrender" for each partial surrender as the product of (a) times (b) where (a) is the ratio of the amount of the partial surrender to the contract value on the date of (but prior to) the partial surrender; and (b) is the death benefit on the date of (but prior to) the partial surrender. Example: [To be filed by amendment.] If your spouse is sole beneficiary under a nonqualified annuity and you die before the settlement date, your spouse may keep the contract 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 contract as owner until the date on which the annuitant would have reached 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: Under a nonqualified annuity we will pay the beneficiary in a single sum unless you give us other written instructions. We must fully distribute the death benefit within five years of your death. However, 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 your 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 process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value at the next accumulation unit value calculated after our death claim requirements are fulfilled. We pay interest, if any, 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 settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. The amount available for payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amounts available to purchase payouts under the plan you select is the contract value on your settlement 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, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. 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 accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the 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 "Making the Most of Your Contract -- Transfer policies." Annuity table The annuity table in your contract 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 5% rate of return, which is reinvested and helps to support future payouts. Substitution of 3.5% table If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% table in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. Using the 5% table results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. 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 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. We will not make any further payouts. This means that if the annuitant dies after we have made only one monthly payout, 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 expires. We calculate the guaranteed payout period from the settlement 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. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. 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 may be required to 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 that 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 settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you 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 you 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 surrender (see detailed discussion below). Any portion of the annuity payouts and any surrenders 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. Qualified annuities: We designed this contract for use with qualified retirement plans. Special rules apply to these retirement plans. Your rights to benefits may be subject to the terms and conditions of these retirement plans regardless of the terms of the contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions during your life and after your death. You should refer to your retirement plan or adoption agreement or consult a tax advisor for more information about your distribution rules. 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 you receive after your investment in the contract is fully recovered will be subject to tax. Tax law requires that all nonqualified deferred annuities issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. Annuity payouts under qualified annuities: Under a qualified annuity, the entire payout generally is includable as ordinary income and is 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 deductible or 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. Surrenders: If you surrender part or all of your contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the value of your contract immediately before the surrender exceeds your investment. You also may have to pay a 10% IRS penalty for surrenders you make before reaching age 59 1/2 unless certain exceptions apply. For qualified annuities, other penalties may apply if you surrender your contract before your plan specifies that you can receive payouts. Death benefits to beneficiaries: The death benefit under a contract is not tax-exempt. Any amount your beneficiary receives that represents previously deferred earnings within the contract is taxable as ordinary income to the beneficiary in the years he or she receives the payments. 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 surrender your contract before your plan specifies that payouts can be made. Withholding, generally: If you receive all or part of the contract value, 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 these 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 can elect not to have any withholding occur. If the distribution is any other type of payment (such as a partial or full surrender), 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 can elect not to have this withholding occur. Some states also 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. Withholding from qualified annuities: If you receive directly all or part of the contract value from a qualified annuity (except an IRA or SEP), mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time we make payout. This mandatory withholding is in place of the elective withholding discussed above. This mandatory withholding will not be imposed if: o instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; o the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; or o the payout is a minimum distribution required under the Code. Payments we make to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. Transfer of ownership of a nonqualified annuity: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be a surrender 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 contract will be the value of the contract 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 surrender. 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 advisor 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, in spite of 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 amendment. Voting Rights As a contract owner with investments in the subaccounts, 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 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 subaccount. We will send notice of shareholders' 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 received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. Substitution of Investments We may substitute the funds in which the subaccounts invest if: o laws or regulations change, o existing funds become unavailable, or o in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute funds other than those currently listed in this prospectus. We may also: o change the funds in which the subaccounts invest, and o add additional subaccounts investing in other funds. In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. We will notify you of any substitution or change. About the Service Providers Issuer and principal underwriter IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at IDS Tower 10, Minneapolis, MN 55440-0010. IDS Life conducts a conventional life insurance business. [Additional distribution and commission information to be filed by amendment.] Legal proceedings A number of lawsuits have been filed against life and health insurers in jurisdictions in which IDS Life and AEFC do business involving insurers' sales practices, alleged agent misconduct, failure to properly supervise agents and other matters. IDS Life and AEFC, like other life and health insurers, from time to time are involved in such litigation. On December 13, 1996, an action entitled Lesa Benacquisto and Daniel Benacquisto vs. IDS Life Insurance Company and American Express Financial Corporation was commenced in Minnesota state court. The action was brought by individuals who replaced an existing IDS Life insurance policy with a new IDS Life policy. The plaintiffs purport to represent a class consisting of all persons who replaced existing IDS Life policies with new policies from and after January 1, 1985. The complaint puts at issue various alleged sales practices and misrepresentations, alleged breaches of fiduciary duties and alleged violations of consumer fraud statutes. IDS Life and AEFC filed an answer to the complaint on February 18, 1997, denying the allegations. A second action, entitled Arnold Mork, Isabella Mork, Ronald Melchart and Susan Melchart vs. IDS Life Insurance Company and American Express Financial Corporation was commenced in the same court on March 21,1997. In addition to claims that are included in the Benacquisto lawsuit, the second action includes an allegation of improper replacement of an existing IDS Life annuity contract. A subsequent class action, Richard Thoresen and Elizabeth Thoresen vs. AEFC, American Partners Life Insurance Company, American Enterprise Life Insurance Company, American Centurion Life Assurance Company, IDS Life Insurance Company and IDS Life Insurance Company of New York, was filed in the same court on October 13, 1998 alleging that the sale of annuities in tax-deferred contributory retirement investment plans (e.g. IRAs) was done through deceptive marketing practices, which IDS Life denies. Plaintiffs in each of the above actions seek damages in an unspecified amount and also seek to establish a claims resolution facility for the determination of individual issues. IDS Life and AEFC believe they have meritorious defenses to the claims raised in the lawsuits. The outcome of any litigation cannot be predicted with certainty. In the opinion of management, however, the ultimate resolution of the above lawsuits and others filed against IDS Life should not have a material adverse effect on IDS Life's consolidated financial position. 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 IDS Life and the variable account. IDS Life and the variable account have no computer systems of their own but are dependent upon the systems of 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 target date for substantially completing corrective measures on business critical systems was Dec. 31, 1998. Substantial testing of these systems was targeted for completion early in 1999. AEFC currently is on track with this schedule and also is on track to finish the work on non-critical systems by June 30, 1999. The Year 2000 readiness of unaffiliated investment managers and other third parties whose system failures could have an impact on IDS Life's and the variable account's operations continues to be evaluated. The potential materiality of any such impact is not known at this time. AEFC's Year 2000 project includes establishing Year 2000 contingency plans for all key business units. Business continuation plans, which address business continuation in the event of a system disruption, are in place for all key business units. These plans are being amended to include specific Year 2000 considerations and will continue to be refined throughout 1999 as additional information related to potential Year 2000 exposure is gathered. [This information will be updated so that it is current as of the time the product becomes effective.] Table of Contents of the Statement of Additional Information IDS Life Preferred Retirement Account p. Performance Information p. Calculating Annuity Payouts p. Rating Agencies p. Principal Underwriter p. Independent Auditors p. Financial Statements Please check the box to receive a copy of the Statement of Additional Information for: - -- AXP Retirement Advisor Variable Annuity - Band 3 - -- IDS Life Retirement Annuity Mutual Funds - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund - -- New Fund Mail your request to: IDS Life Insurance Company IDS Tower 10 Minneapolis, MN 55440-0010 We will mail your request to: Your name _____________________________________________ Address _______________________________________________ City _____________________ State _________ Zip ________ STATEMENT OF ADDITIONAL INFORMATION for AXP RETIREMENT ADVISOR VARIABLE ANNUITY IDS Life Variable Account 10 __, 1999 IDS Life Variable Account 10 is a separate account established and maintained by IDS Life Insurance Company (IDS Life). This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus dated the same date as this SAI, which may be obtained by writing or calling us at the address and telephone number below. The prospectus is incorporated in this SAI by reference. IDS Life Insurance Company IDS Tower 10 Minneapolis, MN 55440-0010 800-437-0602 AXP Retirement Advisor Variable Annuity IDS Life Variable Account 10 TABLE OF CONTENTS IDS Life Preferred Retirement Account...............................p.3 Performance Information.............................................p.4 Calculating Annuity Payouts.........................................p.8 Rating Agencies....................................................p.10 Principal Underwriter..............................................p.10 Independent Auditors...............................................p.10 Financial Statements IDS LIFE PREFERRED RETIREMENT ACCOUNT You may use the AXP Retirement Advisor Variable Annuity to fund the IDS Life Preferred Retirement Account (PRA) as a way to build tax-deferred retirement income. You may use the PRA to supplement, or as an alternative to, a non-deductible IRA or other retirement plan. The advantages of the IDS Life Preferred Retirement Account over a non-deductible IRA are shown below:
IDS Life Preferred Retirement Account Non-deductible IRA - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Maximum amount $100,000 to $1 million initially, $2,000 per year ($4,000 per year you can contribute then $50,000 to $100,000 per year for married individuals filing depending on your age. (jointly) (spouse can have own plan) - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Highest age you The later of age 85 or the 10th 701/2years old can contribute contract anniversary - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Types of income Any type: wages, investment Generally limited to income from you can contribute income, gifts, inheritance, etc. employment - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Records you must keep None required, but IDS Life You must keep all records yourself furnishes you regular reports for your files - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Reports you must None You must report all contributions file with the IRS and withdrawals each year - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Age at which you The later of age 85 or the 10th 701/2years old must begin withdrawals contract anniversary - ------------------------------------- ----------------------------------- -----------------------------------
PERFORMANCE INFORMATION - ------------------------------------------------------------------------------- The subaccounts may quote various performance figures to illustrate past performance. We base total return and current yield quotations (if applicable) on standardized methods of computing performance as required by the Securities and Exchange Commission (SEC). An explanation of the methods used to compute performance follows below. Average Annual Total Return We will express quotations of average annual total return for the subaccounts in terms of the average annual compounded rate of return of a hypothetical investment in the contract over a period of one, five and ten years (or, if less, up to the life of the subaccounts), 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 ERV = Ending Redeemable Value of a hypothetical $1,000 payment made at the beginning of the period, at the end of the period (or fractional portion thereof) We calculated the following performance figures on the basis of historical performance of each fund. Currently we do not show any performance information for the subaccounts because they are new and have not had any activity to date. However, we show performance from the commencement date of the funds as if the contract existed at that time. Past performance does not guarantee future results.
Average Annual Total Return For Nonqualified Annuities With a Seven Year Surrender Schedule For Periods Ending [________] Performance since commencement of the Fund** Since Subaccount Investing in: 1 Year 5 Years 10 Years commencement IDS LIFE [__] Aggressive Growth Fund (1/92)* % % % % [__] Capital Resource Fund (10/81) [__] Global Yield Fund (4/96) [__] Growth Dimensions Fund (4/96) [__] Income Advantage Fund (4/96) [__] International Equity Fund (1/92) [__] Managed Fund (4/86) [__] Moneyshare Fund (10/81) [__] Special Income Fund (10/81) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) * (Commencement dates of the Funds) ** Current applicable charges deducted from fund performance include a $30 contract administrative charge, a 0.95% mortality and expense risk fee and applicable surrender charges associated with the seven year surrender charge schedule.
Average Annual Total Return For Nonqualified Annuities With a Ten Year Surrender Schedule For Periods Ending [________] Performance since commencement of the Fund** Since Subaccount Investing in: 1 Year 5 Years 10 Years commencement IDS LIFE [__] Aggressive Growth Fund (1/92)* % % % % [__] Capital Resource Fund (10/81) [__] Global Yield Fund (4/96) [__] Growth Dimensions Fund (4/96) [__] Income Advantage Fund (4/96) [__] International Equity Fund (1/92) [__] Managed Fund (4/86) [__] Moneyshare Fund (10/81) [__] Special Income Fund (10/81) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) * (Commencement dates of the Funds) ** Current applicable charges deducted from fund performance include a $30 contract administrative charge, a 0.95% mortality and expense risk fee and applicable surrender charges associated with the ten year surrender charge schedule.
Average Annual Total Return For Nonqualified Annuities Without Surrender For Periods Ending [--------] Performance since commencement of the Fund** Since Subaccount Investing in: 1 Year 5 Years 10 Years commencement IDS LIFE [__] Aggressive Growth Fund (1/92)* % % % % [__] Capital Resource Fund (10/81) [__] Global Yield Fund (4/96) [__] Growth Dimensions Fund (4/96) [__] Income Advantage Fund (4/96) [__] International Equity Fund (1/92) [__] Managed Fund (4/86) [__] Moneyshare Fund (10/81) [__] Special Income Fund (10/81) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) * (Commencement dates of the Funds) ** Current applicable charges deducted from fund performance include a $30 contract administrative charge and a 0.95% mortality and expense risk fee.
Average Annual Total Return For Qualified Annuities With a Seven Year Surrender Schedule For Periods Ending [________] Performance since commencement of the Fund** Since Subaccount Investing in: 1 Year 5 Years 10 Years commencement IDS LIFE [__] Aggressive Growth Fund (1/92)* % % % % [__] Capital Resource Fund (10/81) [__] Global Yield Fund (4/96) [__] Growth Dimensions Fund (4/96) [__] Income Advantage Fund (4/96) [__] International Equity Fund (1/92) [__] Managed Fund (4/86) [__] Moneyshare Fund (10/81) [__] Special Income Fund (10/81) ----------------------------------- NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) * (Commencement dates of the Funds) ** Current applicable charges deducted from fund performance include a $30 contract administrative charge, a 0.75% mortality and expense risk fee and applicable surrender charges associated with the seven year surrender charge schedule.
Average Annual Total Return For Qualified Annuities With a Ten Year Surrender Schedule For Periods Ending [________] Performance since commencement of the Fund** Since Subaccount Investing in: 1 Year 5 Years 10 Years commencement IDS LIFE [__] Aggressive Growth Fund (1/92)* % % % % [__] Capital Resource Fund (10/81) [__] Global Yield Fund (4/96) [__] Growth Dimensions Fund (4/96) [__] Income Advantage Fund (4/96) [__] International Equity Fund (1/92) [__] Managed Fund (4/86) [__] Moneyshare Fund (10/81) [__] Special Income Fund (10/81) ----------------------------------- NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) * (Commencement dates of the Funds) ** Current applicable charges deducted from fund performance include a $30 contract administrative charge, a 0.75% mortality and expense risk fee and applicable surrender charges associated with the ten year surrender charge schedule.
Average Annual Total Return For Qualified Annuities Without Surrender For Periods Ending [--------] Performance since commencement of the Fund** Since Subaccount Investing in: 1 Year 5 Years 10 Years commencement IDS LIFE [__] Aggressive Growth Fund (1/92)* % % % % [__] Capital Resource Fund (10/81) [__] Global Yield Fund (4/96) [__] Growth Dimensions Fund (4/96) [__] Income Advantage Fund (4/96) [__] International Equity Fund (1/92) [__] Managed Fund (4/86) [__] Moneyshare Fund (10/81) [__] Special Income Fund (10/81) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) * (Commencement dates of the Funds) ** Current applicable charges deducted from fund performance include a $30 contract administrative charge and a 0.75% mortality and expense risk fee.
Cumulative Total Return Cumulative total return represents the cumulative change in the value of an investment for a given period (reflecting change in a subaccount's accumulation unit value). We compute cumulative total return by 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 period, at the end of the period (or fractional portion thereof). Total return figures reflect the deduction of the surrender charge which assumes you withdraw the entire contract value at the end of the one, five and ten year periods (or, if less, up to the life of the subaccount). We also may show performance figures without the deduction of a surrender charge. In addition, total return figures reflect the deduction of all other applicable charges including the contract administrative charge and mortality and expense risk fee. Annualized Calculation of Yield for Subaccounts Investing in Money Market Funds Simple Yield: For the subaccounts investing in money market funds, we base quotations of simple yield on: (a) the change in the value of a hypothetical subaccount (exclusive of capital changes and income other than investment income) at the beginning of a particular seven-day period; (b) less a pro rata share of the subaccount expenses accrued over the period; (c) dividing this difference by the value of the subaccount at the beginning of the period to obtain the base period return; and (d) multiplying the base period return by 365/7. The subaccount's value includes: o any declared dividends, o the value of any shares purchased with dividends paid during the period, and o any dividends declared for such shares. It does not include: o the effect of any applicable surrender charge, or o any realized or unrealized gains or losses. Annualized Compound Yield: We calculate compound yield using the base period return described above, which we then compound according to the following formula: Compound Yield = [(Base Period Return + 1)365/7] -1 You must consider (when comparing an investment in subaccounts investing in money market funds with fixed annuities) that fixed annuities often provide an agreed-to or guaranteed yield for a stated period of time, whereas the subaccount's yield fluctuates. In comparing the yield of the subaccount to a money market fund, you should consider the different services that the contract provides. Annualized Yield for 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 t 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 it invests and from dividends declared and paid by the fund, which are automatically invested in shares of the fund. The yield on the subaccount's accumulation unit may fluctuate daily and does not provide a basis for determining future yields. Independent rating or statistical services or publishers or publications such as those listed below 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. 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 and World Report, The Wall Street Journal and Wiesenberger Investment Companies Service. 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 contract as of the valuation date that falls on (or closest to the valuation date that falls before) the seventh calendar day before the settlement 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 that falls on (or closest to the valuation date that falls before) the seventh calendar day before the settlement 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 that falls on (or closest to the valuation date that falls before) the seventh calendar day before the payout is due; by o the fixed number of annuity units credited to you. Annuity Unit Values: We originally set this value at $1 for each subaccount. To calculate later values 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 rate built into the annuity table. With an assumed investment rate of 5%, the neutralizing factor is 0.999866 for a one day valuation period. Net Investment Factor: We determine the net investment factor by: o adding the fund's current net asset value per share plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then o dividing that sum by the previous adjusted net asset value per share; and o subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the 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 We guarantee your fixed annuity payout amounts. 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 settlement date or the date you 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. RATING AGENCIES The following chart reflects the ratings given to us 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 subaccounts of the contract. This information relates only to the fixed account and reflects our ability to make annuity payouts and to pay death benefits and other distributions from the contract. Rating Agency Rating A.M. Best A+ (Superior) Duff & Phelps AAA Moody's Aa2 PRINCIPAL UNDERWRITER The principal underwriter for the contract is IDS Life which offers the contract on a continuous basis. The contract is new and therefore we have not received any surrender charges or paid any commissions. INDEPENDENT AUDITORS [To be filed by amendment.] FINANCIAL STATEMENTS STATEMENT OF ADDITIONAL INFORMATION for AXP RETIREMENT ADVISOR VARIABLE ANNUITY-BAND 3 IDS Life Variable Account 10 __, 1999 IDS Life Variable Account 10 is a separate account established and maintained by IDS Life Insurance Company (IDS Life). This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus dated the same date as this SAI, which may be obtained by writing or calling us at the address and telephone number below. The prospectus is incorporated in this SAI by reference. IDS Life Insurance Company IDS Tower 10 Minneapolis, MN 55440-0010 800-437-0602 AXP Retirement Advisor Variable Annuity-Band 3 IDS Life Variable Account 10 TABLE OF CONTENTS IDS Life Preferred Retirement Account............................p.3 Performance Information..........................................p.4 Calculating Annuity Payouts......................................p.8 Rating Agencies.................................................p.10 Principal Underwriter...........................................p.10 Independent Auditors............................................p.10 Financial Statements IDS LIFE PREFERRED RETIREMENT ACCOUNT You may use the AXP Retirement Advisor Variable Annuity-Band 3 to fund the IDS Life Preferred Retirement Account (PRA) as a way to build tax-deferred retirement income. You may use the PRA to supplement, or as an alternative to, a non-deductible IRA or other retirement plan. The advantages of the IDS Life Preferred Retirement Account over a non-deductible IRA are shown below:
IDS Life Preferred Retirement Account Non-deductible IRA - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Maximum amount $100,000 to $2 million initially, $2,000 per year ($4,000 per year you can contribute then $50,000 to $100,000 per for married individuals filing year year depending on your age and jointly) category. (spouse can have own account) - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Highest age you The later of age 85 or the 10th 701/2years old can contribute contract anniversary - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Types of income Any type: wages, investment Generally limited to income from you can contribute income, gifts, inheritance, etc. employment - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Records you must keep None required, but IDS Life You must keep all records yourself furnishes you regular reports for your files - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Reports you must None You must report all contributions file with the IRS and withdrawals each year - ------------------------------------- ----------------------------------- ----------------------------------- - ------------------------------------- ----------------------------------- ----------------------------------- Age at which you The later of age 85 or the 10th 701/2years old must begin withdrawals contract anniversary - ------------------------------------- ----------------------------------- -----------------------------------
PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- The subaccounts may quote various performance figures to illustrate past performance. We base total return and current yield quotations (if applicable) on standardized methods of computing performance as required by the Securities and Exchange Commission (SEC). An explanation of the methods used to compute performance follows below. Average Annual Total Return We will express quotations of average annual total return for the subaccounts in terms of the average annual compounded rate of return of a hypothetical investment in the contract over a period of one, five and ten years (or, if less, up to the life of the subaccounts), 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 ERV = Ending Redeemable Value of a hypothetical $1,000 payment made at the beginning of the period, at the end of the period (or fractional portion thereof) We calculated the following performance figures on the basis of historical performance of each fund. Currently we do not show any performance information for the subaccounts because they are new and have not had any activity to date. However, we show performance from the commencement date of the funds as if the contract existed at that time. Past performance does not guarantee future results. Average Annual Total Return For Periods Ending [________]
Performance since commencement of theFund** Since Subaccount Investing in: 1 Year 5 Years 10 Years commencement IDS LIFE [__] Aggressive Growth Fund (1/92)* % % % % [__] Capital Resource Fund (10/81) [__] Global Yield Fund (4/96) [__] Growth Dimensions Fund (4/96) [__] Income Advantage Fund (4/96) [__] International Equity Fund (1/92) [__] Managed Fund (4/86) [__] Moneyshare Fund (10/81) [__] Special Income Fund (10/81) ----------------------------------- NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) NEW FUND [__] New Fund (___) * (Commencement dates of the Funds) ** Current applicable charges deducted from fund performance include a $30 contract administrative charge and a 0.55% mortality and expense risk fee.
Cumulative Total Return Cumulative total return represents the cumulative change in the value of an investment for a given period (reflecting change in a subaccount's accumulation unit value). We compute cumulative total return by 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 period, at the end of the period (or fractional portion thereof). All total return figures reflect the deduction of all applicable charges including the contract administrative charge and mortality and expense risk fee. Annualized Calculation of Yield for Subaccounts Investing in Money Market Funds Simple Yield: For the subaccounts investing in money market funds, we base quotations of simple yield on: (a) the change in the value of a hypothetical subaccount (exclusive of capital changes and income other than investment income) at the beginning of a particular seven-day period; (b) less a pro rata share of the subaccount expenses accrued over the period; (c) dividing this difference by the value of the subaccount at the beginning of the period to obtain the base period return; and (d) multiplying the base period return by 365/7. The subaccount's value includes: o any declared dividends, o the value of any shares purchased with dividends paid during the period, and o any dividends declared for such shares. It does not include any realized or unrealized gains or losses. Annualized Compound Yield: We calculate compound yield using the base period return described above, which we then compound according to the following formula: Compound Yield = [(Base Period Return + 1)365/7] -1 You must consider (when comparing an investment in subaccounts investing in money market funds with fixed annuities) that fixed annuities often provide an agreed-to or guaranteed yield for a stated period of time, whereas the subaccount's yield fluctuates. In comparing the yield of the subaccount to a money market fund, you should consider the different services that the contract provides. Annualized Yield for 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 it invests and from dividends declared and paid by the fund, which are automatically invested in shares of the fund. The yield on the subaccount's accumulation unit may fluctuate daily and does not provide a basis for determining future yields. Independent rating or statistical services or publishers or publications such as those listed below 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. 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 and World Report, The Wall Street Journal and Wiesenberger Investment Companies Service. 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 contract as of the valuation date that falls on (or closest to the valuation date that falls before) the seventh calendar day before the settlement 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 that falls on (or closest to the valuation date that falls before) the seventh calendar day before the settlement 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 that falls on (or closest to the valuation date that falls before) the seventh calendar day before the payout is due; by o the fixed number of annuity units credited to you. Annuity Unit Values: We originally set this value at $1 for each subaccount. To calculate later values 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 rate built into the annuity table. With an assumed investment rate of 5%, the neutralizing factor is 0.999866 for a one day valuation period. Net Investment Factor: We determine the net investment factor by: o adding the fund's current net asset value per share plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then o dividing that sum by the previous adjusted net asset value per share; and o subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the 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 We guarantee your fixed annuity payout amounts. 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 settlement date or the date you 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. RATING AGENCIES The following chart reflects the ratings given to us 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 subaccounts of the contract. This information relates only to the fixed account and reflects our ability to make annuity payouts and to pay death benefits and other distributions from the contract. Rating Agency Rating A.M. Best A+ (Superior) Duff & Phelps AAA Moody's Aa2 PRINCIPAL UNDERWRITER The principal underwriter for the contract is IDS Life which offers the contract on a continuous basis. The contract is new and therefore we have not received any surrender charges or paid any commissions. INDEPENDENT AUDITORS [To be filed by amendment.] FINANCIAL STATEMENTS 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 Board of Directors of IDS Life establishing the IDS Life Variable Account 10 dated August 23, 1995, filed electronically as Exhibit 1 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 2. Not applicable. 3. Not applicable. 4.1 Form of Deferred Annuity Contract for non-qualified contracts (form 31043), is filed electronically herewith. 4.2 Form of Deferred Annuity Contract for tax qualified contracts (form 31044), is filed electronically herewith. 4.3 Form of Deferred Annuity Contract for IRA contracts (form 31045-IRA), is filed electronically herewith. 4.4 Form of Deferred Annuity Contract for non-qualified contracts (form 31046), is filed electronically herewith. 4.5 Form of Deferred Annuity Contract for tax qualified contracts (form 31047), is filed electronically herewith. 4.6 Form of Deferred Annuity Contract for IRA contracts (form 31048-IRA), is filed electronically herewith. 5. Form of Variable Annuity Application to be filed by amendment. 6.1 Certificate of Incorporation of IDS Life dated July 24, 1957, filed electronically as Exhibit 6.1 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 6.2 Amended By-Laws of IDS Life filed electronically as Exhibit 6.2 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 7. Not applicable. 8. Participation Agreements to be filed by amendment. 9. Opinion of counsel and consent to its use as the legality of the securities being registered to be filed by amendment. 10. Consent of Independent Auditors to be filed by amendment. 11. None. 12. Not applicable. 13. To be filed by amendment. 14. Not applicable. 15(a) Power of Attorney to sign this Registration Statement dated March 12, 1997, filed electronically as Exhibit 15 to Post-Effective Amendment No.2 to Registration Statement No. 33-62407, is incorporated herein by reference. 15(b) Power of Attorney to sign this Registration Statement dated April 9, 1998, filed electronically as Exhibit 15(b) to Post-Effective Amendment No. 3 to Registration Statement No. 33-62407, is incorporated by reference.
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company) Name Principal Business Address Positions and Offices with Depositor Timothy V. Bechtold IDS Tower 10 Executive Vice President, Risk Minneapolis, MN 55440 Management Products David J. Berry IDS Tower 10 Vice President Minneapolis, MN 55440 Mark W. Carter IDS Tower 10 Executive Vice President, Marketing Minneapolis, MN 55440 Robert M. Elconin IDS Tower 10 Vice President Minneapolis, MN 55440 Lorraine R. Hart IDS Tower 10 Vice President, Investments Minneapolis, MN 55440 Jeffrey S. Horton IDS Tower 10 Vice President, Treasurer and Minneapolis, MN 55440 Assistant Secretary David R. Hubers IDS Tower 10 Director Minneapolis, MN 55440 James M. Jensen IDS Tower 10 Vice President, Insurance Product Minneapolis, MN 55440 Development Richard W. Kling IDS Tower 10 Director and President Minneapolis, MN 55440 Paul F. Kolkman IDS Tower 10 Director and Executive Vice President Minneapolis, MN 55440 Paula R. Meyer IDS Tower 10 Director and Executive Vice Minneapolis, MN 55440 President, Assured Assets James A. Mitchell IDS Tower 10 Director, Chairman of the Board and Minneapolis, MN 55440 Chief Executive Officer Pamela J. Moret IDS Tower 10 Executive Vice President, Variable Minneapolis, MN 55440 Assets Barry J. Murphy IDS Tower 10 Director and Executive Vice Minneapolis, MN 55440 President, Client Service James R. Palmer IDS Tower 10 Vice President, Taxes Minneapolis, MN 55440 Stuart A. Sedlacek IDS Tower 10 Director and 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 Vice President, General Counsel and Minneapolis, MN 55440 Secretary Philip C. Wentzel IDS Tower 10 Vice President and Controller Minneapolis, MN 55440
Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant IDS Life Insurance Company 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.
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 Partners LLC Delaware 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 Advisors Japan 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 Mississippi Inc. Mississippi 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 Brokerage Group Minnesota 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 Mississippi Ltd. Mississippi IDS Insurance Agency of New Mexico Inc. New Mexico IDS Insurance Agency of North Carolina Inc. North Carolina IDS Insurance Agency of Ohio Inc. Ohio IDS Insurance Agency of Texas Inc. Texas 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 IDS Realty Corporation Minnesota IDS Sales Support Inc. Minnesota Investors Syndicate Development Corp. Nevada Public Employee Payment Company Minnesota
Item 27. Number of Contractowners Not applicable. Item 28. Indemnification The By-Laws of the depositor provide that it shall indemnify any person who was or is a party or is threatened to be made a party, by reason of the fact that he is or was a director, officer, employee or agent of this Corporation, or is or was serving at the direction of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, to any threatened, pending or completed action, suit or proceeding, wherever brought, to the fullest extent permitted by the laws of the State of Minnesota, as now existing or hereafter amended, provided that this Article shall not indemnify or protect any such director, officer, employee or agent against any liability to the Corporation or its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence, in the performance of his duties or by reason of his reckless disregard of his obligations and duties. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to director, 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. Item 29. Principal Underwriters To be filed by amendment. Item 30. Location of Accounts and Records IDS Life Insurance Company IDS Tower 10 Minneapolis, MN Item 31. Management Services Not applicable. Item 32. Undertakings (a) Registrant undertakes to 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 to 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. (d) Registrant represents that it is relying upon the no-action assurance given to the American Council of Life Insurance (pub. avail. Nov. 28, 1988).Further, Registrant represents that it has complied with the provisions of paragraphs (1)-(4) of that no-action letter. (e) 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. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, IDS Life Insurance Company, on behalf of the Registrant, certifies that it meets requirements for effectiveness of this Amendment to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf in the City of Minneapolis, and State of Minnesota, on the 26th day of May, 1999. IDS LIFE VARIABLE ANNUITY ACCOUNT 10 (Registrant) By IDS Life Insurance Company (Sponsor) By /s/ Richard W. Kling* Richard W. Kling President As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the 26th day of May, 1999. Signature Title /s/ Jeffrey S. Horton** Vice President, Treasurer and Jeffrey S. Horton Assistant Secretary /s/ David R. Hubers* Director David R. Hubers /s/ Richard W. Kling* Director and President Richard W. Kling /s/ Paul F. Kolkman* Director and Executive Vice Paul F. Kolkman President /s/ James A. Mitchell* Director, Chairman of the James A. Mitchell Board and Chief Executive Officer /s/ Barry J. Murphy* Director and Executive Vice Barry J. Murphy President, Client Service /s/ Stuart A. Sedlacek* Director and Executive Vice Stuart A. Sedlacek President /s/ Philip C. Wentzel** Vice President and Controller Philip C. Wentzel *Signed pursuant to Power of Attorney dated March 12, 1997, filed electronically as Exhibit 15 to Post-Effective Amendment No. 2 to Registration Statement No. 33-62407, is incorporated herein by reference. **Signed pursuant to Power of Attorney dated April 9, 1998, filed electronically as Exhibit 15(b) to Post-Effective Amendment No. 3 to the Registration Statement No. 33-62407, is incorporated herein by reference. /s/ Mary Ellyn Minenko Mary Ellyn Minenko Vice President and Group Counsel CONTENTS OF REGISTRATION STATEMENT This Registration Statement is comprised of the following papers and documents: The Cover Page. Part A. The prospectus. Part B. Statement of Additional Information. Part C. Other Information. The signatures. Exhibits. EX-99 2 EXHIBIT INDEX EXHIBIT INDEX Exhibit 4.1 Deferred Annuity Contract for non-qualified contracts (31043) Exhibit 4.2 Deferred Annuity Contract for tax qualified contracts (31044) Exhibit 4.3 Deferred Annuity Contract for IRA contracts (31045-IRA) Exhibit 4.4 Deferred Annuity Contract for non-qualified contracts (31046) Exhibit 4.5 Deferred Annuity Contract for tax qualified contracts (31047) Exhibit 4.6 Deferred Annuity Contract for IRA contracts (31048-IRA) EX-99.4.1 3 DEFERRED ANNUITY (31043) IDS Life Insurance Company DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. Annuitant: Contract Number: Contract Date: Settlement Date: This is a deferred annuity contract. It is a legal contract between you, as the owner, and us, IDS Life Insurance Company, a Stock Company, Minneapolis, Minnesota. PLEASE READ YOUR CONTRACT CAREFULLY. If the annuitant is living on the Settlement Date, upon your request, we will begin to pay you monthly annuity payments. Any payments made by us are subject to the terms of this contract. We issue this contract in consideration of your application and the payment of the purchase payments. Signed for and issued by IDS Life Insurance Company in Minneapolis, Minnesota, as of the contract date shown above. ACCUMULATION VALUES AND ANNUITY PAYMENTS, WHEN BASED ON THE INVESTMENT RESULTS OF THE VARIABLE SUBACCOUNTS, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. SEE PAGE 9 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 representative 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. [signature of] Richard W. Kling President [signature of] William A. Stoltzmann Secretary CONTRACT DATA Annuitiant: John Doe Contract Date: October 6, 1999 Contract Number: XXXX-XXXXXXX Settlement Date: October 6, 2019 Contract Owner: John Doe Deferred Annuity Contract (AXP Retirement Advisor Variable Annuity) Upon issuance of this contract your purchase payments have been scheduled to be paid and applied to the fixed and variable subaccounts as shown below. You may change the amount, frequency and allocations as provided in this contract. Refer to the Purchase Payments provision. Amount submitted With Application: $2,000 Scheduled Purchase Payment: Annual Amount: NA Variable Purchase Payments Subaccounts Fund Allocation Percentage 1. IDS Life Capital Resource Fund 25% 2. IDS Life Special Income Fund 0% 3. IDS Life Moneyshare Fund 0% 4. IDS Life Managed Fund 25% 5. IDS Life International Equity Fund 0% 6. IDS Life Aggressive Growth Fund 0% 7. IDS Life Income Advantage Fund 0% 8. IDS Life Growth Dimensions Fund 0% 9. IDS Life Global Yield Fund 0% 10. Fund 10 0% 11. Fund 11 0% 12. Fund 12 0% 13. Fund 13 0% 14. Fund 14 0% 15. Fund 15 0% 16. Fund 16 0% 17. Fund 17 0% 18. Fund 18 0% 19. Fund 19 0% 20. Fund 20 0% 21. Fund 21 0% 22. Fund 22 0% 23. Fund 23 0% 24. Fund 24 0% 25. Fund 25 0% 26. Fund 26 0% 27. Fund 27 0% 28. Fund 28 0% Fixed Account 50% Schedule of Surrender Charges Surrender Charge Period for Each Purchase Payment: 10 years Number of Completed Surrender Charge Years from Date of Percentage Applied to Each Purchase Payment Purchase Payment - ---------------- ---------------- 0 8% 1 8% 2 8% 3 7% 4 7% 5 6% 6 5% 7 4% 8 3% 9 2% 10 0% Contract Administrative Charge: $30 annually. Charge is waived if contract value, or purchase payments less purchase payments surrendered, equals or exceeds $50,000. See Contract Administrative Charge provision. Maximum Purchase Payments Permitted: 1st contract year: $ 2,000,000 Each contract year thereafter: $ 100,000 Fixed Account Guaranteed Interest Rate: 3% Annual Effective Rate As of the date this contract was issued, any amounts allocated to the fixed account will earn interest, for the first year, at the annual effective rate of 4.25%. New rates may be declared from time to time. GUIDE TO CONTRACT PROVISIONS Definitions Important words and meanings/Page 3 General Provisions Entire Contract; Incontestable; Benefits Based on Incorrect Data; State Laws; Federal Laws; Reports to Owner; Evidence of Survival; Protection of Proceeds; Payments by Us; Voting Rights/Page 4 Ownership and Beneficiary Owner's Rights; Change of Ownership; Beneficiary; Change of Beneficiary; Beneficiary's Rights; Assignment/Page 5 Payments to Beneficiary Describes options and amounts payable upon death/Page 6 Purchase Payments Purchase Payments; Amounts and Intervals; Payment Limits; Allocation of Purchase Payments; Additional "Credits" for Purchase Payments/Page 7 Contract Value Describes the fixed and variable account contract values; Interest to be Credited; Contract Administrative Charge; Premium Tax Charges; Transfers of Contract Values/Page 8 Fixed and Variable Accounts Describes the variable subaccounts, accumulation units and values; Net Investment Factor; Mortality and Expense Risk Charge; Annuity Unit Value/Page 9 Surrender Provisions Surrender of the contract for its surrender value; Rules for Surrender; Surrender Value; Surrender Charge; Surrender Order; Waiver of Surrender Charges; Suspension or Delay in Payment of Surrender/Page 11 Annuity Provisions When annuity payments begin; Different ways to receive annuity payments; Determination of payment amounts/Page 13 Tables of Settlement Rates Tables showing amount of first variable annuity payment and the guaranteed fixed annuity payments for the various payment plans/Page 15 DEFINITIONS The following words are often used 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 contract value prior to settlement. annuitant The person or persons on whose life monthly annuity payments depend. annuity unit An annuity unit is an accounting unit of measure. It is used to calculate the value of annuity payments from the variable subaccounts on and after the settlement date. code The Internal Revenue Code of 1986, as amended, its regulations thereunder and/or promulgations of the Internal Revenue Service, as applicable. contract anniversary The same day and month as the contract date each year that the contract remains in force. contract date 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 Fixed Account Contract Value (which receives a declared interest rate) and the Variable Account Contract Value (which varies with the investment performance of the elected subaccounts) for this contract. 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. settlement The application of the contract value of this contract to an Annuity Payment Plan to provide annuity payments. settlement date The date shown under Contract Data on which annuity payments are scheduled to begin. This date may be changed as provided in this contract. You will be notified prior to the settlement 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 annuity A variable annuity is an annuity with payments which: (1) are not predetermined or guaranteed as to dollar amounts; and (2) vary in amount with the investment experience of one or more of the variable subaccounts. variable subaccounts The portfolios of the Variable Account. The subaccounts available on the contract date are named under Contract Data. we, our, us IDS Life Insurance Company written request A request in writing signed by you and delivered to us at our corporate office. you, your The owner of this contract. The owner may be someone other than the annuitant. The owner may be changed as provided in this contract. GENERAL PROVISIONS Entire Contract This contract form is 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 other representatives or other persons has the authority to change or waive any of our rights or requirements under this contract. Incontestable This contract is incontestable from its date of issue. Benefits Based on Incorrect Data If the amount of benefits is determined by data as to a person's age or sex that is incorrect, benefits will be recalculated on the basis of the correct data. Any underpayments made by us will be made up immediately. Any overpayments made by us will be subtracted from future payments. State Laws This contract is governed by the laws 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. Federal Laws This contract is intended to qualify as an annuity contract under Section 72 of the Internal Revenue 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, despite any other provisions to the contrary. We reserve the right to amend this contract to reflect any clarifications that may be needed or are appropriate to maintain such tax qualification. We will send you a copy of any such amendments. Reports to Owner At least once a year we will send you a statement showing the contract value and the cash surrender 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 given date, proof that such condition has been met may be required by us. Such proof may be required prior to making the payment. Protection of Proceeds Payments under this contract are not assignable by any beneficiary prior to the time they are due. Payments by Us All sums payable by us are payable from our corporate office. Any payment or surrender 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 contract owners. As contract owner, if you have voting rights we will send a notice to you telling you the time and place of the shareholder meeting. The notice will also explain matters to be voted upon and how many votes you have. OWNERSHIP AND BENEFICIARY Owner's 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. Change of Ownership You can change the ownership of this contract 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 recording. Beneficiary Unless designated otherwise, beneficiaries are those you name, in a form satisfactory to us, to receive benefits of this contract when the first of you or the annuitant die while this contract is in force. The owner may change the beneficiary as provided below. Benefits will be paid equally to all primary beneficiaries surviving the annuitant. If none survive, proceeds will be paid equally to all contingent beneficiaries surviving the annuitant. If no beneficiary survives the annuitant, 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. Beneficiary's Rights If the death benefit under this contract becomes payable to a beneficiary (payee) under an Annuity Payment Plan, that payee shall have the right to name a beneficiary. Any such request from the payee must be made on a form satisfactory to us. Assignment While the annuitant is living, you can assign this contract or any interest in it. 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 new assignment must be submitted to us at our corporate office. Any assignment is subject to any action taken or payment made by us before the assignment was recorded at our corporate office. We are not responsible for the validity or effect, tax or otherwise, of any assignment. PAYMENTS TO BENEFICIARY Death Benefit Before the Settlement Date If you or the annuitant die before the Settlement Date while this contract is in force, and both you and the annuitant are age 80 or younger on the date of death, we will pay the beneficiary the greatest of: 1. the contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders"; or 3. the contract value as of the most recent sixth contract anniversary, plus any purchase payments paid and less any "adjusted partial surrenders" since that contract anniversary. An "adjusted partial surrender" is calculated for each partial surrender as the product of (a) times (b) where: (a) is the ratio of the amount of the partial surrender to the contract value on the date of (but prior to) the partial surrender; and (b) is the death benefit on the date of (but prior to) the partial surrender. If either you or the annuitant are age 81 or older on the date of death, we will pay the beneficiary the greater of: 1. the contract value; or 2. the total purchase payments less any adjusted partial surrenders. The above amount will be payable in a lump sum on the valuation date we receive due proof of death of the annuitant or owner, whichever first occurs. The beneficiary may elect to receive payment anytime within 5 years after the date of death. In lieu of a lump sum, payment 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. payments begin no later than one year after the date of death; and 3. the plan provides payments over a period which does not exceed the life or the life expectancy of the beneficiary. In this event, the reference to "annuitant" in the Annuity Provisions shall apply to the beneficiary. We will determine the contract value on which we base amounts payable or applied under this section at the next accumulation unit value calculated after we receive due proof of death at our corporate office. Pre-election of an Annuity Payment Plan During your lifetime you may elect how the death benefit described herein is to be paid under the contract in the event of death before the settlement date. Any such election must be made on a form satisfactory to us. We must receive the form in our corporate office prior to the date of death of the first to die of the owner or annuitant. In this event the death benefit shall be payable as so elected by you, rather than as requested by the beneficiary. If for any reason such election does not satisfy Section 72 of the Code or related distribution requirements, the election will be void and the beneficiary will then be permitted to elect payment pursuant to the provisions of the contract. Spouse Option to Continue Contract Upon Owner's Death If the owner's death occurs prior to the settlement date, the owner's spouse, if designated as sole beneficiary, or as a joint tenant with right of survivorship, may elect in writing to forego receipt of the death benefit and instead continue this contract in force as owner. The election by the spouse must be made within 60 days after we receive due proof of death. Annuitant's Death After the Settlement Date If the annuitant or owner dies after the settlement date, the amount payable, if any, will be as provided in the Annuity Payment Plan then in effect. 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 corporate 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. Amount and Intervals Purchase payments may be paid in a single sum or in installments until the earlier of: (1) the date this contract terminates by surrender or otherwise; or (2) the date on which the annuity payments begin. Subject to the Payment Limits Provision you may: (1) stop and/or restart purchase payments; or (2) increase or decrease the amount of your purchase payments; or (3) change the interval of your purchase payments. Payment Limits Provision Maximum Purchase Payments - The maximum purchase payments in the first or later contract years may not exceed the amounts shown under Contract Data. We reserve the right to increase the maximums. Minimum Purchase Payments - Upon issue of this contract, a purchase payment intended as a Single Purchase Payment must be at least $2,000. If you intend to make installment purchase payments such payments, on an annualized basis, must be at least equal to $600. Additional payments must be at least $50. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum transfer from the fixed account to the variable subaccounts. We also reserve the right to cancel this contract if both of the following conditions exist at the same time: (1) no purchase payments have been paid for a continuous period of 24 months; and (2) less than $600 in purchase payments have been paid under this contract. In this event we will give you 30 days written notice of our intent to cancel this contract. Upon such cancellation we will pay you the contract value in one sum. This contract will then terminate. 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 each account may be made in any whole percent from 0% to 100% as long as the total adds up to 100%. Your allocation instructions as of the contract date are shown under Contract Data. By written request, or by other 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 corporate office. Additional "Credits" for Purchase Payments We will add a Credit of 1% of all purchase payments received under this contract in each of the following situations: 1. if your contract has a 10-year surrender charge schedule as shown under Contract Data; or 2. if your initial purchase payment to this contract was at least $100,000. Each credit is allocated to your contract value when the applicable purchase payment is applied to your contract value. Such Credits are allocated to your contract value according to allocation instructions in effect for your purchase payments. Credits shall be reversed from the contract value for any purchase payment that is not honored. Credits applied within 12 months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, if applicable, shall be reversed from the contract value. The amount returned to you under the Right to Examine Contract (Free-look) provision shall not include any Credits applied to your contract. 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 surrendered; 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 surrenders, 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 and any purchase payment credits so allocated, or transfers among the variable and fixed accounts; less (2) any units deducted for charges or surrenders. Fixed Account Contract Value The fixed account contract value at any time will be: (1) the sum of all amounts credited to the fixed account under this contract; less (2) any amounts deducted for charges or surrenders. Interest to be Credited We will credit interest to the fixed account contract value. Interest will begin to accrue on the date the purchase payments which are received in our corporate office become available to us for use. Such interest will be credited at a rate that we determine from time to time. However, we guarantee that the rate will not be less than the Guaranteed Interest Rate shown under Contract Data. 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 or, if earlier, when the contract is fully surrendered. 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 this charge if your contract value, or your total purchase payments less any purchase payments surrendered, equals or exceeds $50,000. If you make a full surrender of this contract, we deduct the full $30 contract administrative charge at the time of the full surrender regardless of purchase payments made or contract value. The charge does not apply after settlement of this contract under an annuity payment plan. Premium Tax Charges A charge will be made by us against the contract value of this contract at the time that any premium taxes not previously deducted are payable. Transfers of Contract Values While this contract is in force prior to the settlement date, transfer of contract values may be made as outlined below: 1. You may transfer all or part of the values held in one or more 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 after a contract anniversary you may transfer values from the fixed account to one or more of the variable subaccounts. Only one such transfer is allowed during this period each year. If such a transfer is made, no transfers from a variable subaccount to the fixed account may be made until the next contract anniversary. You may make a transfer by written request. Transfer requests may also be made according to telephone procedures or automated transfer procedures that are then currently in effect, if any. There is no fee or charge for these transfers. However, the minimum transfer amount is $250, or if less, the entire value in the account from which the transfer is being made. Smaller minimums may apply to automated transfer procedures. This transfer privilege may be suspended or modified by us at any time. FIXED AND VARIABLE ACCOUNTS The Fixed Account The fixed account is our general account. It is made up of all of our assets other than: (1) those in the variable subaccounts; 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 our assets for this contract to the variable accounts. 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 subaccounts 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 from which the variable subaccounts buy shares if laws or regulations change, the existing funds become unavailable or in our judgment, the funds are no longer suitable for the subaccounts. We have the right to substitute funds for those shown under Contract Data, including funds other than those shown under Contract Data. We may also: add additional subaccounts investing in other funds; combine subaccounts; transfer assets to and from the subaccounts or the variable account; and eliminate or close any subaccounts. When required, we would first seek approval of the Securities and Exchange Commission and, 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 and any purchase payment credits allocated to the subaccount; and 2. transfers to the subaccount; and subtracting the number of accumulation units from: 1. transfers from the subaccount; and 2. surrenders (including surrender 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 receive the purchase payment or transfer value, or during which we deducted transfers, surrenders, surrender charges or contract administrative charges. Variable Account Accumulation Unit Value The value of an accumulation unit for each of the variable subaccounts was arbitrarily set at $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 account 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 one valuation period is determined by: dividing (1) by (2) and subtracting (3) 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 dividend or capital gain distributions made by the fund held in the variable subaccount, if the "ex-dividend" date occurs during the current valuation period. (2) is the net asset value per share of fund held in the variable subaccount, determined at the end of the last prior valuation period. (3) is a factor representing the mortality and expense risk 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 .95% 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. Annuity Unit Value The value of an Annuity Unit for each variable subaccount was arbitrarily set at $1 when the first funds 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 periods 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 settlement tables on page 15. SURRENDER PROVISIONS Surrender By written request and subject to the rules below you may: 1. surrender this contract for the total surrender value; or 2. partially surrender this contract for a part of the surrender value. Rules for Surrender All surrenders 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 the settlement date or the death of the annuitant. 2. Unless we agree otherwise, you must surrender an amount equal to at least $250 or the entire contract value, if less. The contract value after a partial surrender must be at least $600. 3. The amount surrendered, less any charges, will normally be paid to you within seven days of our receipt of your written surrender request and the return of this contract, if required. For surrenders from the fixed account, we have the right to defer payment to you for up to 6 months from the date we receive the request. 4. For partial surrenders, if you do not specify from which accounts the surrender is to be made, the surrender will be made from the variable subaccounts and fixed account in the same proportion as your interest in each bears to the contract value. 5. Any amounts surrendered and charges which may apply can not be repaid. Upon surrender for the full surrender value this contract will terminate. We may require that you return the contract to us before we pay the full surrender value. Surrender Value The surrender value at any time will be: 1. the contract value; 2. minus the contract administrative charge; 3. minus any surrender charge. Surrender Charge If you surrender all or a part of your contract, you may be subject to a surrender charge. A surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven (7) or ten (10) years before surrender. The surrender charge period you selected at the time of application for this contract and applicable surrender charge percentages are shown under Contract Data. We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the total surrender charges. Surrender Order For purposes of determining any surrender charge, we treat amounts surrendered from your contract value in the following order so that the amount actually surrendered, less any surrender charge that applies, equals your requested surrender amount. 1. First, surrenders are from contract earnings. Contract earnings are defined as the contract value less purchase payments not previously surrendered. (No surrender charge.) 2. Next, in each contract year, amounts totaling up to 10% of your prior contract anniversary contract value, but only to the extent not included and surrendered in Number 1. above. Your initial purchase payment is considered the prior contract anniversary contract value during the first contract year. (No surrender charge.) 3. Next, surrenders are from purchase payments received prior to the surrender charge period shown in the schedule under Contract Data. (No surrender charge.) 4. Next, surrenders are from purchase payments received that are still within the surrender charge period shown in the schedule under Contract Data. We surrender these payments on a first-in, first-out basis to minimize the surrender charge that applies to these payments. Waiver of Surrender Charges Surrender charges are waived for all of the following: 1. Death Benefit payments made in the event of the death of the owner or annuitant; or 2. Contracts settled under an Annuity Payment Plan; or 3. Surrenders made if you were under age 76 on the contract date, and you provide proof satisfactory to us that, as of the date you request the surrender, you or the annuitant are confined to a nursing home, have been confined for the prior 90 days, and such confinement began while this contract was in force. 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. Suspension or Delay in Payment of Surrender We have the right to suspend or delay the date of any surrender 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 practicable; or (b) it is not reasonably practicable 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. ANNUITY PROVISIONS Settlement When settlement occurs, the contract value will be applied to make annuity payments. The first payment will be made as of the settlement 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 for the annuity payments. Change of Settlement Date You may change the settlement date shown for this contract. Tell us the new date by written request. However the settlement date may not be later than the later of: (1) the annuitant's 85th birthday; or (2) the tenth contract anniversary. Also, if you select a new date, it must be at least 30 days after we receive your written request at our corporate office. Annuity Payment Plans Subject to the terms of this contract, 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. 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, ten or fifteen 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. Plan D - Monthly payments will be paid during the lifetime of the annuitant and a 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 paid after the death of both the annuitant and joint annuitant. Plan E - (Installments for a specified period ) This provides monthly annuity payments for a period of years. The period of years may be no less than 10 or more than 30. By written request to us at least 30 days before the settlement date, you may select the Plan. If at least 30 days before the settlement date we have not received at our corporate office your written request to select a Plan, we will make payments according to Plan B with payments guaranteed for ten years. If the amount to applied to a Plan is less than $2,000 or would not provide an initial monthly payment of at least $20, we have the right to make a lump sum payment of the contract value. Allocation of Contract Values at Settlement At the time of settlement 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. Unless we agree otherwise, you may use a maximum of five variable subaccounts at any one time during settlement. Fixed Annuity A fixed annuity is an annuity with payments that are guaranteed by us as to dollar amount. Fixed annuity payments after the first will never be less than the amount of the first payment. At settlement, the fixed account contract value will be applied to the applicable Settlement Table. This will be done in accordance with the Payment Plan chosen. The amount payable for each $1,000 so applied is shown in Table B on page 16. 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 First Variable Annuity Payment At settlement, the variable account contract value will be applied to the applicable Settlement Table. This will be done: (1) on the valuation date on or next preceding the 7th calendar day before the settlement 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 15. Variable Annuity Payments After the First Payment Variable annuity payments after the first 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 7th calendar day before the settlement date. This result establishes the fixed number of annuity units for each monthly annuity payment after the first. 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 7th 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 variation 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. Unless we agree otherwise you may use a maximum of five variable subaccounts at any one time. Once annuity payments start, no exchanges may be made to or from any fixed annuity. TABLES OF SETTLEMENT RATES Table A below shows the amount of the first monthly variable annuity payment, based on a 5% 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 Settlement Rates in effect at settlement. 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 settlement. 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 settlement.
Table A - Dollar Amount of First Monthly Variable Annuity Payment Per $1,000 Applied Plan A Plan B Plan C Plan D Age at Beginning Life Five Years Life Income Fifteen Years Life Income Joint & Annui- In Income Certain with Ten Years Certain Installment Survivor tization Non-Refund Certian Refund Non-Refund Male & Female Age 65 Year Male Female Male Female Male Female Male Female Male Female Same Age - ---------- ------- -------- -------- ------ -------- ------- -------- ------- -------- ------ --------- -------------- 2005 6.49 5.85 6.44 5.83 6.29 5.77 6.06 5.66 6.13 5.67 5.34 2010 6.40 5.78 6.35 5.76 6.22 5.71 6.00 5.61 6.06 5.61 5.30 2015 6.31 5.72 6.27 5.70 6.15 5.65 5.95 5.56 6.00 5.56 5.25 2020 6.23 5.66 6.19 5.64 6.08 5.60 5.90 5.52 5.93 5.51 5.21 2025 6.15 5.60 6.12 5.59 6.01 5.54 5.84 5.47 5.88 5.47 5.18 2030 6.08 5.55 6.05 5.53 5.95 5.50 5.80 5.43 5.82 5.43 5.14 Age 70 2005 7.41 6.54 7.29 6.50 6.98 6.36 6.54 6.14 6.79 6.22 5.85 2010 7.28 6.45 7.17 6.41 6.88 6.28 6.48 6.08 6.70 6.15 5.78 2015 7.16 6.35 7.06 6.32 6.80 6.21 6.42 6.03 6.61 6.08 5.72 2020 7.04 6.27 6.95 6.24 6.71 6.14 6.37 5.97 6.53 6.01 5.66 2025 6.93 6.19 6.85 6.16 6.63 6.07 6.31 5.92 6.45 5.95 5.61 2030 6.83 6.11 6.76 6.09 6.55 6.01 6.26 5.87 6.38 5.90 5.56 Age 75 2005 8.67 7.58 8.42 7.47 7.78 7.15 7.02 6.70 7.65 6.99 6.59 2010 8.49 7.43 8.26 7.34 7.68 7.05 6.97 6.63 7.53 6.89 6.49 2015 8.32 7.30 8.11 7.21 7.58 6.96 6.91 6.57 7.42 6.80 6.40 2020 8.16 7.18 7.97 7.10 7.48 6.87 6.86 6.51 7.31 6.71 6.31 2025 8.00 7.06 7.83 6.99 7.38 6.78 6.81 6.46 7.21 6.62 6.24 2030 7.86 6.95 7.70 6.89 7.29 6.70 6.75 6.40 7.12 6.55 6.16 Age 85 2005 13.01 11.44 11.71 10.69 9.46 9.09 7.69 7.60 10.30 9.50 9.30 2010 12.65 11.12 11.48 10.45 9.38 9.00 7.67 7.58 10.11 9.32 9.09 2015 12.31 10.82 11.26 10.23 9.30 8.90 7.66 7.56 9.93 9.15 8.90 2020 11.99 10.55 11.04 10.02 9.22 8.80 7.64 7.53 9.76 9.00 8.72 2025 11.70 10.29 10.84 9.83 9.15 8.71 7.62 7.51 9.60 8.85 8.55 2030 11.42 10.06 10.64 9.64 9.07 8.62 7.61 7.48 9.45 8.72 8.40 - ---------- ------- -------- -------- ------ -------- ------- -------- ------- -------- ------ --------- -------------- Table A above is based on the "1983 Individual Annuitant Mortality Table A" with 100% Projection Scale G and a 5% assumed investment return. 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 5% assumed investment return.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 10 10.51 17 7.20 24 5.88 11 9.77 18 6.94 25 5.76 12 9.16 19 6.71 26 5.65 13 8.64 20 6.51 27 5.54 14 8.20 21 6.33 28 5.45 15 7.82 22 6.17 29 5.36 16 7.49 23 6.02 30 5.28 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Table B- Dollar Amounts of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied - ---------- -------- ---------------- ------ -------- ---------------- ------- ------- ----------------- -------------- Plan A Plan B Plan C Plan D - ---------- -------- ---------------- ------ -------- ---------------- ------- ------- ----------------- -------------- Settlement Life Income Life Income Life Income Joint & Settlement Beginning Non-Refund Five Years with Fifteen Years Installment Survivor 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 - ---------- -------- ------- -------- ------ -------- ------- -------- ------- ------- -------- -------- -------------- 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.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. IDS Life Insurance Company IDS Tower 10 Minneapolis, Minnesota 55440 EX-99.4.2 4 DEFERRED ANNUITY (31044) IDS Life Insurance Company DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. Annuitant: Contract Number: Contract Date: Settlement Date: This is a deferred annuity contract. It is a legal contract between you, as the owner, and us, IDS Life Insurance Company, a Stock Company, Minneapolis, Minnesota. PLEASE READ YOUR CONTRACT CAREFULLY. If the annuitant is living on the Settlement Date, upon your request, we will begin to pay you monthly annuity payments. Any payments made by us are subject to the terms of this contract. We issue this contract in consideration of your application and the payment of the purchase payments. Signed for and issued by IDS Life Insurance Company in Minneapolis, Minnesota, as of the contract date shown above. ACCUMULATION VALUES AND ANNUITY PAYMENTS, WHEN BASED ON THE INVESTMENT RESULTS OF THE VARIABLE SUBACCOUNTS, 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 representative 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. [signature of] Richard W. Kling President [signature of] William A. Stoltzmann [GRAPHIC OMITTED] Secretary CONTRACT DATA Annuitiant: John Doe Contract Date: October 6, 1999 Contract Number: XXXX-XXXXXXX Settlement Date: October 6, 2019 Contract Owner: John Doe Deferred Annuity Contract ("AXP Retirement Advisor Variable Annuity") Upon issuance of this contract your purchase payments have been scheduled to be paid and applied to the fixed and variable subaccounts as shown below. You may change the amount, frequency and allocations as provided in this contract. Refer to the Purchase Payments provision. Amount submitted With Application: $2,000 Scheduled Purchase Payment: Annual Amount: NA Variable Purchase Payments Subaccounts Fund Allocation Percentage 1. IDS Life Capital Resource Fund 25% 2. IDS Life Special Income Fund 0% 3. IDS Life Moneyshare Fund 0% 4. IDS Life Managed Fund 25% 5. IDS Life International Equity Fund 0% 6. IDS Life Aggressive Growth Fund 0% 7. IDS Life Income Advantage Fund 0% 8. IDS Life Growth Dimensions Fund 0% 9. IDS Life Global Yield Fund 0% 10. Fund 10 0% 11. Fund 11 0% 12. Fund 12 0% 13. Fund 13 0% 14. Fund 14 0% 15. Fund 15 0% 16. Fund 16 0% 17. Fund 17 0% 18. Fund 18 0% 19. Fund 19 0% 20. Fund 20 0% 21. Fund 21 0% 22. Fund 22 0% 23. Fund 23 0% 24. Fund 24 0% 25. Fund 25 0% 26. Fund 26 0% 27. Fund 27 0% 28. Fund 28 0% Fixed Account 50% Schedule of Surrender Charges Surrender Charge Period for Each Purchase Payment: 10 years Number of Completed Surrender Charge Years from Date of Percentage Applied to Each Purchase Payment Purchase Payment - ---------------- ---------------- 0 8% 1 8% 2 8% 3 7% 4 7% 5 6% 6 5% 7 4% 8 3% 9 2% 10 0% Contract Administrative Charge: $30 annually. Charge is waived if contract value, or purchase payments less purchase payments surrendered, equals or exceeds $50,000. See Contract Administrative Charge provision. Maximum Purchase Payments Permitted: 1st contract year: $2,000,000 Each contract year thereafter: $ 100,000 Fixed Account Guaranteed Interest Rate: 3% Annual Effective Rate As of the date this contract was issued, any amounts allocated to the fixed account will earn interest, for the first year, at the annual effective rate of 4.25%. New rates may be declared from time to time. GUIDE TO CONTRACT PROVISIONS Definitions Important words and meanings/Page 3 General Provisions Entire Contract; Incontestable; Benefits Based on Incorrect Data; State Laws; Federal Laws; Reports to Owner; Evidence of Survival; Protection of Proceeds; Payments by Us; Voting Rights/Page 4 Ownership and Beneficiary Owner's Rights; Trust or Custodial Ownership; Change of Ownership; Beneficiary; Change of Beneficiary/Page 5 Payments to Beneficiary Describes options and amounts payable upon death/Page 6 Purchase Payments Purchase Payments; Amounts and Intervals; Payment Limits; Allocation of Purchase Payments; Additional "Credits" for Purchase Payments/Page 7 Contract Value Describes the fixed and variable account contract values; Interest to be Credited, Contract Administrative Charge; Premium Tax Charges, Transfers of Contract Values/Page 9 Fixed and Variable Accounts Describes the variable subaccounts, accumulation units and values; Net Investment Factor; Mortality and Expense Risk Charge; Annuity Unit Value/Page 10 Surrender Provisions Surrender; Rules for Surrender; Restrictions on Distributions from the Contract; Surrender Value; Surrender Charge; Surrender Order; Waiver of Surrender Charges; Suspension or Delay in Payment of Surrender; Direct Rollover of Distributions; Eligible Rollover Distributions/Page 12 Annuity Provisions When annuity payments begin; Different ways to receive annuity payments; Determination of payment amounts/Page 15 Tables of Settlement Rates Tables showing amount of first variable annuity payment and the guaranteed fixed annuity payments for the various payment plans/Page 17 DEFINITIONS The following words are often used 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 contract value prior to settlement. annuitant The person or persons on whose life monthly annuity payments depend. annuity unit An annuity unit is an accounting unit of measure. It is used to calculate the value of annuity payments from the variable subaccounts on and after the settlement date. code The Internal Revenue Code of 1986, as amended, its regulations thereunder and/or promulgations of the Internal Revenue Service, as applicable. contract anniversary The same day and month as the contract date each year that the contract remains in force. contract date 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 Fixed Account Contract Value (which receives a declared interest rate) and the Variable Account Contract Value (which varies with the investment performance of the elected subaccounts) for this contract. 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. settlement The application of the contract value of this contract to an Annuity Payment Plan to provide annuity payments. settlement date The date shown under Contract Data on which annuity payments are scheduled to begin. This date may be changed as provided in this contract. You will be notified prior to the settlement 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 annuity A variable annuity is an annuity with payments which: (1) are not predetermined or guaranteed as to dollar amounts; and (2) vary in amount with the investment experience of one or more of the variable subaccounts. variable subaccounts The portfolios of the Variable Account. The subaccounts available on the contract date are named under Contract Data. we, our, us IDS Life Insurance Company written request A request in writing signed by you and delivered to us at our corporate office. you, your The owner of this contract. GENERAL PROVISIONS Entire Contract This contract form is 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 other representatives or other persons has the authority to change or waive any of our rights or requirements under this contract. Incontestable This contract is incontestable from its date of issue. Benefits Based on Incorrect Data If the amount of benefits is determined by data as to a person's age that is incorrect, benefits will be recalculated on the basis of the correct data. Any underpayments made by us will be made up immediately. Any overpayments made by us will be subtracted from future payments. State Laws This contract is governed by the laws 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. Federal Laws This contract is intended to qualify as an annuity contract for Federal income tax purposes. To that end, the provisions of this contract are to be interpreted to ensure or maintain such tax qualification, despite any other provisions to the contrary. We reserve the right to amend this contract to reflect any clarifications that may be needed or are appropriate to maintain such tax qualification. We will send you a copy of any such amendments. Reports to Owner At least once a year we will send you a statement showing the contract value and the cash surrender 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 given date, proof that such condition has been met may be required by us. Such proof may be required prior to making the payment. Protection of Proceeds Payments under this contract are not assignable by any beneficiary prior to the time they are due. Payments by Us All sums payable by us are payable from our home office. Any payment or surrender 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 contract owners. As contract owner, if you have voting rights we will send a notice to you telling you the time and place of the shareholder meeting. The notice will also explain matters to be voted upon and how many votes you have. Trustee or custodian owners shall cast votes according to instructions received from appropriate annuitants. All other votes of such trustee or custodian under the same trust or custodial agreement shall be cast in the same proportion. If no instructions are received, the votes may be cast at the trustee's or custodian's discretion. OWNERSHIP AND BENEFICIARY Owner's 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. Trust or Custodial Ownership If you are a tax qualified trust or tax qualified custodial account, then your trustees or custodian (or their successors) properly named by your trust or custodial agreement may exercise all rights and privileges provided in this contract or allowed by us. Change of Ownership (Restricted) Your right to change the ownership of this contract is restricted. This contract may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for performance of an obligation or for any other purpose to any person other than to us. However, if you are a trust or a custodian or an employer as a part of a qualified plan under Sections 401 or 403 or a deferred compensation plan under Section 457 of the Code, you may transfer ownership of this contract to the annuitant. Such transfer must be 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 Unless designated otherwise, beneficiaries are those you name, in a form satisfactory to us, 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. PAYMENTS TO BENEFICIARY Death Benefit Before the Settlement Date If you or the annuitant die before the Settlement Date while this contract is in force, and both you and the annuitant are age 80 or younger on the date of death, we will pay the beneficiary the greatest of: 1 the contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders"; or 3. the contract value as of the most recent sixth contract anniversary, plus any purchase payments paid and less any "adjusted partial surrenders" since that contract anniversary. An "adjusted partial surrender" is calculated for each partial surrender as the product of (a) times (b) where: (a) is the ratio of the amount of the partial surrender to the contract value on the date of (but prior to) the partial surrender; and (b) is the death benefit on the date of (but prior to) the partial surrender. If either you or the annuitant are age 81 or older on the date of death, we will pay the beneficiary the greater of: 1. contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders". The above amount will be payable in a lump sum on the valuation date we receive due proof of death of the annuitant or owner, whichever first occurs. The beneficiary may elect to receive payment anytime within 5 years after the date of death. In lieu of a lump sum, payment 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. payments begin no later than one year after the date of death; and 3. the plan provides payments over a period which does not exceed the life or the life expectancy of the beneficiary. In this event, the reference to "annuitant" in the Annuity Provisions shall apply to the beneficiary. We will determine the contract value on which we base amounts payable or applied under this section at the next accumulation unit value calculated after we receive due proof of death at our corporate office. Spouse Option to Continue Contract Upon Owner's Death If the annuitant dies prior to the settlement date, a spouse who is designated as sole beneficiary may elect in writing to forego receipt of the death benefit and instead continue this contract in force. The election by the spouse must be made within 60 days after we receive due proof of death. In this event, the settlement date may not be later than April 1 following the calendar year in which the annuitant would have attained 70 1/2 , or such other date which allows the spouse to satisfy the minimum distribution requirements under the Code. Annuitant's Death After the Settlement Date If the annuitant dies after the settlement date, the amount payable, if any, will be as provided in the Annuity Payment Plan then in effect. 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 corporate 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. Amount and Intervals Purchase payments may be paid in a single sum or in installments until the earlier of: (1) the date this contract terminates by surrender or otherwise; or (2) the date on which the annuity payments begin. Subject to the Payment Limits Provision you may: (1) stop and/or restart purchase payments; or (2) increase or decrease the amount of your purchase payments; or (3) change the interval of your purchase payments. Payment Limits Provision Maximum Purchase Payments - The maximum purchase payments in the first or later contract years may not exceed the amounts shown under Contract Data. We reserve the right to increase the maximums. Minimum Purchase Payments - Upon issue of this contract, a purchase payment intended as a Single Purchase Payment must be at least $1,000. If you intend to make installment purchase payments such payments, on an annualized basis, must be at least equal to $600. Additional payments must be at least $50. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum transfer from the fixed account to the variable subaccounts. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum transfer from the fixed account to the variable subaccounts. We also reserve the right to cancel this contract if both of the following conditions exist at the same time: (1) no purchase payments have been paid for a continuous period of 24 months; and (2) less than $600 in purchase payments have been paid under this contract. In this event we will give you 30 days written notice of our intent to cancel this contract. Upon such cancellation we will pay you the contract value in one sum. This contract will then terminate. Limit on Elective Deferrals If your contract is a Tax-Sheltered Annuity qualified under Section 403(b) of the Code, Elective Deferrals made under the contract may not exceed the annual limit on elective deferrals as provided in the Code. Elective Deferrals means employer contributions to the annuity that are excludable from your current income as provided in the Code. Elective Deferrals means employer contributions to the annuity that are excludable from your current income as provided in the Code. 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 each account may be made in any whole percent from 0% to 100% as long as the total adds up to 100%. Your allocation instructions as of the contract date are shown under Contract Data. By written request, or by other 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 home office. Additional "Credits" for Purchase Payments We will add a Credit of 1% of all purchase payments received under this contract in each of the following situations: 1 if your contract has a 10-year surrender charge schedule as shown under Contract Data; or 2. if your initial purchase payment to this contract was at least $100,000. Each credit is allocated to your contract value when the applicable purchase payment is applied to your contract value. Such Credits are allocated to your contract value according to allocation instructions in effect for your purchase payments. Credits shall be reversed from the contract value for any purchase payment that is not honored. Credits applied within 12 months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, if applicable, shall be reversed from the contract value. The amount returned to you under the Right to Examine Contract (Free-look) provision shall not include any Credits applied to your contract. 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 surrendered; 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 surrenders, 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 and any purchase payment credits so allocated, or transfers among the variable and fixed accounts; less (2) any units deducted for charges or surrenders. Fixed Account Contract Value The fixed account contract value at any time will be: (1) the sum of all amounts credited to the fixed account under this contract; less (2) any amounts deducted for charges or surrenders. Interest to be Credited We will credit interest to the fixed account contract value. Interest will begin to accrue on the date the purchase payments which are received in our corporate office become available to us for use. Such interest will be credited at a rate that we determine from time to time. However, we guarantee that the rate will not be less than the Guaranteed Interest Rate shown under Contract Data. 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 value at the end of each contract year or, if earlier, when the contract is fully surrendered. 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 this charge if your contract value, or your total purchase payments less any purchase payments surrendered, equals or exceeds $50,000. If you make a full surrender of this contract, we deduct the full $30 contract administrative charge at the time of the full surrender regardless of purchase payments made or contract value. The charge does not apply after settlement of this contract under an annuity payment plan. Premium Tax Charges A charge will be made by us against the contract value of this contract at the time that any premium taxes not previously deducted are payable. Transfers of Contract Values While this contract is in force prior to the settlement date, transfer of contract values may be made as outlined below: 1. You may transfer all or part of the values held in one or more 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 after a contract anniversary you may transfer values from the fixed account to one or more of the variable subaccounts. Only one such transfer is allowed during this period each year. If such a transfer is made, no transfers from a variable subaccount to the fixed account may be made until the next contract anniversary. You may make a transfer by written request. Transfer requests may also be made according to telephone procedures or automated transfer procedures that are then currently in effect, if any. There is no fee or charge for these transfers. However, the minimum transfer amount is $250, or if less, the entire value in the account from which the transfer is being made. Smaller minimums may apply to automated transfer procedures. This transfer privilege may be suspended or modified by us at any time. FIXED AND VARIABLE ACCOUNTS The Fixed Account The fixed account is our general account. It is made up of all of our assets other than: (1) those in the variable subaccounts; 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 our assets for this contract to the variable accounts. 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 subaccounts 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 from which the variable subaccounts buy shares if laws or regulations change, the existing funds become unavailable or in our judgment, the funds are no longer suitable for the subaccounts. We have the right to substitute funds for those shown under Contract Data, including funds other than those shown under Contract Data. We may also: add additional subaccounts investing in other funds; combine subaccounts; transfer assets to and from the subaccounts or the variable account; and eliminate or close any subaccounts. When required, we would first seek approval of the Securities and Exchange Commission and, 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 and any purchase payment credits allocated to the subaccount; and 2. transfers to the subaccount; and subtracting the number of accumulation units from: 1. transfers from the subaccount; and 2. surrenders (including surrender 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 receive the purchase payment or transfer value, or during which we deducted transfers, surrenders, surrender charges or contract administrative charges. Variable Account Accumulation Unit Value The value of an accumulation unit for each of the variable subaccounts was arbitrarily set at $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 account 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) 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 dividend or capital gain distributions made by the fund held in the variable subaccount, if the "ex-dividend" date occurs during the current valuation period. (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. (3) is a factor representing the mortality and expense risk 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 .75% 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. Annuity Unit Value The value of an Annuity Unit for each variable subaccount was arbitrarily set at $1 when the first funds 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 periods 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 settlement tables on page 17. SURRENDER PROVISIONS Surrender By written request and subject to the rules below you may: Surrender this contract for the total surrender value; or 2. Partially surrender this contract for a part of the surrender value. Rules for Surrender All surrenders 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 the settlement date or the death of the annuitant. 2. Unless we agree otherwise, you must surrender an amount equal to at least $250 or the entire contract value, if less. The contract value after a partial surrender must be at least $600. 3. The amount surrendered, less any charges, will normally be paid to you within seven days of our receipt of your written surrender request and the return of this contract, if required. For surrenders from the fixed account, we have the right to defer payment to you for up to 6 months from the date we receive the request. 4. For partial surrenders, if you do not specify from which accounts the surrender is to be made, the surrender will be made from the variable subaccounts and fixed account in the same proportion as your interest in each bears to the contract value. 5. Any amounts surrendered and charges which may apply can not be repaid. Upon surrender for the full surrender value this contract will terminate. We may require that you return the contract to us before we pay the full surrender value. Restrictions on Distributions from the Contract If your contract is a Tax-Sheltered Annuity qualified under Section 403(b) of the Code, and unless otherwise provided in the Code, no amounts may be distributed from this contract unless you have: 1. attained age 59 1/2 ; or 2. separated from service; or 3. died; or 4. become disabled (as defined in Section 72(m)(7) of the Code); or 5. encountered hardship (within the meaning of Section 403(b) of the Code); and then only such amounts as the Code may provide. We shall require satisfactory written proof of the event(s) in items 1 through 5 above prior to any distribution from the contract. Surrender Value The surrender value at any time will be: 1. the contract value; 2. minus the contract administrative charge; 3. minus any surrender charge. Surrender Charge If you surrender all or a part of your contract, you may be subject to a surrender charge. A surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven (7) or ten (10) years before surrender. The surrender charge period you selected at the time of application for this contract and applicable surrender charge percentages are shown under Contract Data. We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the total surrender charges. Surrender Order For purposes of determining any surrender charge, we treat amounts surrendered from your contract value in the following order so that the amount actually surrendered, less any surrender charge that applies, equals your requested surrender amount. 1. First, surrenders are from contract earnings. Contract earnings are defined as the contract value less purchase payments not previously surrendered. (No surrender charge.) 2. Next, in each contract year, amounts totaling up to 10% of your prior contract anniversary contract value, but only to the extent not included and surrendered in Number 1. above. Your initial purchase payment is considered the prior contract anniversary contract value during the first contract year. (No surrender charge.) 3. Next, surrenders are from purchase payments received prior to the surrender charge period shown in the schedule under Contract Data. (No surrender charge.) 4. Next, surrenders are from purchase payments received that are still within the surrender charge period shown in the schedule under Contract Data. We surrender these payments on a first-in, first-out basis to minimize the surrender charge that applies to these payments. Waiver of Surrender Charges Surrender charges are waived for all of the following: 1. Death benefit payments made in the event of the death of the owner or annuitant; or 2. Contracts settled under an Annuity Payment Plan; or 3. Surrenders made if you were under age 76 on the contract date, and you provide proof satisfactory to us that, as of the date you request the surrender, you or the annuitant are confined to a nursing home, have been confined for the prior 90 days, and such confinement began while this contract was in force. 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. 4. Amounts surrendered to meet applicable minimum distribution requirements under the Code. Amounts surrendered under this waiver provision are limited to one time per year unless we agree otherwise. Suspension or Delay in Payment of Surrender We have the right to suspend or delay the date of any surrender 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 practicable; or (b) it is not reasonably practicable 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. Direct Rollover of Distributions If your contract is a Tax-Sheltered Annuity qualified under Section 403(b) of the Code, the following provisions apply: When you are eligible to receive a distribution from your contract, you may be able to have all or a portion of that distribution paid in a "direct rollover." A direct rollover means that, instead of paying you, we will make your payment directly to an individual retirement account or annuity (IRA, as defined in Section 408 of the Code) or to another Code Section 403(b) contract or custodial account that accepts direct rollovers. If you choose a direct rollover, you will not be taxed on your distribution until you later take it out of the IRA or 403(b) plan. However, you will be subject to any surrender charges or other applicable charges under your contract at the time of the distribution. Eligible Rollover Distributions Only an "eligible rollover distribution" as defined in Section 402(c) of the Code may be paid as a direct rollover. In general, eligible rollover distributions DO NOT include: 1. Any payment that is part of a series of equal or almost equal payments made at least once a year; - over your life or life expectancy, - over the life or life expectancies of you and your beneficiary, - for a period of ten years or more, or 2. Required minimum distributions made beginning in the year you reach age 70 1/2; or 3. Hardship distributions. Qualified Domestic Relations Order The rules outlined above apply to your former spouse, if any, who is an "alternate payee" under a "qualified domestic relations order" (as defined in Code Section 414(p)). A qualified domestic relations order is issued by a court, usually in connection with a divorce or legal separation. Distribution to your Surviving Spouse A beneficiary who is your surviving spouse may elect to have an eligible rollover distribution directly rolled over into an IRA, but not into another 403(b) plan. ANNUITY PROVISIONS Settlement When settlement occurs, the contract value will be applied to make annuity payments. The first payment will be made as of the settlement 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 for the annuity payments. Change of Settlement Date You may change the settlement date shown for this contract. Tell us the new date by written request. The maximum Settlement Date is the later of: 1. April 1 following the calendar year in which the annuitant attains age 70 1/2 or, if later, retires; or 2. such other date which satisfies the minimum distribution requirements under the Code; or 3. Such other date as agreed upon by us. Notwithstanding the above, the maximum Settlement Date is the later of: 1. The contract anniversary on or preceding the annuitant's 85th birthday; or 2. the 10th contract anniversary. Also, if you select a new settlement date, it must be at least 30 days after we receive your written request at our corporate office. Annuity Payment Plans Subject to the terms of this contract, 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 provided: 1. The Plan selected provides for payments over the life of the annuitant or over the life of the annuitant and a joint annuitant; or 2. the Plan selected provides for payments over a period which does not exceed the life expectancy of the annuitant, or the life expectancy of the annuitant and a joint annuitant; and 3. the Plan selected meets the minimum distribution incidental benefit requirements under the Code. 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, ten or fifteen 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. Plan D - Monthly payments will be paid during the lifetime of the annuitant and a 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 paid after the death of both the annuitant and joint annuitant. Plan E - (Installments for a specified period ) This provides monthly annuity payments for a period of years. The period of years may be no less than 10 or more than 30. By written request to us at least 30 days before the settlement date, you may select the Plan. If at least 30 days before the settlement date we have not received at our corporate office your written request to select a Plan, we will make payments according to Plan B with payments guaranteed for ten years. If the amount to applied to a Plan is less than $2,000 or would not provide an initial monthly payment of at least $20, we have the right to make a lump sum payment of the contract value. Allocation of Contract Values at Settlement At the time of settlement 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. Unless we agree otherwise, you may use a maximum of five variable subaccounts at any one time during settlement. Fixed Annuity A fixed annuity is an annuity with payments that are guaranteed by us as to dollar amount. Fixed annuity payments after the first will never be less than the amount of the first payment. At settlement, the fixed account contract value will be applied to the applicable Settlement Table. This will be done in accordance with the Payment Plan chosen. The 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 First Variable Annuity Payment At settlement, the variable account contract value will be applied to the applicable Settlement Table. This will be done: (1) on the valuation date on or next preceding the 7th calendar day before the settlement 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 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 7th calendar day before the settlement date. This result establishes the fixed number of annuity units for each monthly annuity payment after the first. 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 7th 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 variation 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. Unless we agree otherwise you may use a maximum of five variable subaccounts at any one time. Once annuity payments start, no exchanges may be made to or from any fixed annuity. TABLES OF SETTLEMENT RATES Table A below shows the amount of the first monthly variable annuity payment, based on a 5% 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 Settlement Rates in effect at settlement. 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 at settlement. The amount of such annuity payments under Plan D will depend upon the age of the annuitant and the joint annuitant at settlement.
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 tization Certain Year - ---------- -------- --- ----------- --- ------------ ---- ---------- --- ------------ ---- ----------- --------------- Age 65 2005 5.85 5.83 5.77 5.66 5.67 5.20 2010 5.78 5.76 5.71 5.61 5.61 5.16 2015 5.72 5.70 5.65 5.56 5.56 5.13 2020 5.66 5.64 5.60 5.52 5.51 5.09 2025 5.60 5.59 5.54 5.47 5.47 5.06 2030 5.55 5.53 5.50 5.43 5.43 5.04 Age 70 2005 6.54 6.50 6.36 6.14 6.22 5.66 2010 6.45 6.41 6.28 6.08 6.15 5.60 2015 6.35 6.32 6.21 6.03 6.08 5.55 2020 6.27 6.24 6.14 5.97 6.01 5.50 2025 6.19 6.16 6.07 5.92 5.95 5.45 2030 6.11 6.09 6.01 5.87 5.90 5.41 Age 75 2005 7.58 7.47 7.15 6.70 6.99 6.33 2010 7.43 7.34 7.05 6.63 6.89 6.25 2015 7.30 7.21 6.96 6.57 6.80 6.17 2020 7.18 7.10 6.87 6.51 6.71 6.09 2025 7.06 6.99 6.78 6.46 6.62 6.02 2030 6.95 6.89 6.70 6.40 6.55 5.96 Age 85 2005 11.44 10.69 9.09 7.60 9.50 8.88 2010 11.12 10.45 9.00 7.58 9.32 8.69 2015 10.82 10.23 8.90 7.56 9.15 8.51 2020 10.55 10.02 8.80 7.53 9.00 8.34 2025 10.29 9.83 8.71 7.51 8.85 8.19 2030 10.06 9.64 8.62 7.48 8.72 8.05 - ---------- -------- --- ----------- --- ------------ ---- ---------- --- ------------ ---- ----------- --------------- Table A above is based on the "1983 Individual Annuitant Mortality Table A" with 100% Projection Scale G and a 5% assumed investment return. Settlement 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 5% assumed investment return.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 10 10.51 17 7.20 24 5.88 11 9.77 18 6.94 25 5.76 12 9.16 19 6.71 26 5.65 13 8.64 20 6.51 27 5.54 14 8.20 21 6.33 28 5.45 15 7.82 22 6.17 29 5.36 16 7.49 23 6.02 30 5.28 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Table B - Dollar Amounts of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied - ---------- ------- ---------------- ------- -------- --------------- -------- ------- ---------------- --------------- Plan A Plan B Plan C Plan D - ---------- ------- ---------------- ------- -------- --------------- -------- ------- ---------------- --------------- Settlement Life Income Life Income Life Income Joint & Settlement Beginning Non-Refund Five Years with Fifteen Years Installment Survivor In Certain Ten Years Certain Refund Non-Refund Certain Age Year - ---------- ------- ---- ----------- --- ------------ ---- ---------- ---- ----------- ---- ----------- --------------- Age 65 2005 4.68 4.66 4.62 4.53 4.43 4.06 2010 4.61 4.60 4.55 4.48 4.38 4.02 2015 4.55 4.53 4.49 4.42 4.34 3.98 2020 4.48 4.47 4.44 4.38 4.29 3.94 2025 4.43 4.42 4.39 4.33 4.25 3.91 2030 4.37 4.37 4.34 4.29 4.21 3.88 Age 70 2005 5.38 5.35 5.24 5.05 4.97 4.55 2010 5.29 5.26 5.16 4.99 4.90 4.49 2015 5.20 5.17 5.08 4.93 4.84 4.43 2020 5.11 5.09 5.01 4.87 4.78 4.38 2025 5.03 5.01 4.94 4.82 4.72 4.33 2030 4.96 4.94 4.88 4.76 4.67 4.29 Age 75 2005 6.42 6.33 6.07 5.65 5.68 5.25 2010 6.28 6.20 5.97 5.59 5.60 5.16 2015 6.15 6.08 5.87 5.52 5.51 5.08 2020 6.03 5.97 5.78 5.46 5.43 5.01 2025 5.91 5.86 5.69 5.40 5.36 4.94 2030 5.81 5.76 5.60 5.34 5.29 4.88 Age 85 2005 10.25 9.60 8.12 6.64 7.97 7.83 2010 9.94 9.37 8.02 6.61 7.82 7.64 2015 9.65 9.15 7.91 6.59 7.68 7.46 2020 9.38 8.94 7.81 6.56 7.55 7.30 2025 9.14 8.74 7.72 6.54 7.42 7.15 2030 8.91 8.56 7.62 6.51 7.31 7.01 - ---------- ------- ---- ----------- --- ------------ ---- ---------- ---- ----------- ---- ----------- --------------- 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 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.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. IDS Life Insurance Company IDS Tower 10 Minneapolis, Minnesota 55440 EX-99.4.3 5 DEFERRED ANNUITY (31045-IRA) IDS Life Insurance Company DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. Annuitant: Contract Number: Contract Date: Settlement Date: This is a deferred annuity contract. It is a legal contract between you, as the owner, and us, IDS Life Insurance Company, a Stock Company, Minneapolis, Minnesota. PLEASE READ YOUR CONTRACT CAREFULLY. If the annuitant is living on the Settlement Date, upon your request, we will begin to pay you monthly annuity payments. Any payments made by us are subject to the terms of this contract. We issue this contract in consideration of your application and the payment of the purchase payments. Signed for and issued by IDS Life Insurance Company in Minneapolis, Minnesota, as of the contract date shown above. ACCUMULATION VALUES AND ANNUITY PAYMENTS, WHEN BASED ON THE INVESTMENT RESULTS OF THE VARIABLE SUBACCOUNTS, 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 representative within 10 days after you receive it. We will then cancel this contract and refund all premiums which you have paid. This contract will then be considered void from its start. [signature of] Richard W. Kling President [signature of] William A. Stoltzmann Secretary CONTRACT DATA Annuitiant: John Doe Contract Date: October 6, 1999 Contract Number: XXXX-XXXXXXX Settlement Date: October 6, 2019 Contract Owner: John Doe Deferred Annuity Contract ("AXP Retirement Advisor Variable Annuity") Upon issuance of this contract your purchase payments have been scheduled to be paid and applied to the fixed and variable subaccounts as shown below. You may change the amount, frequency and allocations as provided in this contract. Refer to the Purchase Payments provision. Amount submitted With Application: $2,000 Scheduled Purchase Payment: Annual Amount: NA Variable Purchase Payments Subaccounts Fund Allocation Percentage 1. IDS Life Capital Resource Fund 25% 2. IDS Life Special Income Fund 0% 3. IDS Life Moneyshare Fund 0% 4. IDS Life Managed Fund 25% 5. IDS Life International Equity Fund 0% 6. IDS Life Aggressive Growth Fund 0% 7. IDS Life Income Advantage Fund 0% 8. IDS Life Growth Dimensions Fund 0% 9. IDS Life Global Yield Fund 0% 10. Fund 10 0% 11. Fund 11 0% 12. Fund 12 0% 13. Fund 13 0% 14. Fund 14 0% 15. Fund 15 0% 16. Fund 1 0% 17. Fund 1 0% 18. Fund 18 0% 19. Fund 19 0% 20. Fund 20 0% 21. Fund 21 0% 22. Fund 22 0% 23. Fund 23 0% 24. Fund 24 0% 25. Fund 25 0% 26. Fund 26 0% 27. Fund 27 0% 28. Fund 28 0% Fixed Account 50% Schedule of Surrender Charges Surrender Charge Period for Each Purchase Payment: 10 years Number of Completed Surrender Charge Years from Date of Percentage Applied to Each Purchase Payment Purchase Payment - ---------------- ---------------- 0 8% 1 8% 2 8% 3 7% 4 7% 5 6% 6 5% 7 4% 8 3% 9 2% 10 0% Contract Administrative Charge: $30 annually. Charge is waived if contract value, or purchase payments less purchase payments surrendered, equals or exceeds $50,000. See Contract Administrative Charge provision. Maximum Purchase Payments Permitted: 1st contract year: $ 2,000,000 Each contract year thereafter: $ 100,000 Fixed Account Guaranteed Interest Rate: 3% Annual Effective Rate As of the date this contract was issued, any amounts allocated to the fixed account will earn interest, for the first year, at the annual effective rate of 4.25%. New rates may be declared from time to time. GUIDE TO CONTRACT PROVISIONS Definitions Important words and meanings/Page 3 General Provisions Entire Contract; Traditional IRA; Roth IRA; Incontestable; Benefits Based on Incorrect Data; State Laws; Federal Laws; Reports to Owner; Evidence of Survival; Protection of Proceeds; Payments by Us; Voting Rights/ Page 4 Ownership and Beneficiary Owner's Rights; Trust or Custodial Ownership; Change of Ownership; Beneficiary; Change of Beneficiary/Page 5 Payments to Beneficiary Describes options and amounts payable upon death/Page 6 Purchase Payments Purchase Payments; Amount and Intervals; Payment Limits; Allocation of Purchase Payments; Additional "Credits" for Purchase Payments/Page 7 Contract Value Describes the fixed and variable account contract values; Interest to be Credited, Contract Administrative Charge; Premium Tax Charges, Transfers of Contract Values/Page 9 Fixed and Variable Accounts Describes the variable subaccounts, accumulation units and values; Net Investment Factor; Mortality and Expense Risk Charge; Annuity Unit Value/Page 10 Surrender Provisions Surrender of the contract for its surrender value; Rules for Surrender; Surrender Value; Surrender Charge; Surrender Order; Waiver of Surrender Charges; Suspension or Delay in Payment of Surrender/Page 12 Annuity Provisions When annuity payments begin; Different ways to receive annuity payments; Determination of payment amounts/Page 14 Tables of Settlement Rates Tables showing amount of first variable annuity payment and the guaranteed fixed annuity payments for the various payment plans/Page 16 DEFINITIONS The following words are often used 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 contract value prior to settlement. annuitant The person or persons on whose life monthly annuity payments depend. annuity unit An annuity unit is an accounting unit of measure. It is used to calculate the value of annuity payments from the variable subaccounts on and after the settlement date. code The Internal Revenue Code of 1986, as amended, its regulations thereunder and/or promulgations of the Internal Revenue Service, as applicable. contract anniversary The same day and month as the contract date each year that the contract remains in force. contract date 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 Fixed Account Contract Value (which receives a declared interest rate) and the Variable Account Contract Value (which varies with the investment performance of the elected subaccounts) for this contract. 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. settlement The application of the contract value of this contract to an Annuity Payment Plan to provide annuity payments. settlement date The date shown under Contract Data on which annuity payments are scheduled to begin. This date may be changed as provided in this contract. You will be notified prior to the settlement 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 annuity A variable annuity is an annuity with payments which: (1) are not predetermined or guaranteed as to dollar amounts; and (2) vary in amount with the investment experience of one or more of the variable subaccounts. variable subaccounts The portfolios of the Variable Account. The subaccounts available on the contract date are named under Contract Data. we, our, us IDS Life Insurance Company written request A request in writing signed by you and delivered to us at our corporate office. you, your The owner of this contract. GENERAL PROVISIONS Entire Contract This contract form is 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 other representatives or other persons has the authority to change or waive any of our rights or requirements under this contract. Traditional IRA If this contract is intended to qualify as an Individual Retirement Annuity (IRA), we agree to and reserve the right to modify this contract to the extent necessary to qualify this contract as an Individual Retirement Annuity, as described in Sections 408(b) and 219 of the Internal Revenue Code of 1986, as amended and all related sections and regulations which are in effect during the term of the contract. Roth IRA If this contract is intended to qualify as a Roth IRA, we agree to and reserve the right to modify this contract to the extent necessary to qualify this contract as a Roth IRA as described in Section 408A of the Internal Revenue Code of 1986, as amended and all related sections and regulations which are in effect during the term of the contract. Incontestable This contract is incontestable from its date of issue. Benefits Based on Incorrect Data If the amount of benefits is determined by data as to a person's age or sex that is incorrect, benefits will be recalculated on the basis of the correct data. Any underpayments made by us will be made up immediately. Any overpayments made by us will be subtracted from future payments. State Laws This contract is governed by the laws 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. Federal Laws This contract is intended to qualify as an annuity contract for Federal income tax purposes. To that end, the provisions of this contract are to be interpreted to ensure or maintain such tax qualification, despite any other provisions to the contrary. We reserve the right to amend this contract to reflect any clarifications that may be needed or are appropriate to maintain such tax qualification. We will send you a copy of any such amendments. Reports to Owner At least once a year we will send you a statement showing the contract value and the cash surrender 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 given date, proof that such condition has been met may be required by us. Such proof may be required prior to making the payment. Protection of Proceeds Payments under this contract are not assignable by any beneficiary prior to the time they are due. Payments by Us All sums payable by us are payable from our corporate office. Any payment or surrender 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 contract owners. As contract owner, if you have voting rights we will send a notice to you telling you the time and place of the shareholder meeting. The notice will also explain matters to be voted upon and how many votes you have. Trustee or custodian owners shall cast votes according to instructions received from appropriate annuitants. All other votes of such trustee or custodian under the same trust or custodial agreement shall be cast in the same proportion. If no instructions are received, the votes may be cast at the trustee's or custodian's discretion. OWNERSHIP AND BENEFICIARY Owner's 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. Your entire interest is non-forfeitable. Trust or Custodial Ownership If you are a tax qualified trust or tax qualified custodial account, then your trustees or custodian (or other successors) properly named by your trust or custodial agreement may exercise all rights and privileges provided in this contract or allowed by us. Change of Ownership (Restricted) Your right to change the ownership of this contract is restricted. This contract may not be sold, assigned, transferred, forfeited, discounted or pledged as collateral for a loan or as security for performance of an obligation or for any other purpose to any other person other than as may be required or permitted under Section 408 of the Internal Revenue Code or 1986, as amended. Your interest in this contract may be transferred to your former spouse, if any, under a divorce decree or a written instrument incident to such divorce. However, if this contract is owned by a trustee of a tax-qualified trust or the custodian of a tax-qualified custodial account, such trustee or custodian may transfer ownership of this contract to the annuitant or to a qualified successor trustee or custodian. Such transfer shall be effective only if received by us at our corporate office. When so received, such transfer shall take effect as of the date of instrument, subject to any payment made or other action taken by us before such receipt. Beneficiary Unless designated otherwise, beneficiaries are those you name, in a form satisfactory to us, 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. PAYMENTS TO BENEFICIARY Death Benefit Before the Settlement Date If you die before the settlement date while this contract is in force, and you are age 80 or younger on the date of death, we will pay the beneficiary the greatest of: 1. the contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders"; or 3. the contract value as of the most recent sixth contract anniversary, plus any purchase payments paid and less any "adjusted partial surrenders" since that contract anniversary. An "adjusted partial surrender" is calculated for each partial surrender as the product of (a) times (b) where: (a) is the ratio of the amount of the partial surrender to the contract value on the date of (but prior to) the partial surrender; and (b) is the death benefit on the date of (but prior to) the partial surrender. If you are age 81 or older on the date of death, we will pay the beneficiary the greater of: 1. the contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders". If the annuitant dies before the settlement date, the beneficiary may elect to receive a lump sum payment anytime within five years after the date of death of the annuitant. In lieu of a lump sum payment, 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. payments begin no later than: (a) one year after the date of death in the case of a non-spouse beneficiary, or (b) the date on which the annuitant would have attained age 70 1/2 in the case of a spouse beneficiary; and 3. the plan provides for payments over a period which does not exceed the life or the life expectancy of the beneficiary. In this event, the reference to "annuitant" in the Annuity Provisions shall apply to the beneficiary. We will determine the contract value on which we base amounts payable or applied under this section at the next accumulation unit value calculated after we receive due proof of death at our corporate office. Spouse Option to Continue Contract Upon Owner's Death If your death occurs prior to the settlement date, and your spouse is designated as sole beneficiary, they may elect in writing to forego receipt of the death benefit and instead continue this contract in force as the owner. This election by your spouse must be made within 60 days after we receive due proofs of death. If this contract is a traditional IRA, the settlement date may not be later than April 1 following the calendar year in which the annuitant would have attained 70 1/2 , or such other date which allows the spouse to satisfy the minimum distribution requirements under the Code. Annuitant's Death After the Settlement Date If the annuitant dies after the settlement date, the amount payable, if any, will be as provided in the Annuity Payment Plan then in effect. 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 corporate 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. Amount and Intervals Purchase payments may be paid in a single sum or in installments until the earlier of: (1) the date this contract terminates by surrender or otherwise; or (2) the date on which the annuity payments begin. Subject to the Payment Limits Provision you may: (1) stop and/or restart purchase payments; or (2) increase or decrease the amount of your purchase payments; or (3) change the interval of your purchase payments. If this contract is a traditional IRA, no annual purchase payments may be made with respect to the taxable year in which the annuitant attains age 70 1/2 or any later year, with the exception of employer purchase payments made in connection with a Simplified Employee Pension Plan. If this contract is a Roth IRA, purchase payments may be made even after the annuitant has attained age 70 1/2. Payment Limits Provision Maximum Purchase Payments - The maximum purchase payments in the first or later contract years may not exceed the amounts shown under Contract Data. We reserve the right to increase the maximums. Minimum Purchase Payments - Upon issue of this contract, a purchase payment intended as a Single Purchase Payment must be at least $1,000. If you intend to make installment purchase payments such payments, on an annualized basis, must be at least equal to $600. Additional payments must be at least $50. If this contract is a traditional IRA, except as otherwise provided in this paragraph, the total purchase payments for any taxable year may not exceed $2,000. In the case of a rollover contribution described in Sections 402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8) or 408(d)(3), of the Internal Revenue Code of 1986, as amended, there is no limit on the amount of your purchase payment. If this contract is maintained in connection with a Simplified Employee Pension Plan, employer purchase payments for any taxable year may not exceed 15% of your compensation or $30,000, whichever is less. All purchase payments must be made in cash. If you die before your 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. If this contract is a Roth IRA, except as otherwise provided in this paragraph, the total purchase payments for any taxable year may not exceed $2,000. In the case of a rollover contribution or a conversion of an Individual Retirement Annuity (other than a Roth IRA) to a Roth IRA as described in Sections 408A(c)(6) and 408A(d)(3)(C) of the Internal Revenue Code of 1986, as amended, there is no limit on the amount of your purchase payment. 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. With the exception of employer purchase payments/premiums made to a SIMPLE Retirement Account under a SIMPLE Savings Plan, no purchase payments/premiums may be made to this contract other than a rollover contribution from another SIMPLE Retirement Account under Section 408(d)(3)(G) of the Internal Revenue Code of 1986, as amended. Employer purchase payments/premiums made to a SIMPLE Retirement Account under a SIMPLE Savings Plan for any taxable year may not exceed applicable contribution limits described in Section 408(p)(2) of the Internal Revenue Code of 1986, as amended. Annual employer purchase payments/premiums to a SIMPLE Retirement Account under a SIMPLE Savings Plan may be made with respect to the taxable year in which the annuitant attains age 701/2 or any later date. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum transfer from the fixed account to the variable subaccounts. We also reserve the right to cancel this contract if both of the following conditions exist at the same time: (1) no purchase payments have been paid for a continuous period of 24 months; and (2) less than $600 in purchase payments have been paid under this contract. In this event we will give you 30 days written notice of our intent to cancel this contract. Upon such cancellation we will pay you the contract value in one sum. This contract will then terminate. 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 each account may be made in any whole percent from 0% to 100% as long as the total adds up to 100%. Your allocation instructions as of the contract date are shown under Contract Data. By written request, or by other 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 corporate office. Additional "Credits" for Purchase Payments We will add a Credit of 1% of all purchase payments received under this contract in each of the following situations: 1. if your contract has a 10-year surrender charge schedule as shown under Contract Data; or 2. if your initial purchase payment to this contract was at least $100,000. Each credit is allocated to your contract value when the applicable purchase payment is applied to your contract value. Such Credits are allocated to your contract value according to allocation instructions in effect for your purchase payments. Credits shall be reversed from the contract value for any purchase payment that is not honored. Credits applied within 12 months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, if applicable, shall be reversed from the contract value. The amount returned to you under the Right to Examine Contract (Free-look) provision shall not include any Credits applied to your contract. 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 surrendered; 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 surrenders, 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 and any purchase payment credits so allocated, or transfers among the variable and fixed accounts; less (2) any units deducted for charges or surrenders. Fixed Account Contract Value The fixed account contract value at any time will be: (1) the sum of all amounts credited to the fixed account under this contract; less (2) any amounts deducted for charges or surrenders. Interest to be Credited We will credit interest to the fixed account contract value. Interest will begin to accrue on the date the purchase payments which are received in our corporate office become available to us for use. Such interest will be credited at a rate that we determine from time to time. However, we guarantee that the rate will not be less than the Guaranteed Interest Rate shown under Contract Data. 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 or, if earlier, when the contract is fully surrendered. 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 this charge if your contract value, or your total purchase payments less any purchase payments surrendered, equals or exceeds $50,000. If you make a full surrender of this contract, we deduct the full $30 contract administrative charge at the time of the full surrender regardless of purchase payments made or contract value. The charge does not apply after settlement of this contract under an annuity payment plan. Premium Tax Charges A charge will be made by us against the contract value of this contract at the time that any premium taxes not previously deducted are payable. Transfers of Contract Values While this contract is in force prior to the settlement date, transfer of contract values may be made as outlined below: 1. You may transfer all or part of the values held in one or more 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 after a contract anniversary you may transfer values from the fixed account to one or more of the variable subaccounts. Only one such transfer is allowed during this period each year. If such a transfer is made, no transfers from a variable subaccount to the fixed account may be made until the next contract anniversary. You may make a transfer by written request. Transfer requests may also be made according to telephone procedures or automated transfer procedures that are then currently in effect, if any. There is no fee or charge for these transfers. However, the minimum transfer amount is $250, or if less, the entire value in the account from which the transfer is being made. Smaller minimums may apply to automated transfer procedures. This transfer privilege may be suspended or modified by us at any time. FIXED AND VARIABLE ACCOUNTS The Fixed Account The fixed account is our general account. It is made up of all of our assets other than: (1) those in the variable subaccounts; 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 our assets for this contract to the variable accounts. 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 subaccounts 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 from which the variable subaccounts buy shares if laws or regulations change, the existing funds become unavailable or in our judgment, the funds are no longer suitable for the subaccounts. We have the right to substitute funds for those shown under Contract Data, including funds other than those shown under Contract Data. We may also: add additional subaccounts investing in other funds; combine subaccounts; transfer assets to and from the subaccounts or the variable account; and eliminate or close any subaccounts. When required, we would first seek approval of the Securities and Exchange Commission and, 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 and any purchase payment credits allocated to the subaccount; and 2. transfers to the subaccount; and subtracting the number of accumulation units from: 1. transfers from the subaccount; and 2. surrenders (including surrender 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 receive the purchase payment or transfer value, or during which we deducted transfers, surrenders, surrender charges or contract administrative charges. Variable Account Accumulation Unit Value The value of an accumulation unit for each of the variable subaccounts was arbitrarily set at $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 account 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) 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 dividend or capital gain distributions made by the fund held in the variable subaccount, if the "ex-dividend" date occurs during the current valuation period. 2. is the net asset value per share of mutual fund held in the variable subaccount, determined at the end of the last prior valuation period. 3. is a factor representing the mortality and expense risk 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 .75% 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. Annuity Unit Value The value of an Annuity Unit for each variable subaccount was arbitrarily set at $1 when the first funds 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 periods 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 settlement tables on page 16. SURRENDER PROVISIONS Surrender By written request and subject to the rules below you may: 1. surrender this contract for the total surrender value; or 2. partially surrender this contract for a part of the surrender value. Rules for Surrender All surrenders 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 the settlement date or the death of the annuitant. 2. Unless we agree otherwise, you must surrender an amount equal to at least $250 or the entire contract value, if less. The contract value after a partial surrender must be at least $600. 3. The amount surrendered, less any charges, will normally be paid to you within seven days of our receipt of your written surrender request and the return of this contract, if required. For surrenders from the fixed account, we have the right to defer payment to you for up to 6 months from the date we receive the request. 4. For partial surrenders, if you do not specify from which accounts the surrender is to be made, the surrender will be made from the variable subaccounts and fixed account in the same proportion as your interest in each bears to the contract value. 5. Any amounts surrendered and charges which may apply can not be repaid. Upon surrender for the full surrender value this contract will terminate. We may require that you return the contract to us before we pay the full surrender value. Surrender Value The surrender value at any time will be: 1. the contract value; 2. minus the contract administrative charge; 3. minus any surrender charge. Surrender Charge If you surrender all or a part of your contract, you may be subject to a surrender charge. A surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven (7) or ten (10) years before surrender. The surrender charge period you selected at the time of application for this contract and applicable surrender charge percentages are shown under Contract Data. We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the surrender charges. Surrender Order For purposes of determining any surrender charge, we treat amounts surrendered from your contract value in the following order so that the amount actually surrendered, less any surrender charge that applies, equals your requested surrender amount. 1. First, surrenders are from amounts representing contract earnings. Contract earnings are defined as the contract value less purchase payments not previously surrendered. (No surrender charge.) Amounts surrendered from a Roth IRA: For tax purposes, the amounts surrendered will be treated in accordance with the distribution rules described in Section 408A of the Code. 2. Next, in each contract year, amounts totaling up to 10% of your prior contract anniversary contract value, but only to the extent not included and surrendered in Number 1. above. Your initial purchase payment is considered the prior contract anniversary contract value during the first contract year. (No surrender charge.) 3. Next, surrenders are from purchase payments received prior to the surrender charge period shown in the schedule under Contract Data. (No surrender charge.) 4. Next, surrenders are from purchase payments received that are still within the surrender charge period shown in the schedule under Contract Data. We surrender these payments on a first-in, first-out basis to minimize the surrender charge that applies to these payments. Waiver of Surrender Charges Surrender charges are waived for all of the following: 1. Death Benefit payments made in the event of the death of the owner or annuitant; or 2. Contracts settled under an Annuity Payment Plan; or 3. Surrenders made if you were under age 76 on the contract date, and you provide proof satisfactory to us that, as of the date you request the surrender, you or the annuitant are confined to a nursing home, have been confined for the prior 90 days, and such confinement began while this contract was in force. 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. 4. Amounts surrendered to meet applicable minimum distribution requirements under the Code. Amounts surrendered under this waiver provision are limited to one time per year unless we agree other wise. Suspension or Delay in Payment of Surrender We have the right to suspend or delay the date of any surrender 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 practicable; or (b) it is not reasonably practicable 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. ANNUITY PROVISIONS Settlement When settlement occurs, the contract value will be applied to make annuity payments. The first payment will be made as of the settlement 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 for the annuity payments. Change of Settlement Date - Traditional IRA You may change the settlement date shown for this contract. Tell us the new date by written request. The maximum settlement date is the later of: 1. April 1 following the calendar year in which the annuitant attains age 70 1/2 or if later, retires; or 2. such other date which satisfies the minimum distribution requirements under the Code; or 3. Such other date as agreed upon by us. Not withstanding the above, the maximum settlement date is the later of: 1. The contract anniversary on or proceeding the annuitant's 85th birthday; or 2. the 10th contract anniversary. Also, if you select a new settlement date, it must be at least 30 days after we receive your written request at our corporate office. Change of Settlement Date - Roth IRA You may change the settlement date shown for this contract. Tell us the new date by written request. The maximum settlement date is the later of: 1. The contract anniversary on or proceeding the annuitant's 85th birthday; or 2. the 10th contract anniversary; or 3. such other date as agreed upon by us. Also, if you select a new settlement date, it must be at least 30 days after we receive your written request at our corporate office. Annuity Payment Plans Subject to the terms of this contract, 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 provided: 1. The Plan selected provides for payments over the life of the annuitant or over the life of the annuitant and a joint annuitant; or 2. the Plan selected provides for payments over a period which does not exceed the life expectancy of the annuitant, or the life expectancy of the annuitant and a joint annuitant; and 3. the Plan selected meets the minimum death distribution requirements under Section 401(a)(9)(B) of the Code and related regulations which are in effect and applicable to Roth IRAs during the term of the contract. 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, ten or fifteen 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. Plan D - Monthly payments will be paid during the lifetime of the annuitant and a 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 paid after the death of both the annuitant and joint annuitant. Plan E - (Installments for a specified period ) This provides monthly annuity payments for a period of years. The period of years may be no less than 10 or more than 30. By written request to us at least 30 days before the settlement date, you may select the Plan. If at least 30 days before the settlement date we have not received at our corporate office your written request to select a Plan, we will make payments according to Plan B with payments guaranteed for ten years. If the amount to applied to a Plan is less than $2,000 or would not provide an initial monthly payment of at least $20, we have the right to make a lump sum payment of the contract value. Allocation of Contract Values at Settlement At the time of settlement 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. Unless we agree otherwise, you may use a maximum of five variable subaccounts at any one time during settlement. Fixed Annuity A fixed annuity is an annuity with payments that are guaranteed by us as to dollar amount. Fixed annuity payments after the first will never be less than the amount of the first payment. At settlement, the fixed account contract value will be applied to the applicable Settlement Table. This will be done in accordance with the Payment Plan chosen. The amount payable for each $1,000 so applied is shown in Table B on page 17. 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 First Variable Annuity Payment At settlement, the variable account contract value will be applied to the applicable Settlement Table. This will be done: (1) on the valuation date on or next preceding the 7th calendar day before the settlement 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 16. Variable Annuity Payments After the First Payment Variable annuity payments after the first 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 7th calendar day before the settlement date. This result establishes the fixed number of annuity units for each monthly annuity payment after the first. 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 7th 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 variation 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. Unless we agree otherwise you may use a maximum of five variable subaccounts at any one time. Once annuity payments start, no exchanges may be made to or from any fixed annuity. TABLES OF SETTLEMENT RATES Table A below shows the amount of the first monthly variable annuity payment, based on a 5% 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 Settlement Rates in effect at settlement. 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 settlement. 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 settlement.
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 - ---------- ------- -------- -------- ------ -------- ------- -------- ------- -------- ------ --------- -------------- Age 65 2005 6.49 5.85 6.44 5.83 6.29 5.77 6.06 5.66 6.13 5.67 5.34 2010 6.40 5.78 6.35 5.76 6.22 5.71 6.00 5.61 6.06 5.61 5.30 2015 6.31 5.72 6.27 5.70 6.15 5.65 5.95 5.56 6.00 5.56 5.25 2020 6.23 5.66 6.19 5.64 6.08 5.60 5.90 5.52 5.93 5.51 5.21 2025 6.15 5.60 6.12 5.59 6.01 5.54 5.84 5.47 5.88 5.47 5.18 2030 6.08 5.55 6.05 5.53 5.95 5.50 5.80 5.43 5.82 5.43 5.14 Age 70 2005 7.41 6.54 7.29 6.50 6.98 6.36 6.54 6.14 6.79 6.22 5.85 2010 7.28 6.45 7.17 6.41 6.88 6.28 6.48 6.08 6.70 6.15 5.78 2015 7.16 6.35 7.06 6.32 6.80 6.21 6.42 6.03 6.61 6.08 5.72 2020 7.04 6.27 6.95 6.24 6.71 6.14 6.37 5.97 6.53 6.01 5.66 2025 6.93 6.19 6.85 6.16 6.63 6.07 6.31 5.92 6.45 5.95 5.61 2030 6.83 6.11 6.76 6.09 6.55 6.01 6.26 5.87 6.38 5.90 5.56 Age 75 2005 8.67 7.58 8.42 7.47 7.78 7.15 7.02 6.70 7.65 6.99 6.59 2010 8.49 7.43 8.26 7.34 7.68 7.05 6.97 6.63 7.53 6.89 6.49 2015 8.32 7.30 8.11 7.21 7.58 6.96 6.91 6.57 7.42 6.80 6.40 2020 8.16 7.18 7.97 7.10 7.48 6.87 6.86 6.51 7.31 6.71 6.31 2025 8.00 7.06 7.83 6.99 7.38 6.78 6.81 6.46 7.21 6.62 6.24 2030 7.86 6.95 7.70 6.89 7.29 6.70 6.75 6.40 7.12 6.55 6.16 Age 85 2005 13.01 11.44 11.71 10.69 9.46 9.09 7.69 7.60 10.30 9.50 9.30 2010 12.65 11.12 11.48 10.45 9.38 9.00 7.67 7.58 10.11 9.32 9.09 2015 12.31 10.82 11.26 10.23 9.30 8.90 7.66 7.56 9.93 9.15 8.90 2020 11.99 10.55 11.04 10.02 9.22 8.80 7.64 7.53 9.76 9.00 8.72 2025 11.70 10.29 10.84 9.83 9.15 8.71 7.62 7.51 9.60 8.85 8.55 2030 11.42 10.06 10.64 9.64 9.07 8.62 7.61 7.48 9.45 8.72 8.40 - ---------- ------- -------- -------- ------ -------- ------- -------- ------- -------- ------ --------- -------------- Table A above is based on the "1983 Individual Annuitant Mortality Table A" with 100% Projection Scale G and a 5% assumed investment return. 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 5% assumed investment return.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 10 10.51 17 7.20 24 5.88 11 9.77 18 6.94 25 5.76 12 9.16 19 6.71 26 5.65 13 8.64 20 6.51 27 5.54 14 8.20 21 6.33 28 5.45 15 7.82 22 6.17 29 5.36 16 7.49 23 6.02 30 5.28 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Table B- Dollar Amounts of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied - ---------- -------- ---------------- ------ -------- ---------------- ------- ------- ----------------- -------------- Plan A Plan B Plan C Plan D - ---------- -------- ---------------- ------ -------- ---------------- ------- ------- ----------------- -------------- Settlement Life 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 - ---------- -------- ------- -------- ------ -------- ------- -------- ------- ------- -------- -------- -------------- 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.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. IDS Life Insurance Company IDS Tower 10 Minneapolis, Minnesota 55440 EX-99.4.4 6 DEFERRED ANNUITY (31046) IDS Life Insurance Company DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. Annuitant: Contract Number: Contract Date: Settlement Date: This is a deferred annuity contract. It is a legal contract between you, as the owner, and us, IDS Life Insurance Company, a Stock Company, Minneapolis, Minnesota. PLEASE READ YOUR CONTRACT CAREFULLY. If the annuitant is living on the Settlement Date, upon your request, we will begin to pay you monthly annuity payments. Any payments made by us are subject to the terms of this contract. We issue this contract in consideration of your application and the payment of the purchase payments. Signed for and issued by IDS Life Insurance Company in Minneapolis, Minnesota, as of the contract date shown above. ACCUMULATION VALUES AND ANNUITY PAYMENTS, WHEN BASED ON THE INVESTMENT RESULTS OF THE VARIABLE SUBACCOUNTS, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. SEE PAGE 9 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 representative 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. (signature of) Richard W. Kling President (signature of) William A. Stoltzmann Secretary CONTRACT DATA Annuitiant: John Doe Contract Date: October 6, 1999 Contract Number: XXXX-XXXXXXX Settlement Date: October 6, 2019 Contract Owner: John Doe Deferred Annuity Contract ("AXP Retirement Advisor Variable Annuity-Band 3") Upon issuance of this contract your purchase payments have been scheduled to be paid and applied to the fixed and variable subaccounts as shown below. You may change the amount, frequency and allocations as provided in this contract. Refer to the Purchase Payments provision. Amount submitted With Application: $1,000,000 Scheduled Purchase Payment: Annual Amount: NA Variable Purchase Payments Subaccounts Fund Allocation Percentage 1. AXP VP Strategy Aggressive Fund 25% 2. AXP VP Capital Resources Fund 0% 3. AXP VP New Dimensions Fund 0% 4. AXP VP International Fund 25% 5. AXP VP Growth Fund 0% 6. AXP VP Blue Chip Advantage Fund 0% 7. AXP VP Small Cap Advantage Fund 0% 8. AXP VP Diversified Equity Income Fund 0% 9. AXP VP Managed Fund 0% 10. AXP VP Global Bond Fund 0% 11. AXP VP Extra Income Fund 0% 12. AXP VP Bond Fund 0% 13. AXP VP Federal Income Fund 0% 14. AXP VP Cash Management Fund 0% 15. Goldman Sachs CORE U.S. Equity Fund 0% 16. Goldman Sachs CORE Small Cap Equity Fund 0% 17. Goldman Sachs Mid Cap Value Fund 0% 18. American Century VP Value Fund 0% 19. American Century VP International Fund 0% 20. AIM V.I. Capital Appreciation Fund 0% 21. AIM V.I. Capital Development Fund 0% 22. Fidelity VIP Overseas Portfolio: Service Class 0% 23. Fidelity VIP III Growth & Income Portfolio: Service Class 0% 24. Fidelity VIP III Mid Cap Portfolio: Service Class 0% 25. Wagner U.S. Small Cap Advisor Portfolio 0% 26. Wagner International Small Cap Advisor Portfolio 0% 27. Royce Micro-Cap Portfolio 0% 28. Putnam VT Vista Fund Class IB 0% 29. Putnam VT Intl. New Opportunities Fund Class IB 0% 30. Lazard Retirement International Equity Portfolio 0% 31. Templeton Intl. Smaller Co's Investments Fund Class 2 0% 32. Franklin Real Estate Investments Fund Class 2 0% 33. Franklin Small Cap Value Investments Fund Class 2 0% 34. Warburg Pincus Trust Emerging Growth Portfolio 0% 35. Third Avenue Variable Series Small Cap Value Portfolio 0% 36. Janus Aspen Series International Growth Portfolio 0% 37. Janus Aspen series Capital Appreciation Portfolio 0% Fixed Account 50% Contract Administrative Charge: $30 annually. Charge is waived if contract value, or purchase payments less purchase payments surrendered, equals or exceeds $50,000. See Contract Administrative Charge provision. Maximum Purchase Payments Permitted: 1st contract year: $2,000,000 Each contract year thereafter: $ 100,000 Fixed Account Guaranteed Interest Rate: 3% Annual Effective Rate As of the date this contract was issued, any amounts allocated to the fixed account will earn interest, for the first year, at the annual effective rate of 4.25%. New rates may be declared from time to time. GUIDE TO CONTRACT PROVISIONS Definitions Important words and meanings/Page 3 General Provisions Entire Contract; Incontestable; Benefits Based on Incorrect Data; State Laws; Federal Laws; Reports to Owner; Evidence of Survival; Protection of Proceeds; Payments by Us; Voting Rights/Page 4 Ownership and Beneficiary Owner's Rights; Change of Ownership; Beneficiary; Change of Beneficiary; Beneficiary's Rights; Assignment/Page 5 Payments to Beneficiary Describes options and amounts payable upon death/Page 6 Purchase Payments Purchase Payments; Allocation of Purchase Payments; Amounts and Intervals; Payment Limits/Page 7 Contract Value Describes the fixed and variable account contract values; Interest to be Credited; Contract Administrative Charge; Premium Tax Charges; Transfers of Contract Values/Page 8 Fixed and Variable Accounts Describes the variable subaccounts, accumulation units and values; Net Investment Factor; Mortality and Expense Risk Charge; Annuity Unit Value/Page 9 Surrender Provisions Surrender of the contract for its surrender value; Rules for Surrender; Surrender Value; Suspension or Delay in Payment of Surrender/Page 11 Annuity Provisions When annuity payments begin; Different ways to receive annuity payments; Determination of payment amounts/Page 12 Tables of Settlement Rates Tables showing amount of first variable annuity payment and the guaranteed fixed annuity payments for the various payment plans/Page 14 DEFINITIONS The following words are often used 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 contract value prior to settlement. annuitant The person or persons on whose life monthly annuity payments depend. annuity unit An annuity unit is an accounting unit of measure. It is used to calculate the value of annuity payments from the variable subaccounts on and after the settlement date. code The Internal Revenue Code of 1986, as amended, its regulations thereunder and/or promulgations of the Internal Revenue Service, as applicable. 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 Fixed Account Contract Value (which receives a declared interest rate) and the Variable Account Contract Value (which varies with the investment performance of the elected subaccounts) for this contract. 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. settlement The application of the contract value of this contract to an Annuity Payment Plan to provide annuity payments. settlement date The date shown under Contract Data on which annuity payments are scheduled to begin. This date may be changed as provided in this contract. You will be notified prior to the settlement 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 annuity A variable annuity is an annuity with payments which: (1) are not predetermined or guaranteed as to dollar amounts; and (2) vary in amount with the investment experience of one or more of the variable subaccounts. variable subaccounts The portfolios of the Variable Account. The subaccounts available on the contract date are named under Contract Data. we, our, us IDS Life Insurance Company written request A request in writing signed by you and delivered to us at our corporate office. you, your The owner of this contract. The owner may be someone other than the annuitant. The owner may be changed as provided in this contract. GENERAL PROVISIONS Entire Contract This contract form is 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 other representatives or other persons has the authority to change or waive any of our rights or requirements under this contract. Incontestable This contract is incontestable from its date of issue. Benefits Based on Incorrect Data If the amount of benefits is determined by data as to a person's age or sex that is incorrect, benefits will be recalculated on the basis of the correct data. Any underpayments made by us will be made up immediately. Any overpayments made by us will be subtracted from future payments. State Laws This contract is governed by the laws 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. Federal Laws This contract is intended to qualify as an annuity contract under Section 72 of the Internal Revenue 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, despite any other provisions to the contrary. We reserve the right to amend this contract to reflect any clarifications that may be needed or are appropriate to maintain such tax qualification. We will send you a copy of any such amendments. Reports to Owner At least once a year we will send you a statement showing the contract value and the cash surrender 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 given date, proof that such condition has been met may be required by us. Such proof may be required prior to making the payment. Protection of Proceeds Payments under this contract are not assignable by any beneficiary prior to the time they are due. Payments by Us All sums payable by us are payable from our corporate office. Any payment or surrender 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 contract owners. As contract owner, if you have voting rights we will send a notice to you telling you the time and place of the shareholder meeting. The notice will also explain matters to be voted upon and how many votes you have. OWNERSHIP AND BENEFICIARY Owner's 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. Change of Ownership You can change the ownership of this contract 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 recording. Beneficiary Unless designated otherwise, beneficiaries are those you name, in a form satisfactory to us, to receive benefits of this contract when the first of you or the annuitant die while this contract is in force. The owner may change the beneficiary as provided below. Benefits will be paid equally to all primary beneficiaries surviving the annuitant. If none survive, proceeds will be paid equally to all contingent beneficiaries surviving the annuitant. If no beneficiary survives the annuitant, 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. Beneficiary's Rights If the death benefit under this contract becomes payable to a beneficiary (payee) under an Annuity Payment Plan, that payee shall have the right to name a beneficiary. Any such request from the payee must be made on a form satisfactory to us. Assignment While the annuitant is living, you can assign this contract or any interest in it. 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 new assignment must be submitted to us at our corporate office. Any assignment is subject to any action taken or payment made by us before the assignment was recorded at our corporate office. We are not responsible for the validity or effect, tax or otherwise, of any assignment. PAYMENTS TO BENEFICIARY Death Benefit Before the Settlement Date If you or the annuitant die before the Settlement Date while this contract is in force, and both you and the annuitant are age 80 or younger on the date of death, we will pay the beneficiary the greatest of: 1. the contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders"; or 3. the contract value as of the most recent sixth contract anniversary, plus any purchase payments paid and less any "adjusted partial surrenders" since that contract anniversary. An "adjusted partial surrender" is calculated for each partial surrender as the product of (a) times (b) where: (a) is the ratio of the amount of the partial surrender to the contract value on the date of (but prior to) the partial surrender; and (b) is the death benefit on the date of (but prior to) the partial surrender. If either you or the annuitant are age 81 or older on the date of death, we will pay the beneficiary the greater of: 1. the contract value; or 2. the total purchase payments less any adjusted partial surrenders. The above amount will be payable in a lump sum on the valuation date we receive due proof of death of the annuitant or owner, whichever first occurs. The beneficiary may elect to receive payment anytime within 5 years after the date of death. In lieu of a lump sum, payment 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. payments begin no later than one year after the date of death; and 3. the plan provides payments over a period which does not exceed the life or life expectancy of the beneficiary. In this event, the reference to "annuitant" in the Annuity Provisions shall apply to the beneficiary. We will determine the contract value on which we base amounts payable or applied under this section at the next accumulation unit value calculated after we receive due proof of death at our corporate office. Pre-election of an Annuity Payment Plan During your lifetime you may elect how the death benefit described herein is to be paid under the contract in the event of death before the settlement date. Any such election must be made on a form satisfactory to us. We must receive the form in our corporate office prior to the date of death of the first to die of the owner or annuitant. In this event the death benefit shall be payable as so elected by you, rather than as requested by the beneficiary. If for any reason such election does not satisfy Internal Revenue Code Section 72 or related distribution requirements, the election will be void and the beneficiary will then be permitted to elect payment pursuant to the provisions of the contract. Spouse Option to Continue Contract Upon Owner's Death If the owner's death occurs prior to the settlement date, the owner's spouse, if designated as sole beneficiary, or as a joint tenant with right of survivorship, may elect in writing to forego receipt of the death benefit and instead continue this contract in force as owner. The election by the spouse must be made within 60 days after we receive due proof of death. Annuitant's Death After the Settlement Date If the annuitant or owner dies after the settlement date, the amount payable, if any, will be as provided in the Annuity Payment Plan then in effect. 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 corporate 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. 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 each account may be made in any whole percent from 0% to 100% as long as the total adds up to 100%. Your allocation instructions as of the contract date are shown under Contract Data. By written request, or by other 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 corporate office. Amount and Intervals Your initial or scheduled purchase payments are shown under Contract Data. Purchase payments may be paid until the earlier of: (1) the date this contract terminates by surrender or otherwise; or (2) the date on which the annuity payments begin. Subject to the Payment Limits Provision you may: (1) stop and/or restart purchase payments; or (2) increase or decrease the amount of your purchase payments; or (3) change the interval of your purchase payments. Payment Limits Provision Maximum Purchase Payments - The maximum purchase payments in the first or later contract years may not exceed the amounts shown under Contract Data. We reserve the right to increase the maximums. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum transfer from the fixed account to the variable subaccounts. We also reserve the right to cancel this contract if both of the following conditions exist at the same time: (1) no purchase payments have been paid for a continuous period of 24 months; and (2) less than $600 in purchase payments have been paid under this contract. In this event we will give you 30 days written notice of our intent to cancel this contract. Upon such cancellation we will pay you the contract value in one sum. This contract will then terminate. If this contract was purchased as part of your participation in the American Express Diversified Portfolio Service (or similar "wrap fee" program) and you discontinue such participation, we will cancel this contract. We will give you 30 days written notice before cancellation. Upon such cancellation we will pay you the contract value in one sum. This contract will then terminate. 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 surrendered; 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 surrenders, 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) any units deducted for charges or surrenders. Fixed Account Contract Value The fixed account contract value at any time will be: (1) the sum of all amounts credited to the fixed account under this contract; less (2) any amounts deducted for charges or surrenders. Interest to be Credited We will credit interest to the fixed account contract value. Interest will begin to accrue on the date the purchase payments which are received in our corporate office become available to us for use. Such interest will be credited at a rate that we determine from time to time. However, we guarantee that the rate will not be less than the Guaranteed Interest Rate shown under Contract Data. 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 or, if earlier, when the contract is fully surrendered. 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 this charge if your contract value, or your total purchase payments less any purchase payments surrendered, equals or exceeds $50,000. If you make a full surrender of this contract, we deduct the full $30 contract administrative charge at the time of the full surrender regardless of purchase payments made or contract value. The charge does not apply after settlement of this contract under an annuity payment plan. Premium Tax Charges A charge will be made by us against the contract value of this contract at the time that any premium taxes not previously deducted are payable. Transfers of Contract Values While this contract is in force prior to the settlement date, transfer of contract values may be made as outlined below: 1. You may transfer all or part of the values held in one or more 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 after a contract anniversary you may transfer values from the fixed account to one or more of the variable subaccounts. Only one such transfer is allowed during this period each year. If such a transfer is made, no transfers from a variable subaccount to the fixed account may be made until the next contract anniversary. You may make a transfer by written request. Transfer requests may also be made according to telephone procedures or automated transfer procedures that are then currently in effect, if any. There is no fee or charge for these transfers. However, the minimum transfer amount is $250, or if less, the entire value in the account from which the transfer is being made. Smaller minimums may apply to automated transfer procedures. This transfer privilege may be suspended or modified by us at any time. FIXED AND VARIABLE ACCOUNTS The Fixed Account The fixed account is our general account. It is made up of all of our assets other than: (1) those in the variable subaccounts; 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 our assets for this contract to the variable accounts. 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 subaccounts 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 from which the variable subaccounts buy shares if laws or regulations change, the existing funds become unavailable or in our judgment, the funds are no longer suitable for the subaccounts. We have the right to substitute funds for those shown under Contract Data, including funds other than those shown under Contract Data. We may also: add additional subaccounts investing in other funds; combine subaccounts; transfer assets to and from the subaccounts or the variable account; and eliminate or close any subaccounts. When required, we would first seek approval of the Securities and Exchange Commission and, 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 from: 1. transfers from the subaccount; and 2. surrenders 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 receive the purchase payment or transfer value, or during which we deducted transfers, surrenders, or contract administrative charges. Variable Account Accumulation Unit Value The value of an accumulation unit for each of the variable subaccounts was arbitrarily set at $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 account 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) 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 dividend or capital gain distributions made by the fund held in the variable subaccount, if the "ex-dividend" date occurs during the current valuation period. (1) is the net asset value per share of fund held in the variable subaccount, determined at the end of the last prior valuation period. (2) is a factor representing the mortality and expense risk 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 .55% 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. Annuity Unit Value The value of an Annuity Unit for each variable subaccount was arbitrarily set at $1 when the first funds 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 periods 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 settlement tables on page 14. SURRENDER PROVISIONS Surrender By written request and subject to the rules below you may: 1. surrender this contract for the total surrender value; or 2. partially surrender this contract for a part of the surrender value. Rules for Surrender All surrenders 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 the settlement date or the death of the annuitant. 2. Unless we agree otherwise, you must surrender an amount equal to at least $250 or the entire contract value, if less. The contract value after a partial surrender must be at least $600. 3. The amount surrendered, less any charges, will normally be paid to you within seven days of our receipt of your written surrender request and the return of this contract, if required. For surrenders from the fixed account, we have the right to defer payment to you for up to 6 months from the date we receive the request. 4. For partial surrenders, if you do not specify from which accounts the surrender is to be made, the surrender will be made from the variable subaccounts and fixed account in the same proportion as your interest in each bears to the contract value. 5. Any amounts surrendered and charges which may apply can not be repaid. Upon surrender for the full surrender value this contract will terminate. We may require that you return the contract to us before we pay the full surrender value. Surrender Value The surrender value at any time will be: 1. the contract value; 2. minus the contract administrative charge. Suspension or Delay in Payment of Surrender We have the right to suspend or delay the date of any surrender 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 practicable; or (b) it is not reasonably practicable 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. ANNUITY PROVISIONS Settlement When settlement occurs, the contract value will be applied to make annuity payments. The first payment will be made as of the settlement 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 for the annuity payments. Change of Settlement Date You may change the settlement date shown for this contract. Tell us the new date by written request. However the settlement date may not be later than the later of: (1) the annuitant's 85th birthday; or (2) the tenth contract anniversary. Also, if you select a new date, it must be at least 30 days after we receive your written request at our corporate office. Annuity Payment Plans Subject to the terms of this contract, 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. 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, ten or fifteen 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. Plan D - Monthly payments will be paid during the lifetime of the annuitant and a 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 paid after the death of both the annuitant and joint annuitant. Plan E - (Installments for a specified period ) This provides monthly annuity payments for a period of years. The period of years may be no less than 10 or more than 30. By written request to us at least 30 days before the settlement date, you may select the Plan. If at least 30 days before the settlement date we have not received at our corporate office your written request to select a Plan, we will make payments according to Plan B with payments guaranteed for ten years. If the amount to applied to a Plan is less than $2,000 or would not provide an initial monthly payment of at least $20, we have the right to make a lump sum payment of the contract value. Allocation of Contract Values at Settlement At the time of settlement 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. Unless we agree otherwise, you may use a maximum of five variable subaccounts at any one time during settlement. Fixed Annuity A fixed annuity is an annuity with payments that are guaranteed by us as to dollar amount. Fixed annuity payments after the first will never be less than the amount of the first payment. At settlement, the fixed account contract value will be applied to the applicable Settlement Table. This will be done in accordance with the Payment Plan chosen. The amount payable for each $1,000 so applied is shown in Table B on page 15. 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 First Variable Annuity Payment At settlement, the variable account contract value will be applied to the applicable Settlement Table. This will be done: (1) on the valuation date on or next preceding the 7th calendar day before the settlement 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 14. Variable Annuity Payments After the First Payment Variable annuity payments after the first 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 7th calendar day before the settlement date. This result establishes the fixed number of annuity units for each monthly annuity payment after the first. 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 7th 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 variation 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. Unless we agree otherwise you may use a maximum of five variable subaccounts at any one time. Once annuity payments start, no exchanges may be made to or from any fixed annuity. TABLES OF SETTLEMENT RATES Table A below shows the amount of the first monthly variable annuity payment, based on a 5% 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 Settlement Rates in effect at settlement. 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 settlement. 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 settlement.
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 - ---------- ------- -------- -------- ------ -------- ------- -------- ------- -------- ------ --------- -------------- Age 65 2005 6.49 5.85 6.44 5.83 6.29 5.77 6.06 5.66 6.13 5.67 5.34 2010 6.40 5.78 6.35 5.76 6.22 5.71 6.00 5.61 6.06 5.61 5.30 2015 6.31 5.72 6.27 5.70 6.15 5.65 5.95 5.56 6.00 5.56 5.25 2020 6.23 5.66 6.19 5.64 6.08 5.60 5.90 5.52 5.93 5.51 5.21 2025 6.15 5.60 6.12 5.59 6.01 5.54 5.84 5.47 5.88 5.47 5.18 2030 6.08 5.55 6.05 5.53 5.95 5.50 5.80 5.43 5.82 5.43 5.14 Age 70 2005 7.41 6.54 7.29 6.50 6.98 6.36 6.54 6.14 6.79 6.22 5.85 2010 7.28 6.45 7.17 6.41 6.88 6.28 6.48 6.08 6.70 6.15 5.78 2015 7.16 6.35 7.06 6.32 6.80 6.21 6.42 6.03 6.61 6.08 5.72 2020 7.04 6.27 6.95 6.24 6.71 6.14 6.37 5.97 6.53 6.01 5.66 2025 6.93 6.19 6.85 6.16 6.63 6.07 6.31 5.92 6.45 5.95 5.61 2030 6.83 6.11 6.76 6.09 6.55 6.01 6.26 5.87 6.38 5.90 5.56 Age 75 2005 8.67 7.58 8.42 7.47 7.78 7.15 7.02 6.70 7.65 6.99 6.59 2010 8.49 7.43 8.26 7.34 7.68 7.05 6.97 6.63 7.53 6.89 6.49 2015 8.32 7.30 8.11 7.21 7.58 6.96 6.91 6.57 7.42 6.80 6.40 2020 8.16 7.18 7.97 7.10 7.48 6.87 6.86 6.51 7.31 6.71 6.31 2025 8.00 7.06 7.83 6.99 7.38 6.78 6.81 6.46 7.21 6.62 6.24 2030 7.86 6.95 7.70 6.89 7.29 6.70 6.75 6.40 7.12 6.55 6.16 Age 85 2005 13.01 11.44 11.71 10.69 9.46 9.09 7.69 7.60 10.30 9.50 9.30 2010 12.65 11.12 11.48 10.45 9.38 9.00 7.67 7.58 10.11 9.32 9.09 2015 12.31 10.82 11.26 10.23 9.30 8.90 7.66 7.56 9.93 9.15 8.90 2020 11.99 10.55 11.04 10.02 9.22 8.80 7.64 7.53 9.76 9.00 8.72 2025 11.70 10.29 10.84 9.83 9.15 8.71 7.62 7.51 9.60 8.85 8.55 2030 11.42 10.06 10.64 9.64 9.07 8.62 7.61 7.48 9.45 8.72 8.40 - ---------- ------- -------- -------- ------ -------- ------- -------- ------- -------- ------ --------- --------------
Table A above is based on the "1983 Individual Annuitant Mortality Table A" with 100% Projection Scale G and a 5% assumed investment return. 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 5% assumed investment return.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 10 10.51 17 7.20 24 5.88 11 9.77 18 6.94 25 5.76 12 9.16 19 6.71 26 5.65 13 8.64 20 6.51 27 5.54 14 8.20 21 6.33 28 5.45 15 7.82 22 6.17 29 5.36 16 7.49 23 6.02 30 5.28 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Table B- Dollar Amounts of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied - ---------- -------- ---------------- ------ -------- ---------------- ------- ------- ----------------- -------------- Plan A Plan B Plan C Plan D - ---------- -------- ---------------- ------ -------- ---------------- ------- ------- ----------------- -------------- Settlement Life Income Life Income Life Income Joint & Settlement Beginning Non-Refund Five Years with Fifteen Years Installment Survivor 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 - ---------- -------- ------- -------- ------ -------- ------- -------- ------- ------- -------- -------- -------------- 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.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. IDS Life Insurance Company IDS Tower 10 Minneapolis, Minnesota 55440 EX-99.4.5 7 DEFERRED ANNUITY (31047) IDS Life Insurance Company DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. Annuitant: Contract Number: Contract Date: Settlement Date: This is a deferred annuity contract. It is a legal contract between you, as the owner, and us, IDS Life Insurance Company, a Stock Company, Minneapolis, Minnesota. PLEASE READ YOUR CONTRACT CAREFULLY. If the annuitant is living on the Settlement Date, upon your request, we will begin to pay you monthly annuity payments. Any payments made by us are subject to the terms of this contract. We issue this contract in consideration of your application and the payment of the purchase payments. Signed for and issued by IDS Life Insurance Company in Minneapolis, Minnesota, as of the contract date shown above. ACCUMULATION VALUES AND ANNUITY PAYMENTS, WHEN BASED ON THE INVESTMENT RESULTS OF THE VARIABLE SUBACCOUNTS, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. SEE PAGE 9 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 representative 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. (signature of) Richard W. Kling President (signature of) William A. Stoltzmann Secretary CONTRACT DATA Annuitiant: John Doe Contract Date: October 6, 1999 Contract Number: XXXX-XXXXXXX Settlement Date: October 6, 2019 Contract Owner: John Doe Deferred Annuity Contract ("AXP Retirement Advisor Variable Annuit-Band 3") Upon issuance of this contract your purchase payments have been scheduled to be paid and applied to the fixed and variable subaccounts as shown below. You may change the amount, frequency and allocations as provided in this contract. Refer to the Purchase Payments provision. Amount submitted With Application: $1,000,000 Scheduled Purchase Payment: Annual Amount: NA
Variable Purchase Payments Subaccounts Fund Allocation Percentage 1. AXP VP Strategy Aggressive Fund 25% 2. AXP VP Capital Resources Fund 0% 3. AXP VP New Dimensions Fund 0% 4. AXP VP International Fund 25% 5. AXP VP Growth Fund 0% 6. AXP VP Blue Chip Advantage Fund 0% 7. AXP VP Small Cap Advantage Fund 0% 8. AXP VP Diversified Equity Income Fund 0% 9. AXP VP Managed Fund 0% 10. AXP VP Global Bond Fund 0% 11. AXP VP Extra Income Fund 0% 12. AXP VP Bond Fund 0% 13. AXP VP Federal Income Fund 0% 14. AXP VP Cash Management Fund 0% 15. Goldman Sachs CORE U.S. Equity Fund 0% 16. Goldman Sachs CORE Small Cap Equity Fund 0% 17. Goldman Sachs Mid Cap Value Fund 0% 18. American Century VP Value Fund 0% 19. American Century VP International Fund 0% 20. AIM V.I. Capital Appreciation Fund 0% 21. AIM V.I. Capital Development Fund 0% 22. Fidelity VIP Overseas Portfolio: Service Class 0% 23. Fidelity VIP III Growth & Income Portfolio: Service Class 0% 24. Fidelity VIP III Mid Cap Portfolio: Service Class 0% 25. Wagner U.S. Small Cap Advisor Portfolio 0% 26. Wagner International Small Cap Advisor Portfolio 0% 27. Royce Micro-Cap Portfolio 0% 28. Putnam VT Vista Fund Class IB 0% 29. Putnam VT Intl. New Opportunities Fund Class IB 0% 30. Lazard Retirement International Equity Portfolio 0%
CONTRACT DATA - (continued) Variable Purchase Payments Subaccounts Fund Allocation Percentage 31. Templeton Intl. Smaller Co's Investments Fund Class 2 0% 32. Franklin Real Estate Investments Fund Class 2 0% 33. Franklin Small Cap Value Investments Fund Class 2 0% 34. Warburg Pincus Trust Emerging Growth Portfolio 0% 35. Third Avenue Variable Series Small Cap Value Portfolio 0% 36. Janus Aspen Series International Growth Portfolio 0% 37. Janus Aspen series Capital Appreciation Portfolio 0% Fixed Account 50%
Contract Administrative Charge: $30 annually. Charge is waived if contract value, or purchase payments less purchase payments surrendered, equals or exceeds $50,000. See Contract Administrative Charge provision. Maximum Purchase Payments Permitted: 1st contract year: $2,000,000 Each contract year thereafter: $ 100,000 Fixed Account Guaranteed Interest Rate: 3% Annual Effective Rate As of the date this contract was issued, any amounts allocated to the fixed account will earn interest, for the first year, at the annual effective rate of 4.25%. New rates may be declared from time to time. GUIDE TO CONTRACT PROVISIONS Definitions Important words and meanings/Page 3 General Provisions Entire Contract; Incontestable; Benefits Based on Incorrect Data; State Laws; Federal Laws; Reports to Owner; Evidence of Survival; Protection of Proceeds; Payments by Us; Voting Rights/Page 4 Ownership and Beneficiary Owner's Rights; Trust or Custodial Ownership; Change of Ownership; Beneficiary; Change of Beneficiary/Page 5 Payments to Beneficiary Describes options and amounts payable upon death/Page 6 Purchase Payments Purchase Payments; Amount and Intervals; Payment Limits; Limit on Elective Deferrals; Allocation of Purchase Payments/Page 7 Contract Value Describes the fixed and variable account contract values; Interest to be Credited, Contract Administrative Charge; Premium Tax Charges, Transfers of Contract Values/Page 8 Fixed and Variable Accounts Describes the variable subaccounts, accumulation units and values; Net Investment Factor; Mortality and Expense Risk Charge; Annuity Unit Value/Page 9 Surrender Provisions Surrender; Rules for Surrender; Restrictions on Distributions from the Contract; Surrender Value; Suspension or Delay in Payment of Surrender; Direct Rollover of Distributions; Eligible Rollover Distributions/Page 11 Annuity Provisions When annuity payments begin; Different ways to receive annuity payments; Determination of payment amounts/Page 13 Tables of Settlement Rates Tables showing amount of first variable annuity payment and the guaranteed fixed annuity payments for the various payment plans/Page 15 DEFINITIONS The following words are often used 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 contract value prior to settlement. annuitant The person or persons on whose life monthly annuity payments depend. annuity unit An annuity unit is an accounting unit of measure. It is used to calculate the value of annuity payments from the variable subaccounts on and after the settlement date. code The Internal Revenue Code of 1986, as amended, its regulations thereunder and/or promulgations of the Internal Revenue Service, as applicable. contract anniversary The same day and month as the contract date each year that the contract remains in force. contract date 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 Fixed Account Contract Value (which receives a declared interest rate) and the Variable Account Contract Value (which varies with the investment performance of the elected subaccounts) for this contract. 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. settlement The application of the contract value of this contract to an Annuity Payment Plan to provide annuity payments. settlement date The date shown under Contract Data on which annuity payments are scheduled to begin. This date may be changed as provided in this contract. You will be notified prior to the settlement 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 annuity A variable annuity is an annuity with payments which: (1) are not predetermined or guaranteed as to dollar amounts; and (2) vary in amount with the investment experience of one or more of the variable subaccounts. variable subaccounts The portfolios of the Variable Account. The subaccounts available on the contract date are named under Contract Data. we, our, us IDS Life Insurance Company written request A request in writing signed by you and delivered to us at our corporate office. you, your The owner of this contract. GENERAL PROVISIONS Entire Contract This contract form is 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 other representatives or other persons has the authority to change or waive any of our rights or requirements under this contract. Incontestable This contract is incontestable from its date of issue. Benefits Based on Incorrect Data If the amount of benefits is determined by data as to a person's age that is incorrect, benefits will be recalculated on the basis of the correct data. Any underpayments made by us will be made up immediately. Any overpayments made by us will be subtracted from future payments. State Laws This contract is governed by the laws 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. Federal Laws This contract is intended to qualify as an annuity contract for Federal income tax purposes. To that end, the provisions of this contract are to be interpreted to ensure or maintain such tax qualification, despite any other provisions to the contrary. We reserve the right to amend this contract to reflect any clarifications that may be needed or are appropriate to maintain such tax qualification. We will send you a copy of any such amendments. Reports to Owner At least once a year we will send you a statement showing the contract value and the cash surrender 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 given date, proof that such condition has been met may be required by us. Such proof may be required prior to making the payment. Protection of Proceeds Payments under this contract are not assignable by any beneficiary prior to the time they are due. Payments by Us All sums payable by us are payable from our home office. Any payment or surrender 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 contract owners. As contract owner, if you have voting rights we will send a notice to you telling you the time and place of the shareholder meeting. The notice will also explain matters to be voted upon and how many votes you have. Trustee or custodian owners shall cast votes according to instructions received from appropriate annuitants. All other votes of such trustee or custodian under the same trust or custodial agreement shall be cast in the same proportion. If no instructions are received, the votes may be cast at the trustee's or custodian's discretion. OWNERSHIP AND BENEFICIARY Owner's 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. Trust or Custodial Ownership If you are a tax qualified trust or tax qualified custodial account, then your trustees or custodian (or their successors) properly named by your trust or custodial agreement may exercise all rights and privileges provided in this contract or allowed by us. Change of Ownership (Restricted) Your right to change the ownership of this contract is restricted. This contract may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for performance of an obligation or for any other purpose to any person other than to us. However, if you are a trust or a custodian or an employer as a part of a qualified plan under Sections 401 or 403 or a deferred compensation plan under Section 457 of the Code, you may transfer ownership of this contract to the annuitant. Such transfer must be 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 Unless designated otherwise, beneficiaries are those you name, in a form satisfactory to us, 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. PAYMENTS TO BENEFICIARY Death Benefit Before the Settlement Date If you or the annuitant die before the Settlement Date while this contract is in force, and both you and the annuitant are age 80 or younger on the date of death, we will pay the beneficiary the greatest of: 1. the contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders"; or 3. the contract value as of the most recent sixth contract anniversary, plus any purchase payments paid and less any "adjusted partial surrenders" since that contract anniversary. An "adjusted partial surrender" is calculated for each partial surrender as the product of (a) times (b) where: (a) is the ratio of the amount of the partial surrender to the contract value on the date of (but prior to) the partial surrender; and (b) is the death benefit on the date of (but prior to) the partial surrender. If either you or the annuitant are age 81 or older on the date of death, we will pay the beneficiary the greater of: 1. contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders". The above amount will be payable in a lump sum on the valuation date we receive due proof of death of the annuitant or owner, whichever first occurs. The beneficiary may elect to receive payment anytime within 5 years after the date of death. In lieu of a lump sum, payment 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. payments begin no later than one year after the date of death; and 3. the plan provides payments over a period which does not exceed the life or the life expectancy of the beneficiary. In this event, the reference to "annuitant" in the Annuity Provisions shall apply to the beneficiary. We will determine the contract value on which we base amounts payable or applied under this section at the next accumulation unit value calculated after we receive due proof of death at our corporate office. Spouse Option to Continue Contract Upon Owner's Death If the annuitant dies prior to the settlement date, a spouse who is designated as sole beneficiary may elect in writing to forego receipt of the death benefit and instead continue this contract in force. The election by the spouse must be made within 60 days after we receive due proof of death. In this event, the settlement date may not be later than April 1 following the calendar year in which the annuitant would have attained 70 1/2 , or such other date which allows the spouse to satisfy the minimum distribution requirements under the Code. Annuitant's Death After the Settlement Date If the annuitant dies after the settlement date, the amount payable, if any, will be as provided in the Annuity Payment Plan then in effect. 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 corporate 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. Amount and Intervals Purchase payments may be paid in a single sum or in installments until the earlier of: (1) the date this contract terminates by surrender or otherwise; or (2) the date on which the annuity payments begin. Subject to the Payment Limits Provision you may: (1) stop and/or restart purchase payments; or (2) increase or decrease the amount of your purchase payments; or (3) change the interval of your purchase payments. Payment Limits Provision Maximum Purchase Payments - The maximum purchase payments in the first or later contract years may not exceed the amounts shown under Contract Data. We reserve the right to increase the maximums. Minimum Purchase Payments - Upon issue of this contract, a purchase payment intended as a Single Purchase Payment must be at least $2,000. If you intend to make installment purchase payments such payments, on an annualized basis, must be at least equal to $600. Additional payments must be at least $50. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum transfer from the fixed account to the variable subaccounts. We also reserve the right to cancel this contract if both of the following conditions exist at the same time: (1) no purchase payments have been paid for a continuous period of 24 months; and (2) less than $600 in purchase payments have been paid under this contract. In this event we will give you 30 days written notice of our intent to cancel this contract. Upon such cancellation we will pay you the contract value in one sum. This contract will then terminate. Limit on Elective Deferrals If your contract is a Tax-Sheltered Annuity qualified under Section 403(b) of the Code, Elective Deferrals made under the contract may not exceed the annual limit on elective deferrals as provided in the Code. Elective Deferrals means employer contributions to the annuity that are excludable from your current income as provided in the Code. 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 each account may be made in any whole percent from 0% to 100% as long as the total adds up to 100%. Your allocation instructions as of the contract date are shown under Contract Data. By written request, or by other 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 home office. 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 surrendered; 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 surrenders, 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) any units deducted for charges or surrenders. Fixed Account Contract Value The fixed account contract value at any time will be: (1) the sum of all amounts credited to the fixed account under this contract; less (2) any amounts deducted for charges or surrenders. Interest to be Credited We will credit interest to the fixed account contract value. Interest will begin to accrue on the date the purchase payments which are received in our corporate office become available to us for use. Such interest will be credited at a rate that we determine from time to time. However, we guarantee that the rate will not be less than the Guaranteed Interest Rate shown under Contract Data. 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 value at the end of each contract year or, if earlier, when the contract is fully surrendered. 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 this charge if your contract value, or your total purchase payments less any purchase payments surrendered, equals or exceeds $50,000. If you make a full surrender of this contract, we deduct the full $30 contract administrative charge at the time of the full surrender regardless of purchase payments made or contract value. The charge does not apply after settlement of this contract under an annuity payment plan. Premium Tax Charges A charge will be made by us against the contract value of this contract at the time that any premium taxes not previously deducted are payable. Transfers of Contract Values While this contract is in force prior to the settlement date, transfer of contract values may be made as outlined below: 1. You may transfer all or part of the values held in one or more 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 after a contract anniversary you may transfer values from the fixed account to one or more of the variable subaccounts. Only one such transfer is allowed during this period each year. If such a transfer is made, no transfers from a variable subaccount to the fixed account may be made until the next contract anniversary. You may make a transfer by written request. Transfer requests may also be made according to telephone procedures or automated transfer procedures that are then currently in effect, if any. There is no fee or charge for these transfers. However, the minimum transfer amount is $250, or if less, the entire value in the account from which the transfer is being made. Smaller minimums may apply to automated transfer procedures. This transfer privilege may be suspended or modified by us at any time. FIXED AND VARIABLE ACCOUNTS The Fixed Account The fixed account is our general account. It is made up of all of our assets other than: (1) those in the variable subaccounts; 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 our assets for this contract to the variable accounts. 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 subaccounts 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 from which the variable subaccounts buy shares if laws or regulations change, the existing funds become unavailable or in our judgment, the funds are no longer suitable for the subaccounts. We have the right to substitute funds for those shown under Contract Data, including funds other than those shown under Contract Data. We may also: add additional subaccounts investing in other funds; combine subaccounts; transfer assets to and from the subaccounts or the variable account; and eliminate or close any subaccounts. When required, we would first seek approval of the Securities and Exchange Commission and, 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 from: 1. transfers from the subaccount; and 2. surrenders 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 receive the purchase payment or transfer value, or during which we deducted transfers, surrenders, surrender charges or contract administrative charges. Variable Account Accumulation Unit Value The value of an accumulation unit for each of the variable subaccounts was arbitrarily set at $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 account 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) 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 dividend or capital gain distributions made by the fund held in the variable subaccount, if the "ex-dividend" date occurs during the current valuation period. (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. (3) is a factor representing the mortality and expense risk 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 .55% 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. Annuity Unit Value The value of an Annuity Unit for each variable subaccount was arbitrarily set at $1 when the first funds 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 periods 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 settlement tables on page 15. SURRENDER PROVISIONS Surrender By written request and subject to the rules below you may: 1. Surrender this contract for the total surrender value; or 2. Partially surrender this contract for a part of the surrender value. Rules for Surrender All surrenders 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 the settlement date or the death of the annuitant. 2. Unless we agree otherwise, you must surrender an amount equal to at least $250 or the entire contract value, if less. The contract value after a partial surrender must be at least $600. 3. The amount surrendered, less any charges, will normally be paid to you within seven days of our receipt of your written surrender request and the return of this contract, if required. For surrenders from the fixed account, we have the right to defer payment to you for up to 6 months from the date we receive the request. 4. For partial surrenders, if you do not specify from which accounts the surrender is to be made, the surrender will be made from the variable subaccounts and fixed account in the same proportion as your interest in each bears to the contract value. 5. Any amounts surrendered and charges which may apply can not be repaid. Upon surrender for the full surrender value this contract will terminate. We may require that you return the contract to us before we pay the full surrender value. Restrictions on Distributions from the Contract If your contract is a Tax-Sheltered Annuity qualified under Section 403(b) of the Code, and unless otherwise provided in the Code, no amounts may be distributed from this contract unless you have: 1. attained age 59 1/2 ; or 2. separated from service; or 3. died; or 4. become disabled (as defined in Section 72(m)(7) of the Code); or 5. encountered hardship (within the meaning of Section 403(b) of the Code); and then only such amounts as the Code may provide. We shall require satisfactory written proof of the event(s) in items 1 through 5 above prior to any distribution from the contract. Surrender Value The surrender value at any time will be: 1. the contract value; 2. minus the contract administrative charge. Suspension or Delay in Payment of Surrender We have the right to suspend or delay the date of any surrender 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 practicable; or (b) it is not reasonably practicable 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. Direct Rollover of Distributions If your contract is a Tax-Sheltered Annuity qualified under Section 403(b) of the Code, the following provisions apply: When you are eligible to receive a distribution from your contract, you may be able to have all or a portion of that distribution paid in a "direct rollover." A direct rollover means that, instead of paying you, we will make your payment directly to an individual retirement account or annuity (IRA, as defined in Section 408 of the Code) or to another Code Section 403(b) contract or custodial account that accepts direct rollovers. If you choose a direct rollover, you will not be taxed on your distribution until you later take it out of the IRA or 403(b) plan. However, you will be subject to any surrender charges or other applicable charges under your contract at the time of the distribution. Eligible Rollover Distributions Only an "eligible rollover distribution" as defined in Section 402(c) of the Code may be paid as a direct rollover. In general, eligible rollover distributions DO NOT include: 1. Any payment that is part of a series of equal or almost equal payments made at least once a year; - - over your life or life expectancy, - - over the life or life expectancies of you and your beneficiary, - - for a period of ten years or more, or 2. Required minimum distributions made beginning in the year you reach age 70 1/2; or 3. Hardship distributions. Qualified Domestic Relations Order The rules outlined above apply to your former spouse, if any, who is an "alternate payee" under a "qualified domestic relations order" (as defined in Code Section 414(p)). A qualified domestic relations order is issued by a court, usually in connection with a divorce or legal separation. Distribution to your Surviving Spouse A beneficiary who is your surviving spouse may elect to have an eligible rollover distribution directly rolled over into an IRA, but not into another 403(b) plan. ANNUITY PROVISIONS Settlement When settlement occurs, the contract value will be applied to make annuity payments. The first payment will be made as of the settlement 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 for the annuity payments. Change of Settlement Date You may change the settlement date shown for this contract. Tell us the new date by written request. The maximum Settlement Date is the later of: 1. April 1 following the calendar year in which the annuitant attains age 70 1/2 or, if later, retires; or 2. such other date which satisfies the minimum distribution requirements under the Code; or 3. Such other date as agreed upon by us. Notwithstanding the above, the maximum Settlement Date is the later of: 1. The contract anniversary on or preceding the annuitant's 85th birthday; or 2. the 10th contract anniversary. Also, if you select a new settlement date, it must be at least 30 days after we receive your written request at our corporate office. Annuity Payment Plans Subject to the terms of this contract, 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 provided: 1. The Plan selected provides for payments over the life of the annuitant or over the life of the annuitant and a joint annuitant; or 2. the Plan selected provides for payments over a period which does not exceed the life expectancy of the annuitant, or the life expectancy of the annuitant and a joint annuitant; and 3. the Plan selected meets the minimum distribution incidental benefit requirements under the Code. 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, ten or fifteen 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. Plan D - Monthly payments will be paid during the lifetime of the annuitant and a 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 paid after the death of both the annuitant and joint annuitant. Plan E - (Installments for a specified period ) This provides monthly annuity payments for a period of years. The period of years may be no less than 10 or more than 30. By written request to us at least 30 days before the settlement date, you may select the Plan. If at least 30 days before the settlement date we have not received at our corporate office your written request to select a Plan, we will make payments according to Plan B with payments guaranteed for ten years. If the amount to applied to a Plan is less than $2,000 or would not provide an initial monthly payment of at least $20, we have the right to make a lump sum payment of the contract value. Allocation of Contract Values at Settlement At the time of settlement 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. Unless we agree otherwise, you may use a maximum of five variable subaccounts at any one time during settlement. Fixed Annuity A fixed annuity is an annuity with payments that are guaranteed by us as to dollar amount. Fixed annuity payments after the first will never be less than the amount of the first payment. At settlement, the fixed account contract value will be applied to the applicable Settlement Table. This will be done in accordance with the Payment Plan chosen. The amount payable for each $1,000 so applied is shown in Table B on page 16. 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 First Variable Annuity Payment At settlement, the variable account contract value will be applied to the applicable Settlement Table. This will be done: (1) on the valuation date on or next preceding the 7th calendar day before the settlement 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 15. Variable Annuity Payments After the First Payment Variable annuity payments after the first 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 any annuity unit as of the valuation date on or next preceding the 7th calendar day before the settlement date. This result establishes the fixed number of annuity units for each monthly annuity payment after the first. 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 7th 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 variation 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. Unless we agree otherwise you may use a maximum of five variable subaccounts at any one time. Once annuity payments start, no exchanges may be made to or from any fixed annuity. TABLES OF SETTLEMENT RATES Table A below shows the amount of the first monthly variable annuity payment, based on a 5% 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 Settlement Rates in effect at settlement. 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 at settlement. The amount of such annuity payments under Plan D will depend upon the age of the annuitant and the joint annuitant at settlement.
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 tization Certain Year - ---------- -------- --- ----------- --- ------------ ---- ---------- --- ------------ ---- ----------- --------------- Age 65 2005 5.85 5.83 5.77 5.66 5.67 5.20 2010 5.78 5.76 5.71 5.61 5.61 5.16 2015 5.72 5.70 5.65 5.56 5.56 5.13 2020 5.66 5.64 5.60 5.52 5.51 5.09 2025 5.60 5.59 5.54 5.47 5.47 5.06 2030 5.55 5.53 5.50 5.43 5.43 5.04 Age 70 2005 6.54 6.50 6.36 6.14 6.22 5.66 2010 6.45 6.41 6.28 6.08 6.15 5.60 2015 6.35 6.32 6.21 6.03 6.08 5.55 2020 6.27 6.24 6.14 5.97 6.01 5.50 2025 6.19 6.16 6.07 5.92 5.95 5.45 2030 6.11 6.09 6.01 5.87 5.90 5.41 Age 75 2005 7.58 7.47 7.15 6.70 6.99 6.33 2010 7.43 7.34 7.05 6.63 6.89 6.25 2015 7.30 7.21 6.96 6.57 6.80 6.17 2020 7.18 7.10 6.87 6.51 6.71 6.09 2025 7.06 6.99 6.78 6.46 6.62 6.02 2030 6.95 6.89 6.70 6.40 6.55 5.96 Age 85 2005 11.44 10.69 9.09 7.60 9.50 8.88 2010 11.12 10.45 9.00 7.58 9.32 8.69 2015 10.82 10.23 8.90 7.56 9.15 8.51 2020 10.55 10.02 8.80 7.53 9.00 8.34 2025 10.29 9.83 8.71 7.51 8.85 8.19 2030 10.06 9.64 8.62 7.48 8.72 8.05 - ---------- -------- --- ----------- --- ------------ ---- ---------- --- ------------ ---- ----------- ---------------
Table A above is based on the "1983 Individual Annuitant Mortality Table A" with 100% Projection Scale G and a 5% assumed investment return. Settlement 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 5% assumed investment return.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 10 10.51 17 7.20 24 5.88 11 9.77 18 6.94 25 5.76 12 9.16 19 6.71 26 5.65 13 8.64 20 6.51 27 5.54 14 8.20 21 6.33 28 5.45 15 7.82 22 6.17 29 5.36 16 7.49 23 6.02 30 5.28 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Table B - Dollar Amounts of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied - ---------- ------- ---------------- ------- -------- --------------- -------- ------- ---------------- --------------- Plan A Plan B Plan C Plan D - ---------- ------- ---------------- ------- -------- --------------- -------- ------- ---------------- --------------- Settlement Life Income Life Income Life Income Joint & Settlement Beginning Non-Refund Five Years with Fifteen Years Installment Survivor In Certain Ten Years Certain Refund Non-Refund Certain Age Year - ---------- ------- ---- ----------- --- ------------ ---- ---------- ---- ----------- ---- ----------- --------------- Age 65 2005 4.68 4.66 4.62 4.53 4.43 4.06 2010 4.61 4.60 4.55 4.48 4.38 4.02 2015 4.55 4.53 4.49 4.42 4.34 3.98 2020 4.48 4.47 4.44 4.38 4.29 3.94 2025 4.43 4.42 4.39 4.33 4.25 3.91 2030 4.37 4.37 4.34 4.29 4.21 3.88 Age 70 2005 5.38 5.35 5.24 5.05 4.97 4.55 2010 5.29 5.26 5.16 4.99 4.90 4.49 2015 5.20 5.17 5.08 4.93 4.84 4.43 2020 5.11 5.09 5.01 4.87 4.78 4.38 2025 5.03 5.01 4.94 4.82 4.72 4.33 2030 4.96 4.94 4.88 4.76 4.67 4.29 Age 75 2005 6.42 6.33 6.07 5.65 5.68 5.25 2010 6.28 6.20 5.97 5.59 5.60 5.16 2015 6.15 6.08 5.87 5.52 5.51 5.08 2020 6.03 5.97 5.78 5.46 5.43 5.01 2025 5.91 5.86 5.69 5.40 5.36 4.94 2030 5.81 5.76 5.60 5.34 5.29 4.88 Age 85 2005 10.25 9.60 8.12 6.64 7.97 7.83 2010 9.94 9.37 8.02 6.61 7.82 7.64 2015 9.65 9.15 7.91 6.59 7.68 7.46 2020 9.38 8.94 7.81 6.56 7.55 7.30 2025 9.14 8.74 7.72 6.54 7.42 7.15 2030 8.91 8.56 7.62 6.51 7.31 7.01 - ---------- ------- ---- ----------- --- ------------ ---- ---------- ---- ----------- ---- ----------- ---------------
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 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.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. IDS Life Insurance Company IDS Tower 10 Minneapolis, Minnesota 55440 EX-99.4.6 8 DEFERRED ANNUITY (31048-IRA) IDS Life Insurance Company DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. Annuitant: Contract Number: Contract Date: Settlement Date: This is a deferred annuity contract. It is a legal contract between you, as the owner, and us, IDS Life Insurance Company, a Stock Company, Minneapolis, Minnesota. PLEASE READ YOUR CONTRACT CAREFULLY. If the annuitant is living on the Settlement Date, upon your request, we will begin to pay you monthly annuity payments. Any payments made by us are subject to the terms of this contract. We issue this contract in consideration of your application and the payment of the purchase payments. Signed for and issued by IDS Life Insurance Company in Minneapolis, Minnesota, as of the contract date shown above. ACCUMULATION VALUES AND ANNUITY PAYMENTS, WHEN BASED ON THE INVESTMENT RESULTS OF THE VARIABLE SUBACCOUNTS, 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 representative within 10 days after you receive it. We will then cancel this contract and refund all premiums which you have paid. This contract will then be considered void from its start. (signature of) Richard W. Kling President (signature of) William A. Stoltzmann Secretary CONTRACT DATA Annuitiant: John Doe Contract Date: October 6, 1999 Contract Number: XXXX-XXXXXXX Settlement Date: October 6, 2019 Contract Owner: John Doe Deferred Annuity Contract ("AXP Retirement Advisor Variable Annuity-Band 3") Upon issuance of this contract your purchase payments have been scheduled to be paid and applied to the fixed and variable subaccounts as shown below. You may change the amount, frequency and allocations as provided in this contract. Refer to the Purchase Payments provision. Amount submitted With Application: $1,000,000 Scheduled Purchase Payment: Annual Amount: NA
Variable Purchase Payments Subaccounts Fund Allocation Percentage 1. AXP VP Strategy Aggressive Fund 25% 2. AXP VP Capital Resources Fund 0% 3. AXP VP New Dimensions Fund 0% 4. AXP VP International Fund 25% 5. AXP VP Growth Fund 0% 6. AXP VP Blue Chip Advantage Fund 0% 7. AXP VP Small Cap Advantage Fund 0% 8. AXP VP Diversified Equity Income Fund 0% 9. AXP VP Managed Fund 0% 10. AXP VP Global Bond Fund 0% 11. AXP VP Extra Income Fund 0% 12. AXP VP Bond Fund 0% 13. AXP VP Federal Income Fund 0% 14. AXP VP Cash Management Fund 0% 15. Goldman Sachs CORE U.S. Equity Fund 0% 16. Goldman Sachs CORE Small Cap Equity Fund 0% 17. Goldman Sachs Mid Cap Value Fund 0% 18. American Century VP Value Fund 0% 19. American Century VP International Fund 0% 20. AIM V.I. Capital Appreciation Fund 0% 21. AIM V.I. Capital Development Fund 0% 22. Fidelity VIP Overseas Portfolio: Service Class 0% 23. Fidelity VIP III Growth & Income Portfolio: Service Class 0% 24. Fidelity VIP III Mid Cap Portfolio: Service Class 0% 25. Wagner U.S. Small Cap Advisor Portfolio 0% 26. Wagner International Small Cap Advisor Portfolio 0% 27. Royce Micro-Cap Portfolio 0% 28. Putnam VT Vista Fund Class IB 0% 29. Putnam VT Intl. New Opportunities Fund Class IB 0% 30. Lazard Retirement International Equity Portfolio 0% CONTRACT DATA - (continued) Variable Purchase Payments Subaccounts Fund Allocation Percentage 31. Templeton Intl. Smaller Co's Investments Fund Class 2 0% 32. Franklin Real Estate Investments Fund Class 2 0% 33. Franklin Small Cap Value Investments Fund Class 2 0% 34. Warburg Pincus Trust Emerging Growth Portfolio 0% 35. Third Avenue Variable Series Small Cap Value Portfolio 0% 36. Janus Aspen Series International Growth Portfolio 0% 37. Janus Aspen series Capital Appreciation Portfolio 0% Fixed Account 50%
Contract Administrative Charge: $30 annually. Charge is waived if contract value, or purchase payments less purchase payments surrendered, equals or exceeds $50,000. See Contract Administrative Charge provision. Maximum Purchase Payments Permitted: 1st contract year: $2,000,000 Each contract year thereafter: $ 100,000 Fixed Account Guaranteed Interest Rate: 3% Annual Effective Rate As of the date this contract was issued, any amounts allocated to the fixed account will earn interest, for the first year, at the annual effective rate of 4.25%. New rates may be declared from time to time. GUIDE TO CONTRACT PROVISIONS Definitions Important words and meanings/Page 3 General Provisions Entire Contract; Traditional IRA; Roth IRA; Incontestable; Benefits Based on Incorrect Data; State Laws; Federal Laws; Reports to Owner; Evidence of Survival; Protection of Proceeds; Payments by Us; Voting Rights/ Page 4 Ownership and Beneficiary Owner's Rights; Trust or Custodial Ownership; Change of Ownership; Beneficiary; Change of Beneficiary/Page 5 Payments to Beneficiary Describes options and amounts payable upon death/Page 6 Purchase Payments Purchase Payments; Allocation of Purchase Payments; Amount and Intervals; Payment Limits/Page 7 Contract Value Describes the fixed and variable account contract values; Interest to be Credited, Contract Administrative Charge; Premium Tax Charges, Transfers of Contract Values/Page 9 Fixed and Variable Accounts Describes the variable subaccounts, accumulation units and values; Net Investment Factor; Mortality and Expense Risk Charge; Annuity Unit Value/Page 10 Surrender Provisions Surrender of the contract for its surrender value; Rules for Surrender; Surrender Value; Suspension or Delay in Payment of Surrender/Page 12 Annuity Provisions When annuity payments begin; Different ways to receive annuity payments; Determination of payment amounts/Page 13 Tables of Settlement Rates Tables showing amount of first variable annuity payment and the guaranteed fixed annuity payments for the various payment plans/Page 15 DEFINITIONS The following words are often used 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 contract value prior to settlement. annuitant The person or persons on whose life monthly annuity payments depend. annuity unit An annuity unit is an accounting unit of measure. It is used to calculate the value of annuity payments from the variable subaccounts on and after the settlement date. code The Internal Revenue Code of 1986, as amended, its regulations thereunder and/or promulgations of the Internal Revenue Service, as applicable. contract anniversary The same day and month as the contract date each year that the contract remains in force. contract date 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 Fixed Account Contract Value (which receives a declared interest rate) and the Variable Account Contract Value (which varies with the investment performance of the elected subaccounts) for this contract. 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. settlement The application of the contract value of this contract to an Annuity Payment Plan to provide annuity payments. settlement date The date shown under Contract Data on which annuity payments are scheduled to begin. This date may be changed as provided in this contract. You will be notified prior to the settlement 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 annuity A variable annuity is an annuity with payments which: (1) are not predetermined or guaranteed as to dollar amounts; and (2) vary in amount with the investment experience of one or more of the variable subaccounts. variable subaccounts The portfolios of the Variable Account. The subaccounts available on the contract date are named under Contract Data. we, our, us IDS Life Insurance Company written request A request in writing signed by you and delivered to us at our corporate office. you, your The owner of this contract. GENERAL PROVISIONS Entire Contract This contract form is 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 other representatives or other persons has the authority to change or waive any of our rights or requirements under this contract. Traditional IRA If this contract is intended to qualify as an Individual Retirement Annuity (IRA), we agree to and reserve the right to modify this contract to the extent necessary to qualify this contract as an Individual Retirement Annuity, as described in Sections 408(b) and 219 of the Internal Revenue Code of 1986, as amended and all related sections and regulations which are in effect during the term of the contract. Roth IRA If this contract is intended to qualify as a Roth IRA, we agree to and reserve the right to modify this contract to the extent necessary to qualify this contract as a Roth IRA as described in Section 408A of the Internal Revenue Code of 1986, as amended and all related sections and regulations which are in effect during the term of the contract. Incontestable This contract is incontestable from its date of issue. Benefits Based on Incorrect Data If the amount of benefits is determined by data as to a person's age or sex that is incorrect, benefits will be recalculated on the basis of the correct data. Any underpayments made by us will be made up immediately. Any overpayments made by us will be subtracted from future payments. State Laws This contract is governed by the laws 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. Federal Laws This contract is intended to qualify as an annuity contract for Federal income tax purposes. To that end, the provisions of this contract are to be interpreted to ensure or maintain such tax qualification, despite any other provisions to the contrary. We reserve the right to amend this contract to reflect any clarifications that may be needed or are appropriate to maintain such tax qualification. We will send you a copy of any such amendments. Reports to Owner At least once a year we will send you a statement showing the contract value and the cash surrender 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 given date, proof that such condition has been met may be required by us. Such proof may be required prior to making the payment. Protection of Proceeds Payments under this contract are not assignable by any beneficiary prior to the time they are due. Payments by Us All sums payable by us are payable from our corporate office. Any payment or surrender 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 contract owners. As contract owner, if you have voting rights we will send a notice to you telling you the time and place of the shareholder meeting. The notice will also explain matters to be voted upon and how many votes you have. Trustee or custodian owners shall cast votes according to instructions received from appropriate annuitants. All other votes of such trustee or custodian under the same trust or custodial agreement shall be cast in the same proportion. If no instructions are received, the votes may be cast at the trustee's or custodian's discretion. OWNERSHIP AND BENEFICIARY Owner's 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. Your entire interest is non-forfeitable. Trust or Custodial Ownership If you are a tax qualified trust or tax qualified custodial account, then your trustees or custodian (or other successors) properly named by your trust or custodial agreement may exercise all rights and privileges provided in this contract or allowed by us. Change of Ownership (Restricted) Your right to change the ownership of this contract is restricted. This contract may not be sold, assigned, transferred, forfeited, discounted or pledged as collateral for a loan or as security for performance of an obligation or for any other purpose to any other person other than as may be required or permitted under Section 408 of the Internal Revenue Code or 1986, as amended. Your interest in this contract may be transferred to your former spouse, if any, under a divorce decree or a written instrument incident to such divorce. However, if this contract is owned by a trustee of a tax-qualified trust or the custodian of a tax-qualified custodial account, such trustee or custodian may transfer ownership of this contract to the annuitant or to a qualified successor trustee or custodian. Such transfer shall be effective only if received by us at our corporate office. When so received, such transfer shall take effect as of the date of instrument, subject to any payment made or other action taken by us before such receipt. Beneficiary Unless designated otherwise, beneficiaries are those you name, in a form satisfactory to us, 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. PAYMENTS TO BENEFICIARY Death Benefit Before the Settlement Date If you die before the settlement date while this contract is in force, and you are age 80 or younger on the date of death, we will pay the beneficiary the greatest of: 1. the contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders"; or 3. the contract value as of the most recent sixth contract anniversary, plus any purchase payments paid and less any "adjusted partial surrenders" since that contract anniversary. An "adjusted partial surrender" is calculated for each partial surrender as the product of (a) times (b) where: (a) is the ratio of the amount of the partial surrender to the contract value on the date of (but prior to) the partial surrender; and (b) is the death benefit on the date of (but prior to) the partial surrender. If you are age 81 or older on the date of death, we will pay the beneficiary the greater of: 1. the contract value; or 2. the total purchase payments paid less any "adjusted partial surrenders". If the annuitant dies before the settlement date, the beneficiary may elect to receive a lump sum payment anytime within five years after the date of death of the annuitant. In lieu of a lump sum payment, 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. payments begin no later than: (a) one year after the date of death in the case of a non-spouse beneficiary, or (b) the date on which the annuitant would have attained age 70 1/2 in the case of a spouse beneficiary; and 3. the plan provides for payments over a period which does not exceed the life or the life expectancy of the beneficiary. In this event, the reference to "annuitant" in the Annuity Provisions shall apply to the beneficiary. We will determine the contract value on which we base amounts payable or applied under this section at the next accumulation unit value calculated after we receive due proof of death at our corporate office. Spouse Option to Continue Contract Upon Owner's Death If your death occurs prior to the settlement date, and your spouse is designated as sole beneficiary, they may elect in writing to forego receipt of the death benefit and instead continue this contract in force as the owner. This election by your spouse must be made within 60 days after we receive due proof of death. If this contract is a traditional IRA, the settlement date may not be later than April 1 following the calendar year in which the annuitant would have attained 70 1/2 , or such other date which allows the spouse to satisfy the minimum distribution requirements under the Code. Annuitant's Death After the Settlement Date If the annuitant dies after the settlement date, the amount payable, if any, will be as provided in the Annuity Payment Plan then in effect. 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 corporate 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. 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 each account may be made in any whole percent from 0% to 100% as long as the total adds up to 100%. Your allocation instructions as of the contract date are shown under Contract Data. By written request, or by other 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 corporate office. Amount and Intervals Your initial or scheduled purchase payments are shown under Contract Data. Purchase payments may be paid until the earlier of: (1) the date this contract terminates by surrender or otherwise; or (2) the date on which the annuity payments begin. Subject to the Payment Limits Provision you may: (1) stop and/or restart purchase payments; or (2) increase or decrease the amount of your purchase payments; or (3) change the interval of your purchase payments. If this contract is a traditional IRA, no annual purchase payments may be made with respect to the taxable year in which the annuitant attains age 70 1/2 or any later year, with the exception of employer purchase payments made in connection with a Simplified Employee Pension Plan. If this contract is a Roth IRA, purchase payments may be made even after the annuitant has attained age 70 1/2. Payment Limits Provision Maximum Purchase Payments - The maximum purchase payments in the first or later contract years may not exceed the amounts shown under Contract Data. We reserve the right to increase the maximums. If this contract is a traditional IRA, except as otherwise provided in this paragraph, the total purchase payments for any taxable year may not exceed $2,000. In the case of a rollover contribution described in Sections 402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8) or 408(d)(3), of the Internal Revenue Code of 1986, as amended, there is no limit on the amount of your purchase payment. If this contract is maintained in connection with a Simplified Employee Pension Plan, employer purchase payments for any taxable year may not exceed 15% of your compensation or $30,000, whichever is less. All purchase payments must be made in cash. If you die before your 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. If this contract is a Roth IRA, except as otherwise provided in this paragraph, the total purchase payments for any taxable year may not exceed $2,000. In the case of a rollover contribution or a conversion of an Individual Retirement Annuity (other than a Roth IRA) to a Roth IRA as described in Sections 408A(c)(6) and 408A(d)(3)(C) of the Internal Revenue Code of 1986, as amended, there is no limit on the amount of your purchase payment. 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. With the exception of employer purchase payments/premiums made to a SIMPLE Retirement Account under a SIMPLE Savings Plan, no purchase payments/premiums may be made to this contract other than a rollover contribution from another SIMPLE Retirement Account under Section 408(d)(3)(G) of the Internal Revenue Code of 1986, as amended. Employer purchase payments/premiums made to a SIMPLE Retirement Account under a SIMPLE Savings Plan for any taxable year may not exceed applicable contribution limits described in Section 408(p)(2) of the Internal Revenue Code of 1986, as amended. Annual employer purchase payments/premiums to a SIMPLE Retirement Account under a SIMPLE Savings Plan may be made with respect to the taxable year in which the annuitant attains age 701/2 or any later date. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum transfer from the fixed account to the variable subaccounts. We also reserve the right to cancel this contract if both of the following conditions exist at the same time: (1) no purchase payments have been paid for a continuous period of 24 months; and (2) less than $600 in purchase payments have been paid under this contract. In this event we will give you 30 days written notice of our intent to cancel this contract. Upon such cancellation we will pay you the contract value in one sum. This contract will then terminate. If this contract was purchased as part of your participation in the American Express Diversified Portfolio Service (or similar "wrap fee" program) and you discontinue such participation, we will cancel this contract. We will give you 30 days written notice before cancellation. Upon such cancellation we will pay you the contract value in one sum. This contract will then terminate. 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 surrendered; 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 surrenders, 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) any units deducted for charges or surrenders. Fixed Account Contract Value The fixed account contract value at any time will be: (1) the sum of all amounts credited to the fixed account under this contract; less (2) any amounts deducted for charges or surrenders. Interest to be Credited We will credit interest to the fixed account contract value. Interest will begin to accrue on the date the purchase payments which are received in our corporate office become available to us for use. Such interest will be credited at a rate that we determine from time to time. However, we guarantee that the rate will not be less than the Guaranteed Interest Rate shown under Contract Data. 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 or, if earlier, when the contract is fully surrendered. 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 this charge if your contract value, or your total purchase payments less any purchase payments surrendered, equals or exceeds $50,000. If you make a full surrender of this contract, we deduct the full $30 contract administrative charge at the time of the full surrender regardless of purchase payments made or contract value. The charge does not apply after settlement of this contract under an annuity payment plan. Premium Tax Charges A charge will be made by us against the contract value of this contract at the time that any premium taxes not previously deducted are payable. Transfers of Contract Values While this contract is in force prior to the settlement date, transfer of contract values may be made as outlined below: 1. You may transfer all or part of the values held in one or more 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 after a contract anniversary you may transfer values from the fixed account to one or more of the variable subaccounts. Only one such transfer is allowed during this period each year. If such a transfer is made, no transfers from a variable subaccount to the fixed account may be made until the next contract anniversary. You may make a transfer by written request. Transfer requests may also be made according to telephone procedures or automated transfer procedures that are then currently in effect, if any. There is no fee or charge for these transfers. However, the minimum transfer amount is $250, or if less, the entire value in the account from which the transfer is being made. Smaller minimums may apply to automated transfer procedures. This transfer privilege may be suspended or modified by us at any time. FIXED AND VARIABLE ACCOUNTS The Fixed Account The fixed account is our general account. It is made up of all of our assets other than: (1) those in the variable subaccounts; 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 our assets for this contract to the variable accounts. 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 subaccounts 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 from which the variable subaccounts buy shares if laws or regulations change, the existing funds become unavailable or in our judgment, the funds are no longer suitable for the subaccounts. We have the right to substitute funds for those shown under Contract Data, including funds other than those shown under Contract Data. We may also: add additional subaccounts investing in other funds; combine subaccounts; transfer assets to and from the subaccounts or the variable account; and eliminate or close any subaccounts. When required, we would first seek approval of the Securities and Exchange Commission and, 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 from: 1. transfers from the subaccount; and 2. surrenders 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 receive the purchase payment or transfer value, or during which we deducted transfers, surrenders, surrender charges or contract administrative charges. Variable Account Accumulation Unit Value The value of an accumulation unit for each of the variable subaccounts was arbitrarily set at $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 account 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) 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 dividend or capital gain distributions made by the fund held in the variable subaccount, if the "ex-dividend" date occurs during the current valuation period. 2. is the net asset value per share of mutual fund held in the variable subaccount, determined at the end of the last prior valuation period. 3. is a factor representing the mortality and expense risk 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 .55% 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. Annuity Unit Value The value of an Annuity Unit for each variable subaccount was arbitrarily set at $1 when the first funds 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 periods 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 settlement tables on page 15. SURRENDER PROVISIONS Surrender By written request and subject to the rules below you may: 1. surrender this contract for the total surrender value; or 2. partially surrender this contract for a part of the surrender value. Rules for Surrender All surrenders 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 the settlement date or the death of the annuitant. 2. Unless we agree otherwise, you must surrender an amount equal to at least $250 or the entire contract value, if less. The contract value after a partial surrender must be at least $600. 3. The amount surrendered, less any charges, will normally be paid to you within seven days of our receipt of your written surrender request and the return of this contract, if required. For surrenders from the fixed account, we have the right to defer payment to you for up to 6 months from the date we receive the request. 4. For partial surrenders, if you do not specify from which accounts the surrender is to be made, the surrender will be made from the variable subaccounts and fixed account in the same proportion as your interest in each bears to the contract value. 5. Any amounts surrendered and charges which may apply can not be repaid. Upon surrender for the full surrender value this contract will terminate. We may require that you return the contract to us before we pay the full surrender value. Surrender Value The surrender value at any time will be: 1. the contract value; 2. minus the contract administrative charge. Amounts surrendered from a Roth IRA: For tax purposes, the amounts surrendered will be treated in accordance with the distribution rules described in Section 408A of the Code. Suspension or Delay in Payment of Surrender We have the right to suspend or delay the date of any surrender 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 practicable; or (b) it is not reasonably practicable 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. ANNUITY PROVISIONS Settlement When settlement occurs, the contract value will be applied to make annuity payments. The first payment will be made as of the settlement 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 for the annuity payments. Change of Settlement Date - Traditional IRA You may change the settlement date shown for this contract. Tell us the new date by written request. The maximum settlement date is the later of: 1. April 1 following the calendar year in which the annuitant attains age 70 1/2 or if later, retires; or 2. such other date which satisfies the minimum distribution requirements under the Code; or 3. Such other date as agreed upon by us. Not withstanding the above, the maximum settlement date is the later of: 1. The contract anniversary on or proceeding the annuitant's 85th birthday; or 2. the 10th contract anniversary. Also, if you select a new settlement date, it must be at least 30 days after we receive your written request at our corporate office. Change of Settlement Date - Roth IRA You may change the settlement date shown for this contract. Tell us the new date by written request. The maximum settlement date is the later of: 1. The contract anniversary on or proceeding the annuitant's 85th birthday; or 2. the 10th contract anniversary; or 3. such other date as agreed upon by us. Also, if you select a new settlement date, it must be at least 30 days after we receive your written request at our corporate office. Annuity Payment Plans Subject to the terms of this contract, 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 provided: 1. The Plan selected provides for payments over the life of the annuitant or over the life of the annuitant and a joint annuitant; or 2. the Plan selected provides for payments over a period which does not exceed the life expectancy of the annuitant, or the life expectancy of the annuitant and a joint annuitant; and 3. the Plan selected meets the minimum death distribution requirements under Section 401(a)(9)(B) of the Code and related regulations which are in effect and applicable to Roth IRAs during the term of the contract. 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, ten or fifteen 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. Plan D - Monthly payments will be paid during the lifetime of the annuitant and a 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 paid after the death of both the annuitant and joint annuitant. Plan E - (Installments for a specified period ) This provides monthly annuity payments for a period of years. The period of years may be no less than 10 or more than 30. By written request to us at least 30 days before the settlement date, you may select the Plan. If at least 30 days before the settlement date we have not received at our corporate office your written request to select a Plan, we will make payments according to Plan B with payments guaranteed for ten years. If the amount to applied to a Plan is less than $2,000 or would not provide an initial monthly payment of at least $20, we have the right to make a lump sum payment of the contract value. Allocation of Contract Values at Settlement At the time of settlement 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. Unless we agree otherwise, you may use a maximum of five variable subaccounts at any one time during settlement. Fixed Annuity A fixed annuity is an annuity with payments that are guaranteed by us as to dollar amount. Fixed annuity payments after the first will never be less than the amount of the first payment. At settlement, the fixed account contract value will be applied to the applicable Settlement Table. This will be done in accordance with the Payment Plan chosen. The amount payable for each $1,000 so applied is shown in Table B on page 16. 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 First Variable Annuity Payment At settlement, the variable account contract value will be applied to the applicable Settlement Table. This will be done: (1) on the valuation date on or next preceding the 7th calendar day before the settlement 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 15. Variable Annuity Payments After the First Payment Variable annuity payments after the first 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 7th calendar day before the settlement date. This result establishes the fixed number of annuity units for each monthly annuity payment after the first. 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 7th 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 variation 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. Unless we agree otherwise you may use a maximum of five variable subaccounts at any one time. Once annuity payments start, no exchanges may be made to or from any fixed annuity. TABLES OF SETTLEMENT RATES Table A below shows the amount of the first monthly variable annuity payment, based on a 5% 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 Settlement Rates in effect at settlement. 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 settlement. 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 settlement.
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 - ---------- ------- -------- -------- ------ -------- ------- -------- ------- -------- ------ --------- -------------- Age 65 2005 6.49 5.85 6.44 5.83 6.29 5.77 6.06 5.66 6.13 5.67 5.34 2010 6.40 5.78 6.35 5.76 6.22 5.71 6.00 5.61 6.06 5.61 5.30 2015 6.31 5.72 6.27 5.70 6.15 5.65 5.95 5.56 6.00 5.56 5.25 2020 6.23 5.66 6.19 5.64 6.08 5.60 5.90 5.52 5.93 5.51 5.21 2025 6.15 5.60 6.12 5.59 6.01 5.54 5.84 5.47 5.88 5.47 5.18 2030 6.08 5.55 6.05 5.53 5.95 5.50 5.80 5.43 5.82 5.43 5.14 Age 70 2005 7.41 6.54 7.29 6.50 6.98 6.36 6.54 6.14 6.79 6.22 5.85 2010 7.28 6.45 7.17 6.41 6.88 6.28 6.48 6.08 6.70 6.15 5.78 2015 7.16 6.35 7.06 6.32 6.80 6.21 6.42 6.03 6.61 6.08 5.72 2020 7.04 6.27 6.95 6.24 6.71 6.14 6.37 5.97 6.53 6.01 5.66 2025 6.93 6.19 6.85 6.16 6.63 6.07 6.31 5.92 6.45 5.95 5.61 2030 6.83 6.11 6.76 6.09 6.55 6.01 6.26 5.87 6.38 5.90 5.56 Age 75 2005 8.67 7.58 8.42 7.47 7.78 7.15 7.02 6.70 7.65 6.99 6.59 2010 8.49 7.43 8.26 7.34 7.68 7.05 6.97 6.63 7.53 6.89 6.49 2015 8.32 7.30 8.11 7.21 7.58 6.96 6.91 6.57 7.42 6.80 6.40 2020 8.16 7.18 7.97 7.10 7.48 6.87 6.86 6.51 7.31 6.71 6.31 2025 8.00 7.06 7.83 6.99 7.38 6.78 6.81 6.46 7.21 6.62 6.24 2030 7.86 6.95 7.70 6.89 7.29 6.70 6.75 6.40 7.12 6.55 6.16 Age 85 2005 13.01 11.44 11.71 10.69 9.46 9.09 7.69 7.60 10.30 9.50 9.30 2010 12.65 11.12 11.48 10.45 9.38 9.00 7.67 7.58 10.11 9.32 9.09 2015 12.31 10.82 11.26 10.23 9.30 8.90 7.66 7.56 9.93 9.15 8.90 2020 11.99 10.55 11.04 10.02 9.22 8.80 7.64 7.53 9.76 9.00 8.72 2025 11.70 10.29 10.84 9.83 9.15 8.71 7.62 7.51 9.60 8.85 8.55 2030 11.42 10.06 10.64 9.64 9.07 8.62 7.61 7.48 9.45 8.72 8.40 - ---------- ------- -------- -------- ------ -------- ------- -------- ------- -------- ------ --------- --------------
Table A above is based on the "1983 Individual Annuitant Mortality Table A" with 100% Projection Scale G and a 5% assumed investment return. 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 5% assumed investment return.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 10 10.51 17 7.20 24 5.88 11 9.77 18 6.94 25 5.76 12 9.16 19 6.71 26 5.65 13 8.64 20 6.51 27 5.54 14 8.20 21 6.33 28 5.45 15 7.82 22 6.17 29 5.36 16 7.49 23 6.02 30 5.28 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Table B- Dollar Amounts of Each Monthly Fixed Dollar Annuity Payment Per $1,000 Applied - ---------- -------- ---------------- ------ -------- ---------------- ------- ------- ----------------- -------------- Plan A Plan B Plan C Plan D - ---------- -------- ---------------- ------ -------- ---------------- ------- ------- ----------------- -------------- Settlement Life 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 - ---------- -------- ------- -------- ------ -------- ------- -------- ------- ------- -------- -------- -------------- 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.
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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 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 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
DEFERRED ANNUITY CONTRACT - - Flexible purchase payments. - - Optional fixed dollar or variable accumulation values and annuity payments. - - Annuity payments to begin on the settlement date. - - This contract is nonparticipating. Dividends are not payable. IDS Life Insurance Company IDS Tower 10 Minneapolis, Minnesota 55440 -----END PRIVACY-ENHANCED MESSAGE-----