EX-99.(26)(D)(1) 4 d290946dex9926d1.htm SPECIMEN FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY Specimen Flexible Premium Variable Universal Life Insurance Policy
LOGO   

John Hancock Life Insurance Company (U.S.A.)

A Stock Company

 

  LIFE INSURED       [John J. Doe]
  POLICY NUMBER       [12 345 678]
  PLAN NAME       [Protection VUL]

FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY

ADJUSTABLE DEATH BENEFIT

BENEFIT PAYABLE ON LIFE INSURED’S DEATH

FLEXIBLE PREMIUMS PAYABLE TO AGE 121 DURING THE LIFE INSURED’S LIFETIME

NON-PARTICIPATING (NOT ELIGIBLE FOR DIVIDENDS)

Subject to the conditions and provisions of this policy, while the policy is in force, and upon the death of the Life Insured, John Hancock Life Insurance Company (U.S.A.) (“the Company”) agrees to pay the Insurance Benefit to the beneficiary in a lump sum, and to provide the other benefits, rights, and privileges, if any, of the policy. The Insurance Benefit is described in Section 6. If the Company makes other plans of payment available other than a lump sum, then a beneficiary may request written election of any such other plans in lieu of a lump sum.

Your Net Premiums are added to your Policy Value. You may allocate them to one or more of the Investment Accounts and to the Fixed Account, subject to Section 17, and any other applicable provisions of the policy.

The portion of your Policy Value that is in an Investment Account will vary from day to day. The amount is not guaranteed; it may increase or decrease, depending on the investment experience of the underlying Subaccounts for the Investment Accounts that you have chosen.

The portion of your Policy Value that is in the Fixed Account will accumulate, after deductions, at rates of interest we determine. Such rates will not be less than the Fixed Account Annual Rate shown in Section 1.

The amount of the Insurance Benefit, or the duration of the insurance coverage, or both, may be variable or fixed under specified conditions and may increase or decrease as described in Section 6.

READ YOUR POLICY CAREFULLY. It is a contract between you and us.

RIGHT TO RETURN POLICY. If for any reason you are not satisfied with your policy, you may return it for cancellation by delivering or mailing it to us or to the agent who sold it. If this policy does not replace another policy, you may return it within TEN days after receiving it, or if it replaces another policy, you may return it within TWENTY days after receiving it. We will refund in full the payment made. The policy will be void from the beginning.

Signed for the Company by:

 

LOGO   LOGO

 

12PROVUL

   PV0112ADE

 

                    Policy Provisions

  Section

1.

   Policy Specifications

2.

   Table of Rates

3.

   Definitions

4.

   Qualification as Life Insurance

5.

   Total Face Amount

6.

   Insurance Benefit

7.

   Interest On Proceeds

8.

   Premiums

9.

   No-Lapse Guarantee

10.

   Grace Period

11.

   Policy Termination

12.

   Reinstatement

13.

   Coverage at and after Age 121

14.

   Policy Value

15.

   Loan Account, Fixed Account, Investment Accounts

16.

   Separate Account and Subaccounts

17.

   Allocations and Transfers

18.

   Loans

19.

   Surrenders and Withdrawals

20.

   Owner and Beneficiary

21.

   Assignment

22.

   Misstatements

23.

   Suicide

24.

   Incontestability

25.

   The Contract

26.

   Right to Postpone Payment of Benefits

27.

   Claims Of Creditors

28.

   Reports To Owner

29.

   How Values Are Computed

 

2

  

1. POLICY SPECIFICATIONS

 

Life Insured

      [JOHN DOE]   

Plan Name

      [Protection VUL]    Policy Number    [12 345 678]   

Age at Policy Date

      [35]    Issue Date    [May 1, 2012]   

Sex

      [Male]    Policy Date    [May 1, 2012]   

Risk Classification

      [Standard Non Smoker]   

Additional Ratings

      [not applicable]   

Owner, Beneficiary

      As designated in the application or subsequently changed   

Death Benefit

Option at Issue

      [Option 1]   

Life Insurance

Qualification Test

Elected

      [Guideline Premium Test]   
     Base Face Amount at Issue    $ [500,000 ] 
     Supplemental Face Amount at Issue    $ [600,000 ] 
             

 

 

  
     Total Face Amount at Issue    $ [1,100,000 ] 

Governing Law

      [Delaware]   

 

3.0

   PV0312A

1. POLICY SPECIFICATIONS (continued) – Policy [12 345 678]

 

PREMIUMS AT ISSUE

 

Minimum Initial Premium

      $ [000.00 ] 

No- Lapse Guarantee Premium

      $ [0,000.00 ] 

Premium Mode

        [Annual ] 

Planned Premium

      $ [0,000.00 per year ] 

Notice: This policy provides life insurance coverage for the lifetime of the Life Insured if sufficient premiums are paid. Premium payments in addition to the Planned Premium shown may need to be made to keep this policy and coverage in force. Keeping the policy and coverage in force will be affected by factors such as: changes in the current Cost of Insurance Rates, Administrative Charge, Base Face Amount Charge, Asset-Based Risk Charge, or Premium Charge; the amount, timing and frequency of premium payments; the interest rate being credited to the Fixed Account; the investment experience of the Investment Accounts; changes to the Death Benefit Option; changes in the Total Face Amount; loan activity; withdrawals; and deductions for any applicable supplementary benefit riders that are attached to, and made a part of, this policy. Also refer to the Grace Period and Policy Termination provisions in Sections 10 and 11.

 

3.0 (continued)

   PV03C12A

1. POLICY SPECIFICATIONS (continued) – Policy [12 345 678]

 

SCHEDULE OF SUPPLEMENTAL FACE AMOUNTS   

Supplemental Face Amount At Issue

    $ [600,000 ] 

Maximum Increasing Supplemental Face Amount

    $ [1,050,000 ] 

Maximum Total Supplemental Face Amount

    $ [1,650,000 ] 

 

Effective at
Beginning of
Policy Year

  

Supplemental
Face Amount
Increases

    

Total Supplemental

Face Amount

  
1   $ 0      $ 600,000   
2   $ 50,000      $ 650,000   
3   $ 50,000      $ 700,000   
4   $ 75,000      $ 775,000   
5   $ 75,000      $ 850,000   
6   $ 100,000      $ 950,000   
7   $ 100,000      $ 1,050,000   
8   $ 100,000      $ 1,150,000   
9   $ 150,000      $ 1,300,000   
10   $ 150,000      $ 1,450,000   
11   $ 200,000      $ 1,650,000   
12 to 86   $ 0      $ 1,650,000   

[The Supplemental Face Amount will increase at the beginning of each Policy Year for Policy Years 2 to xx by $xxx,xxx. The Total Supplemental Face Amount will not exceed the Maximum Total Supplemental Face Amount shown above.]

[The Supplemental Face Amount will increase at the beginning of each Policy Year for Policy Years 2 to xx by xx.xx% of the Total Face Amount that is in effect immediately prior to the beginning of each such Policy Year. The Total Supplemental Face Amount will not exceed the Maximum Total Supplemental Face Amount shown above.]

 

3.1

   PV03112A

1. POLICY SPECIFICATIONS (continued) – Policy [12 345 678]

 

OTHER BENEFITS AND SPECIFICATIONS

[Not Applicable]

[* Overloan Protection Rider]

[* Acceleration of Death Benefit for Qualified Long Term Care Services Rider]

[* Residual Life Insurance Benefit and Continuation of Acceleration Rider]

[** Cash Value Enhancement]

[*** Accelerated Benefit Rider]

[* Disability Benefit Rider – Payment of Specified Premium in Event of Life Insured’s Total Disability as Defined and Limited]

[* Extended No-Lapse Guarantee Rider]

[* Alternative Cash Value Rider]

 

* Specifications for this benefit are shown under Supplementary Benefits of this Section 1.
** There is a one time charge of $500.00 deducted as part of the first Monthly Deduction due on the Policy Date for this benefit to become effective.
*** References to “Face Amount” in this Supplementary Benefit rider that forms part of your policy means “Total Face Amount” which is made up of 2 components: (i) the Base Face Amount, and (ii) any Supplemental Face Amount.

(Sample display of how riders should show up on this page if elected. Only riders elected or ones that are automatically issued with the issue of the policy (OLP) should show. If no rider is elected and no automatic issues then “not applicable” should show)

 

3.2

   PV03212A

1. POLICY SPECIFICATIONS (continued) – Policy [12 345 678]

 

MAXIMUM EXPENSE CHARGES

Deductions from Premium Payments

 

Premium Charge      A percentage of total premium payments in each Policy Year, the percentages as shown below:

 

Policy Years

  

Up to Premium

Threshold*

  

Excess of Premium

Threshold*

1

   8%   12%

2-5

   8%   8%

6+

   2%   2%

*  The dollar amount of the Premium Threshold is shown in the Table of Values in this section

 

Monthly Deductions:      The following charges are deducted monthly from the Policy Value:
Administrative Charge      $15.00   
Base Face Amount Charge      $[.0000] per $1000 of Base Face Amount for the first 8 Policy Years.

Cost of Insurance

Charge

      Determined in accordance with Section 14. Maximum Monthly Cost of Insurance Rates per $1,000 are shown in Section 2.

Asset-Based Risk

Charge

      Percentage of Investment Account assets as shown below (percentage shown is deducted monthly):
   Policy Years   

Percent of Investment

Account assets

   
   1-15    .0750%   
   16+    .0200%   

 

3A

   PV03A12A

1. POLICY SPECIFICATIONS (continued) – Policy [12 345 678]

 

OTHER CHARGES

 

Surrender Charge   

The Surrender charge is deducted from the Policy Value during the Surrender Charge Period. See Sections 5 and 19 for details of when a Surrender Charge applies. The Surrender Charge in the first Policy Year is equal to (a) minus (b) minus (c), with the result multiplied by the Surrender Charge Ratio, where:

 

(a)      is the Surrender Charge for the Base Face Amount at Issue, as shown in the Table of Values in this section;

 

(b)      is 4.73% multiplied by the sum of premiums paid in the first Policy Year up to the Premium Threshold; and

 

(c)      is 8.73% multiplied by the sum of premiums paid in the first Policy Year in excess of the Premium Threshold.

 

The Surrender Charge Ratio is equal to the sum of premiums paid in the first Policy Year up to the Premium Threshold divided by the Premium Threshold. The Surrender Charge Ratio cannot exceed 1.

 

The Surrender Charge will reduce monthly over the Surrender Charger Period until it becomes zero. The table below shows the applicable grading percentage at the beginning of each Policy Year during the Surrender Charge Period (proportionate grading percentages apply for other Policy Months). The amount to which the Surrender Charge is reduced at any time is determined by multiplying the initial amount of Surrender Charge by the percentage that is applicable at that interval during the Surrender Charge Period.

 

Surrender
Charge Period

(Policy Year)

   Percentage*    

Surrender
Charge Period

(Policy Year)

   Percentage*  
1     [100.00 ]%    7     [60.00 ]% 
2     [90.00 ]%    8     [40.00 ]% 
3     [80.00 ]%    9     [30.00 ]% 
4     [70.00 ]%    10       [10.00 ]% 
5     [60.00 ]%     11+     [0.00 ]% 
6     [60.00 ]%     

 

Supplementary Benefit Rider Charges    Charges for applicable riders are shown under Supplementary Benefits of this Section 1.

 

3A (continued)

   PV3AC12A

1. POLICY SPECIFICATIONS (continued) – Policy [12 345 678]

 

TABLE OF VALUES

Refer to your policy provisions for details on the terms and values shown in this table.

 

Minimum Total Face Amount

    $        50,000   

Minimum Base Face Amount

    $       50,000   

Minimum Total Face Amount Decrease

    $       50,000   

No-Lapse Guarantee Period(s)

   

Base Face Amount

      First [2] Policy Years from Policy Date   

Supplemental Face Amount (if elected)

      First 2 Policy Years from Policy Date   

Allocation Date

      [10TH day after the Issue Date]   

Minimum Fixed Account Annual Rate

      2 % 

Loan Interest Credited Annual Rate

      2 % 

Maximum Loan Interest Charged Annual Rate

   

Policy Years 1-10

      3.25 % 

Policy Years 11+

      2.25 % 

Minimum Loan Amount

    $ 500   

Minimum Withdrawal Amount

    $ 500   

Death Benefit Discount Factor

      1.0016516   

Maximum Transfer Fee

(See Section 17 for Transfer Restrictions)

    $ 25   

Fixed Account Maximum Transfer Percentage

      15 % 

Fixed Account Maximum Transfer Amount

    $ 2,000   

Investment Account Maximum Transfer Amount

    $ 1,000,000   

Premium Threshold

    $ [0,000.00 ] 

Surrender Charge for the Base Face Amount at Issue

    $ [0,000.00 ] 

Partial Surrender Charge Decrease Exemption

      10 % 

(SEE SAMPLE ALTERNATIVE PAGE 3B ON NEXT PAGE WHICH PROVIDES SAMPLE OF FOOTNOTE THAT WILL SHOW WHEN DUE TO ISSUE SPECIFICATIONS, BASE FACE AMOUNT NLG PERIOD SHOWS UNREDUCED PERIOD DUE TO ABSENCE OF ROP AND/OR INCREASING SFA. ONLY ONE OF THESE PAGES WOULD BE ISSUED)

 

3B

   PV03B12A

1. POLICY SPECIFICATIONS (continued) – Policy [12 345 678]

 

TABLE OF VALUES

Refer to your policy provisions for details on the terms and values shown in this table.

 

Minimum Total Face Amount

    $        50,000   

Minimum Base Face Amount

    $       50,000   

Minimum Total Face Amount Decrease

    $       50,000   

No-Lapse Guarantee Period(s)

   

*Base Face Amount

      First [20] Policy Years from Policy Date   

Supplemental Face Amount (if elected)

      First 2 Policy Years from Policy Date   

Allocation Date

      [10TH day after the Issue Date]   

Minimum Fixed Account Annual Rate

      2 % 

Loan Interest Credited Annual Rate

      2 % 

Maximum Loan Interest Charged Annual Rate

   

Policy Years 1-10

      3.25 % 

Policy Years 11+

      2.25 % 

Minimum Loan Amount

    $ 500   

Minimum Withdrawal Amount

    $ 500   

Death Benefit Discount Factor

      1.0016516   

Maximum Transfer Fee

(See Section 17 for Transfer Restrictions)

    $ 25   

Fixed Account Maximum Transfer Percentage

      15 % 

Fixed Account Maximum Transfer Amount

    $ 2,000   

Investment Account Maximum Transfer Amount

    $ 1,000,000   

Premium Threshold

    $ [0,000.00 ] 

Partial Surrender Charge Decrease Exemption

      10 % 

 

* Electing to increase the Supplemental Face Amount may reduce this period. Refer to Section 5 for details

(SAMPLE ALTERNATIVE PAGE 3B PRODUCED WHEN BASE FACE AMOUNT NLG PERIOD SHOWS UNREDUCED PERIOD DUE TO ABSENCE OF ROP AND/OR INCREASING SFA)

 

3B

   PV03B12A

2. TABLE OF RATES– Policy [12 345 678]

A. RATE TABLE

 

Age  

Maximum Monthly

Cost of Insurance

Rates per $1,000 of

Net Amount at Risk

  

Minimum

Death

Benefit

Factors

   Age  

Maximum Monthly

Cost of Insurance

Rates per $1,000 of

Net Amount at Risk

  

Minimum

Death

Benefit

Factors

35

   0.0908   2.5000   79   5.2197   1.0500

36

   0.0958   2.5000   80   5.8397   1.0500

37

   0.1000   2.5000   81   6.5509   1.0500

38

   0.1075   2.5000   82   7.2975   1.0500

39

   0.1142   2.5000   83   8.1096   1.0500

40

   0.1217   2.5000   84   9.0173   1.0500

41

   0.1317   2.4300   85   10.0423   1.0500

42

   0.1442   2.3600   86   11.1922   1.0500

43

   0.1584   2.2900   87   12.4650   1.0500

44

   0.1751   2.2200   88   13.8493   1.0500

45

   0.1943   2.1500   89   15.3334   1.0500

46

   0.2127   2.0900   90   16.9088   1.0500

47

   0.2327   2.0300   91   18.4163   1.0400

48

   0.2444   1.9700   92   20.0152   1.0300

49

   0.2578   1.9100   93   21.7336   1.0200

50

   0.2770   1.8500   94   23.5854   1.0100

51

   0.2996   1.7800   95   25.5730   1.0000

52

   0.3306   1.7100   96   27.4318   1.0000

53

   0.3640   1.6400   97   29.4578   1.0000

54

   0.4067   1.5700   98   31.6726   1.0000

55

   0.4594   1.5000   99   34.0995   1.0000

56

   0.5131   1.4600   100   36.7713   1.0000

57

   0.5709   1.4200   101   38.9513   1.0000

58

   0.6204   1.3800   102   41.3353   1.0000

59

   0.6775   1.3400   103   43.9462   1.0000

60

   0.7463   1.3000   104   46.8128   1.0000

61

   0.8304   1.2800   105   49.9253   1.0000

62

   0.9331   1.2600   106   53.3625   1.0000

63

   1.0485   1.2400   107   57.1734   1.0000

64

   1.1699   1.2200   108   61.4190   1.0000

65

   1.2983   1.2000   109   66.1732   1.0000

66

   1.4286   1.1900   110   71.5293   1.0000

67

   1.5608   1.1800   111   77.6167   1.0000

68

   1.7033   1.1700   112   83.3333   1.0000

69

   1.8512   1.1600   113   83.3333   1.0000

70

   2.0308   1.1500   114   83.3333   1.0000

71

   2.2322   1.1300   115   83.3333   1.0000

72

   2.4973   1.1100   116   83.3333   1.0000

73

   2.7778   1.0900   117   83.3333   1.0000

74

   3.0739   1.0700   118   83.3333   1.0000

75

   3.3986   1.0500   119   83.3333   1.0000

76

   3.7540   1.0500   120   83.3333   1.0000

77

   4.1684   1.0500   121+   0.0000   1.0000

78

   4.6548   1.0500      

For Age 121 and above, the Maximum Monthly Cost of Insurance Rate per $1,000 of Net Amount at Risk is 0 and the Minimum Death Benefit Factor is 1.000.

Maximum Monthly Cost of Insurance Rates are the same for the Base Face Amount and the Supplemental Face Amount and have been adjusted for any applicable Additional Ratings that are applied to the Cost of Insurance rates as shown in Section 1.

 

4

   PV0412A

3. DEFINITIONS

Listed below are some terms that have specific meanings in your policy. Please refer to these definitions as you read your policy. Other terms may be defined in the body of your policy.

Additional Rating means an increase in the Cost of Insurance that is applied when a Life Insured does not meet, at a minimum, our underwriting requirements for the standard Risk Classification.

Age means, on any Policy Anniversary, the age of the person in question at his or her birthday nearest that date.

Annual Processing Date means every 12th Processing Date starting with the Processing Date next after the Policy Date.

Business Day means any day that we are open for business and the New York Stock Exchange is open for trading. The net asset value of the underlying shares of a Subaccount will be determined at the end of each Business Day. We will deem each Business Day to end at the close of regularly scheduled trading of the New York Stock Exchange (currently 4:00 p.m. Eastern Time) on that day.

Cash Surrender Value means the Policy Value less the Surrender Charge.

Date means a calendar day ending at midnight local time at our Service Office.

Fixed Account means that part of the Policy Value reflecting the value you have in our general account.

Fund means each division, with a specific investment objective, of a Series Fund.

In force means that the policy has not terminated in accordance with Sections 9, 10, or 11, or been surrendered in accordance with Section 19.

Investment Account means that part of the Policy Value which reflects the value you have in one of our Subaccounts.

Issue Date means the date shown in the Policy Specifications of this policy from which the Suicide and Incontestability provisions are applied. Issue Date is also used to determine the Allocation Date shown in Section 1.

Loan Account means that part of the Policy Value reflecting amounts transferred from the Fixed Account or the Investment Accounts as collateral for a policy loan.

Minimum Initial Premium means the minimum premium needed to put the policy in force when the Issue Date is equal to or before the Policy Date. It is shown in Section 1.

Net Amount at Risk is an amount used for the purpose of calculating the Cost of Insurance charges as described in Section 14.

Net Cash Surrender Value means the Cash Surrender Value less the Policy Debt.

Net Policy Value means the Policy Value less the value in the Loan Account.

Net Premium means the gross premium paid less any Premium Charge. It is the amount of premium allocated to the Fixed Account or to the Investment Accounts.

Partial Surrender Charge Decrease Exemption means a percentage of the Base Face Amount at Issue that applies to decreases in the Base Face Amount. This percentage is shown in Section 1 in the Table of Values. If cumulative Base Face Amount decreases exceed this exemption percentage during the Surrender Charge Period, then a proportionate amount of the Surrender Charge will apply to the amount of decrease in excess of the exemption. The exemption is not applicable to, and has no effect on, a full surrender of the policy or on any Base Face Amount decrease resulting from a partial withdrawal of the Net Cash Surrender Value.

Planned Premium means the premium that is selected in the application for the policy, which is intended to be paid on a regular modal basis. It is shown in Section 1.

Policy Date means the date from which charges for the first Monthly Deductions are calculated. The Policy Date is shown in Section 1. Policy Years, Policy Months, and Policy Anniversaries are determined from the Policy Date.

 

5

  

3. DEFINITIONS (continued)

 

Policy Debt as of any date equals (a) plus (b) plus (c), minus (d), where:

 

  (a) is the total amount of loans borrowed as of such date;

 

  (b) is the total amount of any unpaid loan interest charges borrowed against the policy on a Policy Anniversary;

 

  (c) is any interest charges accrued from the last Policy Anniversary to the current date; and

 

  (d) is the total amount of loan repayments as of such date.

Policy Value means the sum of the values in the Loan Account, the Investment Accounts, and the Fixed Account.

Policy Year means (a) or (b) below, whichever is applicable.

 

  (a) The first Policy Year is the period beginning on the Policy Date and ending on the Business Day immediately preceding the first Annual Processing Date.

 

  (b) Each subsequent Policy Year is the period beginning on an Annual Processing Date and ending on the Business Day immediately preceding the next Annual Processing Date.

Processing Date means the first day of a Policy Month. A Policy Month shall begin on the day in each calendar month that corresponds to the day of the calendar month on which the Policy Date occurred. If the Policy Date is the 29th, 30th, or 31st day of a calendar month, then for any calendar month that has fewer days, the first day of the Policy Month will be the last day of such calendar month. The Policy Date is not a Processing Date. If the Processing Date falls on a day other then a Business Day the Processing Date for that Policy Month will be the previous Business Day

Separate Account means Separate Account A of John Hancock Life Insurance Company (U.S.A.).

Series Fund means a series type mutual fund registered under the Investment Company Act of 1940 as an open-end diversified management investment company.

Service Office means the office that we designate to service this policy as shown on the back cover of your policy.

Subaccount refers to one of the subaccounts of the Separate Account.

Surrender Charge Period means the period beginning on the Policy Date during which we will assess surrender charges. Surrender charges will apply during this period if you surrender the policy, request a decrease in the Base Face Amount which exceeds the Partial Surrender Charge Decrease Exemption, make a withdrawal that reduces the Base Face Amount, or if the policy terminates due to default. The Surrender Charge Period is shown in Section 1.

Surrender Date means the end of the Business Day on which we receive at our Service Office your Written Request for full surrender of the policy.

We, us, and our refer only to the Company.

Written Request means your request to us which must be in a form satisfactory to us, signed and dated by you, and filed at our Service Office or, if permitted by our administrative practices, an electronic mail message ("e-mail") received by us at the internet address specified by us for receipt of such messages.

You and your refer only to the owner of this policy.

4. QUALIFICATION AS LIFE INSURANCE

It is intended that this policy comply with the definition of “life Insurance contract” set forth in the federal income tax laws, so that, notwithstanding any other provisions of the policy to the contrary, it will be considered as life insurance for federal income tax purposes. We reserve the right to make any reasonable adjustments to the terms or conditions of this policy if it becomes necessary to allow it to qualify as life insurance. This provision should not be construed to guarantee that this policy will receive tax treatment as life insurance or that the tax treatment of life insurance will never be changed by the future actions of any tax authority. One of the following tax qualification tests will apply to the policy. The test you elected is shown in Section 1. Your election cannot be changed after issue.

 

6

  

4. QUALIFICATION AS LIFE INSURANCE (continued)

 

Guideline Premium Test

Under this test, if at any time the premiums received under the policy exceed the amount allowable for such tax qualification, such excess amount shall be removed from the policy as of the date of its payment, together with interest thereon from such date, and any appropriate adjustment in the Death Benefit shall be made as of such date. This excess amount shall be refunded to you no later than 60 days after the end of the applicable Policy Year. If this excess amount is not refunded by then, the Total Face Amount under the policy shall be increased retroactively so that at no time is the Death Benefit ever less than the amount necessary to ensure or maintain such tax qualification. In no event, however, will we refuse to accept any premium necessary to prevent the policy from terminating but only if such premium payment would result in a zero Policy Value at the end of the Policy Year. In addition, the Minimum Death Benefit, as described in Section 6, must be maintained.

Cash Value Accumulation Test

Under this test, the Minimum Death Benefit, as described in Section 6, must be maintained.

Effect on Life Insurance Qualification Tests

A change in Death Benefit Option or Total Face Amount or certain other policy changes will often change the policy’s limits under the life insurance qualification test that you elected.

We reserve the right to refuse or limit any request for a change if the change would cause the policy to fail to qualify as a life insurance contract for federal income tax purposes.

5. TOTAL FACE AMOUNT

The Total Face Amount is made up of two components: (i) the Base Face Amount, and (ii) any Supplemental Face Amount. Minimum Base Face Amount and the Minimum Total Face Amount limits are shown in Section 1. Scheduled increases in any Supplemental Face Amount are elected on the application and, if approved, these amounts, when they are to become effective, and the Maximum Increasing Supplemental Face Amount will be shown in Section 1. If you later request to cancel a scheduled increase, or request a decrease in your Supplemental Face Amount, that request will be honored but all scheduled increases for subsequent Policy Years will cease. You may not increase your Base Face Amount under this policy.

Unscheduled Increases in Supplemental Face Amount

After the first Policy Year, while the Life Insured is alive and the policy is in force, unscheduled increases to the Supplemental Face Amount may be requested in writing. We reserve the right to limit the maximum and minimum amount of such increases. The increases are subject to our approval in accordance with our normal underwriting practices, including evidence of insurability. Any increase will be effective on the next Annual Processing Date after our approval, at which time we may require a minimum premium payment for the increase. When a requested increase becomes effective, and if required by our then current rules, a change in future Planned Premiums will automatically be effected to comply with those rules. If there is any remaining No Lapse Guarantee Period for the Base Face Amount it will be reduced to zero.

Reduction of Total Face Amount

You may request a reduction in Total Face Amount any time after the first Policy Year while this policy is in force. The Minimum Total Face Amount Decrease is shown in Section 1. Any reduction in the Total Face Amount will be implemented by first reducing any Supplemental Face Amount, although we reserve the right to allow a reduction in Base Face Amount first. If there is a reduction in Base Face Amount, a charge may be deducted from the Policy Value. This charge will be equal to a proportionate part of the Surrender Charge that would have applied if the policy had been surrendered on the date the reduction in Base Face Amount takes effect. A requested reduction in Base Face Amount is only allowed if the pro-rata Surrender Charge for the reduction is less than or equal to the Policy Value. The proportion will be equal to the amount of the reduction in Base Face Amount which exceeds the Partial Surrender Charge Decrease Exemption divided by the amount of Base Face Amount in effect immediately before the reduction, less any applicable Partial Surrender Charge Decrease Exemption. This charge will also apply if a withdrawal, as described in Section 19, results in a reduction in Base Face Amount. Without our prior approval, the Base Face Amount cannot be reduced below the minimum as shown in Section 1. Any reduction in Supplemental Face Amount or Base Face Amount will be effective on the next Processing Date after our approval.

 

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6. INSURANCE BENEFIT

If the Life Insured dies while the policy is in force, we will pay the Insurance Benefit upon receipt of due proof of death of the Life Insured, subject to any applicable provisions of the policy.

If the Life Insured dies on or after the date we receive a Written Request from you to surrender the policy, no Insurance Benefit will be paid. We will pay the amount payable under the Surrenders and Withdrawals provision instead.

Insurance Benefit

The Insurance Benefit payable is the greater of (a) or (b), where:

 

  (a) is the Minimum Death Benefit as described below minus any outstanding Policy Debt at the date of death; and

 

  (b) is an amount equal to (i) plus (ii) minus (iii), where:

 

  (i) is the Death Benefit as described below;

 

  (ii) is any amount payable under any supplementary benefit riders as a result of the Life Insured’s death that form part of the policy;

 

  (iii) is any outstanding Policy Debt at the date of death.

If the Life Insured dies during a Grace Period, the Policy Value used in the calculation of the Death Benefit will be the Policy Value as of the date of death of the Life Insured and the Insurance Benefit will be reduced by any outstanding Monthly Deductions due.

Death Benefit

The Death Benefit will depend on whether Option 1 or Option 2 is in effect on the date of the Life Insured’s death.

Death Benefit Options

Under Option 1, the Death Benefit is equal to the Total Face Amount at the date of death of the Life Insured. Under Option 2, the Death Benefit is equal to the Total Face Amount at the date of death of the Life Insured plus the Policy Value at the date of death of the Life Insured.

If any withdrawals are made, the Death Benefit, whether Option 1 or Option 2 is in effect, will be less than it would have been if no withdrawals were made. Withdrawals reduce the Death Benefit by reducing:

 

  (a) the Total Face Amount if Option 1 is in effect, as specified in Section 19; or

 

  (b) the Policy Value if Option 2 is in effect.

Change of Death Benefit Options

You may request in writing to change your Death Benefit Option from Option 2 to Option 1 at any time after the first Policy Year, while the policy is in force. The change will be effective on the next Processing Date following the date we approve the request, and the Total Face Amount after the change will be equal to the Total Face Amount immediately before the change plus the Policy Value as of the effective date of the change. Any increase to the Total Face Amount is effectuated by adding additional Supplemental Face Amount coverage to the policy.

You may not change your Death Benefit Option from Option 1 to Option 2 at any time.

Minimum Death Benefit

The sum of the Death Benefit as described above and the benefit payable upon the death of the Life Insured under any supplementary benefit riders will never be less than the Minimum Death Benefit. The Minimum Death Benefit is equal to the Minimum Death Benefit Factor for the Age of the Life Insured multiplied by the greater of the policy value or the cash surrender value as defined in the federal income tax laws, on the date of death of the Life Insured. The Minimum Death Benefit Factors are shown in Section 2. However, at no time will the Minimum Death Benefit be less than the amount required to maintain qualification of this policy as a life insurance contract for federal income tax purposes. If you elect the Cash Value Accumulation Test as the Life Insurance Qualification Test, we reserve the right to modify the Minimum Death Benefit Factors shown in Section 2, retroactively if necessary, to maintain qualification of this policy as a life insurance contract for federal income tax purposes, notwithstanding any other provisions of this policy to the contrary.

To the extent that the Net Amount at Risk associated with the Minimum Death Benefit that results from this calculation exceeds our guidelines and limitations that may be in effect, we reserve the right to:

 

  (a) distribute to you a portion of the Policy Value such that the Net Amount at Risk associated with the resulting Minimum Death Benefit does not exceed our guidelines and limitations in effect; or

 

  (b) if we should decide to accept the additional Death Benefit, it will be subject to our normal underwriting practices including evidence of insurability.

 

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7. INTEREST ON PROCEEDS

We will pay interest on the Insurance Benefit proceeds as stipulated by the state. If the state does not specify the interest rate, we will use the rate for insurance benefits left on deposit with us.

8. PREMIUMS

The Minimum Initial Premium is shown in Section 1. No insurance will take effect under this policy until our underwriters approve issuance of this policy and the conditions specified in the application form have been satisfied, including receipt of at least the Minimum Initial Premium at our Service Office. In the event the Issue Date is later than the Policy Date, the Minimum Initial Premium due will be the Minimum Initial Premium shown in Section 1, plus an additional amount which is equal to the Minimum Initial Premium multiplied by the number of intervening Processing Dates.

Subsequent premiums can be paid on any Business Day at our Service Office, and in any amount subject to the limits described below. On request, we will give you a receipt signed by one of our officers.

If coverage under the policy takes effect in accordance with the provisions of the application, we will process any premium payment as of the end of the Business Day the payment is received at our Service Office, subject to the limitations of the life insurance qualification test elected by you and to our maximum limits then in effect, unless one of the following exceptions applies.

 

  (a) We will process a payment received prior to the Policy Date as if received on the Policy Date.

 

  (b) We will process the portion of any premium payment for which we require evidence of the Life Insured’s continued insurability on the first Business Day after we have received such evidence and found it satisfactory to us.

 

  (c) If our receipt of any premium payment (or portion thereof) would cause the policy not to qualify as a “life insurance contract” under the federal income tax laws, we will not process such payment or portion. However, in the case of certain other tax situations, we will process the payment (or portion thereof) on the first Business Day after we have received satisfactory written instructions from you.

You may pay premiums until the Life Insured reaches Age 121, at which time Monthly Deductions cease and no further premiums may then be paid as described in Section 13.

If any premium payment would result in the Minimum Death Benefit exceeding the Total Face Amount, we reserve the right either to refund the premium or to require additional underwriting, including evidence of insurability, for any increase in the Minimum Death Benefit.

Continuation of Insurance Upon Discontinuance of Premium Payments

Regardless of whether you continue paying premiums, we will continue taking the Monthly Deductions from the Policy Value. Your insurance coverage will continue subject to the No-Lapse Guarantee, Grace Period, and Policy Termination provisions in Sections 9, 10 and 11.

Returned or Protested Payments

Any purported payment(s) submitted to the Company by check or any other instrument including a wire transfer, whether or not credited to the policy by the Company, which is returned or protested does not constitute payment. The Company does not accept checks or other instruments unconditionally. The Company undertakes no duty to notify any person of a returned or protested payment, except as may be required by applicable law. Any information about the policy, including but not limited to verifications of coverage and policy values provided in any form by the Company on account of such submission(s) is not valid and shall not constitute a waiver or estoppel with respect to any of the terms or conditions of the policy. Such submissions will not prevent or delay a default or termination and do not extend the time for payment or any Grace Period as provided for under the policy.

 

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9. NO-LAPSE GUARANTEE

Your policy includes a No-Lapse Guarantee. The No-Lapse Guarantee Periods applicable to the Base Face Amount and to any Supplemental Face Amount are shown in the Table of Values in Section 1. During your No-Lapse Guarantee Period, if the Net Cash Surrender Value falls to zero or below, any coverage subject to a No-Lapse Guarantee Period will not go into default provided the No-Lapse Guarantee Cumulative Premium Test is satisfied. However, this benefit will not prevent your policy from going into default if the Policy Debt is greater than zero and exceeds the Policy Value.

No Lapse Guarantee Cumulative Premium Test

The test will be performed on any Processing Date that your policy would otherwise be in default in the absence of the No-Lapse Guarantee. Your policy will satisfy the test if the sum of the premiums received, less any Policy Debt, and less any withdrawals, calculated from the Policy Date to the date of the test, is equal to or greater than the sum of the monthly No-Lapse Guarantee Premiums due from the Policy Date to the date of the test. The No-Lapse Guarantee Premium is shown as an annualized amount in Section 1. The monthly No-Lapse Guarantee Premium is one twelfth of this annualized amount.

The No-Lapse Guarantee Premium may change if any of the following changes occur under your policy:

 

(a) a supplementary benefit rider is added, terminated, or changed (including any change in its cost or the expiration thereof);

 

(b) the Death Benefit Option is changed;

 

(c) a decrease in the Base Face Amount or in any Supplemental Face Amount; or

 

(d) a change in the Life Insured’s Risk Classification or, if applicable, Additional Rating.

We will inform you of a change to the No-Lapse Guarantee Premium resulting from any such change. The revised No-Lapse Guarantee Premium will be effective from the date of the change. For the purpose of performing the No-Lapse Guarantee Cumulative Premium Test, we will use the No-Lapse Guarantee Premium in effect as of the Policy Date up to the date of the change, including any revised premium in effect as of the date of a prior change.

During the No-Lapse Guarantee Period, the Policy Value, Cash Surrender Value, and Net Cash Surrender Value will continue to be determined as provided in Sections 3 and 14. At the end of the No-Lapse Guarantee Period, the Net Cash Surrender Value may be insufficient to keep this policy in force and an additional payment may be required to keep this policy and coverage in force. In the event the Policy Value at the end of the No-Lapse Guarantee Period is negative and the No-Lapse Guarantee Cumulative Premium Test has been satisfied, the Company will set the Policy Value equal to zero.

10. GRACE PERIOD

Default

The policy and any supplementary benefit riders will go into default if, at the beginning of any Policy Month, the Net Cash Surrender Value is less than or equal to zero after we take the Monthly Deductions that are due for that month and the No-Lapse Guarantee feature, described in Section 9, is not in effect.

Grace Period Duration

We will allow 61 days from the date the policy goes into default for you to pay the Default Payment described below to bring the policy out of default. At least 30 days prior to termination of coverage, we will send notice to your last known address, specifying the amount you must pay to bring the policy out of default. If we have notice of a policy assignment on file at our Service Office, we will also mail a copy of the notice of the amount due to the assignee on record.

 

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10. GRACE PERIOD (continued)

 

Default Payment

The amount required to bring the policy out of default, referred to as the Default Payment, is equal to (a) plus (b) plus (c) where:

 

  (a) is the amount necessary to bring the Net Cash Surrender Value to zero if it is less than zero, at the date of default;

 

  (b) is an amount equal to three times the Monthly Deductions due on the date of default;

 

  (c) is the applicable Premium Charge.

When payment is received, any expense charges which are past due and unpaid will be immediately deducted from the Net Policy Value. If the Default Payment has not been paid by the end of the Grace Period, the policy will terminate. Upon termination of the policy, the remaining Net Cash Surrender Value, if any, will be paid to the Owner. If the Life Insured dies during the Grace Period, then we will deduct from the Insurance Benefit all Monthly Deductions due and unpaid as of the date of the Life Insured’s death. No Insurance Benefit under the policy or any supplementary benefit riders will be in effect after the policy terminates.

No-Lapse Guarantee

If the policy is in the No-Lapse Guarantee Period, and the No-Lapse Guarantee Cumulative Premium Test has been met, and the Policy Debt does not exceed the Policy Value then one of the following will apply:

 

  (a) During the Supplemental Face Amount No-Lapse Guarantee Period shown in Section 1, the Base Face Amount, any Supplemental Face Amount, and any supplementary benefit riders will remain in effect.

For the remainder of the No-Lapse Guarantee Period, if any (see Section 1 for the duration of the No-Lapse Guarantee Period), the Base Face Amount will remain in effect, but any Supplemental Face Amount and any supplementary benefit riders (unless otherwise stated therein) will be subject to termination. The amount required to maintain any Supplemental Face Amount and any applicable supplementary benefit riders is equal to the Default Payment specified above. If a payment at least equal to the Default Payment is not received by the end of the Grace Period, then any Supplemental Face Amount, and any supplementary benefit riders (unless otherwise stated therein), will cease to be in effect and will be terminated from the policy.

If the policy is in the No-Lapse Guarantee Period, and the No-Lapse Guarantee Cumulative Premium Test has been met, and the Policy Debt is greater than zero and exceeds the Policy Value, then one of the following will apply.

 

  (a) During the Supplemental Face Amount No-Lapse Guarantee Period shown in Section 1 the policy is subject to termination. The amount required to bring the policy out of default is equal to the Default Payment specified above less the Surrender Charge increased by the applicable Premium Charge. If a premium payment at least equal to that amount is not received by the end of the Grace Period the policy will terminate.

 

  (b) For the remainder of the No-Lapse Guarantee Period, if any (see Section 1 for the duration of the No-Lapse Guarantee Period), the policy is subject to termination. The amount required to bring the Base Face Amount out of default is equal to the Default Payment specified above less the Surrender Charge increased by the applicable Premium Charge, but the amount required to maintain any Supplemental Face Amount and any supplementary benefit riders (unless otherwise stated therein) is equal to the Default Payment specified above. If a premium payment at least equal to the Default Payment is not received by the end of the Grace Period, then any Supplemental Face Amount, and any supplementary benefit riders (unless otherwise stated therein), will cease to be in effect and will be terminated from the policy.

 

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10. GRACE PERIOD (continued)

 

Failure to Meet No-Lapse Guarantee Cumulative Premium Test

If the policy is in the No-Lapse Guarantee Period, and the No-Lapse Guarantee Cumulative Premium Test has not been met, then the Base Face Amount, any Supplemental Face Amount, and any supplementary benefit riders will go into default, as described above. The Grace Period Duration and Default Payment provisions described above will apply. In lieu of the Default Payment, however, you may pay the shortfall needed to meet the No-Lapse Guarantee Cumulative Premium Test, in which case one of the following will apply:

 

  (a) During the Supplemental Face Amount No-Lapse Guarantee Period shown in Section 1, the Base Face Amount, any Supplemental Face Amount, and any supplementary benefit riders will remain in effect.

 

  (b) For the remainder of the No-Lapse Guarantee Period, if any, the Base Face Amount will remain in effect, but any Supplemental Face Amount and any supplementary benefit riders (unless otherwise stated therein) will terminate as of the end of the Grace Period.

The shortfall will be equal to the greater of (a) or (b), plus (c); where:

 

  (a) is the amount necessary to satisfy the No-Lapse Guarantee Cumulative Premium Test as of the date of default;

 

  (b) is the amount necessary for the Policy Value to equal or exceed the Policy Debt; and

 

  (c) is the No-Lapse Guarantee Premium for the next three Policy Months.

11. POLICY TERMINATION

This policy terminates on the earliest of the following events:

 

  (a) the end of the Grace Period for which we have not received the amount necessary to bring the policy out of default;

 

  (b) surrender of the policy for its Net Cash Surrender Value; or

 

  (c) the death of the Life Insured.

12. REINSTATEMENT

If the policy terminates at the end of a Grace Period in which you did not make a required payment, the policy may be reinstated within three years from the date of default. The policy cannot be reinstated if it has been surrendered for its Net Cash Surrender Value.

The requirements for reinstatement are as follows:

 

  (a) we must receive Written Request for reinstatement;

 

  (b) reinstatement is subject to our normal underwriting practices including evidence of insurability for the Life Insured, and for any insureds covered under any supplementary benefit rider that you wish to reinstate.

If we approve your request,

 

  (a) we must receive at our Service Office, within 60 days from the date the Company approves the application for reinstatement, a premium equal to the amount that was required to bring the policy out of default immediately prior to termination, plus the amount needed to keep the policy in force for at least the next three Policy Months;

 

  (b) the reinstatement date will be the date we receive the required payment referenced in (a) above at our Service Office, until which time no coverage will be in force;

 

  (c) the Base Face Amount, and any Supplemental Face Amount will be reinstated to the same amounts as they were on the date the policy terminated;

 

  (d) any Surrender Charge will be reinstated to the amount it was at the date of default;

 

  (e) the remaining Surrender Charge Period, if any, will be the same as on the date of default;

 

  (f) the Policy Value on the date of reinstatement, prior to the crediting of any Net Premium paid on the reinstatement, will be equal to the Policy Value on the date the policy terminated; and

 

  (g) any remaining No-Lapse Guarantee Period will be reinstated with the policy, as measured from the Policy Date.

 

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12. REINSTATEMENT (continued)

 

If a Schedule of Supplemental Face Amounts is shown in Section 1 which includes increases that would otherwise become effective except for this policy having been terminated after being in default, such increases in Supplemental Face Amount will be effective on the next Annual Processing Date after the reinstatement date.

The Suicide and Incontestability provisions will apply from reinstatement date. If the policy has been in force for two years during the lifetime of the Life Insured, it will be contestable only as to statements made in the reinstatement application.

13. COVERAGE AT AND AFTER AGE 121

Provided the policy is in force at the Life Insured’s Age 121, we will continue the policy in force thereafter subject to the stipulations stated below.

At and After Age 121

We will not accept any further premium payments. We will cease to take Monthly Deductions for charges listed in Section 1.

We will continue to credit interest monthly to the Fixed Account portion of the Policy Value.

Loan interest will continue to be charged if there is an outstanding loan. Loan repayments will be accepted. The policy will go into default at any time the Policy Debt exceeds the Policy Value, and Section 10, Grace Period, and Section 18, Loans, will apply.

Any Supplemental Face Amount will be terminated, thereby reducing the Death Benefit by such amount. Apart from this change, the Death Benefit will be determined in the same respect as specified in Section 6.

Loans will continue to be allowed as described in Section 18.

Withdrawals will not be allowed.

14. POLICY VALUE

Net Premiums Added

When we receive your premium payments at our Service Office, we deduct a Premium Charge which will not exceed the amount shown in Section 1 and add the balance remaining (the Net Premium) to your Policy Value. We will do this before we take any deductions due on that Business Day.

For any premiums received prior to the Issue Date, we will credit interest at the rate of return then being earned on allocations to the current money market Investment Account, but will not deduct a Premium Charge. The Premium Charge will be deducted on the Issue Date, and the balance remaining will be your Policy Value from which deductions will be taken and to which any subsequent Net Premiums will be added.

Investment allocation of the initial premium payment and any subsequent premium payments will be in accordance with the Allocations provision of Section 17.

While a loan exists, we will treat the amounts you pay as premiums unless you submit to us a Written Request that they be treated as loan repayments, in which case we will first deduct from such payments the amount of accrued interest on loans and then deduct the amount specified as a loan repayment before applying any balance remaining as a premium payment.

Monthly Deductions

A deduction is due and will be taken from your Policy Value as of the Policy Date and as of each applicable subsequent Processing Date. Monthly Deductions are calculated from the Policy Date. If, at your request, we set the Policy Date to a date which precedes the date on which we receive the initial premium, Monthly Deductions due for the period prior to receipt of the initial premium will be taken on the later of the date we receive the initial premium and the policy Issue Date.

Unless we agree otherwise, or you do not have sufficient funds in an account, we will take Monthly Deductions from the Investment Accounts and the Fixed Account in the same proportion that the Policy Value in each of these accounts bears to the Net Policy Value immediately prior to the deduction.

 

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14. POLICY VALUE (continued)

 

Monthly Deductions are due until the Policy Anniversary on which the Life Insured reaches Age 121 at which time we will cease to take any further Monthly Deductions as described in Section 13.

The Monthly Deduction for any Policy Month that will be deducted from your Policy Value consist of charges (a) through (e) listed below, where:

 

  (a) is the Asset-Based Risk Charge;

 

  (b) is the Base Face Amount Charge, if any;

 

  (c) is the Administrative Charge;

 

  (d) is the sum of the charges for riders which are part of the policy, if any, provided such charges are deducted from the Policy Value and are not part of the Cost of Insurance Charge; and

 

  (e) is the Cost of Insurance Charge, as described below.

Cost of Insurance Charge

The rates for the Cost of Insurance Charge, as of the Policy Date and subsequently for each increase in Total Face Amount, are based on the Life Insured’s sex (if issued on a sex distinct basis), Age, Risk Classification, and duration that the coverage has been in force.

The Cost of Insurance Charge for a specific Policy Month is the charge for the Net Amount at Risk, including any Additional Ratings and any supplementary benefit riders which are part of the policy, where charges are deducted from the Policy Value and are based on the Net Amount at Risk. The charge for the Net Amount at Risk is an amount equal to the per dollar Cost of Insurance Rate for that month multiplied by the Net Amount at Risk. The Cost of Insurance Rate will be based on our expectations of future mortality, persistency, investment earnings, expense experience, capital and reserve requirements, and tax assumptions. The Maximum Monthly Cost of Insurance Rates at any age are shown in Section 2 as a rate per $1,000 of Net Amount at Risk. To get the maximum rate per dollar, the rate shown must be divided by 1,000. Each Cost of Insurance Charge is deducted in advance of the applicable insurance coverage for which we are at risk.

The Cost of Insurance calculation will reflect any adjustment for the Minimum Death Benefit.

Periodically, we review our Cost of Insurance Rates, and may re-determine Cost of Insurance Rates at that time on a basis that does not discriminate unfairly within any class of lives insured. These rates however, will never exceed the Maximum Monthly Cost of Insurance Rates shown in Section 2.

Net Amount at Risk

On the Policy Date or each subsequent Processing Date we will determine a Net Amount at Risk used to calculate the Cost of Insurance Charge. In the determination of the Net Amount at Risk, including the calculation of the Minimum Death Benefit, the Policy Value used will be equal to the Policy Value on that day immediately after any Net Premiums have been applied and Monthly Deductions due for that day are taken and before any interest has been credited.

The Net Amount at Risk is the amount determined by subtracting (a) from the greater of (b) or (c) where:

 

  (a) is the Policy Value at the end of the immediately preceding Business Day less all charges due on the Policy Date or subsequent Processing Date;

 

  (b) is the Total Face Amount plus the death benefit payable under any supplementary benefit riders which are part of this policy and for which charges are deducted from the Policy Value and are based on the Net Amount at Risk, divided by the Death Benefit Discount Factor shown in Section 1, plus the Policy Value for policies electing Death Benefit Option 2; and

 

  (c) is the amount defined in (a) multiplied by the applicable Minimum Death Benefit Factor for the Life Insured’s Age as shown in Section 2.

Other Deductions

We will deduct a Surrender Charge, as detailed in Section 5 and Section 19, if during the Surrender Charge Period:

 

  (a) you surrender this policy for its Net Cash Surrender Value;

 

  (b) the Base Face Amount decreases;

 

  (c) you do not pay the Default Payment described in Section 10, and your policy terminates.

 

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15. LOAN ACCOUNT, FIXED ACCOUNT, INVESTMENT ACCOUNTS

The sum of the values in the Loan Account, the Fixed Account, and the Investment Accounts, as described below, comprise the Policy Value.

Loan Account Value

The amount you have in the Loan Account at any time equals:

 

  (a) amounts transferred to it for loans or borrowed loan interest; plus

 

  (b) interest credited to it; less

 

  (c) amounts transferred from it for loan repayment.

For details regarding the Loan Account, see Section 18.

Fixed Account Value

The amount you have in the Fixed Account at any time equals:

 

  (a) Net Premiums allocated to it; plus

 

  (b) amounts transferred to it; plus

 

  (c) interest credited to it; less

 

  (d) amounts deducted from it; less

 

  (e) amounts transferred from it; less

 

  (f) amounts withdrawn from it.

We will determine the rate or rates of interest to be credited to the Fixed Account. Any additional interest will be credited no less frequently than annually. Additional interest is nonforfeitable after crediting. The rate or rates of interest will be determined prospectively and will be based on our expectations for the Fixed Account’s future investment earnings, persistency, mortality, expense and reinsurance costs and future tax, reserve, and capital requirements. However, in no event will the minimum credited interest be less than the Minimum Fixed Account Annual Rate shown in Section 1. The rate or rates of interest will be determined on a uniform basis for life insureds with the same timing and amount of premium, same amount of Policy Debt, and whose policies have been in force for the same length of time. For all transactions, interest is calculated from the date of the transaction.

Investment Account Value

The amount you have in an Investment Account at any time equals the number of units in that Investment Account multiplied by the unit value of the corresponding Subaccount at that time.

The number of units in an Investment Account at any time equals (a) minus (b), where:

 

  (a) is the number of units credited to the Investment Account because of:

 

  (1) Net Premiums allocated to it; and

 

  (2) amounts transferred to it; and

 

  (b) is the number of units canceled from the Investment Account because of:

 

  (1) amounts deducted from it;

 

  (2) amounts transferred from it; and

 

  (3) amounts withdrawn from it.

The number of units credited or canceled for a given transaction is equal to the dollar amount of the transaction, divided by the unit value on the Business Day of the transaction. See the Unit Value Calculation provision in Section 16 for details on how unit values are determined.

16. SEPARATE ACCOUNT AND SUBACCOUNTS

Each Subaccount of the Separate Account purchases shares of corresponding Funds of a Series Fund. The assets of the Separate Account are the property of the Company. They are used to support the Policy Values of variable life insurance policies. Income, gains, and losses of the Separate Account are credited to, or charged against the Separate Account without regard to other income, gains, and losses. The part of the assets that is equal to the Investment Account values in respect of all variable life insurance policies will not be charged with liabilities from any other business we conduct. We can transfer to our general account Separate Account assets in excess of the liabilities of the Separate Account arising under the variable life insurance policies supported by the Separate Account.

 

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16. SEPARATE ACCOUNT AND SUBACCOUNTS (continued)

 

Right to Make Changes

We reserve the right to make certain changes if, in our judgment, they would best serve the interests of the owners of policies such as this or would be appropriate in carrying out the purposes of such policies. Any changes will be made only to the extent and in the manner permitted by applicable laws. Also, when required by law, we will obtain your approval of the changes and approval from any appropriate regulatory authority.

Examples of the changes we may make include the following:

 

  (a) To operate a Separate Account in any form permitted under the Investment Company Act of 1940, or in any other form permitted by law.

 

  (b) To take any action necessary to comply with or obtain and continue any exemptions from the Investment Company Act of 1940.

 

  (c) To create new separate accounts, or to combine any two or more separate accounts including the Separate Account, or to de-register the Separate Account under the Investment Company Act of 1940, or to transfer assets between the Separate Account and other separate accounts.

 

  (d) To transfer any assets in a Subaccount to another Subaccount, or to add, combine or remove Subaccounts.

 

  (e) To substitute, for the investment company shares held in any Subaccount, another class of shares of the investment company or the shares of another investment company or any other investment permitted by law.

 

  (f) To make any other necessary technical changes in this policy in order to conform with any action this provision permits us to take.

The investment policy of a Subaccount within the Separate Account shall not be materially changed unless a statement of the change is first filed with any jurisdiction requiring such a filing. In the event of such a change in investment policy, and while this policy is in force, you may elect a transfer to the Fixed Account as described in Section 17.

Unit Value Calculation

We will determine the unit values for each Subaccount as of the end of each Business Day.

The unit value for each Subaccount was established at $10 for the first Business Day that an amount was allocated, or transferred to the particular Subaccount. For any subsequent Business Day, the unit value for that Subaccount is obtained by multiplying the unit value for the immediately preceding Business Day by the net investment factor for the particular Subaccount on such subsequent Business Day.

Net Investment Factor

The net investment factor for a Subaccount on any Business Day is equal to (a) divided by (b), where:

 

(a) is the net asset value of the underlying Fund shares held by that Subaccount as of the end of such Business Day before any policy transactions are made on that day; and

 

(b) is the net asset value of the underlying Fund shares held by that Subaccount as of the end of the immediately preceding Business Day after all policy transactions were made for that day.

We reserve the right to adjust the above formula for any taxes determined by us to be attributable to the operations of the Subaccount.

17. ALLOCATIONS AND TRANSFERS

Allocations

We process Net Premiums as described in Section 14. Any Net Premium credited to the Policy Value prior to the Allocation Date, as shown in Section 1, will automatically be invested in the current money market Investment Account. On the Allocation Date (or on the date such Net Premium is received, if later), we will reallocate the amount in the current money market Investment Account attributable to any such Net Premium in accordance with the allocation instructions then in effect. We will allocate all other Net Premiums and credits to the Fixed Account and to any Investment Accounts in accordance with the allocation instructions then in effect. Initial allocation instructions are elected in your application for this policy. With regard to the first and subsequent Net Premiums, we reserve the right to limit the dollar amount that may be allocated to any Investment Account or Fixed Account.

 

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17. ALLOCATIONS AND TRANSFERS (continued)

 

You may elect to change your allocation instructions at any time. A change can be elected by Written Request or by any telephone or internet notification if a currently valid written authorization to make changes in this manner is on file with us. A change will be effective as of the end of the Business Day on which we receive notice satisfactory to us. Instructions to us must express allocation percentages as greater than or equal to zero and less than or equal to 100%, and the sum of the allocation percentages must equal 100%. Allocation percentages must be whole numbers.

The date for allocation percentage changes will be as of the end of the Business Day on which we are contacted, as described above, to make the changes. We reserve the right to impose a limit on the number and frequency of such changes and to set minimum and maximum percentages that may be allocated to any Investment Account and the Fixed Account.

Transfers

In the same way as described above in the Allocations provision, instructions may be given to us at any time while the policy is in force to transfer portions of your Policy Value among the Investment Accounts and the Fixed Account. Transfers are subject to the restrictions described below.

General Restrictions on Transfers

You can make up to 2 transfers per calendar month. You can transfer 100% of the Policy Value to the current money market Investment Account after this limit has been reached. If such transfer to the current money market Investment Account is made, no subsequent transfers from the current money market Investment Account to another Investment Account may be made within 30 days.

There is no charge for the first 12 transfers in any Policy Year. If you make more than 12 transfers in any Policy Year, a transfer fee not to exceed the Maximum Transfer Fee shown in Section 1 will apply to each subsequent transfer in the Policy Year. We will consider all transfer requests made on the same Business Day as one transfer. Transfers made pursuant to the Asset Allocation Balancer or Dollar Cost Averaging options described below are not subject to the foregoing general restrictions. Without our approval, the maximum amount that may be transferred to or from an Investment Account in any Policy Year may not exceed the Investment Account Maximum Transfer Amount shown in Section 1.

We reserve the right to impose additional restrictions to restrict short-term trading. Additional restrictions that may be imposed regarding transfers include, but are not limited to restricting:

 

  (a) the number of transfers made during a defined period;

 

  (b) the dollar amount of transfers;

 

  (c) the method used to submit transfers; and

 

  (d) transfers into and out of certain Investment Accounts.

We or a Series Fund in which the Separate Account invests may impose additional restrictions to restrict or terminate transfer privileges at any time.

Restrictions on Transfers to the Fixed Account

You may transfer the Policy Value from any of the Investment Accounts to the Fixed Account without incurring any transfer charges, regardless of the number of transfers previously made, provided such transfers occur:

 

  (a) within 18 months after the Issue Date, as shown in Section 1; or

 

  (b) within the later of (i) or (ii) where (i) is 60 days from the effective date of a material change in the investment objectives of the Subaccount, from which the Policy Value will be transferred, and (ii) is 60 days from the notification date of such change.

Restrictions on Transfers out of the Fixed Account

The maximum amount that you can transfer out of the Fixed Account in any one Policy Year is limited to the greater of:

 

  (a) the Fixed Account Maximum Transfer Percentage shown in Section 1 multiplied by the value in the Fixed Account at the previous Annual Processing Date;

 

  (b) the Fixed Account Maximum Transfer Amount shown in Section 1; and

 

  (c) the amount transferred out of the Fixed Account during the previous Policy Year.

Any transfer out of the Fixed Account may not involve a transfer to the current money market Investment Account.

 

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17. ALLOCATIONS AND TRANSFERS (continued)

 

Asset Allocation Balancer Transfers

If you elect this option, we will automatically transfer amounts among your specified Investment Accounts in order to maintain your designated percentage in each account. We will effect the transfers at specified intervals you select which may be either annually, semi-annually, quarterly, or monthly. When you change your premium allocation instructions, your Asset Allocation Balancer will change so the two are identical. This change will automatically occur unless you instruct us otherwise, or a Dollar Cost Averaging request is in effect. We reserve the right to cease to offer this option as of 90 days after we send you written notice.

Dollar Cost Averaging Transfers

If you elect this option, we will automatically transfer amounts each month from one Investment Account to one or more of the other Investment Accounts or the Fixed Account. You must select the amount to be transferred and the accounts. If the value in the Investment Account from which the transfer is being made is insufficient to cover the transfer amount, we will not effect the transfer and we will notify you. We reserve the right to cease to offer this option as of 90 days after we send you written notice.

18. LOANS

At any time while this policy is in force and there is Available Loan Value, you can obtain a loan by Written Request. Each loan must be for at least the Minimum Loan Amount shown in Section 1. Your Policy Value serves as the only security for a loan, and as such, we may require a signed loan document to formalize this agreement. We may defer loans as provided by law or as provided in Section 26. Loans, except those used to pay premiums on policies with us, may not be made if the policy is in the Grace Period as described in Section 10.

Available Loan Value

The Available Loan Value on any date will be an amount equal to (i) the Net Cash Surrender Value, less (ii) the Monthly Deductions then being deducted from the Policy Value multiplied by the number of months remaining in the Policy Year, less (iii) an amount determined as follows:

 

  (a) deduct (ii) above from (i) above; and

 

  (b) multiply the result by the difference between the effective annual rate then being charged on loans and the effective annual rate then being credited on the Loan Account.

In no event, however, will the Available Loan Value be less than 90% of the Net Cash Surrender Value. Values will be determined, subject to Section 26, as of the end of the Business Day on which the loan application is received at our Service Office.

Loan Account

When you take out a loan, or when loan charges are borrowed, we will transfer amounts from the Fixed Account and the Investment Accounts, as applicable, into the Loan Account. Amounts we transfer into the Loan Account collateralize the loan principal. A Loan Subaccount exists for each Investment Account and for the Fixed Account. Amounts transferred to the Loan Account are allocated to the appropriate Loan Subaccount to reflect the account from which the transfer was made. We will allocate the amounts to be transferred in the same proportion that your value in the Subaccounts bears to the new Policy Value, unless you request otherwise, and our then current rules allow you to designate different proportions. When an amount to be transferred is allocated to an Investment Account, we will redeem units of that Investment Account sufficient in value to cover the allocated amount. These transfers do not count as a transfer for the purposes of the Transfer provisions described in Section 17.

Interest is credited to the Loan Account and interest is also charged on the Policy Debt, as described in the Loan Interest Charged and the Loan Interest Credited provisions.

Loan Interest Charged

Interest will accrue daily on loans. Loan interest will be payable on each Annual Processing Date and on the date the loan is settled. Interest may be paid in advance at the equivalent effective rate. In the event that you do not pay the loan interest charged in any Policy Year, it will be borrowed against the policy and added to the Policy Debt in arrears at the Policy Anniversary. We will allocate the amount borrowed for interest payment in the same proportion that your value in the Fixed Account and the Investment Accounts bears to the Net Policy Value as of the Policy Anniversary.

 

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8. LOANS (continued)

 

The effective loan interest charged rate will not exceed the Maximum Loan Interest Charged Annual Rate shown in Section 1. We will increase the Loan Interest Charged Annual Rate at any time it is determined that the rate being charged would cause a loan to be taxable under any applicable ruling, regulation, or court decision. In such case, we will increase the Loan Interest Charged Annual Rate to an amount that would result in the transaction being treated as a loan under federal tax law.

Loan interest will continue to be charged, as described in Section 13, when Monthly Deductions and premium payments cease at the Life Insured's Age 121.

Loan Interest Credited

Loan interest will accrue daily to amounts in the Loan Account. The effective Loan Interest Credited Annual Rate is shown in Section 1.

Loan Repayment

You may repay the Policy Debt in whole or in part at any time prior to the death of the Life Insured and while the policy is in force. When you make a loan payment or repay a loan, we credit the amount remaining after deduction of the loan interest charges, specified above, to the Loan Account, and make a transfer to the Fixed Account and the Investment Accounts, as applicable.

Upon loan repayment, the same proportionate amount of the entire loan as was borrowed from the Fixed Account will be repaid to the Fixed Account. The remainder of the loan repayment will be allocated to the appropriate Investment Accounts in accordance with the allocation instructions then in effect (unless our then current rules allow you to designate a different allocation with your repayment and you in fact do so).

Subject to any rider, endorsement, or other provisions, while a loan exists, we will treat any amounts you pay as premiums, unless you submit to us a Written Request that they be treated as loan repayments. However, when a portion of the Loan Account is allocated to the Fixed Account, we reserve the right, where permitted by state law, to require that premium payments be applied as loan repayments.

19. SURRENDERS AND WITHDRAWALS

Surrender of the Policy

You may surrender this policy upon Written Request for its Net Cash Surrender Value at any date prior to the death of the Life Insured. We will determine the Net Cash Surrender Value on the Surrender Date. We will process the request and pay the Net Cash Surrender Value only if we have not received due proof that the Life Insured died prior to the Surrender Date. After we receive your Written Request to surrender the policy, no insurance will be in force. If you surrender the policy during the Surrender Charge Period, we will deduct a Surrender Charge from your Policy Value in calculating the Net Cash Surrender Value. The Surrender Charge and Surrender Charge Period are shown in Section 1.

Withdrawals

Once per Policy Month after the first Policy Year, you may request a withdrawal of part of the Net Cash Surrender Value if available. Withdrawals are subject to the following conditions:

 

  (a) without our approval, each withdrawal must be for at least the Minimum Withdrawal Amount shown in Section 1;

 

  (b) after the withdrawal, the remaining Net Cash Surrender Value must be at least equal to 3 times the Monthly Deductions at the time of the withdrawal;

 

  (c) we will process the withdrawal, thereby reducing the Policy Value, as of the end of the Business Day on which we receive your Written Request;

 

  (d) we will deduct a pro-rata Surrender Charge if the withdrawal occurs during the Surrender Charge Period, and the withdrawal results in a reduction in Base Face Amount;

 

  (e) we will reduce the amount of the requested withdrawal if the amount in all accounts is not sufficient to pay the withdrawal and any pro-rata Surrender Charge;

 

  (f) you may specify which Investment Accounts as well as the Fixed Account from which we should make the withdrawal. If we do not receive such instructions, we will allocate the deduction of the withdrawal and any pro-rata Surrender Charge in the same proportion that the value in the Fixed Account and the Investment Accounts bears to the Net Policy Value; and

 

  (g) we will reduce the amount of the withdrawal if it would otherwise cause the Base Face Amount to fall below the Minimum Base Face Amount shown in Section 1.

 

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19. SURRENDERS AND WITHDRAWALS (continued)

 

If Death Benefit Option 1 is in effect at the time of the withdrawal, the Total Face Amount of the policy will be reduced:

 

  (a) by the amount of the withdrawal, if at the time of the withdrawal the Death Benefit equals the Total Face Amount; otherwise

 

  (b) by the amount, if any, by which the withdrawal exceeds the difference between the Minimum Death Benefit, and the Total Face Amount, divided by the applicable, Minimum Death Benefit Factor for the Life Insured’s Age as shown in the Table of Rates in Section 2.

Withdrawals will reduce the Supplemental Face Amount first, and then the Base Face Amount. We reserve the right to allow a reduction in Base Face Amount prior to fully reducing the Supplemental Face Amount. If the Death Benefit on any given day is equal to the Policy Value times the applicable Minimum Death Benefit Factor, withdrawals on such day will reduce the Death Benefit by the amount withdrawn times the applicable Minimum Death Benefit Factor until the Death Benefit is equal to the Total Face Amount. Your Death Benefit will continue to be determined in accordance with Sections 6 and 13, subject to these provisions.

If Death Benefit Option 2 is in effect, an amount equal to any withdrawal will be deducted from the Policy Value. Withdrawals will not affect the Total Face Amount. Your Death Benefit will continue to be determined in accordance with Sections 6 and 13.

A withdrawal requested in Policy Year 2 will not be subject to a Surrender Charge to the extent that the proceeds are applied to repay all or a portion of a loan (plus interest) that existed on the policy as of the Issue Date.

20. OWNER AND BENEFICIARY

Until the Life Insured’s death, with the written consent of any irrevocable beneficiaries, you can receive any amount payable under the policy and exercise all rights and privileges granted by the policy.

Change of Owner

Until the Life Insured’s death, you can change the ownership of the policy by Written Request. The change will take effect as of the date you signed the Written Request. It will not apply to any payments we made or any action we may have taken before we received your Written Request.

Trustee Owner

Should the owner be a trustee, payment to the trustee(s) of any amount to which the trustee(s) is (are) entitled under the policy, either by death or otherwise, will fully discharge us from all liability under the policy to the extent of the amount so paid.

Joint Ownership

Two or more owners will own the policy as joint tenants with right of survivorship, unless otherwise requested on the application or in any subsequent assignment of the policy. On death of any of the owners, the deceased owner's interest in the policy passes to the surviving owner(s).

Successor Owner

If an owner dies prior to the death of the Life Insured, a named successor owner will, if then living, have all the owner’s rights and interest in the policy. The owner, with the consent of any irrevocable beneficiary, can cancel or change the designation of successor owner prior to the death of the Life Insured by agreement in writing with us.

The following four provisions will apply unless there is a beneficiary designation in force that provides otherwise.

Beneficiary Classification

You can appoint beneficiaries for the Insurance Benefit in three classes: primary, secondary, and final. Beneficiaries in the same class will share equally in the Insurance Benefit payable to them.

 

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20. OWNER AND BENEFICIARY (continued)

 

Payment To Beneficiaries

We will pay the Insurance Benefit:

 

  (a) to any primary beneficiaries who are alive when the Life Insured dies; or

 

  (b) if no primary beneficiary is then alive, to any secondary beneficiaries who are then alive; or

 

  (c) if no primary or secondary beneficiary is then alive, to any final beneficiaries who are then alive.

Change Of Beneficiary

Until the Life Insured's death, you can change the beneficiary by Written Request unless you make an irrevocable designation. We are not responsible if the change does not achieve your purpose. The change will take effect as of the date you signed such request. It will not apply to any payments we made or any action we may have taken before we received your Written Request.

Death Of Beneficiary

If no beneficiary is alive when the Life Insured dies, the Insurance Benefit will be payable to you; or if you are the Life Insured, to your estate. Unless otherwise provided, if a beneficiary dies before the seventh day after the death of the Life Insured, we will pay the Insurance Benefit as if the beneficiary had died before the Life Insured.

21. ASSIGNMENT

Your interest in this policy may be assigned with the written consent of any irrevocable beneficiary. Your interest, any interest of the Life Insured and of any revocable beneficiary shall be subject to the terms of the assignment, but such assignment shall not affect the interest of any irrevocable beneficiary.

We will not be on notice of any assignment unless it is in writing, nor will we be on notice until a duplicate of the original assignment has been filed at our Service Office. We assume no responsibility for the validity or sufficiency of any assignment.

22. MISSTATEMENTS

If the age or sex (if issued on a sex distinct basis) of the Life Insured was misstated in the application, we will, if necessary, change the Base Face Amount, any Supplemental Face Amount, and every other benefit to that which would have been purchased at the correct age or sex (if issued on a sex distinct basis) by the most recent Cost of Insurance Charge.

23. SUICIDE

If the Life Insured commits suicide, while sane or insane, within two years from the Issue Date, the policy will terminate on the date of such suicide and we will pay (in place of all other benefits, if any) an amount equal to the premiums paid less the amount of any Policy Debt on the date of death and less any withdrawals. If the Life Insured commits suicide, while sane or insane, after two years from the Issue Date and within two years from:

 

  (a) the date we approve a schedule of increasing Supplemental Face Amount;

 

  (b) the effective date of any unscheduled increase in Supplemental Face Amount; or

 

  (c) the date of an increase in Death Benefit resulting from any payment of premium we are authorized to refuse under Section 4;

the benefits payable under the policy will not include the amount of such Death Benefit increase but will include the amount of premium that pertains to the increase.

We reserve the right under this provision to obtain evidence of the manner and cause of death of the Life Insured.

 

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24. INCONTESTABILITY

This policy shall be incontestable after it has been in force during the lifetime of the Life Insured for two years from the Issue Date, except for fraud or policy termination, or any provision for reinstatement or policy change requiring evidence of insurability.

In the case of reinstatement or any policy change requiring evidence of insurability, the contestable period shall be two years from the effective date of such reinstatement or policy change. For a policy change involving the approval of a schedule of increasing Supplemental Face Amount, the contestable period shall be two years from the date we approve such schedule.

Any premium payment which we accept subject to insurability, and any increase in the Death Benefit resulting from such payment, shall be considered a policy change for purposes of this Section.

We reserve the right under this provision to obtain evidence of the manner and cause of death of the Life Insured.

25. THE CONTRACT

The written application for the policy is attached at issue. The entire contract between the applicant and us consists of the policy, such application, and any riders and endorsements. However, additional Written Requests or applications for policy changes or acceptance of excess payment may be submitted to us after issue and such additional requests may become part of the policy. All statements made in any application shall, in the absence of fraud, be deemed representations and not warranties. We will use no statement made by or on behalf of the Life Insured to defend a claim under the policy unless it is in a written application.

An exchange of this policy for a new policy on a different plan may be made by agreement between you and us in accordance with our published rules in effect at that time.

We reserve the right to make any changes necessary in order to keep this policy in compliance with any changes in federal or state tax laws. Other changes in this policy may be made by agreement between you and us. Only the President, Vice President, the Secretary, or an Assistant Secretary of the Company has authority to waive or agree to change in any respect any of the conditions or provisions of the policy, or to extend credit or to make an agreement for us.

26. RIGHT TO POSTPONE PAYMENT OF BENEFITS

We reserve the right to postpone the payment of Net Cash Surrender Values, withdrawals, policy loans, and the portion of the Insurance Benefit that depends on Investment Account values, for any period during which:

 

(a) the New York Stock Exchange (Exchange) is closed for trading (other than customary week-end and holiday closings), or trading on the Exchange is otherwise restricted;

 

(b) an emergency exists as defined by the Securities and Exchange Commission (SEC), or the SEC requires that trading be restricted; or

 

(c) the SEC permits a delay for the protection of policyholders.

We also reserve the right to postpone payments, including loans, for up to six months if such payments are based on values that do not depend on the investment performance of the Investment Accounts.

In addition, we may deny transfers under the circumstances stated in (a), (b) and (c) above, and in the Allocations and Transfers provision.

27. CLAIMS OF CREDITORS

The proceeds and any income payments under the policy will be exempt from the claims of creditors to the extent permitted by law. These proceeds and payments may not be assigned or withdrawn before becoming payable without our agreement.

 

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28. REPORTS TO OWNER

Within 30 days after each Policy Anniversary, we will send you a report at no charge showing:

 

  (a) the beginning and end dates of the current report;

 

  (b) the Death Benefit at the end of the current report period;

 

  (c) the amounts credited or debited to the Policy Value during the current period, identified by type;

 

  (d) the current allocation in the Fixed Account, the Loan Account, and each of the Investment Accounts at the end of the current report period;

 

  (e) the Loan Account balance, if any, at the end of the current report period;

 

  (f) the Cash Surrender Value, if any, at the end of the current report period;

 

  (g) the Policy Value, if any, at the beginning and at the end of the current report period;

 

  (h) a notice stating that unless premium payments are made, assuming guaranteed interest, mortality and expense charges, the Net Cash Surrender Value will not be sufficient to maintain the policy in force until the end of the next reporting period; and

 

  (i) any further information required by law.

Upon request, we will provide you with a report of projected future values. We will provide one report annually without charge. For additional reports you request, we reserve the right to charge a reasonable fee, not to exceed $50.

29. HOW VALUES ARE COMPUTED

We provide Cash Surrender Values that are at least equal to those required by law. We base minimum Cash Surrender Values on the Commissioners 2001 Standard Ordinary Sex and Smoker Distinct ANB Ultimate Mortality Tables, with substandard ratings as applicable. However, if this policy is issued on a unisex basis, we base minimum Net Cash Surrender Values on the Commissioners 2001 Standard Ordinary 80% Male and 20% Female Mortality Table, with substandard ratings as applicable. We also use these tables in determining Guaranteed Maximum Cost of Insurance Charges. Reserves will be at least as great as the minimum required by law.

A detailed statement of the method of computing the values of this policy has been filed with the insurance department of the state shown in Section 1.

 

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Communications about this policy may be sent to the Company's Service Office, which is currently at [197 Clarendon Street, Boston, Massachusetts 02116-5010. Our toll-free number is 1-800-387-2747].

Flexible Premium Variable Universal Life Insurance policy

Adjustable Death Benefit

Benefit payable on Life Insured’s death

Flexible premiums payable to Age 121 during the Life Insured’s lifetime

Non-Participating (Not eligible for dividends)

 

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