EX-99.24(B)4(I) 3 b69027a1exv99w24xby4xiy.txt FORM OF SPECIMEN CONTRACT, NON-PARTICIPATING FOR VENTURE 200.08 THE JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) A STOCK COMPANY (JOHN HANCOCK (R) LOGO) OVERNIGHT MAILING ADDRESS: ANNUITY SERVICE OFFICE: HOME OFFICE [164 Corporate Drive [P.O. Box 9505 Bloomfield Hills, MI Portsmouth, NH 03801-6815] Portsmouth, NH 03802-9505] [1-800-344-1029] THIS IS A LEGAL CONTRACT - READ IT CAREFULLY. WE AGREE to pay the benefits of this Contract in accordance with its terms. THIS CONTRACT is issued in consideration of the Payments. John Hancock Life Insurance Company (U.S.A.) will provide a guaranteed annual amount for withdrawal beginning on the Lifetime Income Date and continuing for the life of the Annuitant and any co-Annuitant. We will pay an annuity benefit beginning on the Annuity Commencement Date to the Annuitant, if living, unless otherwise directed by the Owner, in accordance with the Annuity Payments provision of this Contract. If the Annuitant dies while this Contract is in effect prior to the Annuity Commencement Date, we will pay the Contract Value to the Beneficiary upon receipt of all required claim forms and proof of death of the Annuitant at the Annuity Service Office. [TEN] DAY RIGHT TO REVIEW YOU MAY CANCEL THE CONTRACT BY RETURNING IT TO OUR ANNUITY SERVICE OFFICE OR REGISTERED REPRESENTATIVE WHO SOLD IT TO YOU AT ANY TIME WITHIN [10] DAYS AFTER RECEIPT OF THE CONTRACT. DURING THE FIRST 7 DAYS OF THIS [10] DAY PERIOD, WE WILL RETURN THE GREATER OF (I) THE CONTRACT VALUE COMPUTED AT THE END OF THE VALUATION PERIOD DURING WHICH THE CONTRACT IS RECEIVED BY US OR (II) THE SUM OF ALL PAYMENTS. AFTER 7 DAYS, WE WILL PAY THE CONTRACT VALUE COMPUTED AT THE END OF THE VALUATION PERIOD DURING WHICH THE CONTRACT IS RECEIVED BY US. WE WILL PAY THE REFUND AMOUNT TO THE OWNER WITHIN 7 DAYS OF RECEIPT OF THE CONTRACT BY US. SIGNED FOR THE COMPANY at Boston, Massachusetts, on the Contract Date. DETAILS OF VARIABLE ACCOUNT PROVISIONS ON PAGE 6.1 /s/ John DesPrez III /s/ Emanuel Alves President Secretary Flexible Payment Deferred Variable Annuity Guaranteed Lifetime Withdrawal Benefit Non-Participating ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. [NATIONAL] Venture.200.08 INTRODUCTION This is a flexible payment deferred variable annuity contract. This Contract provides that, prior to the Annuity Commencement Date, the Contract Value will accumulate on a variable basis. Subject to the provisions of the Contract, you may take withdrawals and transfer amounts among the Investment Options. If you limit withdrawals to the amounts described in the Lifetime Income Benefits provision, we guarantee that the Lifetime Income Amount will be available for withdrawal each Contract Year after the Lifetime Income Date and during the life of the Annuitant and any co-Annuitant. After the Annuity Commencement Date, Annuity Payments may be either fixed or variable, or a combination of fixed and variable. The Contract Value will vary with the investment performance of your Investment Options. If you select Annuity Payments on a variable basis, the payment amount will vary with the investment performance of the Variable Account. You must allocate Payments among one or more Investment Options. The Investment Options are identified on the Specifications Page.
TABLE OF CONTENTS PAGE ----------------- ---- SPECIFICATIONS PAGES...................................................... S.1 PART 1 - DEFINITIONS..................................................... 1.1 PART 2 - GENERAL PROVISIONS.............................................. 2.1 PART 3 - OWNER, BENEFICIARY.............................................. 3.1 PART 4 - PAYMENTS........................................................ 4.1 PART 5 - FEES AND DEDUCTIONS............................................. 5.1 PART 6 - VARIABLE ACCOUNT PROVISIONS..................................... 6.1 PART 7 - TRANSFERS....................................................... 7.1 PART 8 - WITHDRAWAL PROVISIONS........................................... 8.1 PART 9 - LIFETIME INCOME BENEFIT......................................... 9.1 PART 10 - DISTRIBUTIONS DURING ANNUITANT'S LIFE........................... 10.1 PART 11 - DISTRIBUTIONS AFTER ANNUITANT'S DEATH........................... 11.1 PART 12 - ANNUITY PAYMENTS................................................ 12.1 PART 13 - ANNUITY OPTIONS................................................. 13.1
PART 1 DEFINITIONS ------ ----------- WE AND YOU "We", "us" and "our" means the Company. "You" or "your" means the Owner of this Contract. ACCUMULATION UNIT A unit of measure that is used to calculate the value of the Variable Account of this Contract before the Annuity Commencement Date. ADDITIONAL PAYMENTS Any Payment made to us after the initial Payment. ANNUITANT A person whose age and life is used to determine eligibility for the Lifetime Income Benefit and the amount and duration of Annuity Payments involving life contingencies. The Annuitant is as designated on the Specifications Page, unless changed. ANNUITY COMMENCEMENT DATE The date Annuity Payments begin. It is the date selected by you and specified on the Specifications Page, unless changed. This date may not be later than the Maturity Date. ANNUITY OPTION The method selected by you for Annuity Payments made by us. ANNUITY PAYMENT(S) Payment(s) by us to you, in accordance with the Annuity Option elected under the terms of this Contract. ANNUITY SERVICE OFFICE Any office designated by us for the receipt of Payments and processing of Owner requests. ANNUITY UNIT A unit of measure that is used after the Annuity Commencement Date to calculate Variable Annuity payments. BENEFICIARY The person, persons or entity to whom certain benefits are payable following the death of the Annuitant. BENEFIT BASE The Benefit Base is the total amount used for purposes of calculating guaranteed lifetime withdrawals. The Benefit Base cannot be withdrawn in a lump sum. CO-ANNUITANT The second person whose age and life may be used to determine eligibility for the Lifetime Income Benefit. The co-Annuitant is designated on the Specifications Page, unless changed. Only the spouse of the Annuitant is eligible to be a co-Annuitant. COMPANY The insurance company named on the first page of this Contract (or any successor insurance company named by endorsement to this Contract) that will pay benefits in accordance with this Contract. CONTRACT ANNIVERSARY The annual anniversary of the Contract beginning twelve months from the Contract Date and each year thereafter. CONTRACT DATE The date of issue of this Contract as designated on the Specifications Page. CONTRACT VALUE The total of your Investment Account Values. CONTRACT YEAR The period of time measured twelve consecutive months from the Contract Date or any Contract Anniversary thereafter. CONTINGENT BENEFICIARY The person, persons or entity who becomes the Beneficiary if the Beneficiary is not alive. ENDORSEMENT An Endorsement modifies the contract to which it is attached. Endorsements must be signed by an officer of the Company in order to be effective.
1.1 FIXED ANNUITY An Annuity Option with payments which are predetermined and guaranteed as to dollar amount. GENERAL ACCOUNT All the assets of the Company other than assets in separate accounts. INTERNAL REVENUE CODE The Internal Revenue Code of 1986, as amended (IRC) from time to time, and any successor statute of similar purposes. INVESTMENT ACCOUNT VALUE The value of your investment in an Investment Option. INVESTMENT OPTIONS The investment choices available to you. The Investment Options available under this Contract are shown on the Specifications Page. When you select an Investment Option, we allocate your Contract Value to a Sub-Account of the Variable Account that invests in a corresponding Portfolio. LIFETIME INCOME AMOUNT The Lifetime Income Amount is the amount that is guaranteed to be available for withdrawal each Contract Year after the Lifetime Income Date and during the life of the Annuitant and any co-Annuitant while this Contract is in effect. The LIA reduces to zero upon the death of the last to die of the Annuitant and any co-Annuitant. LIFETIME INCOME DATE The Lifetime Income Date is the date on which the initial LIA is calculated. LIFETIME INCOME PERCENTAGE The percentage used to determine your Lifetime Income Amount. This percentage will be either the Single Lifetime Income Percentage or the Spousal Lifetime Income Percentage listed in the Specifications, as applicable. The applicable percentage will be determined as described in Part 9, Lifetime Income Benefit. MATURITY DATE The latest date on which annuity benefits may commence. It is the date specified on the Specifications Page, unless changed. NET PAYMENT The Payment less the amount of premium tax, if any, deducted from the Payment. OWNER The person, persons or entity entitled to the ownership rights under this Contract. The Owner is as designated on the Specifications Page, unless changed. PORTFOLIO The investment choices available to the Variable Account. PAYMENT An amount paid to us by you as consideration for the benefits provided by this Contract. QUALIFIED CONTRACTS Contracts issued under Qualified Plans. QUALIFIED PLANS Retirement plans which receive favorable tax treatment under sections 401, 403, 408 or 457, of the Internal Revenue Code of 1986, as amended. RIDER A rider provides an optional benefit, which may result in an additional charge to the Contract. A rider supplements the contract to which it is attached. Riders must be signed by an officer of the Company in order to be effective. SEPARATE ACCOUNT A segregated account of the Company that is not commingled with our general assets and obligations. SUB-ACCOUNT(S) The Variable Account is divided into Sub-Accounts. Each Sub-Account is invested in shares of a different Portfolio. SURRENDER VALUE The Contract Value on any Valuation Date, less, if applicable, any contract fees, any rider charges, and any deduction for premium taxes or similar taxes. VALUATION DATE Any date on which the New York Stock Exchange is open for business and the net asset value of a Portfolio is determined. VALUATION PERIOD Any period from one Valuation Date to the next, measured from the time on each such date that the net asset value of each Portfolio is determined. VARIABLE ACCOUNT The Company's Separate Account as shown in the Specifications Page.
1.2 VARIABLE ANNUITY An Annuity Option with payments which: (1) are not predetermined or guaranteed as to dollar amount; and (2) vary in relation to the investment experience of one or more specified variable Investment Options. WITHDRAWAL AMOUNT The amount deducted from the Contract Value when you request a withdrawal. This amount is the total of the amount paid to you plus the following, if applicable: any contract fees, any rider charges, any deduction for premium taxes or similar taxes, and any income taxes resulting from the withdrawal and withheld by us. The Withdrawal Amount may not exceed the Contract Value.
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PART 2 GENERAL PROVISIONS ------ ------------------ ENTIRE CONTRACT The entire Contract consists of this Contract, Endorsements and Riders, if any, and the application, if one is attached to this Contract. The benefits and values available under this Contract are not less than the minimum required by any statute of the state in which this Contract is delivered. We have filed a detailed statement of the method used to calculate the benefits and values with the Department of Insurance in the state in which this Contract is delivered, if required by law. MODIFICATION Only the President, a Vice President, or the Secretary of the Company has authority to agree on our behalf to any alteration of the Contract or to any waiver of our rights or requirements. The change or waiver must be in writing. We will not change or modify this Contract without your consent except as may be required to make it conform to any applicable law or regulation or any ruling issued by a government agency; or unless we have reserved the right to change the terms herein. We reserve the right to make any amendments as may be necessary to comply with the applicable provisions of the IRC and regulations thereunder as in effect form time to time. Any such amendment will be subject to any necessary regulatory approvals and, where required, approval of the Owner. We will send you a copy of any amendment. We will not be responsible for any adverse tax consequences resulting form the Owner's rejection of any such amendment. CHANGE IN ANNUITY COMMENCEMENT Prior to the Annuity Commencement Date, an DATE Owner may request in writing a change of the Annuity Commencement Date. Any extension of the Annuity Commencement Date beyond the Maturity Date will be subject to our prior approval and any applicable law or regulation then in effect. ASSIGNMENT This Contract is subject to assignment restrictions for Federal Income Tax purposes. It is established for the exclusive benefit of the Annuitant and his or her Beneficiaries. It shall not be sold, assigned, discounted, or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose, to any person other than us. CLAIMS OF CREDITORS All benefits and payments under this Contract shall be exempt from the claims of creditors to the extent permitted by law. MISSTATEMENT AND PROOF OF AGE, We may require proof of age, sex or survival of SEX OR SURVIVAL any person upon whose age, sex or survival any Lifetime Income Benefit, Annuity Payments or other benefits provided by this Contract or any Rider attached thereto depend. If the age or sex of the Annuitant or any co-Annuitant has been misstated, the benefits will be those which would have been provided for the correct age and sex. If we have made incorrect benefit payments, we will immediately pay the amount of any underpayment. We will deduct the amount of any overpayment from future benefit payments. ADDITION, DELETION OR We reserve the right, subject to compliance SUBSTITUTION OF INVESTMENT with applicable law, to make additions to, OPTIONS deletions from, or substitutions for the Portfolio shares that are held by the Variable Account or that the Variable Account may purchase. We reserve the right to eliminate the shares of any of the eligible Portfolios and to substitute shares of another Portfolio. We will not substitute any shares attributable to your interest in a Sub-Account without notice to you and prior approval of the Securities and Exchange Commission to the extent required by the Investment Company Act of 1940. Nothing contained herein shall prevent the Variable Account from purchasing other securities for other series or classes of contracts, or from effecting a conversion between shares of another open-end investment company.
2.1 We reserve the right, subject to compliance with applicable law, to establish additional Sub-Accounts which would invest in shares of a new Portfolio. We also reserve the right to eliminate existing Sub-Accounts, to combine Sub-Accounts or to transfer assets in a Sub-Account to another Separate Account established by us or an affiliated company. In the event of any such substitution or change, we may, by appropriate endorsement, make such changes in this and other Contracts as may be necessary or appropriate to reflect such substitutions or change. If deemed by us to be in the best interests of persons having voting rights under the Contracts, the Variable Account may be operated as a management company under the Investment Company Act of 1940 or it may be de-registered under such Act in the event such registration is no longer required. NON-PARTICIPATING Your Contract is non-participating and will not share in our profits or surplus earnings. We will pay no dividends on your Contract. REPORTS We will send you reports containing information required by the Investment Company Act of 1940 and applicable state law at least annually without charge. We will provide annual calendar year reports concerning the status of the Contract and such information concerning required minimum distributions as is prescribed by the Commissioner of Internal Revenue. INSULATION The portion of the assets of the Variable Account equal to the reserves and other contract liabilities with respect to such account are not chargeable with liabilities arising out of any other business we may conduct. Moreover, the income, gains and losses, realized or unrealized, from assets allocated to the Variable Account shall be credited to or charged against such account without regard to our other income, gains or losses. CURRENCY AND PLACE OF PAYMENTS All payments made to or by us shall be made in the lawful currency of the United States of America at the Annuity Service Office or elsewhere if we consent. NOTICES AND ELECTIONS To be effective, all notices and elections you make under this Contract must be in writing, signed by you and received by us at the Annuity Service Office. Unless otherwise provided in this Contract, all notices, requests and elections will be effective when received by us at our Annuity Service Office, complete with all necessary information and your signature. GOVERNING LAW This Contract will be governed by the laws of the jurisdiction indicated on the Specifications Page.
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PART 3 OWNER, BENEFICIARY ------ ------------------ OWNER The Owner must be one natural person who is the sole Owner of the Contract and the Annuitant, or a Trust established for the exclusive benefit of the Annuitant or his or her Beneficiaries. The contract is established for the exclusive benefit of the Annuitant or his or her beneficiaries. BENEFICIARY The Beneficiary is as designated on the Specifications Page, unless changed. However, if there is a co-Annuitant, that person will be treated as the Beneficiary upon death of the Annuitant. If no such Beneficiary is living, the Beneficiary is the Contingent Beneficiary. If no Beneficiary or Contingent Beneficiary is living, the Beneficiary is the estate of the deceased Annuitant. CHANGE OF OWNER, Except as permitted under the Death Before ANNUITANT, BENEFICIARY Maturity Date provision, and otherwise permitted under applicable federal tax law, neither the Owner nor the Annuitant may be changed. A co-Annuitant may be added or removed from the Contract prior to the first withdrawal after the Lifetime Income Date, but no such change of co-Annuitant is permitted after that withdrawal and prior to the Annuity Commencement Date. Only the spouse of the Annuitant is eligible to be named as a co-Annuitant. Subject to the right of an irrevocable Beneficiary, you may change the Beneficiary by written request in a form acceptable to us and which is received at our Annuity Service Office. Any change must be approved by us. If approved, any change of Beneficiary will take effect on the date the request is signed. We will not be liable for any payments or actions we take before the change is approved.
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PART 4 PAYMENTS ------ -------- GENERAL The Contract is not effective until Payment is received by us at our Annuity Service Office or such other place designated by us. All Payments under this Contract are payable at our Annuity Service Office or such other place as we may designate. Payment Limits are identified on the Specifications Page. ALLOCATION OF NET PAYMENTS When we receive Payments, the Net Payments will be allocated among Investment Options in accordance with the allocation percentages shown on the Specifications Page. You may change the allocation of subsequent Net Payments at any time, without charge, by giving us written notice in a form acceptable to us.
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PART 5 FEES AND DEDUCTIONS ------ ------------------- CONTRACT ASSET FEE To compensate us for assuming certain administration expenses, expense risks and mortality risks, we deduct from each variable Investment Option a fee each Valuation Period at an annual rate set forth on the Specifications Page. A portion of this Asset Fee may also be used to reimburse us for distribution expenses. This fee is reflected in the Net Investment Factor used to determine the value of Accumulation Units and Annuity Units of the Contract. ANNUAL CONTRACT FEE To compensate us for assuming certain administrative expenses, we charge an Annual Contract Fee as set forth on the Specifications Page. Prior to the Annuity Commencement Date, the Annual Contract Fee is deducted on each Contract Anniversary. We withdraw the Annual Contract Fee from each Investment Option in the same proportion that the Investment Account Value of each Investment Option bears to the Contract Value. After the Annuity Commencement Date, we deduct the Annual Contract Fee on a pro rata basis from each Annuity Payment. LIFETIME INCOME BENEFIT FEE To compensate us for assuming risks associated with the Lifetime Income Benefit, we charge an annual Lifetime Income Benefit Fee. The Lifetime Income Benefit Fee is deducted on each Contract Anniversary. This fee is withdrawn from each Investment Option in the same proportion that the Investment Account Value of each Investment Option bears to the Contract Value. The amount of the fee is equal to the Lifetime Income Benefit Fee Percentage, shown in the Specifications, multiplied by the "Adjusted Benefit Base." The Adjusted Benefit Base is the Benefit Base that was available on the prior Contract Anniversary adjusted for Additional Payments applied to the Benefit Base during the Contract Year prior to the current Contract Anniversary. The Lifetime Income Benefit Fee will not be deducted during the Settlement Phase. The fee will not be deducted after the Maturity Date if an Annuity Option has commenced. The initial Lifetime Income Benefit Fee Percentage is shown in the Specifications. We reserve the right to increase the Lifetime Income Benefit Fee Percentage on the effective date of each Step-Up. In such a situation, the percentage will never exceed the Maximum Lifetime Income Benefit Fee Percentage, shown in the Specifications. TAXES We reserve the right to charge certain taxes against your Payments (either at the time of payment or liquidation), Contract Value, payment of Death Benefit, withdrawals, or Annuity Payments, as appropriate. Such taxes may include premium taxes or other taxes levied by any government entity which we, in our sole discretion, determine have resulted from the establishment or maintenance of the Variable Account, or from the receipt by us of Payments, or from the issuance of this Contract, or from the commencement or continuance of Annuity Payments under this Contract.
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PART 6 VARIABLE ACCOUNT PROVISIONS ------ --------------------------- INVESTMENT ACCOUNT VALUE The Investment Account Value of an Investment Option is determined by multiplying (a) times (b) where: (a) equals the number of Accumulation Units credited to the Investment Option; and, (b) equals the appropriate Accumulation Unit Value. ACCUMULATION UNITS We will credit Net Payments to your Investment Options in the form of Accumulation Units. The number of Accumulation Units we will credit to each Investment Option will be determined by dividing the Net Payment allocated to that Investment Option by the Accumulation Unit Value for that Investment Option. Accumulation Units will be adjusted for any transfers and will be canceled on payment of a death benefit, withdrawal, maturity or assessment of certain charges based on their value for the Valuation Period in which such transaction occurs. ACCUMULATION UNIT VALUE We will determine the Accumulation Unit Value for a particular Investment Option for any Valuation Period by multiplying the Accumulation Unit Value for the immediately preceding Valuation Period by the net investment factor for the corresponding Sub-Account for the Valuation Period for which the value is being determined. The Accumulation Unit Value may increase, decrease or remain the same from one Valuation Period to the next. NET INVESTMENT FACTOR The net investment factor is an index that measures the investment performance of a Sub-Account from one Valuation Period to the next. The net investment factor for any Valuation Period is determined by dividing (a) by (b) and subtracting (c) from the result where: (a) is the net result of: 1) the net asset value per share of a Portfolio share held in the Sub-Account determined as of the end of the current Valuation Period, plus: 2) the per share amount of any dividend or capital gain distributions made by the Portfolio on shares held in the Sub-Account if the ex-dividend date occurs during the current Valuation Period, and (b) is the net asset value per share of a Portfolio share held in the Sub-Account determined as of the end of the immediately preceding Valuation Period, and (c) is the Contract Asset Fee shown on the Specifications Page. The net investment factor may be greater or less than, or equal to, one.
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PART 7 TRANSFERS ------ --------- TRANSFERS BEFORE MATURITY DATE Before the Maturity Date or the Annuity Commencement Date, if earlier, you may transfer amounts among Investment Options of the Contract. Amounts will be canceled from the Investment Options from which amounts are transferred and credited to the Investment Options to which amounts are transferred. We will effect such transfers so that the Contract Value on the date of transfer will not be affected by the transfer. TRANSFERS ON OR AFTER MATURITY Once variable Annuity Payments have begun, you DATE may transfer all or part of the investment upon which your variable Annuity Payments are based from one Investment Option to another. To do this, we will convert variable Annuity Units you hold in the Investment Option from which you are transferring to variable Annuity Units of the Investment Option to which you are transferring. We will determine the number of Annuity Units to transfer so that if the next Annuity Payment were made at that time, it would be the same amount that it would have been without the transfer. You must give us notice at least 30 days before the due date of the first variable Annuity Payment to which the transfer will apply. Transfer charges and limitations are identified on the Specifications Page. After the Annuity Commencement Date, transfers will not be allowed from a fixed to a variable Annuity Option, or from a variable to a fixed Annuity Option. DEFERRAL, MODIFICATION OR We reserve the right to defer, modify or TERMINATION OF TRANSFER terminate the transfer privilege at any time PRIVILEGE that we are unable to purchase or redeem shares of the Portfolios or when a portfolio requires us to impose restrictions due to violation of its short term trading policy. Transfer charges and limitations are identified on the Specifications Page and in the Suspension of Payments provision in the Withdrawals Provisions section.
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PART 8 WITHDRAWAL PROVISIONS ------ --------------------- PAYMENTS OF WITHDRAWALS You may withdraw part or all of the Surrender Value, at any time before the earlier of the death of the Annuitant, the Annuity Commencement Date or the Maturity Date, by sending us a written request. We will pay all withdrawals within seven days of receipt at the Annuity Service Office subject to postponement in certain circumstances, as specified below. SUSPENSION OF PAYMENTS We may defer the right of withdrawal from, or postpone the date of payments from, the variable Investment Options for any period when: (1) the New York Stock Exchange is closed (other than customary weekend and holiday closings); (2) trading on the New York Stock Exchange is restricted; (3) an emergency exists as a result of which disposal of securities held in the Variable Account is not reasonably practicable or it is not reasonably practicable to determine the value of the Variable Account's net assets; or (4) the Securities and Exchange Commission, by order, so permits for the protection of security holders; provided that applicable rules and regulations of the Securities and Exchange Commission shall govern as to whether the conditions described in (2) and (3) exist. TOTAL WITHDRAWAL Upon receipt of your request to withdraw the entire Contract Value, we will terminate the Contract and pay you the Surrender Value. At the time of the total withdrawal, we will deduct the total amount of the Annual Contract Fee from the Contract Value in determining the Surrender Value. We will also deduct a pro rata share of the Lifetime Income Benefit Fee. A pro rata share of the fee is equal to the Lifetime Income Benefit Fee Percentage, shown in the Specifications, multiplied by the Adjusted Benefit Base, and then multiplied by the number of days that have elapsed since the previous Contract Anniversary and divided by 365. For purposes of determining the Lifetime Income Benefit Fee, a total Withdrawal will be deemed to have been taken on the date the Death Benefit is determined and once an Annuity Option has been elected. PARTIAL WITHDRAWAL If you request to withdraw an amount less than the Surrender Value, we will pay you the amount requested and deduct the Withdrawal Amount from the Contract Value. Unless you specify the amount to be withdrawn from each Investment Option, the Withdrawal Amount will be withdrawn from each Investment Option on a pro rata basis. Any withdrawals prior to the Lifetime Income Date, or withdrawals after the Lifetime Income Date that exceed the Lifetime Income Amount, may reduce the Lifetime Income Benefit. FREQUENCY OF PARTIAL You may make as many partial withdrawals as you WITHDRAWALS wish.
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PART 9 LIFETIME INCOME BENEFIT ------ ----------------------- GENERAL This benefit guarantees that each Contract Year after the Lifetime Income Date and during the life of the Annuitant and any co-Annuitant you may take Withdrawals up to an amount equal to the Lifetime Income Amount (LIA), even if your Contract Value reduces to zero. The LIA is described below in the "Lifetime Income Amount (LIA)" provision. The Lifetime Income Date is the Contract Anniversary on or after the later of (a) the date the younger of the Annuitant or any co-Annuitant reaches the Lifetime Income Age or (b) the Minimum Holding Period Expiration. We reserve the right to establish a new Minimum Holding Period equal to the Minimum Holding Period Duration listed in the Specifications, if Additional Payments in any Contract Year prior to the Lifetime Income Date exceed the Benefit Base multiplied by the Payment Limit Percentage. BENEFIT BASE - INITIAL The initial Benefit Base equals the greater of the Initial Payment or the Benefit Base Percentage multiplied by the Transferred Benefit Base. The Benefit Base is available only for the purpose of the Lifetime Income Benefit. It can not be withdrawn as a lump sum. BENEFIT BASE - IMPACT OF Each time an Additional Payment is received ADDITIONAL PAYMENTS prior to the Lifetime Income Date, the Benefit Base will increase by the amount of that Additional Payment. After the Lifetime Income Date, an increase to the Benefit Base due to an Additional Payment is determined as follows: (a) If there have been no Additional Payments, Step-Ups or reductions of the Benefit Base since the Lifetime Income Date, then all Withdrawals since the Lifetime Income Date will be deducted from the Additional Payment. Any Additional Payment remaining after that deduction will be applied to the Benefit Base. (b) If the Benefit Base has been increased due to Additional Payments or Step-Ups, or has been decreased due to a withdrawal in excess of the LIA, then the current Additional Payment will be reduced by Withdrawals less the amount of Additional Payments that have not adjusted the Benefit Base. The Withdrawals and Additional Payments that have not adjusted the Benefit Base are determined beginning with the most recent (i) increase in Benefit Base by an Additional Payment, or (ii) Step-Up, or (iii) decrease of the Benefit Base. Any amount of the current Additional Payment remaining after the reduction will be applied to the Benefit Base. BENEFIT BASE - IMPACT OF If the Contract Value on any Step-Up Date is STEP-UPS greater than the Benefit Base on that date, the Benefit Base will automatically Step-Up to an amount equal to the Contract Value on that Step-Up Date. If the Lifetime Income Benefit Fee Percentage would increase as a result of a Step-Up, you will receive advance notice of the increase and be given the opportunity to decline the automatic Step-Up. If we increase the fee and you decline an automatic Step-Up, you will have the option to elect to Step-Up within 30 days following any subsequent Step-Up Date and this election will resume automatic Step-Ups.
9.1 BENEFIT BASE - IMPACT OF Prior to the Lifetime Income Date, the Benefit WITHDRAWALS Base will decrease as a result of any Withdrawals. The amount deducted in connection with the Withdrawal will be equal to (i) times (ii), where (i) is equal to the Benefit Base prior to the withdrawal, and (ii) is equal to the amount of the partial withdrawal divided by the Contract Value prior to the partial withdrawal. Beginning on the Lifetime Income Date, the Benefit Base will not reduce if total Withdrawals during a Contract Year are less than or equal to the LIA. If a Withdrawal causes total Withdrawals during a Contract Year to exceed the LIA or if total Withdrawals during a Contract Year already exceeded the LIA, then the Benefit Base will be decreased as a result of the Withdrawal. The amount deducted in connection with the Withdrawal will be equal to (i) times (ii), where (i) is equal to the Benefit Base prior to the withdrawal, and (ii) is equal to the amount of the partial withdrawal divided by the Contract Value prior to the partial withdrawal. Notwithstanding the discussion above, the Benefit Base will not be reduced when all Withdrawals during the Contract Year are Life Expectancy Distributions elected under an automatic distribution program, provided by us, even if such Life Expectancy Distributions exceed the LIA for the Contract year. (See the "Life Expectancy Distributions" provision.) LIFETIME INCOME AMOUNT (LIA) The initial LIA will be determined at the time of the first withdrawal on or after the Lifetime Income Date. The initial LIA is equal to the Lifetime Income Percentage multiplied by the Benefit Base on the date of that withdrawal. If there is no co-Annuitant on the Contract when the initial LIA is determined, the Lifetime Income Percentage will be set to the Single Lifetime Income Percentage listed in the Specifications. If there is a co-Annuitant when the initial LIA is determined, the Lifetime Income Percentage will be set to the Spousal Lifetime Income Percentage listed in the Specifications. Each time the Benefit Base is changed after the Lifetime Income Date, then the new LIA will equal the Lifetime Income Percentage multiplied by the new Benefit Base. LIFE EXPECTANCY DISTRIBUTIONS For purposes of this benefit, Life Expectancy Distributions are distributions within a calendar year that: (a) are part of a series of substantially equal periodic payments over the Annuitant's Life Expectancy (or, if applicable, the joint Life Expectancy of the Annuitant and the Annuitant's spouse); and are paid to the Owner as required or contemplated by Code Section 401(a)(9), Section 408(b)(3), or Section 408A(c), as the case may be ("Qualified Death Benefit Stretch Distributions" and "Required Minimum Distributions"); and (b) are the Contract's proportional share of all such distributions as determined by the Company and based on the Company's understanding of the Code. For purposes of this "Life Expectancy Distributions" provision, references to Owner or Annuitant also include the Beneficiary, as applicable. We reserve the right to make any changes necessary to comply with the Code and Treasury Regulations.
9.2 SETTLEMENT PHASE The Contract will enter its Settlement Phase if the Contract Value reduces to zero, Withdrawals during the Contract Year do not exceed the LIA, and the Benefit Base is still greater than zero. When the Contract enters its Settlement Phase the Lifetime Income Benefit will continue, however all other rights and benefits under the Contract, including death benefits, will terminate and additional Payments will not be accepted. You will automatically receive settlement payments equal to the LIA each Contract Year of the Settlement Phase during the life of the Annuitant and any co-Annuitant. If the Settlement Phase is entered prior to the Lifetime Income Date, then settlement payments will begin on or after the Lifetime Income Date. The settlement payments will be paid no less frequently than annually. The Lifetime Income Benefit Fee will not be deducted during the Settlement Phase. If the last of the Annuitant and any co-Annuitant dies during the Settlement Phase, then the Lifetime Income Benefit terminates and no additional settlement payments will be paid.
9.3
PART 10 DISTRIBUTIONS DURING ANNUITANT'S LIFE ------- ------------------------------------- GENERAL Notwithstanding any provision of this Contract to the contrary, the distribution of the Annuitant's interest in the Contract shall be made in accordance with the requirements of IRC Sections 401(a)(9) and 408(b)(3) and the regulations thereunder, the provisions of which are herein incorporated by reference. If distributions are not made in the form of an annuity on an irrevocable basis (except for acceleration), then distribution of the interest in the Contract, as described below, must satisfy the requirements of IRC Section 408(a)(6) and the regulations thereunder, rather than this Part and paragraphs (c) and (d) of Part 11 of this Contract. The required minimum distribution for this Contract may be withdrawn from another Individual Retirement Account in accordance with Q&A-9 of Section 1.408-8 of the Income Tax Regulations. There is no required distribution during the life of the Annuitant if this Contract is issued as a Roth IRA as indicated in the Type of Contract on the Specifications Page. INTEREST IN THE CONTRACT Unless otherwise provided under applicable federal tax law, the "interest" in the Contract includes the amount of any outstanding rollover, transfer, and recharacterization under Q&As-7 and -8 of Section 1.408-8 of the Income Tax Regulations. Also, prior to the date that annuity payments commence on an irrevocable basis (except for acceleration), the "interest" in the Contract includes the actuarial value of any other benefits provided under the Contract, such as guaranteed death benefits or the Lifetime Income Benefit. REQUIRED BEGINNING DATE The "required beginning date" means April 1 of the calendar year following the calendar year in which the Annuitant attains age 70 1/2, or such later date provided by applicable tax law. DISTRIBUTIONS Unless otherwise permitted under applicable federal tax law, the entire interest will commence to be distributed no later than the required beginning date over (i) the life of the Annuitant or the lives of the Annuitant and his or her designated beneficiary (within the meaning of IRC Section 401(a)(9)), or (ii) a period certain not extending beyond the life expectancy of the Annuitant, or joint life and last survivor expectancy of the Annuitant and his or her designated beneficiary. If the interest in the Contract is to be distributed over a period greater than one year, the amount to be distributed by December 31 of each year (including the year in which the required beginning date occurs) shall be determined in accordance with the requirements of IRC Section 401(a)(9) and the regulations thereunder. Payments must be made in periodic payments at intervals of no longer than one year. Unless otherwise provided by applicable federal tax law, payments must be either nonincreasing or they may increase only as provided in Q&As-1 and -4 of Section 1.401(a)(9)-6 of the Income Tax Regulations. In addition, any distribution must satisfy the incidental benefit requirements specified in Q&A-2 of Section 1.401(a)(9)-6. The distribution periods described above cannot exceed the periods specified in Section 1.401(a)(9)-6 of the Income Tax Regulations (except as otherwise provided by applicable federal tax law). If annuity payments commence on or before the required beginning date, the first required payment can be made as late as the required beginning date and must be the payment that is required for one payment interval. The second payment need not be made until the end of the next payment interval.
10.1
PART 11 DISTRIBUTIONS AFTER ANNUITANT'S DEATH ------- ------------------------------------- DEATH BEFORE MATURITY DATE If the Annuitant dies prior to the Maturity Date or Annuity Commencement Date, if earlier, the interest in the Contract will be distributed as follows. Written notice and proof of death and all required claim forms must be received at the Company's Annuity Service Office prior to any distribution. The Contract Value may be withdrawn by the Beneficiary in one sum immediately, in which case the Contract will terminate. If the Contract Value is not taken in one sum immediately, the Contract will continue subject to the following provisions: (a) The Beneficiary becomes the Owner. (b) No additional Payments may be applied to the Contract. (c) If the Beneficiary is not the deceased Annuitant's spouse, the Lifetime Income Benefit will no longer be available and the entire interest in the Contract must be distributed under one of the following options: (i) The entire interest in the Contract must be distributed over the life of the Beneficiary, or over a period not extending beyond the life expectancy of the Beneficiary, with distributions beginning by the end of the calendar year following the calendar year of the Annuitant's death; or (ii) the entire interest in the Contract must be distributed by the end of the calendar year containing the fifth anniversary of the Annuitant's Death, or. (iii) the entire interest in the Contract must be distributed as Annuity Payments under one of the options described in the Annuity Options section. An irrevocable election of the method of distribution must be made no later than the end of the calendar year immediately following the calendar year in which the Annuitant died. If no election is made, the interest in the Contract will be distributed as described in (ii) above. The life expectancy of the beneficiary is determined using the age of the Beneficiary as of his or her birthday in the year following the year of the Annuitant's death. If the Beneficiary dies before the distributions required by (i) or (ii) are complete, the entire remaining Contract Value must be distributed at least as rapidly as under the distribution option chosen. (d) The following options apply if the sole Beneficiary is the Annuitant's spouse. If the sole Beneficiary is the deceased Annuitant's spouse and is the co-Annuitant, the surviving spouse may elect to continue the Contract as the new Owner/Annuitant, the Lifetime Income Benefit will be available during the life of the surviving spouse, and the Lifetime Income Percentage will be set to the Spousal Lifetime Income Percentage listed in the Specifications. If the Annuitant dies prior to the first withdrawal on or after the Lifetime Income Date and the sole Beneficiary is the deceased Annuitant's spouse but is not the co-Annuitant, the surviving spouse may elect to continue the Contract as the new Owner/Annuitant, the Lifetime Income Benefit will be available during the life of the surviving spouse, and the Lifetime Income Percentage will be set to the Spousal Lifetime Income Percentage listed in the Specifications.
11.1 If the Annuitant dies after the first withdrawal on or after the Lifetime Income Date and the sole Beneficiary is the deceased Annuitant's spouse, but is not the co-Annuitant, the surviving spouse may elect to continue the Contract as the new Owner/Annuitant but the Lifetime Income Benefit will no longer be available. The surviving spouse may name a new Beneficiary (and, if no Beneficiary is so named, the surviving spouse's estate will be the Beneficiary). The spouse may also elect distributions under one of the following options: (i) the entire interest in the Contract may be distributed over the life of the Beneficiary, or over a period not extending beyond the life expectancy of the Beneficiary, with distributions beginning by the end of the calendar year following the calendar year of the Annuitant's death (or by the end of the calendar year in which the Annuitant would have attained age 70 1/2, if later); or (ii) the entire interest in the Contract may be distributed by the end of the calendar year containing the fifth anniversary of the Annuitant's Death; or (iii) as Annuity Payments under one of the options described in the Annuity Options section. Such election must be made no later than the earlier of the date distributions are scheduled to begin under (i) above or December 31 of the year containing the fifth anniversary of the Annuitant's death. If no election is made, the entire interest in the Contract will be distributed as described in (ii) above. If the surviving spouse dies before required distributions commence, the remaining interest will be distributed, starting by the end of the calendar year following the calendar year of the spouse's death, over the designated beneficiary's life expectancy determined using the beneficiary's ages as of his or her birthday in the year following the death of the spouse. If elected, the interest may be distributed as described in (ii) above. If there is no beneficiary, the entire interest in the Contract will be distributed by the end of the calendar year containing the fifth anniversary of the Annuitant's death. Life expectancies are determined using the Single Life Table in Q&A-1 of Section 1.401(a)(9)-9 of the Income Tax Regulations. If distributions are made to a surviving spouse as the sole designated beneficiary, such spouse's life expectancy for a year is the number in the Single Life Table corresponding to such spouse's age in the year. In all other cases, remaining life expectancy for a year is the number in the Single Life Table corresponding to the Beneficiary's age in the year distributions must begin, reduced by 1 for each subsequent year. We will permit the Owner to limit the option(s) offered to any named Beneficiary, if the Owner provides written notice to the Company prior to death and the desired option(s) is one provided for in this Contract and it satisfies the applicable requirements of IRC Sections 401(a)(9) and 408(b)(3) and the regulations thereunder. If the Annuitant dies after required distributions commence, the remaining portion of his or her interest in the Contract, if any, will be distributed at least as rapidly as under the distribution option chosen. If there is more than one Beneficiary, the foregoing provisions will independently apply to each Beneficiary, to the extent of that Beneficiary's share.
11.2 DEATH BENEFIT ON OR AFTER If Annuity Payments have been selected based on MATURITY DATE an Annuity Option providing for payments for a guaranteed period, and the Annuitant dies on or after the Annuity Commencement Date, we will make the remaining guaranteed payments to the Beneficiary. Any remaining payments will be made at least as rapidly as under the method of distribution being used as of the date of the Annuitant's death. If no Beneficiary is living, we will commute any unpaid guaranteed payments to a single sum (on the basis of the interest rate used in determining the payments) and pay that single sum to the estate of the last to die of the Annuitant and the Beneficiary. PROOF OF DEATH We will require Proof of death upon the death of the Annuitant or the Owner. Proof of death is one of the following received at the Annuity Service Office: (a) A certified copy of a death certificate. (b) A certified copy of a decree of a court of competent jurisdiction as to the finding of death. (c) Any other proof satisfactory to us.
11.3
PART 12 ANNUITY PAYMENTS ------- ---------------- GENERAL Benefits payable under this Contract may be applied in accordance with one or more of the Annuity Options described below, subject to any restrictions of Internal Revenue Code sections 401(a)(9) and 408(b)(3). If guaranteed payments are to be made, the period over which the guaranteed payments are made may not exceed the period permitted under Section 1.401(a)(9)-6 of the Income Tax Regulations. Once Annuity Payments commence, the Annuity Option may not be changed. We will send you information about Annuity Options before the Annuity Commencement Date. If by the Maturity Date, you do not choose an Annuity Option, make a total Withdrawal of the Surrender Value, or ask us to change the Maturity Date, we will automatically pay you Annuity Payments under the Annuity Option shown in the Specifications Page and the Annuity Commencement Date is considered to be the Maturity Date. You can change the Annuity Option at any time before Annuity Payments commence. You may select a Fixed or Variable Annuity. We will provide variable Annuity Payments unless otherwise elected. Once Annuity Payments commence, the Annuity Option may not be changed. The method used to calculate the amount of the initial and subsequent Annuity Payments is described below. If the monthly income is less than $20, we may pay the greater of the Contract Value or the commuted value of the Lifetime Income Benefit in one lump sum on the Maturity Date, or the Annuity Commencement Date if earlier. VARIABLE ANNUITY PAYMENTS We will determine the amount of the first Variable Annuity Payment by applying the portion of the Contract Value used to effect a Variable Annuity (minus any applicable premium taxes) to the Annuity Option elected based on the mortality table and assumed interest rate shown in the Specifications Page. We will provide a table of the annuity factors upon request. If the current rates in use by us on the Annuity Commencement Date are more favorable to you, we will use the current rates. The portion of the Contract Value used to effect a Variable Annuity will be measured as of a date not more than 10 business days prior to the Annuity Commencement Date. Subsequent payments will be based on the investment performance of the Investment Options you elected. The amount of each subsequent variable annuity payment is determined by multiplying the number of Annuity Units credited for each Investment Option you elect by the appropriate Annuity Unit value on each subsequent determination date, which is a uniformly applied date not more than 10 business days before the payment is due. The number of Annuity Units is determined by dividing the portion of the first payment allocated to an Investment Option by the Annuity Unit value for that Investment Option determined as of the same date that the Contract Value used to effect Annuity Payments was determined. The portion of the first payment allocated to an investment Option will be determined in the same proportion that the Investment Account Value of each Investment Option bears to the Contract Value used to effect the Variable Annuity, unless you elect a different allocation. MORTALITY AND EXPENSE We guarantee that the dollar amount of each GUARANTEE Variable Annuity payment will not be affected by changes in mortality and expense experience. ANNUITY UNIT VALUE The value of an Annuity Unit for each Investment Option for any Valuation Period is determined as follows:
12.1 (a) The net investment factor for the corresponding Sub-Account for the Valuation Period for which the Annuity Unit value is being calculated is multiplied by the value of the Annuity Unit for the preceding Valuation Period; and (b) The result is adjusted to compensate for the interest rate used to determine the first Variable Annuity payment. The dollar value of Annuity Units may increase, decrease or remain the same from one Valuation Period to the next. FIXED ANNUITY PAYMENTS We will determine the amount of each Fixed Annuity payment by applying the portion of the Contract Value used to effect a Fixed Annuity measured as of a date not more than 10 business days prior to the Annuity Commencement Date (minus any applicable premium taxes) to the Annuity Option elected based on the mortality table and interest rate shown on the Specifications Page. The Fixed Annuity payment will not be less than that available by applying the Contract Value to purchase a single premium immediate annuity then offered to the same class of annuitants by us or a company affiliated with us. We guarantee the dollar amount of Fixed Annuity payments.
12.2
PART 13 ANNUITY OPTIONS ------- --------------- DESCRIPTION OF ANNUITY OPTIONS Option 1:Life Annuity Life 5-Year Certain. We will make Annuity Payments for 5 years and after that during the lifetime of the Annuitant. No payments are due after the death of the Annuitant or, if later, the end of the 5-year period. Option 2: Joint Life Annuity Joint Life 5-Year Certain. We will make Annuity Payments for 5 years and after that during the joint lifetime of the Annuitant and co Annuitant. No payments are due after the death of both the Annuitant and co-Annuitant or, if later, the end of the 5-year period. Option 3: Fixed Life Annuity Life Annuity with Cash Refund: We will make payments during the lifetime of the Annuitant. After the death of the Annuitant, we will pay the Beneficiary a lump sum amount equal to the excess, if any, of the Contract Value at the election of this option over the sum of the annuity payments made under this option. This option is available on or after the later of the Annuitant's 90th birthday or the tenth Contract Anniversary. The annual amount of the annuity payments will equal the greater of (a) the Lifetime Income Amount, or (b) the annual amount determined by applying the Contract Value to a Cash Refund Annuity Option based on the Mortality Table and Fixed Annuity Payment Interest Rate listed in the Specifications. Option 4: Fixed Joint Life Annuity Joint Life Annuity with Cash Refund: We will make payments during the lifetime of the Annuitant and co-Annuitant. After the death of both the Annuitant and co-Annuitant, we will pay the Beneficiary a lump sum amount equal to the excess, if any, of the Contract Value at the election of this option over the sum of the annuity payments made under this option. This option is available only if the co-Annuitant has been the co-Annuitant since the first withdrawal on or after the Lifetime Income Date. This option may be elected on or after the earlier of the Annuitant's or co-Annuitant's 90th birthday or the tenth Contract Anniversary, if later. The annual amount of the annuity payments will equal the greater of (c) the Lifetime Income Amount, or (d) the annual amount determined by applying the Contract Value to a joint life Cash Refund Annuity Option based on the Mortality Table and Fixed Annuity Payment Interest Rate listed in the Specifications. ALTERNATE ANNUITY OPTIONS Instead of settlement in accordance with the Annuity Options described above, you may choose an alternate form of settlement acceptable to us. Once Annuity Payments commence, the form of settlement may not be changed.
13.1 THE JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) A STOCK COMPANY (JOHN HANCOCK (R) LOGO)