e497
Supplement
dated September 6, 2011 to the Prospectus dated May 1,
2011 for the
Pacific Value variable annuity contract issued by Pacific Life
Insurance Company
Capitalized terms used in this supplement are defined in the
Prospectus referred to above unless otherwise defined herein.
“We,” “us,” or “our” refer to
Pacific Life Insurance Company; “you” or
“your” refer to the Contract Owner.
This supplement must be preceded or accompanied by the
Prospectus dated May 1, 2011, as supplemented.
THIS SUPPLEMENT ONLY APPLIES TO CONTRACTS ISSUED IN
CALIFORNIA.
The
OTHER
OPTIONAL RIDERS section is amended as
follows:
The
CoreIncome Advantage Plus (Single) and CoreIncome Advantage 5
Plus (Single) subsections are replaced with the
following:
CoreIncome
Advantage Plus (Single)
Purchasing
the Rider
You may purchase this optional Rider on the Contract Date or on
any Contract Anniversary if the age of each Annuitant is
85 years or younger on the date of purchase, the Contract
is not issued as an Inherited IRA, Inherited Roth IRA or
Inherited TSA, and you allocate your entire Contract Value
according to the Investment Allocation Requirements.
Rider
Terms
Annual RMD Amount – The amount required to be
distributed each Calendar Year for purposes of satisfying the
minimum distribution requirements of Code Section 401(a)(9)
(“Section 401(a)(9)”) and related Code provisions
in effect as of the Rider Effective Date.
Early Withdrawal – Any withdrawal that occurs
before the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
591/2 years
of age.
Excess Withdrawal – Any withdrawal (except an
RMD withdrawal) that occurs after the oldest Owner (or youngest
Annuitant, in the case of a Non-Natural Owner or if this Rider
is issued in California) is
age 591/2
or older and exceeds the Protected Payment Amount.
Protected Payment Amount – The maximum amount
that can be withdrawn under this Rider without reducing the
Protected Payment Base. If the oldest Owner (or youngest
Annuitant, in the case of a Non-Natural Owner or if this Rider
is issued in California) is
591/2 years
of age or older, the Protected Payment Amount is equal to 4% of
the Protected Payment Base, less cumulative withdrawals during
that Contract Year and will be reset to 4% of the Protected
Payment Base each Contract Anniversary. If the oldest Owner (or
youngest Annuitant, in the case of a Non-Natural Owner or if
this Rider is issued in California) is younger than
591/2 years
of age, the Protected Payment Amount is equal to zero (0);
however, once the oldest Owner (or youngest Annuitant, in the
case of a Non-Natural Owner or if this Rider is issued in
California) reaches
age 591/2,
the Protected Payment Amount will equal 4% of the Protected
Payment Base and will be reset each Contract Anniversary. The
initial Protected Payment Amount will depend upon the age of the
oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California).
Protected Payment Base – An amount used to
determine the Protected Payment Amount. The Protected Payment
Base will remain unchanged except as otherwise described under
the provisions of this Rider. The initial Protected Payment Base
is equal to the initial Purchase Payment, if the Rider Effective
Date is on the Contract Date, or the Contract Value, if the
Rider Effective Date is on a Contract Anniversary.
Reset Date – Any Contract Anniversary after the
Rider Effective Date on which an Automatic Reset or an
Owner-Elected Reset occurs.
Rider Effective Date – The date the guarantees
and charges for the Rider become effective. If the Rider is
purchased within 60 days of the Contract Date, the Rider
Effective Date is the Contract Date. If the Rider is purchased
within 60 days of a Contract Anniversary, the Rider
Effective Date is the date of that Contract Anniversary.
How the
Rider Works
On any day, this Rider guarantees you can withdraw up to the
Protected Payment Amount, regardless of market performance,
until the Rider terminates. Beginning with the
1st anniversary
of the Rider Effective Date or most recent Reset Date, whichever
is later, the Rider provides for Automatic Annual Resets or
Owner-Elected Resets of the Protected Payment Base to an amount
equal to 100% of the Contract Value. Once the Rider is
purchased, you cannot request a termination of the Rider (see
the Termination subsection of this Rider for more
information).
If the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
591/2 years
of age or older, the Protected Payment Amount is 4% of the
Protected Payment Base. If the oldest Owner (or youngest
Annuitant, in the
case of a Non-Natural Owner or if this Rider is issued in
California) is younger than
591/2 years
of age, the Protected Payment Amount is zero (0).
The Protected Payment Base may change over time. An Automatic
Reset or Owner-Elected Reset will increase or decrease the
Protected Payment Base depending on the Contract Value on the
Reset Date. A withdrawal that is less than or equal to the
Protected Payment Amount will not change the Protected Payment
Base. If a withdrawal is greater than the Protected Payment
Amount and the Contract Value is less than the Protected Payment
Base, the Protected Payment Base will be reduced by an amount
that is greater than the excess amount withdrawn. For
withdrawals that are greater than the Protected Payment Amount,
see the Withdrawal of Protected Payment Amount subsection
below.
For purposes of this Rider, the term “withdrawal”
includes any applicable withdrawal charges. Amounts withdrawn
under this Rider will reduce the Contract Value by the amount
withdrawn and will be subject to the same conditions,
limitations, restrictions and all other fees, charges and
deductions, if applicable, as withdrawals otherwise made under
the provisions of the Contract. Withdrawals under this Rider are
not annuity payouts. Annuity payouts generally receive a more
favorable tax treatment than other withdrawals.
If your Contract is a Qualified Contract, including an IRA or
TSA/403(b) Contract, you are subject to restrictions on
withdrawals you may take prior to a triggering event (e.g.
reaching
age 591/2,
separation from service, disability) and you should consult your
tax or legal advisor prior to purchasing this optional
guarantee, the primary benefit of which is guaranteeing
withdrawals. For additional information regarding withdrawals
and triggering events, see the FEDERAL TAX ISSUES –
IRAs and Qualified Plans section in the Prospectus.
Withdrawal
of Protected Payment Amount
When the oldest Owner (youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
591/2 years
of age or older, you may withdraw up to the Protected Payment
Amount each Contract Year, regardless of market performance,
until the Rider terminates. The Protected Payment Amount will be
reduced by the amount withdrawn during the Contract Year and
will be reset each Contract Anniversary to 4% of the Protected
Payment Base. Any portion of the Protected Payment Amount not
withdrawn during a Contract Year may not be carried over to the
next Contract Year. If a withdrawal does not exceed the
Protected Payment Amount immediately prior to that withdrawal,
the Protected Payment Base will remain unchanged.
Withdrawals Exceeding the Protected Payment Amount. If a
withdrawal (except an RMD withdrawal) exceeds the Protected
Payment Amount immediately prior to that withdrawal, we will
(immediately following the withdrawal) reduce the Protected
Payment Base on a proportionate basis for the amount in excess
of the Protected Payment Amount. (See example 4 in the
COREINCOME ADVANTAGE PLUS (SINGLE AND JOINT) SAMPLE
CALCULATIONS appendix in the Prospectus for a numerical
example of the adjustments to the Protected Payment Base as a
result of an Excess Withdrawal.) If a withdrawal is greater than
the Protected Payment Amount and the Contract Value is less than
the Protected Payment Base, the Protected Payment Base will be
reduced by an amount that is greater than the excess amount
withdrawn.
The amount available for withdrawal under the Contract must be
sufficient to support any withdrawal that would otherwise exceed
the Protected Payment Amount.
For information regarding taxation of withdrawals, see the
FEDERAL TAX ISSUES section in the Prospectus.
Early
Withdrawal
If an Early Withdrawal occurs, we will (immediately following
the Early Withdrawal) reduce the Protected Payment Base either
on a proportionate basis or by the total withdrawal amount,
whichever results in a lower Protected Payment Base. See example
5 in the COREINCOME ADVANTAGE PLUS (SINGLE AND JOINT) SAMPLE
CALCULATIONS appendix in the Prospectus for a numerical
example of the adjustments to the Protected Payment Base as a
result of an Early Withdrawal.
Required
Minimum Distributions
No adjustment will be made to the Protected Payment Base as a
result of a withdrawal that exceeds the Protected Payment Amount
immediately prior to the withdrawal, provided:
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such withdrawal (an “RMD Withdrawal”) is for purposes
of satisfying the minimum distribution requirements of
Section 401(a)(9) and related Code provisions in effect at
that time,
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you have authorized us to calculate and make periodic
distribution of the Annual RMD Amount for the Calendar Year
required based on the payment frequency you have chosen,
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the Annual RMD Amount is based on this Contract only, and
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only RMD withdrawals are made from the Contract during the
Contract Year.
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See example 6 in the COREINCOME ADVANTAGE PLUS (SINGLE AND
JOINT) SAMPLE CALCULATIONS appendix in the Prospectus for
numerical examples that describe what occurs when only
withdrawals of the Annual RMD Amount are made during a Contract
Year and when withdrawals of the Annual RMD Amount plus other
non-RMD Withdrawals are made during a Contract Year.
See the FEDERAL TAX ISSUES – Qualified
Contracts – Required Minimum Distributions
section in the Prospectus.
Depletion
of Contract Value
If the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
younger than
age 591/2
when the Contract Value is zero, the Rider will terminate.
If the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
age 591/2
or older and the Contract Value was reduced to zero by a
withdrawal that exceeds the Protected Payment Amount, the Rider
will terminate.
If the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
age 591/2
or older and the Contract Value was reduced to zero by a
withdrawal (including an RMD withdrawal) that did not exceed the
Protected Payment Amount, the following will apply:
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the Protected Payment Amount will be paid each year until the
date of death of an Owner or the date of death of the sole
surviving Annuitant (first Annuitant in the case of a
Non-Natural Owner),
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the Protected Payment Amount will be paid under a series of
pre-authorized withdrawals under a payment frequency as elected
by the Owner, but no less frequently than annually,
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no additional Purchase Payments will be accepted under the
Contract, and
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the Contract will cease to provide any death benefit.
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Reset of
Protected Payment Base
On and after each Reset Date, the provisions of this Rider shall
apply in the same manner as they applied when the Rider was
originally issued. The limitations and restrictions on Purchase
Payments and withdrawals, the deduction of Rider charges and any
future reset options available on and after the Reset Date, will
again apply and will be measured from that Reset Date. A reset
occurs when the Protected Payment Base is changed to an amount
equal to the Contract Value as of the Reset Date.
Automatic Reset. On each Contract Anniversary while this
Rider is in effect and before the Annuity Date, we will
automatically reset the Protected Payment Base to an amount
equal to 100% of the Contract Value, if the Protected Payment
Base is less than the Contract Value on that Contract
Anniversary. The annual charge percentage may change as a result
of any Automatic Reset (see the CHARGES, FEES AND
DEDUCTIONS – Optional Rider Charges section in the
Prospectus).
Automatic Reset – Opt-Out Election. Within
60 days after a Contract Anniversary on which an Automatic
Reset is effective, you have the option to reinstate the
Protected Payment Base, Protected Payment Amount and annual
charge percentage to their respective amounts immediately before
the Automatic Reset. Any future Automatic Resets will continue
in accordance with the Automatic Reset paragraph above.
If you elect this option, your opt-out election must be
received, in a form satisfactory to us, at our Service Center
within the same 60 day period after the Contract
Anniversary on which the reset is effective.
Automatic Reset – Future Participation. You may
elect not to participate in future Automatic Resets at any time.
Your election must be received, in a form satisfactory to us, at
our Service Center, while this Rider is in effect and before the
Annuity Date. Such election will be effective for future
Contract Anniversaries.
If you previously elected not to participate in Automatic
Resets, you may re-elect to participate in future Automatic
Resets at any time. Your election to resume participation must
be received, in a form satisfactory to us, at our Service Center
while this Rider is in effect and before the Annuity Date. Such
election will be effective for future Contract Anniversaries as
described in the Automatic Reset paragraph above.
Owner-Elected Resets (Non-Automatic). You may, on any
Contract Anniversary, elect to reset the Protected Payment Base
to an amount equal to 100% of the Contract Value. An
Owner-Elected Reset may be elected while Automatic Resets are in
effect. The annual charge percentage may change as a result of
this Reset.
If you elect this option, your election must be received, in a
form satisfactory to us, at our Service Center within
60 days after the Contract Anniversary on which the reset
is effective. The reset will be based on the Contract Value as
of that Contract Anniversary. Your election of this option
may result in a reduction in the Protected Payment Base and
Protected Payment Amount. Generally, the reduction will
occur when your Contract Value is less than the Protected
Payment Base as of the Contract Anniversary you elected the
reset. You are strongly advised to work with your financial
advisor prior to electing an Owner-Elected Reset. We will
provide you with written confirmation of your election.
Subsequent
Purchase Payments
If we receive additional Purchase Payments after the Rider
Effective Date, we will increase the Protected Payment Base by
the amount of the Purchase Payments. However, for purposes of
this Rider, we reserve the right to restrict additional Purchase
Payments that result in a
total of all Purchase Payments received on or after the later of
the
1st Contract
Anniversary or most recent Reset Date to exceed $100,000 without
our prior approval.
Annuitization
If you annuitize the Contract at the maximum Annuity Date
specified in your Contract and this Rider is still in effect at
the time of your election and a Life Only fixed annuity option
is chosen, the annuity payments will be equal to the greater of:
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the Life Only fixed annual payment amount based on the terms of
your Contract, or
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the Protected Payment Amount in effect at the maximum Annuity
Date.
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If you annuitize the Contract at any time prior to the maximum
Annuity Date specified in your Contract, your annuity payments
will be determined in accordance with the terms of your
Contract. The Protected Payment Base and Protected Payment
Amount under this Rider will not be used in determining any
annuity payments. Work with your financial advisor to determine
if you should annuitize your Contract before the maximum Annuity
Date or stay in the accumulation phase and continue to take
withdrawals under the Rider.
Continuation
of Rider if Surviving Spouse Continues Contract
This Rider terminates upon the death of an Owner or sole
surviving Annuitant. If the surviving spouse continues the
Contract, the surviving spouse may re-purchase this Rider (if
available) on any Contract Anniversary. The existing protected
balances will not carry over to the new Rider.
The surviving spouse may elect to receive any death benefit
proceeds instead of continuing the Contract (see the DEATH
BENEFITS AND OPTIONAL DEATH BENEFIT RIDERS – Death
Benefits subsection in the Prospectus).
Termination
You cannot request a termination of the Rider. Except as
otherwise provided below, the Rider will automatically terminate
on the earliest of:
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the day any portion of the Contract Value is no longer allocated
according to the Investment Allocation Requirements,
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the date of the death of an Owner or the date of death of the
sole surviving Annuitant,
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for Contracts with a Non-Natural Owner, the date of death of any
Annuitant, including Primary, Joint and Contingent Annuitants,
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the day the Contract is terminated in accordance with the
provisions of the Contract,
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the day we are notified of a change in ownership of the Contract
to a non-spouse Owner if the Contract is Non-Qualified
(excluding changes in ownership to or from certain trusts or if
this Rider is issued in California),
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the day the Contingent Annuitant becomes the Annuitant (if this
Rider is issued in California),
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the day you exchange this Rider for another withdrawal benefit
Rider,
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the Annuity Date (see the Annuitization subsection for
additional information),
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the day the Contract Value is reduced to zero as a result of a
withdrawal (except an RMD withdrawal) that exceeds the Protected
Payment Amount, or
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the day the Contract Value is reduced to zero if the oldest
Owner (or youngest Annuitant, in the case of a Non-Natural Owner
or if this Rider is issued in California) is younger than
age 591/2.
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The Rider and the Contract will not terminate the day the
Contract Value is zero and you begin taking pre-authorized
withdrawals of the Protected Payment Amount (see the
Depletion of Contract Value subsection). In this case,
the Rider and the Contract will terminate the date of death of
an Owner or the date of death of the sole surviving Annuitant.
Sample
Calculations
Hypothetical sample calculations are in the COREINCOME
ADVANTAGE PLUS (SINGLE AND JOINT) SAMPLE CALCULATIONS
appendix in the Prospectus. The examples are based on
certain hypothetical assumptions and are for example purposes
only. These examples are not intended to serve as projections
of future investment returns.
CoreIncome
Advantage 5 Plus (Single)
Purchasing
the Rider
You may purchase this optional Rider on the Contract Date or on
any Contract Anniversary if the age of each Annuitant is
85 years or younger on the date of purchase, the Contract
is not issued as an Inherited IRA, Inherited Roth IRA or
Inherited TSA, and you allocate your entire Contract Value
according to the Investment Allocation Requirements.
Rider
Terms
Annual RMD Amount – The amount required to be
distributed each Calendar Year for purposes of satisfying the
minimum distribution requirements of Code Section 401(a)(9)
(“Section 401(a)(9)”) and related Code provisions
in effect as of the Rider Effective Date.
Early Withdrawal – Any withdrawal that occurs
before the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
591/2 years
of age.
Excess Withdrawal – Any withdrawal (except an
RMD withdrawal) that occurs after the oldest Owner (or youngest
Annuitant, in the case of a Non-Natural Owner or if this Rider
is issued in California) is
age 591/2
or older and exceeds the Protected Payment Amount.
Protected Payment Amount – The maximum amount
that can be withdrawn under this Rider without reducing the
Protected Payment Base. If the oldest Owner (or youngest
Annuitant, in the case of a Non-Natural Owner or if this Rider
is issued in California) is
591/2 years
of age or older, the Protected Payment Amount is equal to 5% of
the Protected Payment Base, less cumulative withdrawals during
that Contract Year and will be reset to 5% of the Protected
Payment Base each Contract Anniversary. If the oldest Owner (or
youngest Annuitant, in the case of a Non-Natural Owner or if
this Rider is issued in California) is younger than
591/2 years
of age, the Protected Payment Amount is equal to zero (0);
however, once the oldest Owner (or youngest Annuitant, in the
case of a Non-Natural Owner or if this Rider is issued in
California) reaches
age 591/2,
the Protected Payment Amount will equal 5% of the Protected
Payment Base and will be reset each Contract Anniversary. The
initial Protected Payment Amount will depend upon the age of the
oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California).
Protected Payment Base – An amount used to
determine the Protected Payment Amount. The Protected Payment
Base will remain unchanged except as otherwise described under
the provisions of this Rider. The initial Protected Payment Base
is equal to the initial Purchase Payment, if the Rider Effective
Date is on the Contract Date, or the Contract Value, if the
Rider Effective Date is on a Contract Anniversary.
Reset Date – Any Contract Anniversary after the
Rider Effective Date on which an Automatic Reset or an
Owner-Elected Reset occurs.
Rider Effective Date – The date the guarantees
and charges for the Rider become effective. If the Rider is
purchased within 60 days of the Contract Date, the Rider
Effective Date is the Contract Date. If the Rider is purchased
within 60 days of a Contract Anniversary, the Rider
Effective Date is the date of that Contract Anniversary.
How the
Rider Works
On any day, this Rider guarantees you can withdraw up to the
Protected Payment Amount, regardless of market performance,
until the Rider terminates. Beginning with the
1st anniversary
of the Rider Effective Date or most recent Reset Date, whichever
is later, the Rider provides for Automatic Annual Resets or
Owner-Elected Resets of the Protected Payment Base to an amount
equal to 100% of the Contract Value. Once the Rider is
purchased, you cannot request a termination of the Rider (see
the Termination subsection of this Rider for more
information).
If the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
591/2 years
of age or older, the Protected Payment Amount is 5% of the
Protected Payment Base. If the oldest Owner (or youngest
Annuitant, in the case of a Non-Natural Owner or if this Rider
is issued in California) is younger than
591/2 years
of age, the Protected Payment Amount is zero (0).
The Protected Payment Base may change over time. An Automatic
Reset or Owner-Elected Reset will increase or decrease the
Protected Payment Base depending on the Contract Value on the
Reset Date. A withdrawal that is less than or equal to the
Protected Payment Amount will not change the Protected Payment
Base. If a withdrawal is greater than the Protected Payment
Amount and the Contract Value is less than the Protected Payment
Base, the Protected Payment Base will be reduced by an amount
that is greater than the excess amount withdrawn. For
withdrawals that are greater than the Protected Payment Amount,
see the Withdrawal of Protected Payment Amount subsection
below.
For purposes of this Rider, the term “withdrawal”
includes any applicable withdrawal charges. Amounts withdrawn
under this Rider will reduce the Contract Value by the amount
withdrawn and will be subject to the same conditions,
limitations, restrictions and all other fees, charges and
deductions, if applicable, as withdrawals otherwise made under
the provisions of the Contract. Withdrawals under this Rider are
not annuity payouts. Annuity payouts generally receive a more
favorable tax treatment than other withdrawals.
If your Contract is a Qualified Contract, including an IRA or
TSA/403(b) Contract, you are subject to restrictions on
withdrawals you may take prior to a triggering event (e.g.
reaching
age 591/2,
separation from service, disability) and you should consult your
tax or legal
advisor prior to purchasing this optional guarantee, the primary
benefit of which is guaranteeing withdrawals. For additional
information regarding withdrawals and triggering events, see the
FEDERAL TAX ISSUES – IRAs and Qualified Plans
section in the Prospectus.
Withdrawal
of Protected Payment Amount
When the oldest Owner (youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
591/2 years
of age or older, you may withdraw up to the Protected Payment
Amount each Contract Year, regardless of market performance,
until the Rider terminates. The Protected Payment Amount will be
reduced by the amount withdrawn during the Contract Year and
will be reset each Contract Anniversary to 5% of the Protected
Payment Base. Any portion of the Protected Payment Amount not
withdrawn during a Contract Year may not be carried over to the
next Contract Year. If a withdrawal does not exceed the
Protected Payment Amount immediately prior to that withdrawal,
the Protected Payment Base will remain unchanged.
Withdrawals Exceeding the Protected Payment Amount. If a
withdrawal (except an RMD withdrawal) exceeds the Protected
Payment Amount immediately prior to that withdrawal, we will
(immediately following the withdrawal) reduce the Protected
Payment Base on a proportionate basis for the amount in excess
of the Protected Payment Amount. (See example 4 in the
COREINCOME ADVANTAGE 5 PLUS (SINGLE AND JOINT) SAMPLE
CALCULATIONS appendix in the Prospectus for a numerical
example of the adjustments to the Protected Payment Base as a
result of an Excess Withdrawal.) If a withdrawal is greater than
the Protected Payment Amount and the Contract Value is less than
the Protected Payment Base, the Protected Payment Base will be
reduced by an amount that is greater than the excess amount
withdrawn.
The amount available for withdrawal under the Contract must be
sufficient to support any withdrawal that would otherwise exceed
the Protected Payment Amount.
For information regarding taxation of withdrawals, see the
FEDERAL TAX ISSUES section in the Prospectus.
Early
Withdrawal
If an Early Withdrawal occurs, we will (immediately following
the Early Withdrawal) reduce the Protected Payment Base either
on a proportionate basis or by the total withdrawal amount,
whichever results in a lower Protected Payment Base. See example
5 in the COREINCOME ADVANTAGE 5 PLUS (SINGLE AND JOINT)
SAMPLE CALCULATIONS appendix in the Prospectus for a
numerical example of the adjustments to the Protected Payment
Base as a result of an Early Withdrawal.
Required
Minimum Distributions
No adjustment will be made to the Protected Payment Base as a
result of a withdrawal that exceeds the Protected Payment Amount
immediately prior to the withdrawal, provided:
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such withdrawal (an “RMD Withdrawal”) is for purposes
of satisfying the minimum distribution requirements of
Section 401(a)(9) and related Code provisions in effect at
that time,
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you have authorized us to calculate and make periodic
distribution of the Annual RMD Amount for the Calendar Year
required based on the payment frequency you have chosen,
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the Annual RMD Amount is based on this Contract only, and
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only RMD withdrawals are made from the Contract during the
Contract Year.
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See example 6 in the COREINCOME ADVANTAGE 5 PLUS (SINGLE
AND JOINT) SAMPLE CALCULATIONS appendix in the Prospectus
for numerical examples that describe what occurs when only
withdrawals of the Annual RMD Amount are made during a Contract
Year and when withdrawals of the Annual RMD Amount plus other
non-RMD Withdrawals are made during a Contract Year.
See the FEDERAL TAX ISSUES – Qualified
Contracts – Required Minimum Distributions
section in the Prospectus.
Depletion
of Contract Value
If the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
younger than
age 591/2
when the Contract Value is zero, the Rider will terminate.
If the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
age 591/2
or older and the Contract Value was reduced to zero by a
withdrawal that exceeds the Protected Payment Amount, the Rider
will terminate.
If the oldest Owner (or youngest Annuitant, in the case of a
Non-Natural Owner or if this Rider is issued in California) is
age 591/2
or older and the Contract Value was reduced to zero by a
withdrawal (including an RMD withdrawal) that did not exceed the
Protected Payment Amount, the following will apply:
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the Protected Payment Amount will be paid each year until the
date of death of an Owner or the date of death of the sole
surviving Annuitant (first Annuitant in the case of a
Non-Natural Owner),
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the Protected Payment Amount will be paid under a series of
pre-authorized withdrawals under a payment frequency as elected
by the Owner, but no less frequently than annually,
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no additional Purchase Payments will be accepted under the
Contract, and
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the Contract will cease to provide any death benefit.
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Reset of
Protected Payment Base
On and after each Reset Date, the provisions of this Rider shall
apply in the same manner as they applied when the Rider was
originally issued. The limitations and restrictions on Purchase
Payments and withdrawals, the deduction of Rider charges and any
future reset options available on and after the Reset Date, will
again apply and will be measured from that Reset Date. A reset
occurs when the Protected Payment Base is changed to an amount
equal to the Contract Value as of the Reset Date.
Automatic Reset. On each Contract Anniversary while this
Rider is in effect and before the Annuity Date, we will
automatically reset the Protected Payment Base to an amount
equal to 100% of the Contract Value, if the Protected Payment
Base is less than the Contract Value on that Contract
Anniversary. The annual charge percentage may change as a result
of any Automatic Reset (see the CHARGES, FEES AND
DEDUCTIONS – Optional Rider Charges section in the
Prospectus).
Automatic Reset – Opt-Out Election. Within
60 days after a Contract Anniversary on which an Automatic
Reset is effective, you have the option to reinstate the
Protected Payment Base, Protected Payment Amount and annual
charge percentage to their respective amounts immediately before
the Automatic Reset. Any future Automatic Resets will continue
in accordance with the Automatic Reset paragraph above.
If you elect this option, your opt-out election must be
received, in a form satisfactory to us, at our Service Center
within the same 60 day period after the Contract
Anniversary on which the reset is effective.
Automatic Reset – Future Participation. You may
elect not to participate in future Automatic Resets at any time.
Your election must be received, in a form satisfactory to us, at
our Service Center, while this Rider is in effect and before the
Annuity Date. Such election will be effective for future
Contract Anniversaries.
If you previously elected not to participate in Automatic
Resets, you may re-elect to participate in future Automatic
Resets at any time. Your election to resume participation must
be received, in a form satisfactory to us, at our Service Center
while this Rider is in effect and before the Annuity Date. Such
election will be effective for future Contract Anniversaries as
described in the Automatic Reset paragraph above.
Owner-Elected Resets (Non-Automatic). You may, on any
Contract Anniversary, elect to reset the Protected Payment Base
to an amount equal to 100% of the Contract Value. An
Owner-Elected Reset may be elected while Automatic Resets are in
effect. The annual charge percentage may change as a result of
this Reset.
If you elect this option, your election must be received, in a
form satisfactory to us, at our Service Center within
60 days after the Contract Anniversary on which the reset
is effective. The reset will be based on the Contract Value as
of that Contract Anniversary. Your election of this option
may result in a reduction in the Protected Payment Base and
Protected Payment Amount. Generally, the reduction will
occur when your Contract Value is less than the Protected
Payment Base as of the Contract Anniversary you elected the
reset. You are strongly advised to work with your financial
advisor prior to electing an Owner-Elected Reset. We will
provide you with written confirmation of your election.
Subsequent
Purchase Payments
If we receive additional Purchase Payments after the Rider
Effective Date, we will increase the Protected Payment Base by
the amount of the Purchase Payments. However, for purposes of
this Rider, we reserve the right to restrict additional Purchase
Payments that result in a total of all Purchase Payments
received on or after the later of the
1st Contract
Anniversary or most recent Reset Date to exceed $100,000 without
our prior approval.
Annuitization
If you annuitize the Contract at the maximum Annuity Date
specified in your Contract and this Rider is still in effect at
the time of your election and a Life Only fixed annuity option
is chosen, the annuity payments will be equal to the greater of:
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the Life Only fixed annual payment amount based on the terms of
your Contract, or
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the Protected Payment Amount in effect at the maximum Annuity
Date.
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If you annuitize the Contract at any time prior to the maximum
Annuity Date specified in your Contract, your annuity payments
will be determined in accordance with the terms of your
Contract. The Protected Payment Base and Protected Payment
Amount under this Rider will not be used in determining any
annuity payments. Work with your financial advisor to determine
if you should annuitize your Contract before the maximum Annuity
Date or stay in the accumulation phase and continue to take
withdrawals under the Rider.
Continuation
of Rider if Surviving Spouse Continues Contract
This Rider terminates upon the death of an Owner or sole
surviving Annuitant. If the surviving spouse continues the
Contract, the surviving spouse may re-purchase this Rider (if
available) on any Contract Anniversary. The existing protected
balances will not carry over to the new Rider.
The surviving spouse may elect to receive any death benefit
proceeds instead of continuing the Contract (see the DEATH
BENEFITS AND OPTIONAL DEATH BENEFIT RIDERS – Death
Benefits subsection in the Prospectus).
Termination
You cannot request a termination of the Rider. Except as
otherwise provided below, the Rider will automatically terminate
on the earliest of:
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the day any portion of the Contract Value is no longer allocated
according to the Investment Allocation Requirements,
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the date of the death of an Owner or the date of death of the
sole surviving Annuitant,
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for Contracts with a Non-Natural Owner, the date of death of any
Annuitant, including Primary, Joint and Contingent Annuitants,
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the day the Contract is terminated in accordance with the
provisions of the Contract,
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the day we are notified of a change in ownership of the Contract
to a non-spouse Owner if the Contract is Non-Qualified
(excluding changes in ownership to or from certain trusts or if
this Rider is issued in California),
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the day the Contingent Annuitant becomes the Annuitant (if this
Rider is issued in California),
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the day you exchange this Rider for another withdrawal benefit
Rider,
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the Annuity Date (see the Annuitization subsection for
additional information),
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the day the Contract Value is reduced to zero as a result of a
withdrawal (except an RMD withdrawal) that exceeds the Protected
Payment Amount, or
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the day the Contract Value is reduced to zero if the oldest
Owner (or youngest Annuitant, in the case of a Non-Natural Owner
or if this Rider is issued in California) is younger than
age 591/2.
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The Rider and the Contract will not terminate the day the
Contract Value is zero and you begin taking pre-authorized
withdrawals of the Protected Payment Amount (see the
Depletion of Contract Value subsection). In this case,
the Rider and the Contract will terminate the date of death of
an Owner or the date of death of the sole surviving Annuitant.
Sample
Calculations
Hypothetical sample calculations are in the COREINCOME
ADVANTAGE 5 PLUS (SINGLE AND JOINT) SAMPLE CALCULATIONS
appendix in the Prospectus. The examples are based on
certain hypothetical assumptions and are for example purposes
only. These examples are not intended to serve as projections
of future investment returns.
The CoreIncome Advantage Plus (Joint) and CoreIncome
Advantage 5 Plus (Joint) Termination subsections are
amended as follows:
The 7th bullet is deleted and replaced with the following:
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the day that neither Designated Life is an Owner (or Annuitant,
in the case of a custodial owned IRA or TSA) (this bullet does
not apply if this Rider is issued in California),
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