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EX-4.(V) — Instrument Defining the Rights of Security Holders
Pacific Life Insurance Company has issued this Rider as a part of the annuity Contract to
which it is attached.
All provisions of the Contract that do not conflict with this Rider apply to this Rider. In the
event of any conflict between the provisions of this Rider and the provisions of the Contract, the
provisions of this Rider shall prevail over the provisions of the Contract.
The numeric examples contained in this Rider are based on certain assumptions. They have been
provided to assist in understanding the benefits provided by this Rider and to demonstrate how
Purchase Payments received and withdrawals made from the Contract prior to the Annuity Date affect
the values and benefits under this Rider over an extended period of time.
Withdrawals to Satisfy Required Minimum Distribution
4
Depletion of Contract Value
4
Depletion of Remaining Protected Balance
5
Automatic Reset
5
Automatic Reset — Opt-Out Election
5
Automatic Reset — Future Participation
5
Owner-Elected Resets (Non-Automatic)
5
Application of Rider Provisions
6
Annuitization
6
Continuation of Rider if Surviving Spouse Continues Contract
6
Termination of Rider
6
Rider Effective Date
7
Sample Calculations
8
1
Definition
of Terms – Unless redefined below, the terms defined in the Contract will have the same
meaning when used in this Rider. For purposes of this Rider, the following definitions apply:
Annual
RMD Amount – The amount required to be distributed each Calendar Year for purposes of
satisfying the minimum distribution requirements of Internal Revenue Code Section 401(a)(9) and
related Code provisions in effect on the Rider Effective Date.
Protected
Payment Amount – The maximum amount that can be withdrawn under this Rider without
reducing the Protected Payment Base. The Protected Payment Amount on any day after the Rider
Effective Date is equal to the lesser of:
(a)
5% of the Protected Payment Base as of that day, less cumulative withdrawals
during that Contract Year; or
(b)
the Remaining Protected Balance as of that day.
The Protected Payment Amount will never be less than zero.
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.
Remaining
Protected Balance – The amount available for future withdrawals made under this
Rider. The Remaining Protected Balance will never be less than zero.
Reset
Date – Any Contract Anniversary beginning with the first (1st) Contract
Anniversary after the Rider Effective Date on which an automatic reset or an Owner-elected reset
occurs.
For purposes of this Rider, the term “withdrawal” includes any applicable withdrawal charges and
charges for premium taxes and/or other taxes, if applicable. 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.
5%
Guaranteed Withdrawal Benefit – You have purchased a 5% Guaranteed Withdrawal Benefit Rider.
Subject to the terms and conditions described herein, this Rider:
(a)
allows for withdrawals up to the Protected Payment Amount without any adjustment to the
Protected Payment Base, regardless of market performance, until the Remaining Protected
Balance equals zero;
(b)
provides for an annual credit to be applied to the Protected Payment Base and Remaining
Protected Balance as described under the Annual Credit provision of this Rider;
(c)
allows for withdrawals for purposes of satisfying the minimum distribution requirements
of Internal Revenue Code Section 401(a)(9) and related Code provisions in effect on the
Rider Effective Date, regardless of the amount, without any adjustment to the Protected
Payment Base, subject to certain conditions as described herein;
(d)
provides for automatic annual resets or Owner-elected resets of the Protected Payment
Base and Remaining Protected Balance to an amount equal to 100% of the Contract Value as of
a Reset Date.
This Rider may be purchased and added to the Contract, provided that on the Rider Effective Date:
(a) the age of each Annuitant is 85 years or younger; and (b) the entire Contract Value is invested
according to an asset allocation program established and maintained by us for this Rider.
Annual
Charge – An annual charge for expenses related to this Rider will be deducted from the
Investment Options on a proportionate basis relative to the Account Value in each such Investment
Option.
The annual charge is deducted, in arrears, on each Contract Anniversary that this Rider remains in
effect. The annual charge is equal to 0.65% (not to exceed a maximum annual charge percentage of
1.20%) multiplied by the Protected Payment Base on the day the charge is deducted.
2
The annual charge percentage established on the Rider Effective Date will not change, except as
otherwise described in the provisions of this Rider.
If this Rider terminates on a Contract Anniversary, the entire annual charge for the prior Contract
Year will be deducted from the Contract Value on that Contract Anniversary.
If the Rider terminates prior to a Contract Anniversary, we will prorate the annual charge. The
prorated amount will be based on the Protected Payment Base as of the day the Rider terminates.
Such prorated amount will be deducted from the Contract Value on the earlier of the day the
Contract terminates or the Contract Anniversary immediately following the day the Rider terminates.
We will waive the annual charge if the Rider terminates as a result of the death of an Owner or
sole surviving Annuitant, or upon full annuitization of the Contract.
Any portion of the annual charge we deduct from any of our fixed-rate General Account Investment
Options (if available under the Contract) will not be greater than the annual interest credited in
excess of that option’s minimum guaranteed interest rate.
Change
in Annual Charge – The annual charge percentage may change as a result of any automatic
reset or Owner-elected reset. The annual charge percentage will never exceed the annual charge
percentage then in effect for new issues of this same rider. If we are no longer issuing this
rider, any change in the annual charge percentage will not result in an annual charge percentage
that exceeds the maximum annual charge percentage specified in the Annual Charge provision.
If the Protected Payment Base and Remaining Protected Balance are never reset, the annual charge
percentage established on the Rider Effective Date is guaranteed not to change.
Initial
Values – The Protected Payment Base, Remaining Protected Balance and Protected
Payment Amount are initially determined on the Rider Effective Date. On the Rider Effective Date,
the Protected Payment Base and Remaining Protected Balance are equal to the Initial Purchase
Payment or, if available on a Contract Anniversary, the Contract Value on that Contract
Anniversary. The Protected Payment Amount is equal to 5% of the Protected Payment Base.
Subsequent
Purchase Payments – Purchase Payments received after the Rider Effective Date will
result in an increase in the Protected Payment Base and Remaining Protected Balance equal to the
amount of the Purchase Payment.
Limitation
on Subsequent Purchase Payments – For purposes of this Rider, in no event may any
Purchase Payment received on and after the first (1st) Contract Anniversary, measured from the
Rider Effective Date or the most recent Reset Date, whichever is later, result in the total of all
Purchase Payments received since that Contract Anniversary to exceed $100,000, without our prior
approval.
This provision only applies if the Contract permits Purchase Payments after the first (1st)
Contract Anniversary, measured from the Contract Date.
Annual
Credit – On each Contract Anniversary after the Rider Effective Date, an annual credit will
be applied to the Protected Payment Base and Remaining Protected Balance if, as of that Contract
Anniversary:
(a)
no withdrawals have occurred after the Rider Effective Date or the most recent Reset
Date, whichever is later; and
(b)
that Contract Anniversary is prior to the eleventh (11th) Contract Anniversary,
measured from the Rider Effective Date or the most recent Reset Date, whichever is later.
The annual credit is equal to 6% of the sum of (A) and (B) as of the Contract Anniversary on which
the credit is added, where:
(A)
is the Remaining Protected Balance on the Rider Effective Date or the most recent Reset
Date, whichever is later.
(B)
is cumulative Purchase Payments received after the Rider Effective Date or the most
recent Reset Date, whichever is later.
3
Once a withdrawal has occurred, no annual credit will be applied to the Protected Payment Base and
Remaining Protected Balance on any Contract Anniversary following the withdrawal, unless an
automatic reset or an Owner-elected reset occurs, in which case eligibility for the annual credit
will begin as of the Reset Date of that automatic reset or Owner-elected reset. (See Application
of Rider Provisions).
Withdrawal
of Protected Payment Amount – While this Rider is in effect, you may withdraw up to the
Protected Payment Amount without any adjustment to the Protected Payment Base, regardless of market
performance, until the Remaining Protected Balance equals zero.
If a withdrawal does not exceed the Protected Payment Amount immediately prior to that withdrawal,
the Protected Payment Base will remain unchanged. The Remaining Protected Balance will decrease by
the withdrawal amount immediately following the withdrawal.
Withdrawals
Exceeding Protected Payment Amount – Except as otherwise provided under the
Withdrawals to Satisfy Required Minimum Distribution provision of this Rider, if a withdrawal
exceeds the Protected Payment Amount immediately prior to that withdrawal, we will adjust the
Protected Payment Base and Remaining Protected Balance immediately following the withdrawal to the
lesser of:
(a)
the Contract Value immediately after the withdrawal; or
(b)
the Remaining Protected Balance immediately prior to the withdrawal, less the
withdrawal amount.
The amount available for withdrawal under the Contract must be sufficient to support any withdrawal
that would otherwise exceed the Protected Payment Amount.
Withdrawals
to Satisfy Required Minimum Distribution – No adjustment will be made to the Protected
Payment Base if a withdrawal made under this Rider exceeds the Protected Payment Amount immediately
prior to the withdrawal, provided that such withdrawal (herein referred to as an “RMD withdrawal”)
is for purposes of satisfying the minimum distribution requirements of Internal Revenue Code
Section 401(a)(9) and related Code provisions in effect on the Rider Effective Date, and further
subject to the following:
(a)
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;
(b)
the Annual RMD Amount is based on this Contract only; and
(c)
no withdrawals (other than RMD withdrawals) are made from the Contract during the
Contract Year.
Each RMD withdrawal will decrease the Remaining Protected Balance by the amount withdrawn
immediately following the RMD withdrawal.
Depletion
of Contract Value – If a withdrawal (including an RMD withdrawal) does not exceed the
Protected Payment Amount and reduces the Contract Value to zero, the following will apply:
(a)
if the oldest Owner (or youngest Annuitant, in the case of an Owner who is a
Non-Natural Owner):
(i)
was younger than age 591/2 when the first withdrawal was taken under this
Rider after the Rider Effective Date or the most recent Reset Date, whichever is
later, 5% of the Protected Payment Base will be paid each year until the Remaining
Protected Balance is reduced to zero; or
(ii)
was age 591/2 or older when the first withdrawal was taken under this Rider
after the Rider Effective Date or the most recent Reset Date, whichever is later, 5%
of the Protected Payment Base will be paid each year until the day of the first
death of an Owner or the date of death of the sole surviving Annuitant.
The payments under subparagraphs (a)(i) and (a)(ii) above will be made under a series of
pre-authorized withdrawals under a payment frequency, as elected by the Owner, but no less
frequently than annually;
(b)
no additional Purchase Payments will be accepted under the Contract;
(c)
any Remaining Protected Balance will not be available for payment in a lump sum and
will not be applied to provide payments under an Annuity Option; and
(d)
the Contract will cease to provide any death benefit.
4
If the Owner or sole surviving Annuitant dies and the Contract Value is zero as of the date of
death, any Remaining Protected Balance will be paid to the Beneficiary under the series of
pre-authorized withdrawals and payment frequency then in effect at the time of the Owner’s or sole
surviving Annuitant’s death.
Depletion
of Remaining Protected Balance – If a withdrawal reduces the Remaining Protected Balance
to zero and Contract Value remains, the following will apply:
If the oldest Owner (or youngest Annuitant, in the case of an Owner who is a Non-Natural Owner):
(a)
was younger than age 591/2 when the first withdrawal was taken under this Rider after the
Rider Effective Date or the most recent Reset Date, whichever is later, this Rider will
terminate; or
(b)
was age 591/2 or older when the first withdrawal was taken under this Rider after the
Rider Effective Date or the most recent Reset Date, whichever is later, you may elect to
withdraw up to 5% of the Protected Payment Base each year until the day of the first death
of an Owner or the date of death of the sole surviving Annuitant.
If a withdrawal made under subparagraph (b) (except an RMD withdrawal) taken from the Contract
exceeds the Protected Payment Amount, this Rider will terminate.
Any death benefit proceeds to be paid to the Beneficiary from remaining Contract Value will be paid
as described under the Death Benefit provisions of the Contract.
Automatic
Reset – On each Contract Anniversary while this rider is in effect and before the
Annuity Date and after any annual credit is applied, we will automatically reset the Protected
Payment Base and Remaining Protected Balance 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 Change in Annual
Charge provision). We will provide you with written confirmation of each automatic reset.
Automatic
Reset – Opt-Out Election – If you are within thirty (30) days after a Contract
Anniversary on which an automatic reset is effective, you have the option to reinstate the
Protected Payment Base, Remaining Protected Balance and any change in the annual charge percentage
to their respective amounts immediately before the automatic reset.
If you elect this option, your opt-out election must be received, in a form satisfactory to us, at
our Service Office within the same thirty (30) day period after the Contract Anniversary on which
the reset is effective.
Any future automatic resets will continue in effect in accordance with the Automatic Reset
provision of this Rider.
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 Office 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 provision.
Owner-Elected
Resets (Non-Automatic) – You may, on any Contract Anniversary beginning with the
first (1st) Contract Anniversary, measured from the Rider Effective Date or the most
recent Reset Date, whichever is later, elect to reset the Remaining Protected Balance and Protected
Payment Base to an amount equal to 100% of the Contract Value as of that Contract Anniversary. The
annual charge percentage may change if you elect this reset option. (See Change in Annual Charge
provision).
On each Reset Date and after any annual credit is applied, we will set the Remaining Protected
Balance and Protected Payment Base to an amount equal to 100% of the Contract Value as of that
Reset Date.
5
If you elect this option, your election must be received, in a form satisfactory to us, at our
Service Center within thirty (30) days after the Contract Anniversary on which the reset is
effective. Your election of this option may result in a reduction in the Protected Payment Base,
Remaining Protected Balance, Protected Payment Amount and any annual credit that may be applied.
We will provide you with written confirmation of your election.
Application
of Rider Provisions – 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. Eligibility for the
annual credit, the limitations and restrictions on Purchase Payments and withdrawals, the deduction
of annual charges and any future reset options available on and after each Reset Date, will again
apply and will be measured from that Reset Date.
Annuitization
– If you annuitize the Contract at the maximum Annuity Date specified in the
Contract and this Rider is still in effect at the time of your election and a Life Only annuity
option is chosen, the annuity payments will be equal to the greater of:
.
(a)
the Life Only payment amount calculated based on the Net Contract Value at the maximum
Annuity Date, less any charges for premium taxes and/or other taxes, and the Life Only
annuity rates based on the greater of our current income factors in effect for the Contract
on the maximum Annuity Date; or our guaranteed income factors; or
(b)
the Protected Payment Amount in effect at the maximum Annuity Date divided by the
number of months in the payment frequency elected for the Life Only annuity option.
If you annuitize the Contract at any time prior to the maximum Annuity Date specified in the
Contract, your annuity payments will be determined in accordance with the terms of the Contract.
The Protected Payment Base, Remaining Protected Balance and Protected Payment Amount under this
Rider will not be used in determining any annuity payments.
Continuation
of Rider if Surviving Spouse Continues Contract – If the Owner dies while this Rider
is in effect and if the surviving spouse of the deceased Owner elects to continue the Contract in
accordance with its terms, the surviving spouse may continue to take withdrawals of the Protected
Payment Amount under this Rider, until the Remaining Protected Balance is reduced to zero.
The surviving spouse may elect any of the reset options available under this Rider for subsequent
Contract Anniversaries. If an election to reset is made, whether by an automatic reset or an
Owner-elected reset, then the provisions of this Rider will continue in full force and in effect
for the surviving spouse.
Termination
of Rider – Except as otherwise provided under the Continuation of Rider if Surviving
Spouse Continues Contract provision of this Rider, this Rider will automatically terminate upon the
earliest to occur of one of the following events:
(a)
the day any portion of the Contract Value is no longer invested according to an asset
allocation program established and maintained by us for this Rider;
(b)
the day the Remaining Protected Balance is reduced to zero;
(c)
the day of the first death of an Owner or the date of death of the sole surviving
Annuitant;
(d)
the day the Contract is terminated in accordance with the provisions of the Contract;
(e)
the day we are notified of a change in ownership of the Contract; or
(f)
the Annuity Date.
This Rider will not terminate under subparagraph (b) above if the oldest Owner (or youngest
Annuitant, in the case of an Owner who is a Non-Natural Owner) was age 591/2 or older when the first
withdrawal was taken under this Rider after the Rider Effective Date or the most recent Reset Date,
whichever is later. In this case the Rider will terminate under subparagraph (c).
6
This Rider and the Contract will not terminate under subparagraph (d) above if at the time of this
event, the Contract Value is zero and we are making pre-authorized withdrawals of 5% of the
Protected Payment Base. In this case, the Rider and Contract will terminate under:
(i)
subparagraph (b) if the oldest Owner (or youngest Annuitant, in the case of an Owner
who is a Non-Natural Owner) was younger than age 591/2 when the first withdrawal was taken
under this Rider after the Rider Effective Date or the most recent Reset Date, whichever is
later: or
(ii)
subparagraph (c) if the oldest Owner (or youngest Annuitant, in the case of an Owner
who is a Non-Natural Owner) was age 591/2 or older when the first withdrawal was taken under
this Rider after the Rider Effective Date or the most recent Reset Date, whichever is
later.
Rider
Effective Date – This Rider is effective on the Contract Date, unless a later date is shown
below
Rider Effective Date: [Date]
All other terms and conditions of the Contract remain unchanged by this Rider.
PACIFIC LIFE INSURANCE COMPANY
Chairman and Chief Executive Officer
Secretary
7
5% GUARANTEED WITHDRAWAL BENEFIT RIDER
SAMPLE CALCULATIONS
The numeric examples shown in this section are based on certain assumptions. They have been
provided to assist in understanding the benefits provided by this Rider and to demonstrate how
Purchase Payments received and withdrawals made from the Contract prior to the Annuity Date affect
the values and benefits under this Rider over an extended period of time. These examples are not
intended to serve as projections of future investment returns.
Example
#1 – Setting of Initial Values.
The values shown below are based on the following assumptions:
•
Initial Purchase Payment = $100,000
•
Rider Effective Date = Contract Date
Beginning
Protected
Protected
Remaining
of Contract
Purchase
Contract Value
Annual
Payment
Payment
Protected
Year
Payment
Withdrawal
after Activity
Credit
Base
Amount
Balance
1
$
100,000
$
100,000
$
0.00
$
100,000
$
5,000
$
100,000
On the Rider Effective Date, the initial values are set as follows:
•
Protected Payment Base = Initial Purchase Payment = $100,000
Protected Payment Amount = 5% of Protected Payment Base = $5,000
Example
#2 – Subsequent Purchase Payments.
The values shown below are based on the following assumptions:
•
Initial Purchase Payment = $100,000
•
Rider Effective Date = Contract Date
•
A subsequent Purchase Payment of $100,000 is received during Contract Year 1.
•
No withdrawals taken.
•
No automatic resets or Owner-elected resets.
Beginning
Protected
Protected
Remaining
of Contract
Purchase
Contract Value
Annual
Payment
Payment
Protected
Year
Payment
Withdrawal
after Activity
Credit
Base
Amount
Balance
1
$
100,000
$
100,000
$
0.00
$
100,000
$
5,000
$
100,000
Activity
$
100,000
$
200,000
$
200,000
$
10,000
$
200,000
2
$
207,000
$
12,000
$
212,000
$
10,600
$
212,000
Immediately after the $100,000 subsequent Purchase Payment during Contract Year 1, the Protected
Payment Base and Remaining Protected Balance are increased by the Purchase Payment amount to
$200,000 ($100,000 + $100,000). The Protected Payment Amount after the Purchase Payment is equal
to $10,000 (5% of the Protected Payment Base after the Purchase Payment since there were no
withdrawals during that Contract Year).
Since no withdrawal occurred prior to the Contract Anniversary at the Beginning of Contract Year 2,
an annual credit of $12,000 (6% of the initial Remaining Protected Balance plus cumulative Purchase
Payments received after the Rider Effective Date) is applied to the Protected Payment Base and
Remaining Protected Balance on that Contract Anniversary, increasing both to $212,000. As a
result, the Protected Payment Amount on that Contract Anniversary is equal to $10,600 (5% of the
Protected Payment Base on that Contract Anniversary).
In addition to Purchase Payments, the Contract Value is further subject to increases and/or
decreases during each Contract Year as a result of additional amounts credited, charges, fees and
other deductions, and increases and/or decreases in the investment performance of the Variable
Account.
8
5% GUARANTEED WITHDRAWAL BENEFIT RIDER
SAMPLE CALCULATIONS
Example
#3 – Withdrawals Not Exceeding Protected Payment Amount.
The values shown below are based on the following assumptions:
•
Initial Purchase Payment = $100,000
•
Rider Effective Date = Contract Date
•
A subsequent Purchase Payment of $100,000 is received during Contract Year 1.
•
A withdrawal equal to or less than the Protected Payment Amount is taken during Contract Years 2, 3 and 4.
•
Automatic resets at Beginning of Contract Years 4 and 5.
Beginning
Protected
Protected
Remaining
of Contract
Purchase
Contract Value
Annual
Payment
Payment
Protected
Year
Payment
Withdrawal
after Activity
Credit
Base
Amount
Balance
1
$
100,000
$
100,000
$
0.00
$
100,000
$
5,000
$
100,000
Activity
$
100,000
$
200,000
$
200,000
$
10,000
$
200,000
2
$
207,000
$
12,000
$
212,000
$
10,600
$
212,000
Activity
$
10,600
$
210,890
$
212,000
$
201,400
3
$
210,890
$
0.00
$
212,000
$
10,600
$
201,400
Activity
$
10,600
$
215,052
$
212,000
$
190,800
4
(Prior to Automatic Reset)
$
215,052
$
0.00
$
212,000
$
10,600
$
190,800
4
(After Automatic Reset)
$
215,052
$
0.00
$
215,052
$
10,752
$
215,052
Activity
$
10,600
$
219,506
$
215,052
$
204,452
5
(Prior to Automatic Reset)
$
219,506
$
0.00
$
215,506
$
10,752
$
204,506
5
(After Automatic Reset)
$
219,506
$
0.00
$
219,506
$
10,975
$
219,506
For an explanation of the values and activities at the start of and during Contract Year 1, refer
to Examples #1 and #2.
As the withdrawal during Contract Year 2 did not exceed the Protected Payment Amount immediately
prior to the withdrawal ($10,600):
(a)
the Protected Payment Base remains unchanged; and
(b)
the Remaining Protected Balance is reduced by the amount of the withdrawal to $201,400
($212,000 – $10,600).
As the withdrawal during Contract Year 3 did not exceed the Protected Payment Amount immediately
prior to the withdrawal ($10,600):
(c)
the Protected Payment Base remains unchanged; and
(d)
the Remaining Protected Balance is reduced by the amount of the withdrawal to $190,800
($201,400 – $10,600).
Because at the Beginning of Contract Year 4, the Protected Payment Base was less than the Contract
Value on that Contract Anniversary (see balances at
Beginning of Contract Year 4 – Prior to
Automatic Reset), an automatic reset occurred which resets the Protected Payment Base and Remaining
Protected Balance to an amount equal to 100% of the Contract Value (see balances at Beginning of
Contract Year 4 – After Automatic Reset). As a result, the Protected Payment Amount is equal to
$10,752 (5% of the reset Protected Payment Base).
As the withdrawal during Contract Year 4 did not exceed the Protected Payment Amount immediately
prior to the withdrawal ($10,600):
(e)
the Protected Payment Base remains unchanged; and
(f)
the Remaining Protected Balance is reduced by the amount of the withdrawal to $204,452
($215,452 – $10,600).
Because at the Beginning of Contract Year 5, the Protected Payment Base was less than the Contract
Value on that Contract Anniversary (see balances at
Beginning of Contract Year 5 – Prior to
Automatic Reset), an automatic reset occurred which resets the Protected Payment Base and Remaining
Protected Balance to an amount equal to 100% of the Contract Value (see balances at Beginning of
Contract Year 5 – After Automatic Reset). As a result, the Protected Payment Amount is equal to
$10,975 (5% of the reset Protected Payment Base).
Since withdrawals occurred during Contract Years 2, 3 and 4, no annual credit will be applied to
the Protected Payment Base and Remaining Protected Balance on any Contract Anniversary following
the withdrawal.
9
5% GUARANTEED WITHDRAWAL BENEFIT RIDER
SAMPLE CALCULATIONS
Example
#4 – Withdrawals Exceeding Protected Payment Amount.
The values shown below are based on the following assumptions:
•
Initial Purchase Payment = $100,000
•
Rider Effective Date = Contract Date
•
A subsequent Purchase Payment of $100,000 is received during Contract Year 1.
•
A withdrawal greater than the Protected Payment Amount is taken during Contract Years 2, 3 and 4.
•
Automatic resets at Beginning of Contract Years 3, 4 and 5.
Beginning
Protected
Protected
Remaining
of Contract
Purchase
Contract Value
Annual
Payment
Payment
Protected
Year
Payment
Withdrawal
after Activity
Credit
Base
Amount
Balance
1
$
100,000
$
100,000
$
0.00
$
100,000
$
5,000
$
100,000
Activity
$
100,000
$
200,000
$
200,000
$
10,000
$
200,000
2
$
207,000
$
12,000
$
212,000
$
10,600
$
212,000
Activity
$
15,000
$
206,490
$
197,000
$
0.00
$
197,000
3
(Prior to Automatic Reset)
$
206,490
$
0.00
$
197,000
$
9,850
$
197,000
3
(After Automatic Reset)
$
206,490
$
0.00
$
206,490
$
10,325
$
206,490
Activity
$
15,000
$
205,944
$
191,490
$
0.00
$
191,490
4
(Prior to Automatic Reset)
$
205,944
$
0.00
$
191,490
$
9,575
$
191,490
4
(After Automatic Reset)
$
205,944
$
0.00
$
205,944
$
10,297
$
205,944
Activity
$
15,000
$
205,360
$
190,944
$
0.00
$
190,944
5
(Prior to Automatic Reset)
$
205,360
$
0.00
$
190,944
$
9,547
$
190,944
5
(After Automatic Reset)
$
205,360
$
0.00
$
205,360
$
10,268
$
205,360
For an explanation of the values and activities at the start of and during Contract Year 1, refer
to Examples #1 and #2.
Because the $15,000 withdrawal during Contract Year 2 exceeds the Protected Payment Amount
immediately prior to the withdrawal ($15,000 > $10,600), the Protected Payment Base and
Remaining Protected Balance immediately after the withdrawal are adjusted to the lesser of:
(a)
the Contract Value immediately after the withdrawal ($206,490); or
(b)
the Remaining Protected Balance immediately prior to the withdrawal, less the
withdrawal amount ($212,000 – $15,000 = $197,000).
The Protected Payment Amount immediately after the withdrawal is equal to $0 (5% of the Protected
Payment Base after the withdrawal (5% of $197,000 = $9,850), less cumulative withdrawals during
that Contract Year ($15,000), but not less than zero).
Because at the Beginning of Contract Year 3, the Protected Payment Base was less than the Contract
Value on that Contract Anniversary (see balances at
Beginning of Contract Year 3 – Prior to
Automatic Reset), an automatic reset occurred which resets the Protected Payment Base and Remaining
Protected Balance to an amount equal to 100% of the Contract Value (see balances at Beginning of
Contract Year 3 – After Automatic Reset). As a result, the Protected Payment Amount is equal to
$10,325 (5% of the reset Protected Payment Base).
Because the $15,000 withdrawal during Contract Year 3 exceeds the Protected Payment Amount
immediately prior to the withdrawal ($15,000 > $10,325), the Protected Payment Base and
Remaining Protected Balance immediately after the withdrawal are adjusted to the lesser of:
(c)
the Contract Value immediately after the withdrawal ($205,944); or
(d)
the Remaining Protected Balance immediately prior to the withdrawal, less the
withdrawal amount ($206,490 – $15,000 = $191,490).
The Protected Payment Amount immediately after the withdrawal is equal to $0 (5% of the Protected
Payment Base after the withdrawal (5% of $191,490 = $9,575), less cumulative withdrawals during
that Contract Year ($15,000), but not less than zero).
Because at the Beginning of Contract Year 4, the Protected Payment Base was less than the Contract
Value on that Contract Anniversary (see balances at
Beginning of Contract Year 4 – Prior to
Automatic Reset), an automatic reset occurred which resets the Protected Payment Base and Remaining
Protected Balance to an amount equal to 100% of the Contract Value (see balances at Beginning of
Contract Year 4 – After Automatic Reset). As a result, the Protected Payment Amount is equal to
$10,297 (5% of the reset Protected Payment Base).
10
5% GUARANTEED WITHDRAWAL BENEFIT RIDER
SAMPLE CALCULATIONS
Example
#4 – Withdrawals Exceeding Protected Payment Amount (continued)
Because the $15,000 withdrawal during Contract Year 4 exceeds the Protected Payment Amount
immediately prior to the withdrawal ($15,000 > $10,297), the Protected Payment Base and
Remaining Protected Balance immediately after the withdrawal are adjusted to the lesser of:
(e)
the Contract Value immediately after the withdrawal ($205,360); or
(f)
the Remaining Protected Balance immediately prior to the withdrawal, less the
withdrawal amount ($205,944 – $15,000 = $190,944).
The Protected Payment Amount immediately after the withdrawal is equal to $0 (5% of the Protected
Payment Base after the withdrawal (5% of $191,490 = $9,547), less cumulative withdrawals during
that Contract Year ($15,000), but not less than zero).
Because at the Beginning of Contract Year 5, the Protected Payment Base was less than the Contract
Value on that Contract Anniversary (see balances at
Beginning of Contract Year 5 – Prior to
Automatic Reset), an automatic reset occurred which resets the Protected Payment Base and Remaining
Protected Balance to an amount equal to 100% of the Contract Value (see balances at Beginning of
Contract Year 5 – After Automatic Reset). As a result, the Protected Payment Amount is equal to
$10,268 (5% of the reset Protected Payment Base).
Since withdrawals occurred during Contract Years 2, 3 and 4, no annual credit will be applied to
the Protected Payment Base and Remaining Protected Balance on any Contract Anniversary following
the withdrawal.
11
5% GUARANTEED WITHDRAWAL BENEFIT RIDER
SAMPLE CALCULATIONS
Example
#5 – Lifetime Income
The values shown below are based on the following assumptions:
•
Initial Purchase Payment = $100,000
•
Rider Effective Date = Contract Date
•
No subsequent Purchase Payments are received.
•
Owner is age 591/2 or older when the first withdrawal was taken
•
Withdrawals, each equal to 5% of the Protected Payment Base are taken each Contract Year.
•
No automatic reset or Owner-elected reset is assumed during the life of the Rider.
Contract
End of Year
Annual
Protected
Protected
Remaining
Year
Withdrawal
Contract Value
Credit
Payment Base
Payment Amount
Protected Balance
1
$
5,000
$
96,489
$
0
$
100,000
$
5,000
$
95,000
2
$
5,000
$
94,384
$
0
$
100,000
$
5,000
$
90,000
3
$
5,000
$
92,215
$
0
$
100,000
$
5,000
$
85,000
4
$
5,000
$
89,982
$
0
$
100,000
$
5,000
$
80,000
5
$
5,000
$
87,681
$
0
$
100,000
$
5,000
$
75,000
6
$
5,000
$
85,311
$
0
$
100,000
$
5,000
$
70,000
7
$
5,000
$
82,871
$
0
$
100,000
$
5,000
$
65,000
8
$
5,000
$
80,357
$
0
$
100,000
$
5,000
$
60,000
9
$
5,000
$
77,768
$
0
$
100,000
$
5,000
$
55,000
10
$
5,000
$
75,101
$
0
$
100,000
$
5,000
$
50,000
11
$
5,000
$
72,354
$
0
$
100,000
$
5,000
$
45,000
12
$
5,000
$
69,524
$
0
$
100,000
$
5,000
$
40,000
13
$
5,000
$
66,610
$
0
$
100,000
$
5,000
$
35,000
14
$
5,000
$
63,608
$
0
$
100,000
$
5,000
$
30,000
15
$
5,000
$
60,517
$
0
$
100,000
$
5,000
$
25,000
16
$
5,000
$
57,332
$
0
$
100,000
$
5,000
$
20,000
17
$
5,000
$
54,052
$
0
$
100,000
$
5,000
$
15,000
18
$
5,000
$
50,674
$
0
$
100,000
$
5,000
$
10,000
19
$
5,000
$
47,194
$
0
$
100,000
$
5,000
$
5,000
20
$
5,000
$
43,610
$
0
$
100,000
$
5,000
$
0
21
$
5,000
$
39,918
$
0
$
100,000
$
5,000
$
0
22
$
5,000
$
36,115
$
0
$
100,000
$
5,000
$
0
23
$
5,000
$
32,199
$
0
$
100,000
$
5,000
$
0
24
$
5,000
$
28,165
$
0
$
100,000
$
5,000
$
0
25
$
5,000
$
24,010
$
0
$
100,000
$
5,000
$
0
26
$
5,000
$
19,730
$
0
$
100,000
$
5,000
$
0
27
$
5,000
$
15,322
$
0
$
100,000
$
5,000
$
0
28
$
5,000
$
10,782
$
0
$
100,000
$
5,000
$
0
29
$
5,000
$
6,105
$
0
$
100,000
$
5,000
$
0
30
$
5,000
$
1,288
$
0
$
100,000
$
5,000
$
0
31
$
5,000
$
0
$
0
$
100,000
$
5,000
$
0
32
$
5,000
$
0
$
0
$
100,000
$
5,000
$
0
33
$
5,000
$
0
$
0
$
100,000
$
5,000
$
0
34
$
5,000
$
0
$
0
$
100,000
$
5,000
$
0
On the Rider Effective Date, the initial values are set as follows:
•
Protected Payment Base = Initial Purchase Payment = $100,000
Protected Payment Amount = 5% of Protected Payment Base = $5,000
12
5% GUARANTEED WITHDRAWAL BENEFIT RIDER
SAMPLE CALCULATIONS
Example
#5 – Lifetime Income (continued)
Because the amount of each withdrawal does not exceed the Protected Payment Amount immediately
prior to the withdrawal ($5,000): (a) the Protected Payment Base remains unchanged; and (b) the
Remaining Protected Balance is reduced by the amount of each withdrawal.
Since a withdrawal occurred during Contract Year 1, no annual credit will be applied to the
Protected Payment Base and Remaining Protected Balance on any Contract Anniversary following the
withdrawal.
Since it was assumed that the Owner was age 591/2 or older when the first withdrawal was taken,
withdrawals of 5% of the Protected Payment Base will continue to be paid each year (even after the
Contract Value and Remaining Protected Balance have been reduced to zero) until the day of the
first death of an Owner or the date of death of the sole surviving Annuitant, whichever occurs
first.
