0000950123-11-051518.txt : 20110825
0000950123-11-051518.hdr.sgml : 20110825
20110518110650
ACCESSION NUMBER: 0000950123-11-051518
CONFORMED SUBMISSION TYPE: N-4/A
PUBLIC DOCUMENT COUNT: 5
FILED AS OF DATE: 20110518
DATE AS OF CHANGE: 20110610
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: JOHN HANCOCK LIFE INSURANCE CO OF NEW YORK SEPARATE ACCOUNT A
CENTRAL INDEX KEY: 0000884525
IRS NUMBER: 000000000
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: N-4/A
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-172474
FILM NUMBER: 11853800
BUSINESS ADDRESS:
STREET 1: 100 SUMMIT LAKE DRIVE
STREET 2: SECOND FLOOR
CITY: VALHALLA
STATE: NY
ZIP: 10595
BUSINESS PHONE: 6172666008
MAIL ADDRESS:
STREET 1: 100 SUMMIT LAKE DRIVE
STREET 2: SECOND FLOOR
CITY: VAHALLA
STATE: NY
ZIP: 10595
FORMER COMPANY:
FORMER CONFORMED NAME: JOHN HANCOCK INSURANCE CO OF NEW YORK SEPARATE ACCOUNT A
DATE OF NAME CHANGE: 20050103
FORMER COMPANY:
FORMER CONFORMED NAME: MANUFACTURERS LIFE INSURANCE CO OF NEW YORK SEP ACCOUNT A
DATE OF NAME CHANGE: 19971022
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: JOHN HANCOCK LIFE INSURANCE CO OF NEW YORK SEPARATE ACCOUNT A
CENTRAL INDEX KEY: 0000884525
IRS NUMBER: 000000000
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: N-4/A
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-06584
FILM NUMBER: 11853801
BUSINESS ADDRESS:
STREET 1: 100 SUMMIT LAKE DRIVE
STREET 2: SECOND FLOOR
CITY: VALHALLA
STATE: NY
ZIP: 10595
BUSINESS PHONE: 6172666008
MAIL ADDRESS:
STREET 1: 100 SUMMIT LAKE DRIVE
STREET 2: SECOND FLOOR
CITY: VAHALLA
STATE: NY
ZIP: 10595
FORMER COMPANY:
FORMER CONFORMED NAME: JOHN HANCOCK INSURANCE CO OF NEW YORK SEPARATE ACCOUNT A
DATE OF NAME CHANGE: 20050103
FORMER COMPANY:
FORMER CONFORMED NAME: MANUFACTURERS LIFE INSURANCE CO OF NEW YORK SEP ACCOUNT A
DATE OF NAME CHANGE: 19971022
0000884525
S000002860
JOHN HANCOCK LIFE INSURANCE CO OF NEW YORK SEPARATE ACCOUNT A
C000100452
Venture 4 Series Variable Annuity
N-4/A
1
b86614a1nv4za.txt
JHLICO OF NY SEPARATE ACCOUNT A
As filed with the Securities and Exchange Commission on May 17, 2011
Registration No. 333-172474
811-6584
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. 2
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 168
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A
(formerly, The Manufacturers Life Insurance Company of New York
Separate Account A)
(Exact name of Registrant)
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
(formerly, The Manufacturers Life Insurance Company of New York)
(Name of Depositor)
100 Summit Lake Drive, Second Floor
Valhalla, New York 10595
(Address of Depositor's Principal Executive Offices)
(914) 773-0708
(Depositor's Telephone Number Including Area Code)
Thomas J. Loftus, Esquire
John Hancock Life Insurance Company of New York
601 Congress Street
Boston, MA 02210-2805
(Name and Address of Agent for Service)
Copy to:
Approximate Date of Proposed Public Offering: June 1, 2011
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that the Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Title of Securities Being Registered: Variable Annuity Insurance Contracts
PART A
INFORMATION REQUIRED IN A PROSPECTUS
[JOHN HANCOCK LOGO]
the future is yours(R)
-----------------------------------------------
Venture(R) 4 Series Variable Annuity Prospectus
-----------------------------------------------
June 1, 2011
This Prospectus describes interests in VENTURE(R) 4 SERIES flexible Purchase
Payment deferred Variable Annuity contracts (singly, a "Contract" and
collectively, the "Contracts") issued by JOHN HANCOCK LIFE INSURANCE COMPANY
(U.S.A.) ("John Hancock USA") in all jurisdictions except New York, or by JOHN
HANCOCK LIFE INSURANCE COMPANY OF NEW YORK ("John Hancock New York") in New
York. Unless otherwise specified, "we," "us," "our," or a "Company" refers to
the applicable issuing company of a Contract. You, the Contract Owner, should
refer to the first page of your Venture(R) 4 Series Variable Annuity Contract
for the name of your issuing Company.
VARIABLE INVESTMENT OPTIONS. We measure Contract Value and Variable Annuity
payments according to the investment performance of Variable Investment Options
under the Contracts. We hold the assets for each Variable Investment Option in a
corresponding Subaccount of JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
SEPARATE ACCOUNT H or, in the case of John Hancock New York, a corresponding
Subaccount of JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A
(singly, a "Separate Account" and collectively, the "Separate Accounts"). Each
Subaccount, in turn, invests in a Portfolio of the John Hancock Variable
Insurance Trust. John Hancock Investment Management Services, LLC ("JHIMS LLC"),
an affiliate of ours, is the investment adviser to the John Hancock Variable
Insurance Trust.
On the date of this Prospectus, each of the Subaccounts that we make available
for the Contracts invests in one of the following Portfolios (We show the
Portfolio's manager (i.e., a subadviser) in bold above the names of the
Portfolios):
CONTRACTS WITH INCOME PLUS FOR LIFE 6.11 SERIES RIDERS
JOHN HANCOCK ASSET MANAGEMENT (NORTH AMERICA) &
JOHN HANCOCK ASSET MANAGEMENT(2)
Bond PS Series(1)
Lifestyle Balanced PS Series
Lifestyle Conservative PS Series
Lifestyle Growth PS Series
Lifestyle Moderate PS Series
JOHN HANCOCK ASSET MANAGEMENT
Ultra Short Term Bond Trust
CONTRACTS WITHOUT INCOME PLUS FOR LIFE 6.11 SERIES RIDERS
JOHN HANCOCK ASSET MANAGEMENT (NORTH AMERICA) &
JOHN HANCOCK ASSET MANAGEMENT(2)
Lifestyle Balanced Trust
Lifestyle Conservative Trust
Lifestyle Growth Trust
Lifestyle Moderate Trust
JOHN HANCOCK ASSET MANAGEMENT
Ultra Short Term Bond Trust
----------
(1) You cannot directly allocate Purchase Payments or Contract Value to the
Bond PS Subaccount. We may make automatic transfers of Contract Value to
and from the Bond PS Subaccount if you purchase a Contract with one of the
optional Income Plus for Life 6.11 Series Riders (the "IPFL 6.11 Series
Riders") we offer, as determined by the Portfolio Stabilization Process
that we use in connection with those Riders. We describe the process and
the automatic transfers in this Prospectus under "Features of the IPFL
6.11 Series Riders."
(2) John Hancock Asset Management (North America) is a division of Manulife
Asset Management Limited and John Hancock Asset Management is a division
of Manulife Asset Management (US) LLC.
CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED, GUARANTEED OR ENDORSED
BY, ANY BANK, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT
FOR FUTURE REFERENCE. IT CONTAINS INFORMATION ABOUT THE SEPARATE ACCOUNTS AND
THE VARIABLE INVESTMENT OPTIONS THAT YOU SHOULD KNOW BEFORE INVESTING. THE
CONTRACTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION ("SEC"). NEITHER THE SEC NOR ANY STATE HAS DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Venture(R) 4 Series
JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
JOHN HANCOCK ANNUITIES SERVICE CENTER MAILING ADDRESS
164 Corporate Drive Post Office Box 9505
Portsmouth, NH 03801-6815 Portsmouth, NH 03802-9505
(800) 344-1029 www.jhannuities.com
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
JOHN HANCOCK ANNUITIES SERVICE CENTER MAILING ADDRESS
164 Corporate Drive Post Office Box 9506
Portsmouth, NH 03801-6815 Portsmouth, NH 03802-9506
(800) 551-2078 www.jhannuitiesnewyork.com
Venture 2009
ii
Table of Contents
I. GLOSSARY ................................................................................................ 1
GENERAL TERMS ............................................................................................ 1
SPECIAL TERMS USED WITH OUR INCOME PLUS FOR LIFE 6.11 SERIES RIDERS ...................................... 3
II. OVERVIEW ............................................................................................... 5
III. FEE TABLES ............................................................................................ 11
EXAMPLES ................................................................................................. 13
IV. GENERAL INFORMATION ABOUT US, THE SEPARATE ACCOUNTS AND THE PORTFOLIOS ................................. 15
THE COMPANIES ............................................................................................ 15
THE SEPARATE ACCOUNTS .................................................................................... 15
THE PORTFOLIOS ........................................................................................... 16
VOTING INTEREST .......................................................................................... 19
V. DESCRIPTION OF THE CONTRACT ............................................................................. 20
ELIGIBLE PLANS ........................................................................................... 20
ACCUMULATION PERIOD PROVISIONS ........................................................................... 20
Purchase Payments ...................................................................................... 20
Accumulation Units ..................................................................................... 21
Value of Accumulation Units ............................................................................ 21
Net Investment Factor .................................................................................. 22
Transfers You May Make Among Investment Options ........................................................ 22
Automatic Transfers Under IPFL 6.11 Series Riders ...................................................... 23
Telephone and Electronic Transactions .................................................................. 23
Special Transfer Services -- Dollar Cost Averaging ..................................................... 24
Special Transfer Services -- Asset Rebalancing Program ................................................. 24
Withdrawals ............................................................................................ 25
Signature Guarantee Requirements for Surrenders and Withdrawals ........................................ 26
Special Withdrawal Services -- The Income Plan ......................................................... 26
Special Withdrawal Services -- The Income Made Easy Program ............................................ 26
Death Benefit During Accumulation Period ............................................................... 26
PAY-OUT PERIOD PROVISIONS ................................................................................ 28
General ................................................................................................ 28
Annuity Options ........................................................................................ 29
Determination of Amount of the First Variable Annuity Payment .......................................... 31
Annuity Units and the Determination of Subsequent Variable Annuity Payments ............................ 31
Transfers During Pay-out Period ........................................................................ 32
Death Benefit During Pay-out Period .................................................................... 32
OTHER CONTRACT PROVISIONS ................................................................................ 32
Right to Review ........................................................................................ 32
Ownership .............................................................................................. 33
Annuitant .............................................................................................. 33
Beneficiary ............................................................................................ 33
Spouse ................................................................................................. 34
Modification ........................................................................................... 34
Code Section 72(s) ..................................................................................... 34
Our Approval ........................................................................................... 34
Misstatement and Proof of Age or Survival .............................................................. 34
VI. OPTIONAL BENEFITS ...................................................................................... 35
FEATURES OF THE IPFL 6.11 SERIES RIDERS .................................................................. 35
Rider Fee .............................................................................................. 36
Restrictions on Additional Purchase Payments ........................................................... 36
IPFL 6.11 Series Riders Benefits ....................................................................... 37
Variable Investment Options and Automatic Transfers of Contract Value Under
an IPFL 6.11 Series Rider ............................................................................. 38
Other Investment Limitations Under an IPFL 6.11 Series Rider ........................................... 44
Increases in Guaranteed Amounts ........................................................................ 44
Withdrawals, Distributions and Settlements ............................................................. 46
Additional Annuity Options ............................................................................. 49
Comparison between Guaranteed Minimum Withdrawal Benefits and Annuity Payments ......................... 50
Impact of Death Benefits ............................................................................... 50
Tax Considerations ..................................................................................... 52
ANNUAL STEP-UP DEATH BENEFIT ............................................................................. 52
VII. CHARGES AND DEDUCTIONS ................................................................................ 54
WITHDRAWAL CHARGES ....................................................................................... 54
Waiver of Applicable Withdrawal Charge -- Confinement to Eligible Nursing Home ......................... 55
ANNUAL CONTRACT FEE ...................................................................................... 55
ASSET-BASED CHARGES ...................................................................................... 56
Administration Fee ..................................................................................... 56
Mortality and Expense Risks Fee ........................................................................ 56
Distribution Fee ....................................................................................... 56
REDUCTION OR ELIMINATION OF CHARGES AND DEDUCTIONS ....................................................... 56
PREMIUM TAXES ............................................................................................ 57
VIII. FEDERAL TAX MATTERS .................................................................................. 58
INTRODUCTION ............................................................................................. 58
OUR TAX STATUS ........................................................................................... 58
SPECIAL CONSIDERATIONS FOR OPTIONAL BENEFITS ............................................................. 58
NONQUALIFIED CONTRACTS ................................................................................... 59
Aggregation of Contracts ............................................................................... 59
Exchanges of Annuity Contracts ......................................................................... 59
Loss of Interest Deduction Where Contracts are Held by or for the Benefit of
Certain Non-Natural Persons ........................................................................... 59
Undistributed Gains .................................................................................... 59
Taxation of Annuity Payments ........................................................................... 60
Surrenders, Withdrawals and Death Benefits ............................................................. 60
Taxation of Death Benefit Proceeds ..................................................................... 60
Penalty Tax on Premature Distributions ................................................................. 61
Diversification Requirements ........................................................................... 61
Puerto Rico Nonqualified Contracts ..................................................................... 62
QUALIFIED CONTRACTS ...................................................................................... 62
Required Minimum Distributions ......................................................................... 62
Penalty Tax on Premature Distributions ................................................................. 63
Rollovers and Transfers ................................................................................ 63
Section 403(b) Qualified Plans ......................................................................... 65
Puerto Rico Contracts Issued to Fund Retirement Plans .................................................. 65
Designated Roth Accounts within Qualified Plans ........................................................ 65
IX. GENERAL MATTERS ........................................................................................ 66
ASSET ALLOCATION SERVICES ................................................................................ 66
DISTRIBUTION OF CONTRACTS ................................................................................ 66
Standard Compensation .................................................................................. 66
Revenue Sharing and Additional Compensation ............................................................ 66
Differential Compensation .............................................................................. 67
TRANSACTION CONFIRMATIONS ................................................................................ 67
REINSURANCE ARRANGEMENTS ................................................................................. 67
STATEMENTS OF ADDITIONAL INFORMATION ..................................................................... 67
APPENDIX A: EXAMPLES OF CALCULATION OF WITHDRAWAL CHARGE ................................................... A-1
APPENDIX B: QUALIFIED PLAN TYPES ........................................................................... B-1
Venture 2009
I. Glossary
GENERAL TERMS
In the following section, we define terms that we use throughout this
Prospectus. After that, we define terms contained in this Prospectus that we use
to describe our Income Plus for Life 6.11 Series Riders. We also define other
terms in specific sections of this Prospectus.
ACCUMULATION PERIOD: The period between the issue date of the Contract and the
Annuity Commencement Date.
ADDITIONAL PURCHASE PAYMENT: Any Purchase Payment made after the initial
Purchase Payment.
ANNIVERSARY VALUE: A term used with our optional Annual Step-Up Death Benefit
Rider that describes one of the values we use to determine the death benefit.
(See "VI. Optional Benefits -- Annual Step-Up Death Benefit.")
ANNUITANT: Any natural person or persons to whom annuity payments are made and
whose life is used to determine the duration of annuity payments involving life
contingencies. If the Contract Owner names more than one person as an Annuitant,
the second person named is referred to as "co-Annuitant." The Annuitant and
co-Annuitant are referred to collectively as "Annuitant." The Annuitant is as
designated on the Contract specification page or in the application, unless
changed. The Annuitant becomes the Owner of the Contract during the Pay-out
Period, unless the Owner is a trust or a custodian.
ANNUITIES SERVICE CENTER: The mailing address of our service office is listed on
page ii of this Prospectus. You can send overnight mail to us at the street
address of the service office, 164 Corporate Drive, Portsmouth, New Hampshire
03801-6815.
ANNUITY COMMENCEMENT DATE: The date we/you annuitize your Contract. That is, the
Pay-out Period commences and we begin to make annuity payments to the Annuitant.
You can change the Annuity Commencement Date to any date at least six months
(for John Hancock USA Contracts) or one year (for John Hancock New York
Contracts) after the Contract Date, and prior to the Maturity Date.
ANNUITY OPTION: The method selected by the Contract Owner (or as specified in
the Contract if no selection is made) for annuity payments made by us.
ANNUITY UNIT: A unit of measure that is used after the election of an Annuity
Option to calculate Variable Annuity payments.
ASSET ALLOCATION SERVICES: Programs offered by third parties in connection with
the Contracts through which the third party may transfer amounts among
Investment Options from time to time on your behalf.
BENEFICIARY: The person, persons or entity entitled to the death benefit under
the Contract upon the death of a Contract Owner or, in certain circumstances, an
Annuitant. The Beneficiary is as specified in the application, unless changed.
BUSINESS DAY: Any day on which the New York Stock Exchange is open for business.
The end of a Business Day is the close of daytime trading of the New York Stock
Exchange, which generally is 4:00 p.m. Eastern Time.
CODE: The Internal Revenue Code of 1986, as amended.
COMMUTED VALUE: The present value of any remaining guaranteed annuity payments
under your Contract, determined on the day we receive your written request for
surrender. See "Full Surrenders During the Pay-out Period" in "V. Description of
the Contract-Pay-Out Period Provisions."
COMPANY: John Hancock USA or John Hancock New York, as applicable.
CONTINGENT BENEFICIARY: The person, persons or entity to become the Beneficiary
if the Beneficiary is not alive. The Contingent Beneficiary is as specified in
the application, unless changed.
CONTRACT: The Variable Annuity contract offered by this Prospectus.
CONTRACT ANNIVERSARY: The day in each calendar year after the Contract Date that
is the same month and day as the Contract Date.
CONTRACT DATE: The date of issue of the Contract.
CONTRACT VALUE: The total of the Investment Account values attributable to the
Contract.
1
CONTRACT YEAR: A period of twelve consecutive months beginning on the date as of
which the Contract is issued, or any anniversary of that date.
FIXED ANNUITY: An Annuity Option with payments for a set dollar amount that we
guarantee.
GENERAL ACCOUNT: All of a Company's assets, other than assets in its Separate
Account and any other separate accounts it may maintain.
GOOD ORDER: The standard that we apply when we determine whether an instruction
is satisfactory. An instruction will be considered in Good Order if it is
received at our Annuities Service Center: (a) in a manner that is satisfactory
to us such that it is sufficiently complete and clear that we do not need to
exercise any discretion to follow such instruction and it complies with all
relevant laws and regulations and Company requirements; (b) on specific forms,
or by other means we then permit (such as via telephone or electronic
submission); and/or (c) with any signatures and dates we may require. We will
notify you if an instruction is not in Good Order.
INVESTMENT ACCOUNT: An account we establish for you which represents your
interests in an Investment Option during the Accumulation Period.
INVESTMENT OPTIONS: The investment choices available to Contract Owners.
JOHN HANCOCK NEW YORK: John Hancock Life Insurance Company of New York.
JOHN HANCOCK USA: John Hancock Life Insurance Company (U.S.A.).
MATURITY DATE: The latest allowable Annuity Commencement Date under your
Contract. That is, the last date (unless we consent to a later date) on which
the Pay-out Period commences and we begin to make annuity payments to the
Annuitant. The Maturity Date is the date specified on the Contract
specifications page, unless changed with our consent.
NONQUALIFIED CONTRACT: A Contract which is not issued under a Qualified Plan.
OWNER OR CONTRACT OWNER ("YOU"): The person, persons (co-Owner) or entity
entitled to all of the ownership rights under the Contract. References in this
Prospectus to Contract Owners are typically by use of "you." The Owner has the
legal right to make all changes in contractual designations where specifically
permitted by the Contract. The Owner is as specified in the application, unless
changed. The Annuitant becomes the Owner of the Contract during the Pay-out
Period, unless the Owner is a trust or a custodian.
PAY-OUT PERIOD: The period when we make annuity payments to you following the
Annuity Commencement Date.
PORTFOLIO: A series of a registered open-end management investment company which
corresponds to a Variable Investment Option.
PROSPECTUS: This prospectus that describes interests in the Contract.
PURCHASE PAYMENT: An amount you pay to us for the benefits provided by the
Contract.
QUALIFIED CONTRACT: A Contract issued under a Qualified Plan.
QUALIFIED PLAN: A retirement plan that receives favorable tax treatment under
section 401, 403, 408 (IRAs), 408A (Roth IRAs) or 457 of the Code.
RIDER: An optional benefit that you may elect for an additional charge.
SEPARATE ACCOUNT: John Hancock Life Insurance Company (U.S.A.) Separate Account
H or John Hancock Life Insurance Company of New York Separate Account A, as
applicable. A separate account is a segregated asset account of a Company that
is not commingled with the general assets and obligations of the Company.
SUBACCOUNT: A separate division of the applicable Separate Account.
UNLIQUIDATED PURCHASE PAYMENTS: The amount of all Purchase Payments in the
Contract net of any withdrawals in excess of earnings that have been taken to
date.
VARIABLE ANNUITY: An Annuity Option with payments which: (1) are not
predetermined or guaranteed as to dollar amount; and (2) vary in relation to the
investment experience of one or more specified Subaccounts.
2
VARIABLE INVESTMENT OPTIONS: The variable investment choices available to
Contract Owners, and the Bond PS Subaccount that we use for automatic transfers
of Contract Value to or from other Variable Investment Options under the
Portfolio Stabilization Process.
WITHDRAWAL AMOUNT: The total amount taken from your Contract Value, including
any applicable withdrawal charge, tax and proportional share of administrative
fee, to process a withdrawal.
SPECIAL TERMS USED WITH OUR INCOME PLUS FOR LIFE 6.11 SERIES RIDERS
In the following section, we define terms used in this Prospectus in connection
with our Income Plus for Life 6.11 Series Riders. Please see "VI. Optional
Benefits" for more details about these Riders.
ADJUSTED BENEFIT BASE: The Riders' Benefit Base immediately after we adjust it
during a Contract Year to reflect the value of Additional Purchase Payments that
we add to the Benefit Base.
AGE 65 CONTRACT ANNIVERSARY: The Contract Anniversary on, or next following, the
date the Covered Person (oldest Covered Person under an Income Plus for Life --
Joint Life 6.11 Rider) attains age 65.
AGE 95 CONTRACT ANNIVERSARY: The Contract Anniversary on, or next following, the
date the Covered Person (oldest Covered Person under an Income Plus for Life --
Joint Life 6.11 Rider) attains age 95.
ASSUMED EQUITY ALLOCATION FACTOR OR AEAF: An assumed equity factor assigned to
each of the Lifestyle PS Subaccounts under the Portfolio Stabilization Process
that does not change. The Portfolio Stabilization Process also determines a
dollar-weighted AEAF on a periodic basis based on your current Contract Value in
the Lifestyle PS Subaccounts.
BENEFIT BASE: The value we use to determine guaranteed annual withdrawal amounts
under the Riders.
BENEFIT RATE: The rate we use to determine guaranteed annual withdrawal amounts
under the Riders.
COVERED PERSON(s): The individual (or two individuals under an Income Plus for
Life -- Joint Life 6.11 Rider) whose lifetime(s) we use to determine the
duration of any guaranteed lifetime withdrawal amounts under the Rider. The
Covered Person(s) must be the Annuitant (or Co-Annuitants) under the Contract.
CREDIT: A potential way to increase guaranteed annual withdrawal amounts under
the Riders. A Credit, if applicable, will increase the Benefit Base if you defer
taking withdrawals during one or more Credit Periods.
CREDIT PERIOD: The period of time we use to measure the availability of Credits.
CREDIT RATE: The rate we use to determine a Credit, if any, under the Riders.
The Credit Rate is based on the Covered Person's (youngest Covered Person's
under an Income Plus For Life -- Joint Life 6.11 Rider) age on each Contract
Anniversary.
EXCESS WITHDRAWAL: A withdrawal that exceeds certain limits under the Income
Plus For Life 6.11 Series Riders.
INCOME PLUS FOR LIFE 6.11 RIDER: A guaranteed minimum withdrawal benefit Rider
that provides guaranteed withdrawal amounts based on the lifetime of a single
Covered Person. We also may refer to this Rider as the "IPFL 6.11 RIDER."
INCOME PLUS FOR LIFE -- JOINT LIFE 6.11 RIDER: A guaranteed minimum withdrawal
benefit Rider that provides guaranteed withdrawal amounts based on the lifetime
of two Covered Persons. We also may refer to this Rider as the "IPFL -- JOINT
LIFE 6.11 RIDER."
INCOME PLUS FOR LIFE 6.11 SERIES RIDERS: Both Income Plus For Life 6.11 Riders
-- i.e., Income Plus For Life 6.11 and Income Plus For Life -- Joint Life 6.11.
We also may refer to these Riders as the "IPFL 6.11 SERIES RIDERS."
LIFETIME INCOME AMOUNT: The annual guaranteed withdrawal amounts under the
Riders.
LIFETIME INCOME DATE: The date on which the Lifetime Income Amount guarantee
begins.
LIFESTYLE PS SUBACCOUNTS: The Subaccounts that invest in a specific Lifestyle PS
Series Portfolio of the John Hancock Variable Insurance Trust: Lifestyle
Balanced PS Subaccount, Lifestyle Conservative PS Subaccount, Lifestyle Growth
PS Subaccount and Lifestyle Moderate PS Subaccount. We make the Lifestyle PS
Subaccounts available under a Contract with an IPFL 6.11 Series Rider.
3
MONTHLY ANNIVERSARY: The day in each calendar month that is the same day of the
month as the Contract Date. If that day is not a Business Day, the Monthly
Anniversary will be the next Business Day. If the Monthly Anniversary is on the
29th, 30th or 31st, then for any month that does not include those dates, the
Monthly Anniversary will be the first Business Day of the following month.
PORTFOLIO STABILIZATION PROCESS: A non-discretionary, systematic mathematical
process we use each Business Day to monitor the Contract Value under a Contract
with an IPFL 6.11 Series Rider. The Portfolio Stabilization Process determines
the amount of Contract Value, if any, that we will automatically transfer
between the Lifestyle PS Subaccounts and the Bond PS Subaccount at the end of a
Business Day.
REFERENCE VALUE: A value that the Portfolio Stabilization Process uses each
Business Day to compare against your Contract Value. The Reference Value is
based on your initial Contract Value, and is adjusted each Business Day to
reflect Additional Purchase Payments and Excess Withdrawals. We adjust the
Reference Value on each Monthly Anniversary to reflect the current Contract
Value if that amount is greater than the most recently determined Reference
Value. THE REFERENCE VALUE HAS NO CASH VALUE, AND YOU CANNOT WITHDRAW IT. IT IS
NOT DESIGNED TO EQUAL THE BENEFIT BASE OR THE LIFETIME INCOME AMOUNT.
REFERENCE VALUE RATIO or RV RATIO: The Contract Value on any Business Day
divided by the current Reference Value.
SETTLEMENT PHASE: The period when your Contract Value is less than the Lifetime
Income Amount and we automatically begin making payments to you under the Rider,
subject to the conditions described in the Rider. During the Settlement Phase,
the Contract continues but all other rights and benefits under the Contract,
including death benefits and any additional Riders, terminate.
STEP-UP: A potential way to increase guaranteed annual withdrawal amounts under
the Riders. A Step-Up, if applicable, will increase the Benefit Base to reflect
favorable investment performance, if any, on Contract Anniversaries before and
after the Lifetime Income Date, up to and including the Age 95 Contract
Anniversary.
STEP-UP DATE: A date on which we determine whether a Step-Up could occur.
TARGET BOND PS SUBACCOUNT ALLOCATION: The target amount required to be
maintained in the Bond PS Subaccount, before adjustment to reflect Contract
Value allocated to the Ultra Short Term Bond Subaccount.
4
II. Overview
This overview tells you some key points you should know about the Contract.
Because this is an overview, it does not contain all the information that may be
important to you. You should read carefully this entire Prospectus, including
its Appendices, and the Statement of Additional Information ("SAI") for more
detailed information.
We disclose all material features and benefits of the Contracts in this
Prospectus. Insurance laws and regulations apply to us in every state in which
our Contracts are sold. As a result, a Contract purchased in one state may have
terms and conditions that vary from the terms and conditions of a Contract
purchased in a different jurisdiction. We disclose all material variations in
this Prospectus.
WHAT KIND OF CONTRACT IS DESCRIBED IN THIS PROSPECTUS?
The Contract is a flexible Purchase Payment deferred Variable Annuity Contract
between you and a Company. "Deferred" means payments by a Company begin on a
future date under the Contract. "Variable" means amounts in the Contract may
increase or decrease in value daily based upon your Contract's Variable
Investment Options. The Contract provides for the accumulation of these
investment amounts and the payment of annuity benefits on a variable and/or
fixed basis.
WHO IS ISSUING MY CONTRACT?
Your Contract provides the name of the Company that issues your Contract. In
general, John Hancock USA may issue the Contract in any jurisdiction except New
York. John Hancock New York issues the Contract only in New York. Each Company
sponsors its own Separate Account.
WHAT ARE SOME BENEFITS OF THE CONTRACT?
The Contract offers access to Variable Investment Options, tax-deferred
treatment of earnings during the Accumulation Period, and the ability to receive
annuity payments at a future date. We will pay a death benefit to your
Beneficiary if you die during the Accumulation Period, which is described in
this Prospectus under "Death Benefit During Accumulation Period."
We offer a variety of Fixed Annuity and Variable Annuity payment options.
Periodic annuity payments will begin on the Annuity Commencement Date. You
select the Annuity Commencement Date, the frequency of payment and the type of
annuity payment option. Annuity payments are made to the Annuitant, unless the
Owner is a trust or custodian. We provide more information about payout benefits
in "V. Description of the Contract -- Pay-Out Period Provisions."
In most cases, no income tax will have to be paid on your earnings under the
Contract until these earnings are paid out. WHEN YOU PURCHASE A CONTRACT FOR ANY
QUALIFIED PLAN, THE CONTRACT DOES NOT PROVIDE ANY ADDITIONAL TAX-DEFERRED
TREATMENT OF EARNINGS BEYOND THE TREATMENT PROVIDED BY THE PLAN. CONSEQUENTLY,
YOU SHOULD PURCHASE A CONTRACT FOR A QUALIFIED PLAN ONLY ON THE BASIS OF OTHER
BENEFITS OFFERED BY THE CONTRACT. THESE BENEFITS MAY INCLUDE LIFETIME INCOME
PAYMENTS AND PROTECTION THROUGH LIVING AND DEATH BENEFITS.
You may elect to purchase additional benefit options when you purchase a
Contract. The Contract offers an optional death benefit called the "Annual
Step-Up Death Benefit" and optional guaranteed minimum withdrawal benefits
called the "Income Plus For Life 6.11 Series Riders," each for an additional
fee. We provide more information about these benefits under "VI. Optional
Benefits."
HOW DOES THE CONTRACT WORK?
Under the Contract, you make one or more Purchase Payments to a Company for a
period of time, known as the Accumulation Period. During the Accumulation
Period, your Purchase Payments will be allocated to Investment Options. You may
transfer among the Investment Options and take withdrawals. Later, beginning on
the Annuity Commencement Date, that Company makes one or more annuity payments
under the Contract for a period of time, known as the Pay-out Period. Your
Contract Value during the Accumulation Period is variable, and the amounts of
annuity payments during the Pay-out Period may either be variable or fixed,
depending upon your choice.
5
HOW CAN I INVEST MONEY IN THE CONTRACT?
We use the term Purchase Payment to refer to the investments you make in the
Contract. The table below shows the required minimum amount for the initial
Purchase Payment. The table also shows the required minimum amount for
Additional Purchase Payments.
MINIMUM INITIAL MINIMUM ADDITIONAL
PURCHASE PAYMENT PURCHASE PAYMENT
$10,000 $30
Generally, you may make Additional Purchase Payments at any time, subject to the
following limits. You must obtain our approval to make a Purchase Payment if it
would cause your contract values in this Contract plus any other variable
annuity contracts with the same Owner or Annuitant, issued by us or our
affiliates (your "total contract values"), to exceed $1 million, or if your
total contract values already exceed $1 million. Additionally, we reserve the
right to limit or refuse any Additional Purchase Payments after the first
Contract Year. We impose additional restrictions on Purchase Payments if you
purchase a Contract with an Income Plus For Life 6.11 Series Rider (see "VI.
Optional Benefits -- Restrictions on Additional Purchase Payments").
WHAT CHARGES DO I PAY UNDER THE CONTRACT?
The Contracts have an annual Contract fee of $50, which we will waive if you are
registered for electronic delivery of transaction confirmations (see "V.
Description of the Contract -- Telephone and Electronic Transactions"). Your
Contract also has asset-based charges to compensate us primarily for our
administrative and distribution expenses and for the mortality and expense risks
that we assume under the Contract. We take the deduction proportionally from
each of your Variable Investment Options. We make deductions for any applicable
taxes based on the amount of a Purchase Payment. If you elect a Rider, we also
deduct the Rider charges shown in the Fee Tables proportionally from each of
your Investment Options, based on your value in each.
If you withdraw some of your Purchase Payments from your Contract prior to the
Annuity Commencement Date (including withdrawals under an Income Plus For Life
6.11 Series Rider), or if you surrender your Contract in its entirety for cash
prior to the Annuity Commencement Date, we may assess a withdrawal charge. The
amount of this charge will depend on the number of years that have passed since
we received your Purchase Payments, as shown in the Fee Tables.
WHAT ARE MY INVESTMENT CHOICES?
VARIABLE INVESTMENT OPTIONS. We hold the assets of each Variable Investment
Option in a Subaccount that invests solely in a corresponding Portfolio. The
Portfolio prospectuses contain full descriptions of the Portfolios. The amount
invested in any Variable Investment Option will increase or decrease based upon
the investment performance of the corresponding Portfolio (reduced by certain
charges we deduct -- see "III. Fee Tables").
We offer two sets of Variable Investment Options. The set of Variable Investment
Options available to you depends upon whether you select an Income Plus for Life
6.11 Series Rider with your Contract.
CONTRACTS WITH AN INCOME PLUS FOR LIFE 6.11 SERIES RIDER. If you purchase a
Contract WITH an IPFL 6.11 Series Rider, you may allocate Purchase Payments and
Contract Value to one or more of the following Investment Options:
Lifestyle Balanced PS Subaccount
Lifestyle Conservative PS Subaccount
Lifestyle Growth PS Subaccount
Lifestyle Moderate PS Subaccount
Ultra Short Term Bond Subaccount
In addition, we may make automatic transfers of your Contract Value to and from
the Bond PS Subaccount, in accordance with the Portfolio Stabilization Process
that is a feature of the IPFL 6.11 Series Riders. You cannot directly allocate
any of your Contract Value to the Bond PS Subaccount, but we may transfer your
Contract Value between the Lifestyle PS Subaccounts you choose and the Bond PS
Subaccount. We describe the Portfolio Stabilization Process we use to determine
when and how much we may transfer under "VI. Optional Benefits."
6
IF YOU PURCHASE A CONTRACT WITH AN INCOME PLUS FOR LIFE 6.11 SERIES RIDER, YOU
AUTHORIZE US TO TRANSFER YOUR CONTRACT VALUE BETWEEN THE LIFESTYLE PS
SUBACCOUNTS AND THE BOND PS SUBACCOUNT. ACCORDINGLY, YOUR ABILITY TO MAINTAIN AN
INVESTMENT IN THE LIFESTYLE PS SUBACCOUNTS WILL BE AFFECTED BY AUTOMATIC
TRANSFERS WE MAY MAKE TO AND FROM THE BOND PS SUBACCOUNT. AN INCOME PLUS FOR
LIFE 6.11 SERIES RIDER MAY NOT BE AN APPROPRIATE CHOICE IF YOU ARE PRIMARILY
INTERESTED IN MAXIMIZING THE CONTRACT'S POTENTIAL FOR LONG-TERM PARTICIPATION IN
EQUITY SECURITIES MARKETS.
CONTRACTS WITHOUT AN INCOME PLUS FOR LIFE 6.11 SERIES RIDER. If you purchase a
Contract WITHOUT an IPFL 6.11 Series Rider, you may allocate Purchase Payments
and Contract Value to one or more of the following Variable Investment Options:
Lifestyle Balanced Subaccount
Lifestyle Conservative Subaccount
Lifestyle Growth Subaccount
Lifestyle Moderate Subaccount
Ultra Short Term Bond Subaccount
ALL CONTRACTS
Before you select Variable Investment Options under a Contract, you should
consider:
- You bear the investment risk that your Contract Value will increase
or decrease to reflect the results of your Contract's investment in
underlying Portfolios. We do not guarantee Contract Value in a
Variable Investment Option or the investment performance of any
Portfolio.
- The risks, fees and expenses (such as operating expenses and
transaction costs) associated with the Portfolios available under a
Contract with an Income Plus For Life 6.11 Series Rider generally
will differ from those associated with the Portfolios available in a
Contract without an Income Plus For Life 6.11 Series Rider, even
where the Portfolio names are similar (see "IV. General Information
about Us, the Separate Accounts and the Portfolios -- The
Portfolios"). You should review the Portfolio prospectuses for more
information.
- Although the Portfolios may invest directly in securities or
indirectly, through other underlying funds, you will not have the
ability to determine the investment decisions or strategies of the
Portfolios. If you would prefer greater control or a broader range
of investment options, you (and your financial advisor) should
carefully consider the features of other variable annuity contracts,
offered by us or by other life insurance companies, before
purchasing a Contract.
HOW CAN I CHANGE MY INVESTMENT CHOICES?
ALLOCATION OF PURCHASE PAYMENTS. You designate how you would like your Purchase
Payments to be allocated among the Variable Investment Options available under
your Contract. You may change this investment allocation for future Purchase
Payments at any time.
TRANSFERS AMONG INVESTMENT OPTIONS. During the Accumulation Period, you may
transfer your investment amounts among Investment Options, subject to certain
restrictions described below and in "V. Description of the Contract -- Transfers
You May Make Among Investment Options." During the Pay-out Period, you may
transfer your allocations among the Variable Investment Options, subject to
certain restrictions described in "Transfers During Pay-out Period."
7
The Variable Investment Options can be a target for abusive transfer activity.
To discourage disruptive frequent trading activity, we have adopted a policy for
each Separate Account to restrict Owner-initiated transfers to two per calendar
month per Contract, with certain exceptions described in more detail in "V.
Description of the Contract -- Transfers You May Make Among Investment Options."
We apply each Separate Account's policy and procedures uniformly to all Contract
Owners.
In addition to the transfer restrictions that we impose, the John Hancock
Variable Insurance Trust also has adopted policies under Rule 22c-2 of the 1940
Act to detect and deter abusive short-term trading. Accordingly, a Portfolio may
require us to impose trading restrictions if it discovers violations of its
frequent short-term trading policy. We will provide tax identification numbers
and other Contract Owner transaction information to John Hancock Variable
Insurance Trust upon request, which it may use to identify any pattern or
frequency of activity that violates its short-term trading policy.
TRANSFERS BETWEEN ANNUITY OPTIONS. During the Pay-out Period, you may not
transfer from a Variable Annuity Option to a Fixed Annuity Option, or from a
Fixed Annuity Option to a Variable Annuity Option (see "V. Description of the
Contract -- Transfers During Pay-out Period").
TRANSFERS UNDER CONTRACTS WITH AN INCOME PLUS FOR LIFE 6.11 SERIES RIDER. We
impose restrictions on your ability to make transfers among certain Variable
Investment Options available under the Income Plus For Life 6.11 Series Riders.
In addition, we are authorized to make automatic transfers under the Portfolio
Stabilization Process from time to time. These automatic transfers move your
Contract Value between the Lifestyle PS Subaccounts you select and the Bond PS
Subaccount (see "VI. Optional Benefits").
HOW DO I ACCESS MY MONEY?
During the Accumulation Period, you may withdraw all or a portion of your
Contract Value. The amount you withdraw from any Investment Option must be at
least $300 or, if less, your entire balance in that Investment Option. If a
withdrawal plus any applicable withdrawal charge would reduce your Contract
Value to less than $1,000, we may treat your withdrawal request as a request to
withdraw all of your Contract Value. A withdrawal charge and an administration
fee may apply to your withdrawal (see "VII. Charges and Deductions -- Withdrawal
Charges"). Withdrawals from Contracts with an Income Plus For Life 6.11 Series
Rider may affect the benefits under the Rider (see "VI. Optional Benefits"). A
withdrawal also may be subject to income tax and a 10% penalty tax.
WHAT TYPES OF OPTIONAL BENEFIT RIDERS MAY I BUY UNDER THE CONTRACT?
For the additional charge shown in the Fee Tables, you may purchase a Rider
offering optional benefits. The availability of the Riders may vary by state.
Income Plus For Life 6.11 Series Riders
The Income Plus For Life 6.11 Series Riders (or "IPFL 6.11 Series Riders") are
optional guaranteed minimum withdrawal benefit Riders. The Riders contain our
guarantee that you will be able to make withdrawals of a Lifetime Income Amount,
regardless of your Contract's investment performance. We describe the Riders'
terms in more detail in "VI. Optional Benefits."
AVAILABILITY. If it is available in your state, you may elect to purchase an
IPFL 6.11 Series Rider through your registered representative's authorized
distributor. The IPFL 6.11 Series Riders are not available if you inherit a
Contract issued as an IRA (see "VI. Optional Benefits -- Availability"). You (or
the applicable oldest "Covered Person") must be under age 81 to purchase the
Rider. ONCE WE ISSUE A CONTRACT WITH AN IPFL 6.11 SERIES RIDER, YOU WILL NOT BE
ABLE TO TERMINATE THE RIDER OR EXCHANGE IT FOR ANOTHER RIDER WHILE YOUR CONTRACT
IS IN EFFECT.
RIDER BENEFIT. We designed the IPFL 6.11 Series Riders to make a Lifetime Income
Amount available for annual withdrawals starting on a "Lifetime Income Date." If
you limit your annual withdrawals to the Lifetime Income Amount, we will make
this benefit available for as long as you live, even if your Contract Value
reduces to zero. You may elect to receive the Lifetime Income Amount
automatically under our Income Made Easy program. We will pay the Lifetime
Income Amount automatically during the Rider's "Settlement Phase," which begins
when your Contract Value reduces below a minimum required amount and you satisfy
the conditions described in the Rider.
EXCESS WITHDRAWALS. Under the IPFL 6.11 Series Riders, you choose how much
Contract Value to withdraw at any time. We may reduce the Lifetime Income Amount
that we guarantee for future lifetime benefit payments, however, if:
- you make a withdrawal before the Lifetime Income Date, or
- your annual Withdrawal Amounts exceed the Lifetime Income Amount in
any year after the Lifetime Income Date.
IF YOUR ANNUAL WITHDRAWAL AMOUNTS EXCEED THE LIMITS SPECIFIED IN THE IPFL 6.11
SERIES RIDERS, WE WILL REDUCE THE LIFETIME INCOME AMOUNT IF YOU TAKE ANY
WITHDRAWALS BEFORE THE APPLICABLE LIFETIME INCOME DATE. YOU WILL LOSE THE
LIFETIME INCOME
8
AMOUNT IF YOUR WITHDRAWAL AMOUNTS BEFORE THE APPLICABLE LIFETIME
INCOME DATE DEPLETE YOUR CONTRACT VALUE AND ANY REMAINING BENEFIT BASE TO ZERO
(SEE "VI. OPTIONAL BENEFITS -- FEATURES OF IPFL 6.11 SERIES RIDERS").
BENEFIT BASE. We use a Benefit Base to determine the Lifetime Income Amount. You
cannot request a withdrawal of the Benefit Base, and it will usually differ from
the Contract Value. The initial Benefit Base is equal to your initial Purchase
Payment, up to the maximum Benefit Base ($3 million). If you choose not to make
any withdrawals at all during certain Contract Years, we will increase the
Benefit Base by a Credit. We also may increase or "step up" the Benefit Base on
certain dates to reflect market performance or other factors. You may also
increase the amounts we guarantee by making Additional Purchase Payments that we
accept, but we impose special limits on Additional Purchase Payments under
Contracts issued with an IPFL 6.11 Series Rider.
INVESTMENT LIMITATIONS -- AUTOMATIC TRANSFERS OF CONTRACT VALUE. If you purchase
a Contract with an IPFL 6.11 Series Rider, you must invest your Contract Value
only in the Variable Investment Options we make available for that Rider. Under
the IPFL 6.11 Series Riders, we monitor your Contract Value each Business Day
and we may make automatic transfers of some of your Contract Value between the
Lifestyle PS Subaccounts you select and the Bond PS Subaccount. We only make
these automatic transfers to or from the Bond PS Subaccount under a
non-discretionary, systematic mathematical process we call the "Portfolio
Stabilization Process." We describe the Portfolio Stabilization Process in more
detail in "VI. Optional Benefits," and in the SAI. We do not permit you to
invest directly in or transfer funds directly out of the Bond PS Subaccount.
Annual Step-Up Death Benefit Rider
You may elect to purchase the optional Annual Step-Up Death Benefit Rider, if
available in your state, whether or not you purchase an Income Plus For Life
6.11 Series Rider. Under the Annual Step-Up Death Benefit Rider, we guarantee a
minimum death benefit up to the earlier of the Annuity Commencement Date or the
Maturity Date based on the Contract's highest "Anniversary Value" that may be
achieved up to the Contract Anniversary after you (or any Co-Owner) have
attained age 75 (or death if earlier). The Annual Step-Up Death Benefit is
available only at Contract issue and cannot be revoked once elected. You may not
purchase the Annual Step-Up Death Benefit Rider, however, if you (or any
co-Owner) have attained age 75, or if your Contract is an IRA that you inherited
from someone else (unless you are the spouse of the decedent and own the IRA in
your own name).
Please consult your registered representative or contact our Annuities Service
Center at the address or phone number shown on page ii of this Prospectus for
information on whether the Rider is available in your state.
IF YOU ELECT TO PURCHASE AN ANNUAL STEP-UP DEATH BENEFIT RIDER AND NOT AN IPFL
6.11 SERIES RIDER, YOU MUST INVEST YOUR CONTRACT VALUE IN THE INVESTMENT OPTIONS
AVAILABLE UNDER A CONTRACT WITHOUT AN IPFL 6.11 SERIES RIDER. WE RESERVE THE
RIGHT TO IMPOSE ADDITIONAL RESTRICTIONS ON INVESTMENT OPTIONS AT ANY TIME. If we
do impose additional restrictions, any Contract Value already allocated to a
permitted Investment Option will not be affected by the restriction as long as
it remains in that Investment Option.
WHAT ARE THE TAX CONSEQUENCES OF OWNING A CONTRACT?
In most cases, no income tax will have to be paid on amounts you earn under a
Contract until these earnings are paid out. All or part of the following
distributions from a Contract may constitute a taxable payout of earnings:
- withdrawals (including surrenders and systematic withdrawals);
- payment of any death benefit proceeds;
- periodic payments under one of our annuity payment options;
- certain ownership changes; and
- any loan, assignment or pledge of the Contract as collateral.
How much you will be taxed on a distribution is based upon complex tax rules and
depends on matters such as:
- the type of the distribution;
- when the distribution is made;
- the nature of any Qualified Plan for which the Contract is being
used; and
- the circumstances under which the payments are made.
If your Contract is issued in connection with a Qualified Plan, all or part of
your Purchase Payments may be tax deductible or excludible from income.
A 10% tax penalty applies in many cases to the taxable portion of any
distributions taken from a Contract before you reach age 59 1/2. Also, most
Qualified Plans require that minimum distributions from a Contract commence
and/or be completed within a certain period of time. This effectively limits the
period of time during which you can continue to derive tax-deferral benefits
from any tax-deductible or tax-deferred Purchase Payments you paid or on any
earnings under the Contract.
9
IF YOU ARE PURCHASING THE CONTRACT AS AN INVESTMENT VEHICLE FOR A QUALIFIED
PLAN, INCLUDING AN IRA, YOU SHOULD CONSIDER THAT THE CONTRACT DOES NOT PROVIDE
ANY ADDITIONAL TAX-DEFERRAL BENEFITS BEYOND THE TREATMENT PROVIDED BY THE
QUALIFIED PLAN. THE FAVORABLE TAX-DEFERRAL BENEFITS AVAILABLE FOR QUALIFIED
PLANS THAT INVEST IN ANNUITY CONTRACTS ARE ALSO GENERALLY AVAILABLE IF THE
QUALIFIED PLANS PURCHASE OTHER TYPES OF INVESTMENTS, SUCH AS MUTUAL FUNDS,
EQUITIES AND DEBT INSTRUMENTS. HOWEVER, THE CONTRACT OFFERS FEATURES AND
BENEFITS THAT OTHER INVESTMENTS MAY NOT OFFER. YOU AND YOUR REGISTERED
REPRESENTATIVE SHOULD CAREFULLY CONSIDER WHETHER THE FEATURES AND BENEFITS,
INCLUDING THE INVESTMENT OPTIONS AND PROTECTION THROUGH LIVING GUARANTEES, DEATH
BENEFITS AND OTHER BENEFITS PROVIDED UNDER AN ANNUITY CONTRACT ISSUED IN
CONNECTION WITH A QUALIFIED PLAN ARE SUITABLE FOR YOUR NEEDS AND OBJECTIVES AND
ARE APPROPRIATE IN LIGHT OF THE EXPENSE.
We provide additional information on taxes in "VIII. Federal Tax Matters." We
make no attempt to provide more than general information about use of the
Contract with the various types of retirement plans. Purchasers of Contracts for
use with any retirement plan should consult their legal counsel and a qualified
tax advisor regarding the suitability of the Contract.
CAN I RETURN MY CONTRACT?
In most cases, you have the right to cancel your Contract within 10 days (or
longer in some states) after you receive it. In most states, you will receive a
refund equal to the Contract Value on the date of cancellation, which may be
increased by any charges for premium taxes deducted by us to that date. In some
states, or if your Contract is issued as an IRA, you will receive a refund of
any Purchase Payments you made, if that amount is higher. The date of
cancellation is the date we receive the Contract or acceptable written
notification.
WILL I RECEIVE A TRANSACTION CONFIRMATION?
We will send you a confirmation statement for certain transactions in your
Investment Accounts. You should carefully review these transaction confirmations
to verify their accuracy. You should immediately report any mistakes to our
Annuities Service Center (at the address or phone number shown on page ii of
this Prospectus). If you fail to notify our Annuities Service Center of any
mistake within 60 days of the delivery of the transaction confirmation, you will
be deemed to have ratified the transaction. We encourage you to register for
electronic delivery of your transaction confirmations, and we will waive the $50
annual Contract fee if you are registered. Please contact the John Hancock
Annuities Service Center at the applicable telephone number or Internet address
shown on page ii of this Prospectus for more information on electronic
transactions.
10
III. Fee Tables
The following tables describe the fees and expenses applicable to buying, owning
and surrendering a Venture(R) 4 Series Contract. These fees and expenses are
more completely described in this Prospectus under "VII. Charges and
Deductions." The items listed under "Total Annual Portfolio Operating Expenses"
are described in detail in the Portfolio prospectus. Unless otherwise shown, the
tables below show the maximum fees and expenses (including fees deducted from
Contract Value for optional benefits).
THE FOLLOWING TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU PAY AT THE TIME
THAT YOU BUY THE CONTRACT, WITHDRAW CONTRACT VALUES, SURRENDER THE CONTRACT, OR
TRANSFER CASH VALUE BETWEEN INVESTMENT OPTIONS. STATE PREMIUM TAXES MAY ALSO BE
DEDUCTED.
CONTRACT OWNER TRANSACTION EXPENSES(1)
JOHN HANCOCK USA
JOHN HANCOCK NEW YORK
WITHDRAWAL CHARGE(2)
(as percentage of Purchase Payments)
First Year 8%
Second Year 7%
Third Year 6%
Fourth Year 5%
Fifth Year and Thereafter 0%
TRANSFER FEE(3)
Maximum Fee $25
Current Fee $ 0
----------
(1) State premium taxes may also apply to your Contract, which currently range
from 0.04% to 4.00% of each Purchase Payment (see "VII. Charges and
Deductions -- Premium Taxes").
(2) This charge is taken upon withdrawal or surrender within the specified
period of years measured from the date of each Purchase Payment. The total
withdrawal charge will be the sum of the withdrawal charges for the
Purchase Payments being liquidated.
(3) This fee is not currently assessed against transfers. We reserve the right
to impose a charge in the future for transfers in excess of 12 per year.
The amount of this fee will not exceed the lesser of $25 or 2% of the
amount transferred.
11
THE FOLLOWING TABLE DESCRIBES FEES AND EXPENSES THAT YOU PAY PERIODICALLY DURING
THE TIME THAT YOU OWN THE CONTRACT. THIS TABLE DOES NOT INCLUDE ANNUAL PORTFOLIO
OPERATING EXPENSES.
PERIODIC FEES AND EXPENSES OTHER THAN PORTFOLIO EXPENSES
JOHN HANCOCK USA
JOHN HANCOCK NEW York
ANNUAL CONTRACT FEE(1) $ 50
ANNUAL SEPARATE ACCOUNT EXPENSES(2)
(as a percentage of average Contract Value)
Mortality and Expense Risks Fee(3) 1.00%
Administration Fee (asset based) 0.15%
Distribution Fee 0.55%
----
TOTAL ANNUAL SEPARATE ACCOUNT EXPENSES(2) 1.70%
(With No Optional Riders Reflected)
OPTIONAL BENEFITS
FEES DEDUCTED FROM SEPARATE ACCOUNT
Optional Annual Step-Up Death Benefit Fee 0.30%
----
TOTAL ANNUAL SEPARATE ACCOUNT EXPENSES(4) 2.00%
----------
(1) The annual Contract fee is waived if you are registered for e-delivery of
transaction confirmations (see "IX. General Matters -- Transaction
Confirmations").
(2) A daily charge reflected as a percentage of the Variable Investment
Options.
(3) This charge is assessed on all active Contracts, including Contracts
continued by a beneficiary upon the death of the Contract Owner.
(4) Amount shown includes the Mortality and Expense Risks Fee, Administration
Fee, Distribution Fee, as well as the optional Annual Step-Up Death
Benefit Fee, as applicable.
OTHER ACCOUNT FEES DEDUCTED FROM CONTRACT VALUE
Optional Guaranteed Minimum Withdrawal Benefit Riders
(You may select only one of the following. We deduct the fee on an annual basis
from Contract Value.)
IPFL 6.11 RIDER (1) IPFL -- JOINT LIFE 6.11(2)
------------------- --------------------------
Maximum Fee 1.50% 1.50%
Current Fee 1.00% 1.00%
----------
(1) The current charge for the Income Plus For Life 6.11 Rider is 1.00% of the
Adjusted Benefit Base. We reserve the right to change the charge up to a
maximum charge of 1.50% at any time, but we will not do so during the
first 2 Contract Years, or within the 2 Contract Years following such a
change.
(2) The current charge for the Income Plus For Life -- Joint Life 6.11 Rider
is 1.00% of the Adjusted Benefit Base. We reserve the right to change the
charge up to a maximum charge of 1.50% at any time, but we will not do so
during the first 2 Contract Years, or within the 2 Contract Years
following such a change.
THE NEXT TABLE DESCRIBES THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES
CHARGED BY THE PORTFOLIOS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU
OWN THE CONTRACT. MORE DETAIL CONCERNING EACH PORTFOLIO'S FEES AND EXPENSES IS
CONTAINED IN THE PORTFOLIO'S PROSPECTUS.
VENTURE(R) 4 SERIES WITH VENTURE(R) 4 SERIES WITHOUT
IPFL 6.11 SERIES RIDER IPFL 6.11 SERIES RIDER
------------------------ ---------------------------
TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES MINIMUM MAXIMUM MINIMUM MAXIMUM
--------- --------- ----------- ----------
Range of expenses that are deducted from Portfolio assets, including
management fees, Rule 12b-1 fees and other expenses 0.88% 1.04% 0.88% 1.06%
12
EXAMPLES
We provide the following examples that are intended to help you compare the
costs of investing in a Contract with the costs of investing in other variable
annuity contracts. These costs include Contract Owner expenses, Contract fees,
Separate Account annual expenses and Portfolio fees and expenses. Example 1
pertains to a Contract with the optional benefit Riders shown below. Example 2
pertains to a Contract without optional benefit Riders.
EXAMPLE 1: MAXIMUM PORTFOLIO OPERATING EXPENSES -- CONTRACT WITH OPTIONAL
BENEFIT RIDERS
The following example assumes that you invest $10,000 in a Contract with the
optional benefit Riders shown below. The first example also assumes that your
investment has a 5% return each year and assumes the maximum annual Contract
fee, Rider fees, and the maximum fees and expenses of any of the Portfolios.
Please note that the Rider fees are reflected as a percentage of the Adjusted
Benefit Base, which may vary in value from the total Variable Investment Option
value. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
JOHN HANCOCK USA
JOHN HANCOCK NEW YORK
CONTRACT WITH INCOME PLUS FOR LIFE 6.11 AND ANNUAL STEP-UP DEATH BENEFIT RIDERS
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
If you surrender the Contract at the end of the
applicable time period: $1,251 $ 2,120 $ 2,659 $ 5,495
If you annuitize, or do not surrender the Contract
at the end of the applicable time period: $ 516 $ 1,572 $ 2,659 $ 5,495
EXAMPLE 2: MINIMUM PORTFOLIO OPERATING EXPENSES -- CONTRACT WITH NO OPTIONAL
BENEFIT RIDERS
The next example assumes that you invest $10,000 in a Contract, but with no
optional benefit Riders. This example also assumes that your investment has a 5%
return each year and assumes the average annual Contract fee we expect to
receive for the Contracts and the minimum fees and expenses of any of the
Portfolios. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
JOHN HANCOCK USA
JOHN HANCOCK NEW YORK
CONTRACT WITH NO OPTIONAL BENEFIT RIDERS
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
If you surrender the Contract at the end of the
applicable time period: $1,050 $ 1,524 $ 1,604 $ 3,338
If you annuitize, or do not surrender the Contract at
the end of the applicable time period: $ 311 $ 947 $ 1,604 $ 3,338
THE FOLLOWING TABLES DESCRIBE THE OPERATING EXPENSES FOR EACH OF THE PORTFOLIOS,
AS A PERCENTAGE OF THE PORTFOLIO'S AVERAGE NET ASSETS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2010, EXCEPT AS STATED BELOW IN THE NOTES THAT FOLLOW THE TABLES.
MORE DETAIL CONCERNING EACH PORTFOLIO'S FEES AND EXPENSES IS CONTAINED IN THE
PORTFOLIO'S PROSPECTUS AND IN THE NOTES FOLLOWING THE TABLES.
The available Portfolios differ for Contracts issued with and Contracts issued
without an IPFL 6.11 Series Rider (see "VI. Optional Benefits").
PORTFOLIO EXPENSES FOR CONTRACTS WITH AN IPFL 6.11 SERIES RIDER:
DISTRIBUTION ACQUIRED TOTAL ANNUAL
AND SERVICE OTHER PORTFOLIO FEES OPERATING
PORTFOLIO/SERIES MANAGEMENT FEE (12B-1) FEES EXPENSES AND EXPENSES EXPENSES (1)
--------------------------------------- -------------- ------------ -------- -------------- ------------
LIFESTYLE BALANCED PS SERIES(2)
Series II 0.05% 0.25% 0.04% 0.68% 1.02%
LIFESTYLE CONSERVATIVE PS SERIES(2)
Series II 0.05% 0.25% 0.06% 0.63% 0.99%
13
DISTRIBUTION ACQUIRED TOTAL ANNUAL
AND SERVICE OTHER PORTFOLIO FEES OPERATING
PORTFOLIO/SERIES MANAGEMENT FEE (12B-1) FEES EXPENSES AND EXPENSES EXPENSES (1)
--------------------------------------- -------------- ------------ -------- -------------- ------------
LIFESTYLE GROWTH PS SERIES(2)
Series II 0.05% 0.25% 0.04% 0.70% 1.04%
LIFESTYLE MODERATE PS SERIES(2)
Series II 0.05% 0.25% 0.06% 0.66% 1.02%
BOND PS SERIES(2)
Series II 0.65% 0.25% 0.06% 0.00% 0.96%
ULTRA SHORT TERM BOND(2)
Series II 0.55% 0.25% 0.08% 0.00% 0.88%
----------
(1) The "Total Annual Operating Expenses" include fees and expenses incurred
indirectly by a Portfolio as a result of its investment in other
investment companies ("Acquired Portfolio Fees and Expenses"). The Total
Annual Operating Expenses shown may not correlate to the Portfolio's ratio
of expenses to average net assets shown in the "Financial Highlights"
section of the Portfolio prospectus, which does not include Acquired
Portfolio Fees and Expenses. Acquired Portfolio Fees and Expenses are
based on the estimated indirect net expenses associated with the
Portfolio's investment in the underlying Portfolios.
(2) For Portfolios and classes that have not commenced operations or have an
inception date of less than six months as of December 31, 2010, expenses
are estimated.
FUND EXPENSES FOR CONTRACTS WITHOUT AN IPFL 6.11 SERIES RIDER:
DISTRIBUTION ACQUIRED TOTAL ANNUAL
AND SERVICE OTHER PORTFOLIO FEES OPERATING
PORTFOLIO/SERIES MANAGEMENT FEE (12B-1) FEES EXPENSES AND EXPENSES EXPENSES (1)
--------------------------------------- -------------- ------------ -------- -------------- ------------
LIFESTYLE BALANCED
Series II 0.04% 0.25% 0.02% 0.73% 1.04%
LIFESTYLE CONSERVATIVE
Series II 0.04% 0.25% 0.03% 0.69% 1.01%
LIFESTYLE GROWTH
Series II 0.04% 0.25% 0.03% 0.74% 1.06%
LIFESTYLE MODERATE
Series II 0.04% 0.25% 0.03% 0.71% 1.03%
ULTRA SHORT TERM BOND(2)
Series II 0.55% 0.25% 0.08% 0.00% 0.88%
----------
(1) The "Total Annual Operating Expenses" include fees and expenses incurred
indirectly by a Portfolio as a result of its investment in other
investment companies ("Acquired Portfolio Fees and Expenses"). The Total
Annual Operating Expenses shown may not correlate to the Portfolio's ratio
of expenses to average net assets shown in the "Financial Highlights"
section of the Portfolio prospectus, which does not include Acquired
Portfolio Fees and Expenses. Acquired Portfolio Fees and Expenses are
based on the estimated indirect net expenses associated with the
Portfolio's investment in the underlying portfolios.
(2) For funds and classes that have not commenced operations or have an
inception date of less than six months as of December 31, 2010, expenses
are estimated.
14
IV. General Information about Us, the Separate Accounts and the Portfolios
THE COMPANIES
We are subsidiaries of Manulife Financial Corporation.
Your Contract is issued by either John Hancock USA or John Hancock New York.
Please refer to your Contract to determine which Company issued your Contract.
John Hancock USA, formerly known as "The Manufacturers Life Insurance Company
(U.S.A.)," is a stock life insurance company originally organized under the laws
of Maine on August 20, 1955, by a special act of the Maine legislature. John
Hancock USA redomesticated under the laws of Michigan on December 30, 1992. John
Hancock USA is authorized to transact life insurance and annuity business in all
states (except New York), the District of Columbia, Guam, Puerto Rico and the
Virgin Islands. Its principal office is located at 601 Congress Street, Boston,
Massachusetts 02210-2805. John Hancock USA also has an Annuities Service Center
at 164 Corporate Drive, Portsmouth, NH 03801-6815.
John Hancock New York, formerly known as "The Manufacturers Life Insurance
Company of New York," is a wholly-owned subsidiary of John Hancock USA and is a
stock life insurance company organized under the laws of New York on February
10, 1992. John Hancock New York is authorized to transact life insurance and
annuity business only in the State of New York. Its principal office is located
at 100 Summit Lake Drive, Valhalla, New York 10595. John Hancock New York also
has an Annuities Service Center at 164 Corporate Drive, Portsmouth, NH
03801-6815.
The ultimate parent of both companies is Manulife Financial Corporation, a
publicly traded company, based in Toronto, Canada. Manulife Financial
Corporation is the holding company of The Manufacturers Life Insurance Company
and its subsidiaries, collectively known as Manulife Financial. The Companies
changed their names to John Hancock Life Insurance Company (U.S.A.) and John
Hancock Life Insurance Company of New York, respectively, on January 1, 2005
following Manulife Financial Corporation's acquisition of John Hancock Financial
Services, Inc.
The Company incurs obligations under the Contract to guarantee amounts in
addition to your Contract Value, and investors must depend on the financial
strength of the Company for satisfaction of the Company's obligations such as
the Lifetime Income Amount, the death benefit and any guaranteed amounts
associated with our optional benefits Riders. To the extent that the Company
pays such amounts, the payments will come from the Company's general account
assets. You should be aware that, unlike the Separate Accounts, the Company's
general account is not segregated or insulated from the claims of the Company's
creditors. The general account consists of securities and other investments that
may decline in value during periods of adverse market conditions. The Company's
financial statements contained in the SAI include a further discussion of risks
inherent within the Company's general account investments.
THE SEPARATE ACCOUNTS
We use our Separate Accounts to support the Variable Investment Options.
You do not invest directly in the Portfolios made available under the Contracts.
When you direct or transfer money to a Variable Investment Option, or when we
transfer Contract Value to the Bond PS Series Investment Option, we will
purchase shares of a corresponding Portfolio through one of our Separate
Accounts. We hold the Portfolio's shares in a "Subaccount" (usually with a name
similar to that of the corresponding Portfolio) of the applicable Separate
Account. A Separate Account's assets (including the Portfolio's shares) belong
to the Company that maintains that Separate Account.
For Contracts issued by John Hancock USA, we purchase and hold Portfolio shares
in John Hancock Life Insurance Company (U.S.A.) Separate Account H, a Separate
Account under the laws of Michigan. For Contracts issued by John Hancock New
York, we purchase and hold Portfolio shares in John Hancock Life Insurance
Company of New York Separate Account A, a Separate Account under the laws of New
York.
The income, gains and losses, whether or not realized, from assets of a Separate
Account are credited to or charged against that Separate Account without regard
to a Company's other income, gains, or losses. Nevertheless, all obligations
arising under a Company's Contracts are general corporate obligations of that
Company. Assets of a Separate Account may not be charged with liabilities
arising out of any of the respective Company's other business.
We reserve the right, subject to compliance with applicable law, to add other
Subaccounts, eliminate existing Subaccounts, combine Subaccounts or transfer
assets in one Subaccount to another Subaccount that we, or an affiliated
company, may establish. We will not
15
eliminate existing Subaccounts or combine Subaccounts without the prior approval
of the appropriate state and/or federal regulatory authorities.
We registered the Separate Accounts with the SEC under the Investment Company
Act of 1940, as amended (the "1940 Act") as unit investment trusts. Registration
under the 1940 Act does not involve supervision by the SEC of the management or
investment policies or practices of the Separate Accounts. If a Company
determines that it would be in the best interests of persons having voting
rights under the Contracts it issues, that Company's Separate Account may be
operated as a management investment company under the 1940 Act or it may be
deregistered if 1940 Act registration were no longer required.
THE PORTFOLIOS
When you select a Variable Investment Option, or when we transfer Contract Value
to or from the Bond PS Series Investment Option, we invest your money in a
Subaccount of our Separate Account and it invests in shares of a corresponding
Portfolio of John Hancock Variable Insurance Trust.
THE PORTFOLIOS IN THE SEPARATE ACCOUNT ARE NOT PUBLICLY TRADED MUTUAL FUNDS. The
Portfolios are only available to you as Investment Options in the Contracts or,
in some cases, through other variable annuity contracts or variable life
insurance policies issued by us or by other life insurance companies. In some
cases, the Portfolios also may be available through participation in certain
tax-qualified pension, retirement or college savings plans.
Investment Management
The Portfolios' investment advisers and managers may manage publicly traded
mutual funds with similar names and investment objectives. However, the
Portfolios are NOT directly related to any publicly traded mutual fund. You
should not compare the performance of any Portfolio described in this Prospectus
with the performance of a publicly traded mutual fund. THE PERFORMANCE OF ANY
PUBLICLY TRADED MUTUAL FUND COULD DIFFER SUBSTANTIALLY FROM THAT OF ANY OF THE
PORTFOLIOS HELD IN OUR SEPARATE ACCOUNT. SIMILARLY, THE PERFORMANCE OF A
PORTFOLIO AVAILABLE UNDER A CONTRACT WITHOUT AN IPFL 6.11 SERIES RIDER COULD
DIFFER SUBSTANTIALLY FROM THAT OF A PORTFOLIO WITH A SIMILAR NAME AND INVESTMENT
OBJECTIVE THAT IS AVAILABLE UNDER A CONTRACT WITH AN IPFL 6.11 SERIES RIDER.
In selecting the Portfolios that are available as Investment Options under a
Contract with an IPFL 6.11 Series Rider, we may establish requirements that are
intended, among other things, to mitigate market price and interest rate risk
for compatibility with the Portfolio Stabilization Process and our obligations
to pay guarantees and benefits under the Rider. We seek to make available
Investment Options that use strategies that are intended to lower potential
volatility, including, but not limited to, strategies that: encourage
diversification in asset classes and style; combine equity exposure with
exposure to fixed income securities; and allow us to effectively and efficiently
manage our exposure under the Rider. The requirements we impose are intended to
protect us from loss. They may increase a Portfolio's transaction costs, and may
otherwise lower the performance and reduce the availability of Investment
Options under the Contract and/or under optional benefit Riders.
The John Hancock Variable Insurance Trust is a so-called "series" type mutual
fund and is registered under the 1940 Act as an open-end management investment
company. John Hancock Investment Management Services, LLC ("JHIMS LLC") provides
investment advisory services to the John Hancock Variable Insurance Trust and
receives investment management fees for doing so. JHIMS LLC pays a portion of
its investment management fees to other firms that manage the John Hancock
Variable Insurance Trust's Portfolios (i.e., subadvisers). JHIMS LLC is our
affiliate and we indirectly benefit from any investment management fees JHIMS
LLC retains.
The John Hancock Variable Insurance Trust has obtained an order from the SEC
permitting JHIMS LLC, subject to approval by the Board of Trustees, to change a
subadviser for a Portfolio or the fees paid to subadvisers and to enter into new
subadvisory agreements from time to time without the expense and delay
associated with obtaining shareholder approval of the change. This order does
not, however, permit JHIMS LLC to appoint a subadviser that is an affiliate of
JHIMS LLC or the John Hancock Variable Insurance Trust (other than by reason of
serving as subadviser to a Portfolio) (an "Affiliated Subadviser") or to change
a subadvisory fee of an Affiliated Subadviser without the approval of
shareholders.
If shares of a Portfolio are no longer available for investment or in our
judgment investment in a Portfolio becomes inappropriate, we may eliminate the
shares of a Portfolio and substitute shares of another Portfolio, or of another
open-end registered investment company. A substitution may be made with respect
to both existing investments and the investment of future Purchase Payments.
However, we will make no such substitution without first notifying you and
obtaining approval of the SEC (to the extent required by the 1940 Act).
Portfolio Expenses
The table in the Fee Tables section of the Prospectus shows the investment
management fees, Rule 12b-1 fees and other operating expenses for these
Portfolio shares as a percentage (rounded to two decimal places) of each
Portfolio's average daily net assets for 2010, except as indicated in the
footnotes appearing at the end of the table. Fees and expenses of the Portfolios
are not fixed or
16
specified under the terms of the Contracts and may vary from year to year. These
fees and expenses differ for each Portfolio and reduce the investment return of
each Portfolio. Therefore, they also indirectly reduce the return you will earn
on any Separate Account Investment Options.
The Portfolios pay us or certain of our affiliates compensation for some of the
distribution, administrative, shareholder support, marketing and other services
we or our affiliates provide to the Portfolios. The amount of this compensation
is based on a percentage of the assets of the Portfolios attributable to the
variable insurance products that we and our affiliates issue. These percentages
may differ from Portfolio to Portfolio and among classes of shares within a
Portfolio. In some cases, the compensation is derived from the Rule 12b-1 fees
which are deducted from a Portfolio's assets and paid for the services we or our
affiliates provide to that Portfolio. Compensation payments may be made by a
Portfolio's investment adviser or its affiliates. None of these compensation
payments results in any charge to you in addition to what is shown in the Total
Annual Portfolio Operating Expenses table.
Funds of Funds
Each of the John Hancock Variable Insurance Trust's "Lifestyle" Portfolios is a
"fund of funds" that invests in other underlying mutual funds. Expenses for a
fund of funds may be higher than those for other Portfolios because a fund of
funds bears its own expenses and indirectly bears its proportionate share of
expenses of the underlying portfolios in which it invests. The prospectus for
each of these funds of funds contains a description of the underlying portfolios
for that Portfolio, including expenses of the portfolios, associated investment
risks, and deductions from and expenses paid out of the assets of the Portfolio.
JHIMS LLC retains QS Investors, LLC to provide direct subadvisory consulting
services in its management of the Lifestyle Balanced, Lifestyle Conservative,
Lifestyle Growth, and Lifestyle Moderate Portfolios, and the Lifestyle Balanced
PS Series, Lifestyle Conservative PS Series, Lifestyle Growth PS Series and
Lifestyle Moderate PS Series Portfolios.
The John Hancock Variable Insurance Trust has adopted a policy to post holdings
of each of these funds of funds in other funds on a website within 30 days after
each calendar quarter end and within 30 days after any material changes are made
to the holdings of a fund of funds. In addition, the ten largest holdings of
each fund will be posted to the website 30 days after each calendar quarter end.
Please read the SAI for additional details about information posted to the
website.
Portfolio Investment Objectives and Strategies
You bear the investment risk of any Portfolio you choose as a Variable
Investment Option for your Contract. The following tables contain a general
description of:
A. Portfolios for Contracts issued with an IPFL Series Rider;
B. Portfolios for Contracts issued without an IPFL Series Rider; and
C. Portfolio used with all Contracts.
You can find a full description of each Portfolio, including the investment
objectives, policies and restrictions of, and the risks relating to, investment
in the Portfolio in the prospectus for that Portfolio. YOU CAN OBTAIN A COPY OF
A PORTFOLIO'S PROSPECTUS, WITHOUT CHARGE, BY CONTACTING US AT THE ANNUITIES
SERVICE CENTER SHOWN ON PAGE II OF THIS PROSPECTUS. YOU SHOULD READ THE
PORTFOLIO'S PROSPECTUS CAREFULLY BEFORE INVESTING IN THE CORRESPONDING VARIABLE
INVESTMENT OPTION.
A. PORTFOLIOS FOR CONTRACTS ISSUED WITH AN IPFL 6.11 SERIES RIDER. If you
purchase a Contract with an IPFL Series Rider, you may allocate Purchase
Payments to one or more of the Lifestyle PS Subaccounts and/or the Ultra Short
Term Bond Subaccount. In purchasing the Rider, you authorize the Company to
monitor your allocations of Contract Value to the Lifestyle PS Subaccounts, and
to reallocate Contract Value between the Lifestyle PS Subaccounts and the Bond
PS Subaccount by the Portfolio Stabilization Process, a non-discretionary,
systematic mathematical process described in "VI. Optional Benefits - Features
of the IPFL 6.11 Series Riders."
THE PORTFOLIO STABILIZATION PROCESS MAY RESULT IN LARGE-SCALE ASSET FLOWS INTO
AND OUT OF ONE OR MORE OF THESE PORTFOLIOS, WHICH MAY NEGATIVELY AFFECT THE
PORTFOLIO'S PERFORMANCE. IT MAY INCREASE THE PORTFOLIO'S TRANSACTION COSTS, AND
CAUSE THE PORTFOLIO TO PURCHASE SECURITIES IN ANTICIPATION OF POSSIBLE ASSET
FLOWS OR SELL SECURITIES WHEN IT WOULD NOT NORMALLY DO SO. IT COULD BE
PARTICULARLY DISADVANTAGEOUS FOR THE PORTFOLIO IF IT EXPERIENCES OUTFLOWS AND
NEEDS TO SELL SECURITIES AT A TIME OF VOLATILITY IN THE MARKETS, WHEN VALUES
COULD BE FALLING. OUTFLOWS MAY ALSO INCREASE THE PORTFOLIO'S EXPENSE RATIO, AND
THE PURCHASE OF SECURITIES IN ANTICIPATION OF POSSIBLE ASSET FLOWS COULD LOWER
THE PORTFOLIO'S OVERALL PERFORMANCE AT A TIME WHEN VALUES COULD BE RISING.
JOHN HANCOCK VARIABLE INSURANCE TRUST
We show the Portfolio's investment adviser or subadviser ("manager")
in bold above the name of the Portfolio.
JOHN HANCOCK ASSET MANAGEMENT (NORTH AMERICA) & JOHN HANCOCK ASSET MANAGEMENT
Bond PS Series Seeks income and capital appreciation. The Portfolio invests at
least 80% of its net assets (plus any borrowings for investment
purposes) in a diversified mix of debt securities and
instruments. There is no limit on the Portfolio's average
maturity.
17
JOHN HANCOCK VARIABLE INSURANCE TRUST
We show the Portfolio's investment adviser or subadviser ("manager")
in bold above the name of the Portfolio.
Lifestyle Balanced PS Series Seeks a balance between a high level of current income and
growth of capital, with a greater emphasis on growth of
capital. The Portfolio operates as a fund of funds and
normally invests approximately 50% of its assets in portfolios
that invest primarily in equity securities, and approximately
50% in portfolios which invest primarily in fixed-income
securities
Lifestyle Conservative PS Series Seeks a high level of current income with some consideration
given to growth of capital. The Portfolio operates as a fund
of funds and normally invests approximately 80% of its assets
in portfolios which invest primarily in fixed-income
securities, and approximately 20% in portfolios which invest
primarily in equity securities.
Lifestyle Growth PS Series Seeks long-term growth of capital. Current income is also a
consideration. The Portfolio operates as a fund of funds and
normally invests approximately 70% of its assets in portfolios
which invest primarily in equity securities, and approximately
30% of its assets in portfolios which invest primarily in
fixed-income securities.
Lifestyle Moderate PS Series Seeks a balance between a high level of current income and
growth of capital, with a greater emphasis on income. The
Portfolio operates as a fund of funds and normally invests
approximately 60% of its assets in portfolios which invest
primarily in fixed-income securities, and approximately 40% of
its assets in portfolios which invest primarily in equity
securities.
B. PORTFOLIOS FOR CONTRACTS ISSUED WITHOUT AN IPFL 6.11 SERIES RIDER.
JOHN HANCOCK VARIABLE INSURANCE TRUST
We show the Portfolio's investment adviser or subadviser ("manager")
in bold above the name of the Portfolio.
JOHN HANCOCK ASSET MANAGEMENT (NORTH AMERICA) & JOHN HANCOCK ASSET MANAGEMENT
Lifestyle Balanced Trust Seeks a balance between a high level of current income and
growth of capital, with a greater emphasis on growth of
capital. The Portfolio operates as a fund of funds and
normally invests approximately 50% of its assets in portfolios
that invest primarily in equity securities, and approximately
50% in portfolios which invest primarily in fixed-income
securities.
Lifestyle Conservative Trust Seeks a high level of current income with some consideration
given to growth of capital. The Portfolio operates as a fund
of funds and normally invests approximately 80% of its assets
in portfolios which invest primarily in fixed-income
securities, and approximately 20% in portfolios which invest
primarily in equity securities.
Lifestyle Growth Trust Seeks long-term growth of capital. Current income is also a
consideration. The Portfolio operates as a fund of funds and
normally invests approximately 70% of its assets in portfolios
which invest primarily in equity securities, and approximately
30% of its assets in portfolios which invest primarily in
fixed-income securities.
18
JOHN HANCOCK VARIABLE INSURANCE TRUST
We show the Portfolio's investment adviser or subadviser ("manager")
in bold above the name of the Portfolio.
Lifestyle Moderate Trust Seeks a balance between a high level of current income and
growth of capital, with a greater emphasis on income. The
Portfolio operates as a fund of funds and normally invests
approximately 60% of its assets in portfolios which invest
primarily in fixed-income securities, and approximately 40% of
its assets in portfolios which invest primarily in equity
securities.
C. PORTFOLIO USED WITH ALL CONTRACTS.
JOHN HANCOCK VARIABLE INSURANCE TRUST
We show the Portfolio's investment adviser or subadviser ("manager")
in bold above the name of the Portfolio.
JOHN HANCOCK ASSET MANAGEMENT
Ultra Short Term Bond Trust Seeks a high level of current income consistent with the
maintenance of liquidity and the preservation of capital. To do
this, the Portfolio normally invests at least 80% of its net
assets in a diversified portfolio of domestic, investment grade
debt securities.
Note: The Ultra Short Term Bond Portfolio is not a money market
fund. Although the Portfolio seeks to preserve the principal
value of your investment, the Portfolio's value fluctuates, and
it is possible to lose money by investing in this Investment
Option.
VOTING INTEREST
You instruct us how to vote Portfolio shares.
We will vote Portfolio shares held in a Separate Account at any Portfolio
shareholder meeting in accordance with timely voting instructions received from
the persons having the voting interest under the Contract. We will determine the
number of Portfolio shares for which voting instructions may be given not more
than 90 days prior to the meeting. We will arrange for voting materials to be
distributed to each person having the voting interest under the Contract
together with appropriate forms for giving voting instructions. We will vote all
Portfolio shares that we hold (including our own shares and those we hold in a
Separate Account for Contract Owners) in proportion to the instructions so
received. One effect of this proportional voting is that a small number of
Contract Owners can determine the outcome of a vote.
During the Accumulation Period, the Contract Owner has the voting interest under
a Contract. We determine the number of votes for each Portfolio for which voting
instructions may be given by dividing the value of the Investment Account
corresponding to the Subaccount in which such Portfolio shares are held by the
net asset value per share of that Portfolio.
During the Pay-out Period, the Annuitant has the voting interest under a
Contract. We determine the number of votes as to each Portfolio for which voting
instructions may be given by dividing the reserve for the Contract allocated to
the Subaccount in which such Portfolio shares are held by the net asset value
per share of that Portfolio. Generally, the number of votes tends to decrease as
annuity payments progress since the amount of reserves attributable to a
Contract will usually decrease after commencement of annuity payments.
We reserve the right to make any changes in the voting rights described above
that may be permitted by the federal securities laws, regulations, or
interpretations thereof.
19
V. Description of the Contract
ELIGIBLE PLANS
The Contract may be used to fund plans qualifying for special income tax
treatment under the Code, such as individual retirement accounts and annuities,
pension and profit-sharing plans for corporations and sole
proprietorships/partnerships ("H.R. 10" and "Keogh" plans), and state and local
government deferred compensation plans (see Appendix B: "Qualified Plan Types,"
or you may request a copy of the SAI). We also designed the Contract so that it
may be used with nonqualified retirement plans, such as payroll savings plans
and such other groups (with or without a trustee), and other individually owned
nonqualified contracts, as may be eligible under applicable law.
If you are considering purchasing a Contract for use in connection with a
Qualified Plan, you should consider, in evaluating the suitability of the
Contract, that:
- the Contract was not designed to hold both Roth and non-Roth
accounts; we do not separately account for any part of any Purchase
Payments, Contract Value or any Annuity Payments as attributable to
both a Roth Account and a non-Roth account, even if permitted in
your Qualified Plan, and that you or your plan administrator will be
responsible for any tax related accounting required by such a split;
- any transfer of Contract Value from a Contract used to fund a
non-Roth account to a Roth account permitted in your Qualified Plan
(or from a Contract used to fund a Roth account to a non-Roth
account) may incur withdrawal charges; and
- the Contract was not designed to fund a comingled account for
multiple participants in a Qualified Plan.
Please see "VIII. Federal Tax Matters -- Qualified Contracts" for additional
information about the use of the Contract in connection with Qualified Plans.
ELIGIBILITY RESTRICTION -- SECTION 403(b) QUALIFIED PLANS. We currently are not
offering this Contract for use in a new retirement plan intended to qualify as a
Section 403(b) Qualified Plan (a "Section 403(b) Qualified Plan" or the "Plan").
For information regarding Contracts issued for use in existing Section 403(b)
Qualified Plans, please see Appendix B: "Qualified Plan Types," or you may
request a copy of the Statement of Additional Information from the Annuities
Service Center.
ACCUMULATION PERIOD PROVISIONS
We may impose restrictions on your ability to make initial and Additional
Purchase Payments.
Purchase Payments
You may make Purchase Payments to us at our Annuities Service Center at any
time. The minimum initial Purchase Payment is $10,000 for Nonqualified Contracts
and Qualified Contracts. Additional Purchase Payments must be at least $30. All
Purchase Payments must be in U.S. dollars. We may provide for Purchase Payments
to be automatically withdrawn from your bank account on a periodic basis. If a
Purchase Payment would cause your contract values in this Contract plus any
other variable annuity contracts with the same Owner or Annuitant, issued by us
or our affiliates (your "total contract values"), to exceed $1 million, or if
your total contract values already exceed $1 million, you must obtain our
approval in order to make the Purchase Payment. Additionally, we reserve the
right to limit or refuse any Additional Purchase Payments after the first
Contract Year. There may be additional restrictions on Purchase Payments if you
purchase an Income Plus For Life 6.11 Series Rider. See "VI. Optional Benefits
-- Restrictions on Additional Purchase Payments."
For the year that you become age 70 1/2 and for any subsequent years, if we
issue your Contract in connection with an IRA, we will only accept a Purchase
Payment intended to qualify as a "rollover contribution." For information
regarding additional restrictions on Purchase Payments for Contracts issued for
use in Section 403(b) Qualified Plans, you may request a copy of the SAI from
the Annuities Service Center.
John Hancock USA may reduce or eliminate the minimum initial Purchase Payment
requirement, upon your request and as permitted by state law, in the following
circumstances:
- You purchase your Contract through an exchange under section 1035 of
the Code or a Qualified Plan transfer from an existing contract(s)
issued by another carrier(s) AND at the time of application, the
value of your existing contract(s) meets or exceeds the applicable
minimum initial Purchase Payment requirement AND prior to our
receipt of such section 1035 or Qualified Plan monies, the value
drops below the applicable minimum initial Purchase Payment
requirement due to market conditions.
- You purchase more than one new Contract and such Contracts cannot be
combined AND the average initial Purchase Payments for these new
Contracts is equal to or greater than $50,000.
- You and your spouse each purchase at least one new Contract AND the
average initial Purchase Payments for the new Contract(s) is equal
to or greater than $50,000.
20
- You purchase multiple Contracts issued in conjunction with a written
retirement savings plan (either qualified or non-qualified), for the
benefit of plan participants AND the Annuitant under each Contract
is a plan participant AND the average initial Purchase Payment for
these new Contracts is equal to or greater than $50,000.
If permitted by state law, we may cancel a Contract at the end of any TWO
consecutive Contract Years (THREE for Contracts issued in New York) in which no
Purchase Payments have been made, if both:
- the total Purchase Payments made over the life of the Contract, less
any withdrawals, are less than $2,000; and
- the Contract Value at the end of such two-year period is less than
$2,000.
As a matter of administrative practice, the respective Company will attempt to
notify you prior to any such cancellation in order to allow you to make the
necessary Additional Purchase Payment to keep your Contract in force. The
cancellation of Contract provisions may vary in certain states to comply with
the requirements of insurance laws and regulations in such states. If we cancel
your Contract, we will pay you the Contract Value computed as of the period from
one Business Day to the next (the "valuation period") during which the
cancellation occurs. The amount paid will be treated as a withdrawal for federal
tax purposes and thus may be subject to income tax and to a 10% penalty tax (see
"VIII. Federal Tax Matters").
You designate how your Purchase Payments are to be allocated among the
Investment Options. You may change the allocation of Additional Purchase
Payments at any time by notifying us in writing (or by telephone or
electronically if you comply with our telephone or electronic transaction
procedures described in "Telephone and Electronic Transactions" in this section,
below).
Accumulation Units
During the Accumulation Period, we establish an Investment Account for you for
each Variable Investment Option to which you allocate a portion of your Contract
Value, and for the Bond PS Subaccount when we transfer Contract Value into that
Subaccount. We credit amounts to those Investment Accounts in the form of
"accumulation units" to measure the value of the variable portion of your
Contract during the Accumulation Period. We calculate and credit the number of
accumulation units in each of your Contract's Investment Accounts by dividing
(i) the amount allocated to that Investment Account by (ii) the value of an
accumulation unit for that Investment Account we next compute after a purchase
transaction is complete.
We will usually credit initial Purchase Payments received by mail or wire
transfer on the Business Day on which they are received in Good Order at our
Annuities Service Center, and no later than two Business Days after our receipt
of all information necessary for issuing the Contract. We will inform you of any
deficiencies preventing processing if your Contract cannot be issued. If the
deficiencies are not remedied within five Business Days after receipt of your
initial Purchase Payment, we will return your Purchase Payment promptly, unless
you specifically consent to our retaining your Purchase Payment until all
necessary information is received. We will credit Purchase Payments received by
wire transfer from broker-dealers on the Business Day received by us if the
broker-dealers have made special arrangements with us.
We will deduct accumulation units based on the value of an accumulation unit we
next compute each time you make a withdrawal or transfer amounts from an
Investment Option, and when we deduct certain Contract charges, pay death
benefit proceeds, transfer amounts to or from the Bond PS Subaccount, or apply
amounts to an Annuity Option.
We measure the value of an Investment Account in accumulation units, which vary
in value with the performance of the underlying Portfolio.
Value of Accumulation Units
The value of your accumulation units will vary from one Business Day to the next
depending upon the investment results of the Investment Options holding Contract
assets. We arbitrarily set the value of an accumulation unit for each Subaccount
on the first Business Day the Subaccount was established. We determine the value
of an accumulation unit for any subsequent Business Day by multiplying (i) the
value of an accumulation unit for the immediately preceding Business Day by (ii)
the "net investment factor" for that Subaccount (described below) for the
Business Day on which the value is being determined. We value accumulation units
as of the end of each Business Day. We deem a Business Day to end, for these
purposes, at the time a Portfolio determines the net asset value of its shares.
We will use a Portfolio share's net asset value at the end of a Business Day to
determine accumulation unit value for a Purchase Payment, withdrawal or transfer
transaction only if:
- your Purchase Payment transaction is complete before the close of
daytime trading on the New York Stock Exchange (usually 4:00 p.m.
Eastern Time) for that Business Day;
- we receive your request for a withdrawal or transfer of Contract
Value at the Annuities Service Center before the close of daytime
trading on the New York Stock Exchange for that Business Day; or
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- the transfer of Contract Value is an "automated transaction"
scheduled for that Business Day under the Portfolio Stabilization
Process.
AUTOMATED TRANSACTIONS. Automated transactions include transfers under Dollar
Cost Averaging and the Asset Rebalancing program, pre-scheduled withdrawals or
Purchase Payments, Required Minimum Distributions, substantially equal periodic
payments under section 72(t)/72(q) of the Code, transfers of Contract Value
under the IPFL 6.11 Series Riders' Portfolio Stabilization Process, and annuity
payments. Automated transactions are processed and valued as of the date they
are scheduled, unless the scheduled day is not a Business Day. In that case, the
transaction will be processed and valued on the next Business Day unless, with
respect to Required Minimum Distributions, substantially equal periodic payments
under section 72(t)/72(q) of the Code, and annuity payments only, the next
Business Day falls in the subsequent calendar year, in which case the
transaction will be processed and valued on the prior Business Day. Please see
the SAI for more information on processing Automated transactions.
Net Investment Factor
The net investment factor is an index used to measure the investment performance
of a Subaccount over a valuation period. The net investment factor may be
greater, less than or equal to one; therefore, the value of an accumulation unit
may increase, decrease or remain the same. We determine the net investment
factor for each Subaccount for any valuation period by dividing (a) by (b) and
subtracting (c) from the result, where:
(a) is the net asset value per share of a Portfolio share held in the
Subaccount determined at the end of the current valuation period,
plus any dividends and distributions received per share during the
current valuation period;
(b) is the net asset value per share of a Portfolio share held in the
Subaccount determined as of the end of the immediately preceding
valuation period; and
(c) is a factor representing the charges deducted from the Subaccount on
a daily basis for Annual Separate Account Expenses.
Transfers You May Make Among Investment Options
During the Accumulation Period, you may transfer amounts among the Variable
Investment Options, subject to the restrictions set forth below.
You may make a transfer by providing written notice to us, by telephone or by
other electronic means that we may provide through the Internet (see "Telephone
and Electronic Transactions," below). We will cancel accumulation units from the
Investment Account from which you transfer amounts and we will credit
accumulation units to the Investment Account to which you transfer amounts. Your
Contract Value on the date of the transfer will not be affected by a transfer.
We reserve the right to require your transfers to be at least $300 or, if less,
the entire value of the Investment Account. If after the transfer the amount
remaining in the Investment Account is less than $100, then we may transfer the
entire amount instead of the requested amount.
Currently, we do not impose a charge for transfer requests. The first twelve
transfers in a Contract Year are free of any transfer charge. For each
additional transfer in a Contract Year, we do not currently assess a charge but
we reserve the right (to the extent permitted by your Contract) to assess a
reasonable charge (not to exceed the lesser of $25 or 2% of the amount
transferred) to reimburse us for the expenses of processing transfers.
Investment options in variable annuity and variable life insurance products can
be a target for abusive transfer activity because these products value their
investment options on a daily basis and allow transfers among investment options
without immediate tax consequences. As a result, some investors may seek to
frequently transfer into and out of variable investment options in reaction to
market news or to exploit some perceived pricing inefficiency. Whatever the
reason, frequent transfer activity can harm long-term investors in a variable
investment option since such activity may expose a variable investment option's
underlying portfolio to increased portfolio transaction costs and/or disrupt the
portfolio manager's ability to effectively manage a portfolio in accordance with
its investment objective and policies, both of which may result in dilution with
respect to interests held for long-term investment.
We have adopted a policy and procedures to restrict frequent transfers of
Contract Value among Variable Investment Options.
To discourage disruptive frequent trading activity, we have adopted a policy for
each Separate Account to restrict transfers you make to two per calendar month
per Contract, with certain exceptions, and have established procedures to count
the number of transfers made under a Contract. Under the current procedures of
the Separate Accounts, we count all transfers made during each Business Day as a
SINGLE transfer. We do NOT count: (a) scheduled transfers made pursuant to our
Dollar Cost Averaging program or our Asset Rebalancing program, (b) automatic
transfers to or from the Bond PS Subaccount under the Portfolio Stabilization
Process; (c) transfers made within a prescribed period before and after a
substitution of underlying Portfolios and (d) transfers made during the Pay-out
Period (these transfers are subject to a 30-day notice requirement, however, as
described below in "Pay-Out Period Provisions -- Transfers During Pay-out
Period"). Under each Separate Account's policy and procedures, a Contract Owner
may transfer to the Ultra Short Term Bond Investment Option even if the Contract
Owner reaches the two-transfer-per-month limit, as long as 100% of the Contract
Value in all Variable Investment Options is transferred to the Ultra Short Term
Bond Investment Option. If such a transfer to the Ultra Short Term Bond
Investment Option is made, for a 30-calendar day period after such transfer a
Contract Owner may not make
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any subsequent transfers from the Ultra Short Term Bond Investment Option to
another Variable Investment Option. We apply each Separate Account's policy and
procedures uniformly to all Contract Owners.
We reserve the right to take other actions to restrict trading, including, but
not limited to:
- restricting the number of transfers made during a defined period;
- restricting the dollar amount of transfers;
- restricting the method used to submit transfers (e.g., requiring
transfer requests to be submitted in writing via U.S. mail); and
- restricting transfers into and out of certain Subaccount(s).
In addition, we reserve the right to defer a transfer at any time we are unable
to purchase or redeem shares of the Portfolios (see "Withdrawals" in this
section, below, for details on when suspensions of redemptions may be
permissible). We also reserve the right to modify or terminate the transfer
privilege at any time (to the extent permitted by applicable law).
In addition to the transfer restrictions that we impose, the John Hancock
Variable Insurance Trust also has adopted policies under Rule 22c-2 of the 1940
Act to detect and deter abusive short-term trading. Accordingly, a Portfolio may
require us to impose trading restrictions if it discovers violations of its
frequent short-term trading policy. We will provide tax identification numbers
and other Contract Owner transaction information to John Hancock Variable
Insurance Trust upon request, which it may use to identify any pattern or
frequency of activity that violates its short-term trading policy.
While we seek to identify and prevent disruptive frequent trading activity, it
is not always possible to do so. Therefore, we cannot provide assurance that the
restrictions we impose will be successful in restricting disruptive frequent
trading activity and avoiding harm to long-term investors.
Automatic Transfers Under IPFL 6.11 Series Riders
If you purchase a Contract with an IPFL 6.11 Series Rider, we will use a
non-discretionary, systematic mathematical process, the "Portfolio Stabilization
Process," to transfer Contract Value to and from the Bond PS Subaccount. We
describe the Portfolio Stabilization Process in more detail in "VI. Optional
Benefits" in this Prospectus, and in the SAI.
We permit you to make certain types of transactions by telephone or
electronically through the Internet.
Telephone and Electronic Transactions
When you purchase a Contract, we will automatically permit you to request
transfers and withdrawals by telephone. We also encourage you to access
information about your Contract, request transfers and perform some transactions
electronically through the Internet. We encourage you to register for electronic
delivery of your transaction confirmations, and we will waive the $50 annual
Contract fee if you are registered. Please contact the John Hancock Annuities
Service Center at the applicable telephone number or Internet address shown on
page ii of this Prospectus for more information on electronic transactions.
To access information and perform electronic transactions through our website,
we require you to create an account with a username and password, and to
maintain a valid e-mail address. You may also authorize other people to make
certain transaction requests by telephone or electronically through the Internet
by sending us instructions in a form acceptable to us. If you register for
electronic delivery, we keep your personal information confidential and secure,
and we do not share this information with outside marketing agencies.
We will not be liable for following instructions communicated by telephone or
electronically that we reasonably believe to be genuine. We will employ
reasonable procedures to confirm that instructions we receive are genuine. Our
procedures require you to provide information to verify your identity when you
call us and we will record all conversations with you. When someone contacts us
by telephone and follows our procedures, we will assume that you are authorizing
us to act upon those instructions. For electronic transactions through the
Internet, you will need to provide your username and password. You are
responsible for keeping your password confidential and must notify us of:
- any loss or theft of your password; or
- any unauthorized use of your password.
We may be liable for any losses due to unauthorized or fraudulent instructions
only where we fail to employ our procedures properly.
All transaction instructions we receive by telephone or electronically will be
followed by either a hardcopy or electronic delivery of a transaction
confirmation. Transaction instructions we receive by telephone or electronically
before the close of any Business Day will usually be effective at the end of
that day. Your ability to access or transact business electronically may be
limited due to circumstances beyond our control, such as system outages, or
during periods when our telephone lines or our website may be busy. We may, for
example, experience unusual volume during periods of substantial market change.
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We may suspend, modify or terminate our telephone or electronic transaction
procedures at any time. We may, for example, impose limits on the maximum
Withdrawal Amount available to you through a telephone transaction. Also, as
stated earlier in this Prospectus, we have imposed restrictions on transfers and
reserve the right to take other actions to restrict trading, including the right
to restrict the method used to submit transfers (e.g., by requiring transfer
requests to be submitted in writing via U.S. mail). We also reserve the right to
suspend or terminate the transfer privilege altogether with respect to anyone
who we feel is abusing the privilege to the detriment of others.
We make available Dollar Cost Averaging and Asset Rebalancing programs.
Special Transfer Services -- Dollar Cost Averaging
We administer a Dollar Cost Averaging ("DCA") program. If you enter into a DCA
agreement, you may elect, at no cost, to automatically transfer on a monthly
basis a predetermined dollar amount from any Variable Investment Option (the
"DCA Source Investment Option") to other Variable Investment Options (the
"Destination Investment Options") until the amount in the DCA Source Investment
Option is exhausted. You may make Additional Purchase Payments (if otherwise
allowable) while you are enrolled in a DCA program. If you do not provide us
with express written allocation instructions for these Additional Purchase
Payments, no amount will be allocated into your DCA Source Investment Option.
Instead, they will be allocated among the Destination Investment Options
according to the allocation you selected upon enrollment in the DCA program.
The DCA program allows investments to be made in equal installments over time in
an effort to reduce the risk posed by market fluctuations. Therefore, you may
achieve a lower purchase price over the long-term by purchasing more
accumulation units of a particular Subaccount when the unit value is low, and
less when the unit value is high. However, the DCA program does not guarantee
profits or prevent losses in a declining market and requires regular investment
regardless of fluctuating price levels. In addition, the DCA program does not
protect you from market fluctuations in your DCA Source Investment Option. If
you are interested in the DCA program, you may elect to participate in the
program on the appropriate application or you may obtain a separate
authorization form and full information concerning the program and its
restrictions from your registered representative or our Annuities Service
Center. You may elect out of the DCA program at any time. There is no charge for
participation in the DCA program.
IMPACT OF AUTOMATIC TRANSFERS UNDER AN IPFL 6.11 SERIES RIDER. If you purchase a
Contract with an IPFL 6.11 Series Rider, we will use the Portfolio Stabilization
Process to determine if any Contract Value will be transferred to or from the
Bond PS Subaccount. THE PORTFOLIO STABILIZATION PROCESS MAY RESULT INSTEAD IN
LIMITING YOUR ABILITY TO ACHIEVE THE DESIRED BENEFIT OF THE DCA programs.
Although we will process a daily transaction under the DCA program before we
process a transaction under the Portfolio Stabilization Process, you may
experience:
(i) greater redemptions of accumulation units of a particular Investment
Option when the unit value is low;
(ii) greater purchases of accumulation units of a particular Investment
Option when the unit value is high; and
(iii) less time, and different amounts, invested in a particular
Investment Option than you initially intended.
We describe the Portfolio Stabilization Process in more detail in "VI. Optional
Benefits" and in the SAI.
You should consult with your financial professional to assist you in determining
whether the DCA program is suited for your financial needs and investment risk
tolerance.
Special Transfer Services -- Asset Rebalancing Program
We administer an Asset Rebalancing program which enables you to specify the
allocation percentage levels you would like to maintain in particular Investment
Options. We will automatically rebalance your Contract Value pursuant to the
schedule described below to maintain the indicated percentages by transfers
among the Investment Options. You must include your entire value in the Variable
Investment Options in the Asset Rebalancing program. Other investment programs,
such as the DCA program, or other transfers or withdrawals may not work in
concert with the Asset Rebalancing program. Therefore, you should monitor your
use of these other programs and any other transfers or withdrawals while the
Asset Rebalancing program is being used. If you are interested in the Asset
Rebalancing program, you may obtain a separate authorization form and full
information concerning the program and its restrictions from your registered
representative or our Annuities Service Center. There is no charge for
participation in the Asset Rebalancing program.
We will permit asset rebalancing only on the following time schedules:
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- quarterly on the 25th day of the last month of the calendar quarter
(or the next Business Day if the 25th is not a Business Day);
- semi-annually on June 25th and December 26th (or the next Business
Day if these dates are not Business Days); or
- annually on December 26th (or the next Business Day if December 26th
is not a Business Day).
IMPACT OF AUTOMATIC TRANSFERS UNDER AN IPFL 6.11 SERIES RIDER. If you purchase a
Contract with an IPFL 6.11 Series Rider, we will use the Portfolio Stabilization
Process to determine if any Contract Value will be transferred to or from the
Bond PS Subaccount. THE PORTFOLIO STABILIZATION PROCESS IS NOT DESIGNED TO
MAINTAIN CONTRACT VALUE AMONG INVESTMENT OPTIONS IN YOUR INDICATED PERCENTAGES.
IT MAY RESULT INSTEAD IN LIMITING YOUR ABILITY TO ACHIEVE THE DESIRED BENEFIT OF
THE ASSET REBALANCING PROGRAM. Although we will process a scheduled transaction
under the Asset Rebalancing program before we process a transaction under the
Portfolio Stabilization Process, you may experience:
(i) transfers on a scheduled asset rebalancing date that do not match
your indicated percentages;
(ii) transfers to and from a particular Investment Option between
scheduled asset rebalancing dates; and
(iii) gains and losses between scheduled asset rebalancing dates for a
particular Investment Option that do not reflect the investment of
your indicated percentage of Contract Value in the Investment Option
for the entire period.
We describe the Portfolio Stabilization Process in more detail in "VI. Optional
Benefits" in this Prospectus, and in the SAI.
You should consult with your financial professional to assist you in deciding
whether the Asset Rebalancing program is suited for your financial needs and
investment risk tolerance, and in determining appropriate percentages for each
Investment Option you select.
You may withdraw all or a portion of your Contract Value, but you may incur
withdrawal charges or tax liability as a result.
Withdrawals
During the Accumulation Period, you may withdraw all or a portion of your
Contract Value upon written request (complete with all necessary information) to
our Annuities Service Center. You may make withdrawals by telephone as described
above under "Telephone and Electronic Transactions." For certain Qualified
Contracts, exercise of the withdrawal right may require the consent of the
Qualified Plan participant's spouse under the Code. See the SAI for further
information regarding the impact of taking withdrawals from Section 403(b)
Qualified Contracts. In the case of a total withdrawal, we will pay the Contract
Value as of the date of receipt of the request, complete with all necessary
information, at our Annuities Service Center, minus any applicable withdrawal
charge, Rider charge, administrative fee, or tax. We will then cancel the
Contract. In the case of a partial withdrawal, we will pay the amount requested,
reduced by any applicable withdrawal charge, Rider charge, administrative fee,
or amount withheld for taxes, and cancel accumulation units credited to each
Investment Account equal in value to the amount withdrawn from that Investment
Account plus any applicable withdrawal charge deducted from that Investment
Account.
When making a withdrawal from a Contract with an IPFL 6.11 Series Rider, your
Withdrawal Amount is taken proportionally from all of your Variable Investment
Options, including the Bond PS Subaccount.
When making a withdrawal from a Contract without an IPFL 6.11 Series Rider, you
may specify the Investment Options from which the withdrawal is to be made. The
amount requested from an Investment Option may not exceed the value of that
Investment Option minus any applicable withdrawal charge. If you do not specify
the Investment Options from which a withdrawal is to be taken, we will take the
withdrawal proportionally from all of your Variable Investment Options.
There is no limit on the frequency of withdrawals; however, the amount withdrawn
must be at least $300 or, if less, the entire balance in the Investment Option.
If after the withdrawal (and deduction of any withdrawal charge) the amount
remaining in the Investment Option is less than $100, we generally treat the
withdrawal as a withdrawal of the entire amount held in the Investment Option.
If a withdrawal plus any applicable withdrawal charge would reduce the Contract
Value to less than $1,000, we generally treat the withdrawal as a total
withdrawal of the Contract Value. We currently enforce these Contract minimum
restrictions only for Venture(R) 4 Series variable annuity Contracts that do not
have an Income Plus For Life 6.11 Series Rider. We reserve the right to enforce
these restrictions for other Contracts in the future.
We do not permit you to apply any amount less than your entire Contract Value to
the Annuity Options available under your Contract. If you want to use a part of
your Contract Value to purchase an immediate annuity contract, you must make a
withdrawal request, which will be subject to any applicable withdrawal charge.
We will pay the amount of any withdrawal from the Variable Investment Options
promptly, and in any event within seven days of receipt of the request, complete
with all necessary information, at our Annuities Service Center. We reserve the
right to defer the right of withdrawal or postpone payments for any period when:
- the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
- trading on the New York Stock Exchange is restricted;
25
- an emergency exists as determined by the SEC, as a result of which
disposal of securities held in the Separate Accounts is not
reasonably practicable or it is not reasonably practicable to
determine the value of the Separate Accounts' net assets;
- pursuant to SEC rules, the Money Market Subaccount suspends payment
of redemption proceeds in connection with a liquidation of the
underlying Portfolio; or
- the SEC, by order, so permits for the protection of security
holders; provided that applicable rules and regulations of the SEC
shall govern as to whether trading is restricted or an emergency
exists.
IMPACT OF DIVORCE. In the event that you and your spouse become divorced after
you purchase a Contract, we will treat any request to reduce or divide benefits
under a Contract as a request for a withdrawal of Contract Value. The
transaction may be subject to any applicable tax or withdrawal charge. Also, for
Contracts issued with an optional Income Plus For Life 6.11 Series Rider, your
guarantee may be reduced. If you determine to divide a Contract with an optional
benefit Rider, we will permit you to continue the existing Rider under one, but
not both, resulting Contracts. We will also permit the Owner of the other
Contract to purchase any optional benefit Rider then available.
TAX CONSIDERATIONS. Withdrawals from the Contract may be subject to income tax
and a 10% penalty tax. Withdrawals are permitted from Contracts issued in
connection with Section 403(b) Qualified Plans only under limited circumstances
(see "VIII. Federal Tax Matters" and the section titled "Qualified Plan Types"
in the SAI).
Signature Guarantee Requirements for Surrenders and Withdrawals
(Not applicable to Contracts issued in New Jersey)
We may require that you provide a signature guarantee on a surrender or
withdrawal request in the following circumstances:
- you are requesting that we mail the amount withdrawn to an alternate
address; or
- you have changed your address within 30 days of the withdrawal
request; or
- you are requesting a withdrawal in the amount of $250,000 or
greater.
We must receive the original signature guarantee on your withdrawal request. We
will not accept copies or faxes of a signature guarantee. You may obtain a
signature guarantee at most banks, financial institutions or credit unions. A
notarized signature is not the same as a signature guarantee and will not
satisfy this requirement. There may be circumstances, of which we are not
presently aware, in which we would not impose a signature guarantee on a
surrender or withdrawal as described above.
You may make Systematic "Income Plan" withdrawals.
Special Withdrawal Services -- The Income Plan
For Contracts without an IPFL 6.11 Series Rider, we administer an Income Plan
("IP") that permits you to pre-authorize a periodic exercise of the Contractual
withdrawal rights described above. After entering into an IP agreement, you may
instruct us to withdraw a level dollar amount from specified Investment Options
on a periodic basis. We limit the total of IP withdrawals in a Contract Year to
not more than 10% of the Purchase Payments made (to ensure that no withdrawal
charge will ever apply to an IP withdrawal). If additional withdrawals, outside
the IP program, are taken from a Contract in the same Contract Year in which an
IP program is in effect, IP withdrawals after the withdrawal charge-free
Withdrawal Amount has been exceeded are subject to a withdrawal charge. The IP
is not available to Contracts for which Purchase Payments are being
automatically deducted from a bank account on a periodic basis. We reserve the
right to suspend your ability to make Additional Purchase Payments while you are
enrolled in an IP. IP withdrawals, like other withdrawals, may be subject to
income tax and a 10% penalty tax. If you are interested in an IP, you may obtain
a separate authorization form and full information concerning the program and
its restrictions from your registered representative or our Annuities Service
Center. There is no charge for participation in the IP program.
Special Withdrawal Services -- The Income Made Easy Program
Our Income Made Easy Program provides you with an automatic way to access
guaranteed withdrawal amounts if you purchase a Contract with an IPFL 6.11
Series Rider. There is no charge for participation in this program. Please read
"VI. Optional Benefits -- Withdrawals, Distributions and Settlements --
Pre-authorized Withdrawals -- The Income Made Easy Program," for more
information.
If you die during the Accumulation Period, your Beneficiary will receive a death
benefit that could exceed your Contract Value.
Death Benefit During Accumulation Period
The Contracts described in this Prospectus provide for the distribution of a
death benefit before the Annuity Commencement Date.
AMOUNT OF DEATH BENEFIT. The death benefit payable under the Contract will be
the greater of:
- the Contract Value; or
- the "Guaranteed Minimum Death Benefit," i.e., the sum of all
Purchase Payments made, less any amounts deducted in connection with
withdrawals.
The death benefit is reduced in connection with withdrawals on a pro rata basis,
by an amount equal to (i) multiplied by (ii) where:
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(i) is equal to the death benefit prior to the withdrawal; and
(ii) is equal to the amount of the withdrawal divided by the Contract
Value prior to the withdrawal.
If you die during the Settlement Phase under an optional Income Plus For Life
6.11 Series Rider, however, the death benefit will be the amount, if any, then
payable under that Rider. Please read "VI. Optional Benefits" for more
information.
PAYMENT OF DEATH BENEFIT. The determination of the death benefit will be made on
the date we receive written notice and "proof of death" as well as all required
claims forms in Good Order from all Beneficiaries at our Annuities Service
Center. No one is entitled to the death benefit until this time. Proof of death
occurs when we receive one of the following at our Annuities Service Center:
- a certified copy of a death certificate; or
- a certified copy of a decree of a court of competent jurisdiction as
to the finding of death; or
- any other proof satisfactory to us.
DISTRIBUTION OF DEATH BENEFIT. The following discussion applies principally to
distribution of death benefits upon the death of an Owner under Contracts that
are not issued in connection with Qualified Plans, i.e., Nonqualified Contracts.
Tax law requirements applicable to Qualified Plans, including IRAs, and the tax
treatment of amounts held and distributed under such plans, are quite complex.
Accordingly, if your Contract is used in connection with a Qualified Plan, you
should seek competent legal and tax advice regarding requirements governing the
distribution of benefits, including death benefits, under the plan. In
particular, if you intend to use the Contract in connection with a Qualified
Plan, including an IRA, you and your advisor should consider that there is some
uncertainty as to the income tax effects of the death benefit on Qualified
Plans, including IRAs (see "VIII. Federal Tax Matters" and the section titled
"Qualified Plan Types" in the SAI).
In designating Beneficiaries you may impose restrictions on the timing and
manner of payment of death benefits. The description of death benefits in this
Prospectus does not reflect any of the restrictions that could be imposed, and
it should be understood as describing what will happen if the Contract Owner
chooses not to restrict death benefits under the Contract. If the Contract Owner
imposes restrictions, those restrictions will govern payment of the death
benefit to the extent permitted by the Code and by Treasury Department
regulations.
We will pay the death benefit to the Beneficiary if any Contract Owner dies
before the earlier of the Maturity Date or the Annuity Commencement Date. If
there is a surviving Owner, that Contract Owner will be deemed to be the
Beneficiary. No death benefit is payable on the death of any Annuitant, except
that if any Owner is not a natural person, the death of any Annuitant will be
treated as the death of an Owner. On the death of the last surviving Annuitant,
the Owner, if a natural person, will become the Annuitant unless the Owner
designates another person as the Annuitant.
Upon request, the death benefit proceeds may be taken in the form of a lump sum.
In that case, we will pay the death benefit within seven calendar days of the
date that we determine the amount of the death benefit, subject to postponement
under the same circumstances for which payment of withdrawals may be postponed
(see "Withdrawals" above). Beneficiaries who opt for a lump sum payout of their
portion of the death benefit may choose to receive the funds either in a single
check or wire transfer or in a John Hancock Safe Access Account ("JHSAA").
Similar to a checking account, the JHSAA provides the Beneficiary access to the
payout funds via a checkbook, and account funds earn interest at a variable
interest rate. Any interest paid may be taxable. The Beneficiary can obtain the
remaining death benefit proceeds in a single sum at any time by cashing one
check for the entire amount. The Beneficiary may draw a check on the JHSAA that
is payable to himself/herself as well as to any other person or party. Note,
however, that a JHSAA is not a true checking account, but is solely a means of
distributing the Contract's death benefit. The Beneficiary can only make
withdrawals, and not deposits. The JHSAA is part of our general account; it is
not a bank account and it is not insured by the FDIC or any other government
agency. As part of our general account, it is subject to the claims of our
creditors. We receive a benefit from all amounts left in the JHSAA.
If the Beneficiary does not choose a form of payment, or the death benefit
payable upon the death of an Owner is not taken in a lump sum, the Contract will
continue, subject to the following:
- The Beneficiary will become the Owner.
- We will allocate any excess of the death benefit over the Contract
Value to the Owner's Investment Accounts in proportion to their
relative values on the date of receipt by us of due proof of the
Owner's death.
- No Additional Purchase Payments may be made (even if the Beneficiary
is a surviving spouse).
- We will waive withdrawal charges for all future distributions.
- If the deceased Owner's Beneficiary is a surviving spouse who falls
within the definition of "spouse" under the federal Defense of
Marriage Act (see "Other Contract Provisions -- Spouse" below), he
or she may continue the Contract as the new Owner without triggering
adverse federal tax consequences. In such a case, the distribution
rules applicable when a Contract Owner dies will apply when the
spouse, as the Owner, dies. In addition, a death benefit will be
paid upon the death of the spouse. For purposes of calculating the
death benefit payable upon the death of the spouse (excluding any
optional benefits), we will treat the death benefit paid upon the
first Owner's death as a Purchase Payment to the Contract. In
addition, all Purchase Payments made and all amounts deducted in
connection with withdrawals prior to
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the date of the first Owner's death will be excluded from
consideration in the determination of the spouse's death benefit.
- If the Beneficiary is not the deceased Owner's spouse (as defined by
the federal Defense of Marriage Act), distribution of the Owner's
entire interest in the Contract must be made within five years of
the Owner's death, or alternatively, an individual Beneficiary may
take distributions as an annuity, under one of the Annuity Options
described below, which begins within one year after the Owner's
death and is payable over the life of the Beneficiary or over a
period not extending beyond the life expectancy of the Beneficiary
(see "Annuity Options" below). Note: we continue to assess the
mortality and expense risks charge during this period, even though
we bear only the expense risk and not any mortality risk (see "VII.
Charges and Deductions -- Mortality and Expense Risks Fee"). If
distribution is not made within five years and the Beneficiary has
not specified one of the above forms of payment, we will distribute
a lump sum cash payment of the Beneficiary's portion of the death
benefit. Also, if distribution is not made as an annuity, upon the
death of the Beneficiary, any remaining death benefit proceeds will
be distributed immediately in a single sum cash payment.
- Alternatively, if the Contract is not a Qualified Contract, an
individual Beneficiary may take distribution of the Owner's entire
interest in the Contract as a series of withdrawals over the
Beneficiary's life expectancy, beginning one year after the Owner's
death. If this form of distribution is selected, the Beneficiary may
not reduce or stop the withdrawals, but may in any year withdraw
more than the required amount for that year. If life expectancy
withdrawals have been selected and the initial Beneficiary dies
while value remains in the Contract, a successor Beneficiary may
either take a lump sum distribution of the remaining balance or
continue periodic withdrawals according to the original schedule
based on the initial Beneficiary's life expectancy.
We may change the way we calculate the death benefit if you add any Contract
Owner. If we do, the new death benefit will equal the Contract Value as of the
date of the ownership change. We will also treat the Contract Value on the date
of the change as a "Purchase Payment" made on that date for any subsequent
calculations of the death benefit prior to the Annuity Commencement Date, and we
will not consider any Purchase Payments made and any amounts deducted in
connection with withdrawals prior to the date of the ownership change in our
determination of the death benefit.
If you substitute a new Contract Owner, the death benefit will be the Contract
Value and the Guaranteed Minimum Death Benefit will not longer apply, with the
following exceptions:
(a) the new Owner is a guardian, a custodian or a trust established for
the sole benefit of the previous Owner;
(b) the new Owner is an individual and the previous Owner was a
guardian, a custodian or a trust established for the sole benefit of
that individual;
(c) the change is from one guardian , custodian or trust established for
the sole benefit of an individual to another guardian, custodian or
trust established for the sole benefit of that individual; or
(d) ownership is transferred to the Owner's spouse following the death
of the Owner.
A change of Contract Owner may be a taxable event if the Owner or co-Owner
before the change is an individual and the new Owner or co-Owner is not a spouse
of the previous Owner (or co-Owner). You should consult with a qualified tax
advisor for further information relevant to your situation.
Please see "VI. Optional Benefits" for a discussion of benefits available to
Beneficiaries under the optional Annual Step-Up Death Benefit Rider.
PAY-OUT PERIOD PROVISIONS
You have a choice of several different ways of receiving annuity payments from
us.
General
Generally, the Contracts contain provisions for the commencement of annuity
payments to the Annuitant up to the Contract's Maturity Date (the "Annuity
Commencement Date" is the first day of the Pay-out Period). The Maturity Date is
the date shown on your Contract's specifications page, unless we have approved a
change. For John Hancock USA Contracts, the earliest allowable Annuity
Commencement Date is six months after the Contract Date. For John Hancock New
York Contracts, the earliest allowable Annuity Commencement Date is one year
from the Contract Date. If no date is specified, the Maturity Date is the first
day of the month following the 95th birthday of the oldest Annuitant (or in New
York, the later of the 90th birthday of the oldest Annuitant or the tenth
Contract Anniversary) ("Default Maturity Date"). You may request a different
Maturity Date (including a date later than the Default Maturity Date) at any
time by written request at least one month before both the current and new
Maturity Dates. Under our current administrative procedures, however, the new
Maturity Date may not be later than the Default Maturity Date unless we consent
otherwise.*
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NOTICE OF MATURITY DATE. Under our current administrative procedures, we will
send you one or more notices at least 30 days before your scheduled Maturity
Date and request that you verify information we currently have on file. If you
do not choose an Annuity Option, do not make a total withdrawal of the Surrender
Value, or do not ask us to change the Maturity Date, we will provide as a
default a variable Annuity Option in the form of a life annuity with monthly
payments guaranteed for ten years, as described below. The Annuity Commencement
Date will be the Maturity Date. However, if the Contract Value is such that a
monthly payment would be less than $20, we may pay the Contract Value in one
lump sum to the Annuitant on the Annuity Commencement Date.
Annuity Options
Annuity payments are available under the Contract on a fixed, variable, or
combination fixed and variable basis. Upon purchase of the Contract, and at any
time during the Accumulation Period, you may select one or more of the Annuity
Options described below on a fixed and/or variable basis or choose an alternate
form of payment acceptable to us. A Beneficiary may also elect to apply the
Death Benefit to an Annuity Option. We apply your entire Contract Value or the
Beneficiary's entire portion of the Death Benefit proceeds to the Annuity
Option(s) selected. We will determine annuity payments based on the Investment
Account Value of each Investment Option at the Annuity Commencement Date. You
may select the frequency of annuity payments. However, if the Contract Value at
the Annuity Commencement Date is such that a monthly payment would be less than
$20, we may pay the Contract Value in one lump sum to the Annuitant on the
Annuity Commencement Date.
United States Treasury Regulations may preclude the availability of certain
Annuity Options in connection with certain Qualified Contracts. Once annuity
payments commence:
- you will no longer be permitted to make any withdrawals under the
Contract;
- you will no longer be permitted to make or receive any withdrawals
under an Income Plus For Life 6.11 Series Rider;
- we may not change the Annuity Option or the form of settlement; and
- your Guaranteed Minimum Death Benefit will terminate.
Please read the description of each Annuity Option carefully. In general, a
non-refund life annuity provides the highest level of payments. However, because
there is no guarantee that any minimum number of payments will be made, an
Annuitant may receive only one payment if the Annuitant dies prior to the date
the second payment is due. You may also elect annuities with payments guaranteed
for a certain number of years but the amount of each payment will be lower than
that available under the non-refund life Annuity Option.
ANNUITY OPTIONS OFFERED IN THE CONTRACT. The Contracts guarantee the
availability of the following Annuity Options:
Option 1(a): Non-Refund Life Annuity -- An annuity with payments during the
lifetime of the Annuitant. No payments are due after the death of the Annuitant.
Because we do not guarantee that we will make any minimum number of payments, an
Annuitant may receive only one payment if the Annuitant dies prior to the date
the second payment is due.
Option 1(b): Life Annuity with Payments Guaranteed for 10 Years -- An annuity
with payments guaranteed for 10 years and continuing thereafter during the
lifetime of the Annuitant. Because we guarantee payments for 10 years, we will
make annuity payments to the end of such period if the Annuitant dies prior to
the end of the tenth year.
Option 2(a): Joint & Survivor Non-Refund Life Annuity -- An annuity with
payments during the lifetimes of the Annuitant and a designated co-Annuitant. No
payments are due after the death of the last survivor of the Annuitant and
co-Annuitant. Because we do not guarantee that we will make any minimum number
of payments, an Annuitant or co-Annuitant may receive only one payment if the
Annuitant and co-Annuitant die prior to the date the second payment is due.
Option 2(b): Joint & Survivor Life Annuity with Payments Guaranteed for 10 Years
-- An annuity with payments guaranteed for 10 years and continuing thereafter
during the lifetimes of the Annuitant and a designated co-Annuitant. Because we
guarantee payments for 10 years, we will make annuity payments to the end of
such period if both the Annuitant and the co-Annuitant die prior to the end of
the tenth year.
----------
* We will deny our consent to a later Annuity Commencement Date based solely
upon any current or future legal restrictions imposed by state laws and
regulations, by regulatory authorities or by the Internal Revenue Code and
the IRS. Currently, for Nonqualified Contracts, the IRS has not provided
guidance with respect to a maximum date on which annuity payments must
start. In the event that any future rulings, regulations, or other
pronouncements by the IRS provide us with guidance, we may need to
restrict your ability to change to an Annuity Commencement Date under a
Nonqualified Contract which occurs when the Annuitant is at an advanced
age (i.e., past age 95). You should consult with a qualified tax advisor
for information about potential adverse tax consequences for such Annuity
Commencement Dates. For Qualified Contracts, distributions may be required
before the Annuity Commencement Date (see "VII. Federal Tax Matters -
Qualified Contracts - Required Minimum Distributions").
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ADDITIONAL ANNUITY OPTIONS. We currently offer the following Annuity Options
which are in addition to the ones we are contractually obligated to make
available. We may cease offering any of the following Annuity Options at any
time and may offer other Annuity Options in the future.
Option 3: Life Annuity with Payments Guaranteed for 5, 15 or 20 Years -- An
annuity with payments guaranteed for 5, 15 or 20 years and continuing thereafter
during the lifetime of the Annuitant. Because we guarantee payments for the
specific number of years, we make annuity payments to the end of the last year
of the 5-, 15- or 20-year period.
Option 4: Lifetime Annuity with Cash Refund -- An annuity with payments during
the lifetime of the Annuitant. After the death of the Annuitant, we will pay the
Beneficiary a lump sum amount equal to the excess, if any, of the Contract Value
at the election of this option over the sum of the annuity payments made under
this option.
Option 5: Joint Life Annuity with Payments Guaranteed for 20 Years -- An annuity
with payments guaranteed for 20 years and continuing thereafter during the
lifetime of the Annuitant and a designated co-Annuitant. Because we guarantee
payments for the specific number of years, we make annuity payments to the end
of the last year of the 20-year period if both the Annuitant and the
co-Annuitant die during the 20-year period.
Option 6: Joint & Two-Thirds Survivor Non-Refund Life Annuity -- An annuity with
full payments during the joint lifetime of the Annuitant and a designated
co-Annuitant and two-thirds payments during the lifetime of the survivor.
Because we do not guarantee that we will make any minimum number of payments, an
Annuitant or co-Annuitant may receive only one payment if the Annuitant and
co-Annuitant die prior to the date the second payment is due.
Option 7: Period Certain Only Annuity for 10, 15 or 20 Years -- An annuity with
payments for a 10-, 15- or 20-year period and no payments thereafter. You may
surrender all or part of your Contract for its 'Commuted Value' after the
Pay-out Period has begun only if you select a variable pay-out under this
Option. (See "Full Surrenders During the Pay-out Period" and "Partial Surrenders
During the Pay-out Period" below.)
ADDITIONAL ANNUITY OPTIONS FOR CONTRACTS WITH AN IPFL 6.11 SERIES RIDER. We make
additional Annuity Options available if you purchase a Contract with one of our
Income Plus For Life 6.11 Series Riders ("IPFL Alternate Annuity Options"). The
applicable fixed IPFL Alternate Annuity Option for single or joint lives shown
below will be provided as the default option at your Contract's Maturity Date.
IPFL Alternate Annuity Option 1: Lifetime Income Amount with Cash Refund -- This
Annuity Option is available if you purchase a Contract with an IPFL 6.11 Rider.
Under this option, we will make annuity payments during the lifetime of the
Annuitant. After the death of the Annuitant, we will pay the Beneficiary a lump
sum amount equal to the excess, if any, of the Contract Value at the election of
this option over the sum of the annuity payments made under this option. The
annual amount of the annuity payments will equal the greater of:
- the Lifetime Income Amount on the Annuity Commencement Date, if any,
as provided by the IPFL 6.11 Rider that you purchased with your
Contract; or
- the annual amount that your Contract Value provides on a guaranteed
basis under a lifetime with cash refund annuity.
IPFL Alternate Annuity Option 2: Joint & Survivor Lifetime Income Amount with
Cash Refund -- This Annuity Option is available if you purchase a Contract with
the IPFL -- Joint Life 6.11 Rider and both Covered Persons remain on the Rider
at the Annuity Commencement Date. Under this option, we will make annuity
payments during the joint lifetime of the co-Annuitants. After the death of the
last surviving Annuitant, we will pay the Beneficiary a lump sum amount equal to
the excess, if any, of the Contract Value at the election of this option over
the sum of the annuity payments made under this option. The annual amount of the
annuity payments will equal the greater of:
- the Lifetime Income Amount on the Annuity Commencement Date, if any,
as provided by the IPFL -- Joint Life 6.11 Rider that you purchased
with your Contract; or
- the annual amount that your Contract Value provides on a guaranteed
basis under a joint life with cash refund annuity.
FULL SURRENDERS DURING THE PAY-OUT PERIOD. You may surrender your Contract,
after the Pay-out Period has begun, only if you have selected a variable pay-out
under Option 7: Period Certain Only Annuity for 10, 15, or 20 years. Under this
option, we will pay you the present value of any remaining guaranteed annuity
payments ("Commuted Value") of your Contract. The Commuted Value is determined
on the day we receive your written request for surrender. We determine the
Commuted Value by:
- multiplying the number of Annuity Units we currently use to
determine each payment by the respective Annuity Unit value on the
last payment date (see "Annuity Units and the Determination of
Subsequent Variable Annuity Payments" below for a description of an
Annuity Unit);
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- assuming that the net investment factor for the remainder of the
guarantee period will equal the assumed interest rate of 1%,
resulting in level annuity payments; and
- calculating the present value of these payments at the assumed
interest rate of 1%.
If you elect to take the entire Commuted Value of the remaining annuity payments
due in the Period Certain, no future annuity payments will be made.
PARTIAL SURRENDERS DURING THE PAY-OUT PERIOD. We permit partial surrenders after
the Pay-out Period has begun, only if you have selected a variable pay-out under
Option 7: Period Certain Only Annuity for 10, 15, or 20 years. You may take
partial surrenders of amounts equal to the Commuted Value of the payments that
we would have made during the Period Certain. The Commuted Value is determined
in the manner described above on the day we receive your written request for
surrender.
If you elect to take only the Commuted Value of some of the remaining annuity
payments due in the Period Certain, we will reduce the remaining annuity
payments during the remaining Period Certain by reducing the number of Annuity
Units used to determine payments (see "Annuity Units and the Determination of
Subsequent Variable Annuity Payments" in this section, below, for how we
determine the initial number of Annuity Units used to determine payments). Since
there will be fewer Annuity Units, your remaining payments will be reduced. The
new number of Annuity Units used to determine future payments after an amount is
commuted will equal a x {1 - ((b / c) / d)}, where:
a equals the number of Annuity Units used to determine future payments
before the commutation;
b equals the dollar amount requested to be paid out as part of the
commutation;
c equals the present value of all Annuity Units to be paid out if
there were no commutation, where the interest rate used to present
value the Annuity Units is the assumed interest rate of 1%; and
d equals the Annuity Unit value on the day the commutation is
executed.
For example, assume that before you request a partial Commuted Value, you will
receive 400 units a year for 10 years. You request $20,000 in Commuted Value.
Since you are receiving those 400 units for 10 years, C equals the present value
of 400 units for 10 years starting the end of this year at a rate of an assumed
interest rate of 1%. This value is 3,788.52 units. Assuming the annuity unit
value on the day the commutation is executed is $12.50, after the commutation
you will receive 400 x {1 - (($20,000 / 3,788.52) / $12.50)} = 231.07 units a
year for 10 years.
Once annuity payments begin under an Annuity Option, you will not be able to
make any additional withdrawals under a Contract with an Income Plus For Life
6.11 Series Rider.
FIXED ANNUITY OPTIONS. Upon death (subject to the distribution of death benefits
provisions; see "Death Benefit During Accumulation Period"), withdrawal or the
Maturity Date of the Contract, the proceeds may be applied to a Fixed Annuity
Option.
We determine the amount of each Fixed Annuity payment by applying the portion of
the proceeds (minus any applicable premium taxes) applied to purchase the Fixed
Annuity to the appropriate table in the Contract. If the table we are then using
is more favorable to you, we will substitute that table. If you choose an
Annuity Option that is not guaranteed in the Contract, we will use the
appropriate table that we are currently offering. We guarantee the dollar amount
of Fixed Annuity payments.
We do not permit you to apply any amount less than your entire Contract Value to
the Annuity Options available under your Contract. If you request to use a part
of your Contract Value to purchase an immediate annuity contract, we will treat
the request as a withdrawal request, subject to any applicable withdrawal
charge.
Determination of Amount of the First Variable Annuity Payment
We determine the first Variable Annuity payment by applying the portion of the
proceeds (minus any applicable premium taxes) applied to purchase a Variable
Annuity to the annuity tables contained in the Contract. We will determine the
amount of the Contract Value as of the date not more than ten Business Days
prior to the Annuity Commencement Date. We will reduce Contract Value used to
determine annuity payments by any applicable premium taxes.
The rates contained in the annuity tables vary with the Annuitant's age and the
Annuity Option selected. The longer the life expectancy of the Annuitant under
any life Annuity Option or the longer the period for which payments are
guaranteed under the option, the smaller the amount of the first monthly
Variable Annuity payment will be.
Annuity Units and the Determination of Subsequent Variable Annuity Payments
We will base Variable Annuity payments after the first one on the investment
performance of the Subaccounts selected during the Pay-out Period. The amount of
a subsequent payment is determined by dividing the amount of the first annuity
payment from each Subaccount by the Annuity Unit value of that Subaccount (as of
the same date the Contract Value to effect the annuity was determined) to
establish the number of Annuity Units which will thereafter be used to determine
payments. This number of Annuity Units for each Subaccount is then multiplied by
the appropriate Annuity Unit value as of a uniformly applied date not more than
ten Business Days before the annuity payment is due, and the resulting amounts
for each Subaccount are then totaled to arrive at the
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amount of the annuity payment to be made. The number of Annuity Units generally
remains constant throughout the Pay-out Period (assuming no transfer is made).
We will deduct a pro rata portion of the administration fee from each annuity
payment.
We charge the same Annual Separate Account Expenses during the annuitization
period as we do during the Accumulation Period. We determine the "net investment
factor" for an Annuity Unit in the same manner as we determine the net
investment factor for an accumulation unit (see "Value of Accumulation Units"
and "Net Investment Factor" under "V. Description of the Contract"). The value
of an Annuity Unit for each Subaccount for any Business Day is determined by
multiplying the Annuity Unit value for the immediately preceding Business Day by
the net investment factor for that Subaccount for the valuation period for which
the Annuity Unit value is being calculated and by a factor to neutralize the
assumed interest rate.
Generally, if the net investment factor is greater than the assumed interest
rate, the payment amount will increase. If the net investment factor is less
than the assumed interest rate, the payment amount will decrease.
We build a 1% assumed interest rate into the annuity tables in the Contract used
to determine the first Variable Annuity payment. The smallest annual rate of
investment return which is required to be earned on the assets of the Separate
Account so that the dollar amount of Variable Annuity payments will not decrease
is 2.73%.
Some transfers are permitted during the Pay-out Period, but subject to different
limitations than during the Accumulation Period.
Transfers During Pay-out Period
Once Variable Annuity payments have begun, you may transfer all or part of the
investment upon which those payments are based from one Subaccount to another.
You must submit your transfer request to our Annuities Service Center at least
30 DAYS BEFORE the due date of the first annuity payment to which your transfer
will apply. We will make transfers after the Annuity Commencement Date by
converting the number of Annuity Units being transferred to the number of
Annuity Units of the Subaccount to which the transfer is made, so that the next
annuity payment if it were made at that time would be the same amount that it
would have been without the transfer. Thereafter, annuity payments will reflect
changes in the value of the Annuity Units for the new Subaccount selected. We
reserve the right to limit, upon notice, the maximum number of transfers a
Contract Owner may make to four per Contract Year. Once annuity payments have
commenced, a Contract Owner may not make transfers from a Fixed Annuity Option
to a Variable Annuity Option or from a Variable Annuity Option to a Fixed
Annuity Option. In addition, we reserve the right to defer the transfer
privilege at any time that we are unable to purchase or redeem shares of a
Portfolio. We also reserve the right to modify or terminate the transfer
privilege at any time in accordance with applicable law.
Death Benefit During Pay-out Period
If an Annuity Option providing for payments for a guaranteed period has been
selected and the Annuitant dies during the Pay-out Period, we will make the
remaining guaranteed payments to the Beneficiary. We will make any remaining
payments as rapidly as under the method of distribution being used as of the
date of the Annuitant's death. If no Beneficiary is living, we will commute any
unpaid guaranteed payments to a single sum (on the basis of the interest rate
used in determining the payments) and pay that single sum to the estate of the
last to die of the Annuitant and the Beneficiary.
We do not make any payments to a Beneficiary, however, if the last surviving
Covered Person dies while we are making payments under an Annuity Option
providing only for payments for life, or payments during the Settlement Phase
under an optional Income Plus For Life 6.11 Series Rider. Please read "VI.
Optional Benefits" for additional information.
OTHER CONTRACT PROVISIONS
You have a right to cancel your Contract.
Right to Review
You may cancel the Contract by returning it to our Annuities Service Center or
to your registered representative at any time within 10 days after receiving it
or such other period as required by law. Within 7 days of receiving a returned
Contract, we will pay you the Contract Value computed at the end of the Business
Day on which we receive your returned Contract or written notification
acceptable to us.
No withdrawal charge is imposed upon return of a Contract within the right to
review period. The number of days for a right to review may vary in certain
states and for certain age groups in order to comply with the requirements of
state insurance laws and regulations. Also, when required by state law or when
the Contract is issued as an individual retirement annuity under section 408 or
408A of the Code, during the first 7 days of the right to review period, we will
return all Purchase Payments if this is greater than the amount otherwise
payable.
If you purchase your Contract in connection with a replacement of an existing
contract, your Contract may provide for a longer time period to return it to us.
For example, in New York, you may return the Contract at any time within 60 days
after receiving it. Replacement of an existing annuity contract generally is
defined as the purchase of a new contract in connection with (a) the lapse,
partial or full surrender or change of, or borrowing from, an existing annuity
or life insurance contract or (b) the assignment to a new issuer of an existing
annuity contract. This description, however, does not necessarily cover all
situations which could be considered
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a replacement of an existing contract. Therefore, you should consult with your
registered representative or attorney regarding whether the purchase of a new
Contract is a replacement of an existing contract.
Ownership
You own the Contract.
Prior to the Maturity Date, the Contract Owner is the person(s) designated in
the Contract specifications page or as subsequently named. We do not permit
joint ownership of Contracts purchased by a non-natural person (such as a
corporation or a trust) or held for the benefit of such an entity. On and after
the Annuity Commencement Date, the Annuitant is the Contract Owner (except when
the Owner is a trust or custodian). If amounts become payable to any Beneficiary
under the Contract, the Beneficiary becomes the Contract Owner.
You must make any requests to change ownership in writing and we must receive
such written change at the Annuities Service Center.
Before requesting a change of ownership or making an assignment of your
Contract, you should consider:
- A change of ownership may be treated as a distribution from the
Contract and subject to tax. We consider a collateral assignment to
be a distribution from the Contract, and we will report any taxable
amounts as may be required.
- A change of ownership may result in termination of a qualified
minimum withdrawal benefit guarantee (see "VI. Optional Benefits").
- An addition of any Contract Owner may result in a reduction of the
death benefit. We may reset the death benefit to an amount equal to
the Contract Value as of the date of the change of ownership, and
treat that amount as a "Purchase Payment" made on the same date for
purposes of computing further adjustments to the amount of the death
benefit.
- A substitution of any Contract Owner may result in a reduction of
the death benefit. We may reset the death benefit to an amount equal
to the Contract Value.
- A change of ownership (or collateral assignment) will be subject to
the rights of any irrevocable Beneficiary.
- You may not change ownership or make a collateral assignment after
the earlier of the Maturity Date or the Annuity Commencement Date.
- Contracts issued to a Qualified Plan may be subject to restrictions
on transferability. For example, Qualified Contracts generally may
not be transferred except by the trustee of an exempt employees'
trust which is part of a retirement plan qualified under section 401
of the Code or as otherwise permitted by applicable Treasury
Department regulations. You may not be able to sell, assign,
transfer, discount or pledge (as collateral for a loan or as
security for the performance of an obligation, or for any other
purpose) a Qualified Contract to any person other than us.
We assume no liability for any payments made or actions taken before a change is
approved or an assignment is accepted. We assume no responsibility for the
validity or sufficiency of any assignment. An absolute assignment or ownership
change will revoke the interest of any revocable Beneficiary.
The Annuitant is either you or someone you designate.
Annuitant
The Annuitant is any natural person or persons whose life is used to determine
the duration of annuity payments involving life contingencies. The Annuitant is
entitled to receive all annuity payments under the Contract. If the Contract
Owner names more than one person as an "Annuitant," the second person named
shall be referred to as "co-Annuitant." The Annuitant is as designated on the
Contract specifications page or in the application, unless changed. You must
make any change of Annuitant in writing in a form acceptable to us and the
change must be received at our Annuities Service Center. We must approve any
change.
On the death of the Annuitant prior to the Annuity Commencement Date, the
co-Annuitant, if living, becomes the Annuitant. If there is no living
co-Annuitant, the Owner becomes the Annuitant. In the case of certain Qualified
Contracts, there are limitations on the ability to designate and change the
Annuitant and the co-Annuitant. The Annuitant becomes the Owner of the Contract
at the Annuity Commencement Date (except when the Owner is a trust or
custodian).
If any Annuitant is changed and any Contract Owner is not a natural person, we
normally distribute the entire interest in the Contract to the Contract Owner
within five years. We will reduce the amount distributed by charges that would
otherwise apply upon withdrawal.
The Beneficiary is the person you designate to receive the death benefit if you
die.
Beneficiary
The Beneficiary is the person, persons or entity designated in the Contract
specifications page (or as subsequently changed). However, if there is a
surviving Contract Owner, we will treat that person as the Beneficiary. You may
change the Beneficiary subject to the rights of any irrevocable Beneficiary. You
must make any change in writing and the change must be received at our Annuities
Service Center. We must approve any change. If approved, we will effect such
change as of the date on which it was written. We assume no liability for any
payments made or actions taken before the change is approved. If no Beneficiary
is living, any designated Contingent Beneficiary will be the Beneficiary. The
interest of any Beneficiary is subject to that of any assignee. If no
33
Beneficiary or Contingent Beneficiary is living, the Beneficiary is the estate
of the deceased Contract Owner. In the case of certain Qualified Contracts,
Treasury Department regulations may limit designations of Beneficiaries.
Spouse
FEDERAL DEFINITION OF SPOUSE. Any federal tax provisions related to status as a
"spouse" are governed by the Federal Defense of Marriage Act ("DOMA"), which
does not recognize civil unions or same-sex marriages that may be allowed under
state law. Please consult with your own qualified tax advisor for information on
how federal tax rules may affect Contracts where civil union or same-sex
marriage partners, either singularly or jointly own the Contract, or are
designated Annuitant(s), Beneficiary(ies) and/or Covered Person(s).
STATE VARIATIONS. Some states require that civil union and same-sex marriage
partners receive the same contractual benefits as spouses who fall within the
DOMA definition. To see a table of states with such a requirement, you may
request an SAI from the Annuities Service Center. You should consult with a
qualified financial professional for additional information on your state's
regulations regarding civil unions and same-sex marriages.
Modification
We may not modify your Contract or certificate without your consent, except to
the extent required to make it conform to any law or regulation or ruling issued
by a governmental agency.
Code Section 72(s)
In order for our Nonqualified Contracts (i.e., Contracts not purchased to fund
an Individual Retirement Account or other Qualified Plan) to be treated as
annuities under the Code, we will interpret the provisions of the Contract so as
to comply with the requirements of section 72(s) of the Code, which prescribes
certain required provisions governing distributions after the death of the
Owner.
Our Approval
We reserve the right to accept or reject any Contract application at our sole
discretion.
Misstatement and Proof of Age or Survival
We may require proof of age or survival of any person upon whose age or survival
any payment depends. If the age of the Annuitant has been misstated, the
benefits will be those that would have been provided for the Annuitant's correct
age. If we have made incorrect payments under the Contract, we will either pay
the amount of any underpayment immediately or we will deduct the amount of any
overpayment from future payments.
34
VI. Optional Benefits
OVERVIEW
We currently offer two types of optional benefit Riders that you may elect to
purchase when you purchase a Contract:
- the Income Plus For Life 6.11 Series Riders*, which are designed to
provide a stream of lifetime income to the annuitant through
withdrawals; and
- the Annual Step-Up Death Benefit Rider, which has the potential to
provide a death benefit in excess of that provided under the
Contract if the holder of the Contract (or the Annuitant, if the
holder is a legal entity) dies during the Accumulation Phase of the
Contract.
*We use the term "IPFL 6.11 SERIES RIDERS" in the Prospectus to refer to both
Income Plus For Life Riders, i.e., Income Plus For Life 6.11 and Income Plus For
Life -- Joint Life 6.11.
You may elect to purchase these Riders only at the time you purchase a Contract.
Once you elect a Rider and the right to cancel your Contract period expires (see
"Other Contract Provisions -- Right to Review" in "V. Description of the
Contract"), you may not revoke these optional benefits.
FEATURES OF THE IPFL 6.11 SERIES RIDERS
Covered Person(s)
The Income Plus For Life 6.11 Series Riders we currently offer provide a
lifetime income guarantee based on a single life (Income Plus For Life 6.11) or
on the lifetime duration of two Covered Persons (Income Plus For Life -- Joint
Life 6.11).
SINGLE LIFE GUARANTEE. For Income Plus For Life 6.11 Riders that provide a
lifetime income guarantee based on the life of a single Covered Person, the
Covered Person is the oldest Annuitant at issue of the Rider.
The Covered Person must remain an Annuitant (subject to our underwriting rules)
to receive benefits under a Rider.
JOINT LIFE GUARANTEE. Income Plus For Life -- Joint Life 6.11 Riders provide a
lifetime income guarantee based on the lifetime duration of two Covered Persons,
determined at the time you elect the Rider. A spouse may need to qualify as a
"spouse" under federal law to be treated as a Covered Person under the Contract.
See "Civil Union and Same-Sex Marriage Partners" below.
Availability
You may elect an IPFL 6.11 Series Rider at the time you purchase a Contract,
provided:
- the Rider is available for sale in the state where the Contract was
sold;
- you limit your investment allocations of Purchase Payments and
Contract Value to the Investment Options we make available with the
Rider;
- the Covered Person complies with the age restrictions we may impose
for the Rider; and
- if you intend the Contract to be used with an IRA you inherited from
someone else (sometimes referred to as an "Inherited IRA" or
"Beneficiary IRA"), you must be the surviving spouse of the decedent
and own the IRA in your own name.
If you are the Beneficiary of a Contract that is intended to qualify as an IRA:
- you may be able to continue that Contract in effect as an Inherited
IRA, but if the Contract has an existing IPFL 6.11 Rider, the Rider
will terminate and
- you will not be permitted to purchase a new IPFL 6.11 Rider for use
with the Contract.
In most cases, an IPFL 6.11 -- Joint Life Rider that we issued with a Contract
intended for use as an IRA continues until the death of the last Covered Person.
You may elect to purchase an Income Plus For Life 1.11 Series Rider only at the
time you purchase a Contract. Once you elect a Rider and the right to cancel
your Contract period expires (see "Other Contract Provisions -- Right to Review"
in "V. Description of the Contract"), you may not revoke this optional benefit.
Please contact the John Hancock Annuities Service Center at 800-344-1029 (in NY:
800-551-2078) for additional information on availability. We offer these
optional benefit Riders only where approved by state insurance regulatory
agencies. We reserve the right to accept or refuse to issue a Rider at our sole
discretion. Once you elect to purchase a Rider, its effective date usually will
be the Contract Date (unless we permit otherwise) and it is irrevocable.
AGE RESTRICTIONS. The Covered Person (oldest Covered Person for IPFL 6.11 --
Joint Life) must be under age 81 for you to purchase a Rider.
35
IMPACT OF OWNERSHIP ARRANGEMENTS ON THE AVAILABILITY OF INCOME PLUS FOR LIFE --
JOINT LIFE 6.11 RIDERS. We will issue an Income Plus For Life -- Joint Life 1.11
Rider only if your ownership arrangement permits continuation of your Contract
at death of the Owner.
We will issue Income Plus For Life -- Joint Life 6.11 Riders if the spouses are
co-Annuitants and under the following ownership arrangements:
- In general, covered spouses should be joint Owners, or one covered
spouse should be the Owner and the other covered spouse should be
named as the sole primary Beneficiary.
- For non-natural person ownership designations, generally the covered
spouses should be the co-Beneficiaries.
- For custodial IRAs and Qualified Plans, the surviving spouse must be
the designated primary Beneficiary of the custodial IRA or Qualified
Plan account.
We may issue the Income Plus For Life -- Joint Life 6.11 Rider under certain
other non-natural person ownership arrangements, provided the arrangement allows
for the continuation of the Contract at death of the Annuitant. Please note that
naming a trust as the Beneficiary may trigger an accelerated payment of the
death benefit and negate continuation of the Rider benefit to the surviving
spouse. You are responsible for understanding the impact of ownership
arrangements in your estate planning and for establishing and maintaining
ownership arrangements that will allow for spousal continuation. It is the
responsibility of the trustee, under a custodial IRA or a Qualified Plan, to
determine whether the Beneficiary designation on file with the trustee will
allow for continuation of the Rider benefit.
Changes to the Owner, Annuitant or Beneficiary after the Rider is issued may
reduce, limit, or terminate benefits available under the Rider.
CIVIL UNION AND SAME-SEX MARRIAGE PARTNERS. The Rider generally is designed to
comply with current federal tax provisions related to status as a "spouse" under
the federal Defense of Marriage Act ("DOMA"). The DOMA definition does not
recognize civil unions or same-sex marriages that may be allowed under state
law. In certain states, however, we will allow civil union and same-sex marriage
partners to purchase the Contract with the Rider and receive the same Rider
benefits as a "spouse" who falls within the DOMA definition. See the SAI for a
table identifying these states. Please note that in these states, there may be
adverse federal tax consequences with distributions and other transactions upon
the death of the first civil union or same-sex marriage partner. Please consult
with your own qualified tax advisor.
Rider Fee
We charge an additional fee on each Contract Anniversary for the IPFL 6.11
Series Riders. Subject to certain limits described below, we reserve the right
to change the fee, up to the maximum fee, at any time. We withdraw the fee from
each Investment Option in the same proportion that the value of Investment
Accounts of each Investment Option bears to the Contract Value. We will deduct a
pro rata share of this annual fee from the Contract Value:
- on the date we determine the death benefit;
- after the Annuity Commencement Date at the time an Annuity Option
under the Contract begins; or
- at full surrender of the Contract.
We do not deduct any additional Rider fee during the Settlement Phase or after
the Annuity Commencement Date once an Annuity Option begins.
The current fee is equal to 1.00% of the Adjusted Benefit Base. The Adjusted
Benefit Base is the Benefit Base that was available on the prior Contract
Anniversary (including any Step-Up applied on that prior Contract Anniversary)
increased by any Additional Purchase Payments that we applied to the Benefit
Base during the Contract Year prior to the current Contract Anniversary. We
reserve the right to change the IPFL 6.11 Series Rider fee at any time, but we
will not change the Rider fee during the first two Contract Years, or within the
two Contract Years following a change in the Rider fee. The fee will never
exceed a maximum fee of 1.50%.
Restrictions on Additional Purchase Payments
In addition to the limits we place on Additional Purchase Payments in the
Contract, we further restrict your ability to make Additional Purchase Payments
into Contracts with an IPFL 6.11 Series Rider. You must obtain our prior
approval if the contract values in this Contract plus any other variable annuity
contracts with the same Owner or Annuitant and issued by us or our affiliates
(your "total contract values") would, immediately following an Additional
Purchase Payment, exceed $1 million. We do not permit Additional Purchase
Payments during a Rider's Settlement Phase (see "Settlement Phase" below). Other
limitations on Additional Purchase Payments may vary by state.
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SPECIAL PURCHASE PAYMENT LIMITS ON NONQUALIFIED CONTRACTS. If we issue your
Contract not in connection with an IRA or other Qualified Plan, we also will not
accept, without our prior approval, an Additional Purchase Payment if your total
payments after the first Contract Anniversary exceed $100,000.
SPECIAL PURCHASE PAYMENT LIMITS ON QUALIFIED CONTRACTS. If we issue your
Contract in connection with a Qualified Plan, including an IRA, we also impose
additional limits on your ability to make Purchase Payments:
- to the extent provided in your Rider, we will not accept an
Additional Purchase Payment if your total payments after the first
Contract Anniversary, or the Age 65 Contract Anniversary, if later,
exceed $100,000; and
- we will not accept any Purchase Payment after the oldest Covered
Person becomes age 81.
Prior to purchasing a Contract or an IPFL 6.11 Series Rider, you should consult
with a qualified tax advisor for further information on tax rules affecting
Qualified Contracts, including IRAs.
GENERAL RIGHT OF REFUSAL. We reserve the right to refuse to accept Additional
Purchase Payments at any time after the first Contract Anniversary to the extent
permitted in the state we issue your Contract.
IPFL 6.11 Series Riders Benefits
LIFETIME INCOME AMOUNT. The Rider provides our guarantee that a Lifetime Income
Amount will be available for withdrawal each Contract Year, beginning on a
Lifetime Income Date as long as:
- (for the IPFL 6.11 Rider): the Covered Person remains alive and is
designated as an Annuitant under the Contract, or
- (for the IPFL -- Joint Life 6.11 Rider): either Covered Person
remains alive and is designated as an Annuitant under the Contract.
The Rider terminates upon the death of the last Covered Person or upon a change
in Owner, Beneficiary or Annuitant that removes the last Covered Person from the
Contract as an Owner, Beneficiary or Annuitant.
We determine the initial Lifetime Income Amount by multiplying:
- the Benefit Rate for the Rider on the Lifetime Income Date; by
- the Benefit Base for the Rider on the Lifetime Income Date.
EXAMPLE (IPFL 6.11): Assume that the Benefit Base on the Lifetime Income Date is
$100,000. If the Benefit Rate is 5%, the Lifetime Income Amount is $5,000 (5% x
$100,000).
We will increase the Lifetime Income Amount to reflect Additional Purchase
Payments, Credits and Step-Ups that we may apply to an IPFL 6.11 Series Rider's
Benefit Base and/or Benefit Rate. Please see "Increases in Guaranteed Amounts"
below for more information.
We will reduce the Lifetime Income Amount if you take Excess Withdrawals. During
periods of declining investment performance, Excess Withdrawals could result in
substantial reductions to your Benefit Base. Please see "Withdrawals,
Distributions and Settlements" below for more information.
LIFETIME INCOME DATE. The Lifetime Income Amount guarantee starts on a Lifetime
Income Date. The earliest Lifetime Income Date will be the date you purchase the
Rider (the Rider's "effective date") if the youngest Covered Person will attain
age 59 1/2 or older during the first Contract Year.
Otherwise, the Lifetime Income Date in most cases is the Contract Anniversary
immediately preceding the date the youngest Covered Person attains age 59 1/2.
The earliest available Lifetime Income Date we offer for this Rider is subject
to change. Once you purchase this Rider, the earliest available Lifetime Income
Date in effect when we issue the Rider will remain in effect for as long as the
Rider remains in effect.
Benefits under the Rider may be affected if you purchase the Rider before the
earliest available Lifetime Income Date and take a withdrawal before then.
Please see "Withdrawals before the Lifetime Income Date" for more information.
We determine the initial Lifetime Income Amount on the Lifetime Income Date. You
cannot change or defer the Lifetime Income Date under the Rider, but you may
continue to be eligible for Credits and increases in the Benefit Rate, if any,
if you defer taking withdrawals (see "Increases in Guaranteed Amounts," below).
BENEFIT BASE. We use a Benefit Base to determine the Lifetime Income Amount. The
maximum Benefit Base at any time for an IPFL 6.11 Series Rider is $3 million.
The initial Benefit Base equals the amount of your initial Purchase Payment (up
to $3 million).
37
We will reduce the Benefit Base if you take Excess Withdrawals. We reduce the
Benefit Base to reflect these withdrawals on a pro rata basis. During periods of
declining investment performance, Excess Withdrawals could result in substantial
reductions to your Benefit Base. Please see "Withdrawals, Distributions and
Settlements" in this section, below, for more information.
We will increase the Benefit Base to reflect Additional Purchase Payments,
Credits and Step-Ups. Please see "Increases in Guaranteed Amounts" below for
more information.
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BENEFIT RATE. We use the following Benefit Rates to determine the Lifetime
Income Amount:
BENEFIT RATE BY AGE
--------------------------------------------------------------------------------
Covered Person's age during the
Contract Year of the first
withdrawal after the Lifetime
Income Date IPFL 6.11 Rider IPFL -- Joint Life 6.11 Rider
-------------------------------- --------------- ------------------------------
59 1/2 -- 64 4.00% 3.75%
65 and over 5.00% 4.75%
Because we provide our guarantee over the lifetimes of two Covered Persons under
the Income Plus For Life -- Joint Life 6.11 Rider, we use a lower Benefit Rate
than we do under the Income Plus For Life 6.11 Rider. Because there is a higher
Benefit Rate at older ages, if you defer taking withdrawals after the Lifetime
Income Date, we will use the Benefit Rate applicable to the attained age of the
Covered Person (youngest Covered Person under IPFL -- Joint Life 6.11) on the
first withdrawal after the Lifetime Income Date.
EXAMPLE: Assume that you purchase a Contract with the IPFL 6.11 Rider when your
age is 57 years and 7 months. Your Lifetime Income Date will be the first
Contract Anniversary since you will attain age 59 1/2 during the Contract Year
that begins on that anniversary. If the first time you take a withdrawal after
the Lifetime Income Date is during the second Contract Year, we will set your
Benefit Rate equal to 4% since you were over age 59 1/2 and under age 65 during
the Contract Year of the withdrawal. If you wait until the 8th Contract Year to
take the first withdrawal after the Lifetime Income Date, we will set your
Benefit Rate equal to 5% since you will attain age 65 during the Contract Year
of the withdrawal.
We may change the Benefit Rate we offer for this Rider. With the higher Benefit
Rate at older ages, if you defer taking withdrawals after the Lifetime Income
Date, we will use the Benefit Rate applicable to the attained age of the Covered
Person on the first withdrawal after the Lifetime Income Date.
We do not expect the Benefit Rate(s) we offer to be less than 3% or more than
7%, but we provide no assurance that we will continue to offer the Rider within
this range. Once you purchase this Rider, however, the Benefit Rate(s) in effect
when we issue the Rider will remain in effect for as long as the Rider remains
in effect.
Variable Investment Options and Automatic Transfers of Contract Value Under an
IPFL 6.11 Series Rider The Variable Investment Options that we use for Contracts
with an IPFL 6.11 Series Rider differ from the Variable Investment Options we
make available for Contracts without an IPFL 6.11 Series Rider.
The Variable Investment Options for Contracts with an IPFL 6.11 Series Rider
are:
VARIABLE INVESTMENT OPTIONS THAT YOU MAY SELECT VARIABLE INVESTMENT OPTION
-------------------------------------------------------------------------------------------------------- THAT WE USE FOR AUTOMATIC
Subject to automatic transfers of Contract Value: Not subject to automatic transfers of Contract Value: TRANSFERS OF CONTRACT VALUE
------------------------------------------------- ----------------------------------------------------- ---------------------------
Lifestyle Balanced PS Subaccount Ultra Short Term Bond Subaccount Bond PS Subaccount
Lifestyle Growth PS Subaccount
Lifestyle Moderate PS Subaccount
Lifestyle Conservative PS Subaccount* Lifestyle Conservative PS Subaccount*
----------
* Automatic transfers will not apply if you allocate 100% of your Contract
Value to the Lifestyle Conservative PS Subaccount or the Ultra Short Term
Bond Subaccount.
When you select a Variable Investment Option, we allocate your money to a
Subaccount of our Separate Account. Each Subaccount invests in a corresponding
Portfolio of the John Hancock Variable Insurance Trust. Please see "IV. General
Information about Us, the Separate Accounts and the Portfolios" for more
information about each of these Portfolios.
You also may use a Variable Investment Option (other than the Bond PS
Subaccount) as a DCA Source Investment Option under our DCA program. (See "V.
Description of the Contract -- Special Transfer Services -- Dollar Cost
Averaging" for more information about this program.) We reserve the right to
restrict in the future the Variable Investment Options that you may select to
allocate your Contract Value.
YOU SHOULD CONSULT WITH YOUR REGISTERED REPRESENTATIVE TO ASSIST YOU IN
DETERMINING WHICH AVAILABLE VARIABLE INVESTMENT OPTIONS ARE BEST SUITED FOR YOUR
FINANCIAL NEEDS AND RISK TOLERANCE.
39
If you elect to purchase an IPFL 6.11 Series Rider, you may invest your Contract
Value only in the Investment Options we make available with that Rider, and we
may transfer your Contract Value between the Lifestyle PS Subaccounts and the
Bond PS Subaccount
AUTOMATIC TRANSFERS. When you purchase an IPFL 6.11 Series Rider, you give us
authority to make automatic transfers between your selected Lifestyle PS
Subaccounts and the Bond PS Subaccount. Accordingly, we will monitor your
Contract Value daily and systematically transfer amounts between the Lifestyle
PS Subaccounts shown above and the Bond PS Subaccount. The determination of
when, and how much, to transfer is made through a non-discretionary, systematic
mathematical process that we call the "Portfolio Stabilization Process."
We intend the process to limit your Contract Value's exposure to equity markets
by allocating Contract Value to the Bond PS Subaccount during periods of equity
market volatility and also when you take withdrawals after the Lifetime Income
Date. The Portfolio Stabilization Process determines when and how much to
transfer, if any, from the Lifestyle PS Subaccounts to the Bond PS Subaccount.
The Portfolio Stabilization Process also determines when, and how much, Contract
Value to transfer, if any, from the Bond PS Subaccount to the Lifestyle PS
Subaccounts. We designed the Portfolio Stabilization Process, and made it an
integral part of the IPFL 6.11 Series Riders, to protect us by reducing the
potential impact of volatile markets on the risk we assume from the guarantees
provided to you under the Riders. The process works to monitor your Contract
Value every Business Day and to determine whether to transfer Contract Value
between the Lifestyle PS Subaccounts and the Bond PS Subaccount. Transfers under
the Portfolio Stabilization Process do not affect the current value of the
Benefit Base or the Lifetime Income Amount, and they are not included within the
Separate Account's short term trading restriction of two transfers per month.
(See "V. Description of the Contract -- Transfers You May Make Among Investment
Options.")
Because the Portfolio Stabilization Process can allocate Contract Value to
the Bond PS Subaccount, it may limit your ability to participate in
favorable investment performance of the Lifestyle PS Subaccounts whenever
a portion of your Contract Value is invested in the Bond PS Subaccount. On
the other hand, when Contract Value is allocated and retained in the Bond
PS Subaccount, the Portfolio Stabilization Process has the potential to
protect your Contract Value from declining and volatile equity markets.
WE PROVIDE NO ASSURANCE:
- OF THE AMOUNT, IF ANY, AND DURATION OF ANY INVESTMENT IN THE BOND PS
SUBACCOUNT;
- THAT THE PORTFOLIO STABILIZATION PROCESS WILL ENHANCE THE EARNINGS
POTENTIAL OF YOUR CONTRACT OR PROTECT YOUR CONTRACT VALUE FROM
DECLINES IN VALUE; OR
- THAT THE AMOUNT AND/OR FREQUENCY OF STEP-UPS WILL NOT BE AFFECTED BY
THE PORTFOLIO STABILIZATION PROCESS.
YOU MAY NOT DIRECTLY ALLOCATE CONTRACT VALUE TO THE BOND PS SUBACCOUNT. Your
Contract will refer to the Bond PS Subaccount as the "Designated Investment
Option." We reserve the right to designate a different Subaccount for automatic
transfers of Contract Value in the event there is a substantial change in the
investment objectives and strategy of the Bond PS Series Portfolio.
Operation of the Portfolio Stabilization Process
Here's how the Portfolio Stabilization Process generally works:
STEP ONE
DETERMINATION OF REFERENCE VALUE. We calculate a Reference Value based on the
initial Contract Value of your Contract in each of your selected Variable
Investment Options. We increase the Reference Value each Business Day to
reflect:
- prior to the Lifetime Income Date, the full amount of Additional
Purchase Payments we receive on that Business Day; and
- on or after the Lifetime Income Date, the excess, if any, of any
Additional Purchase Payments we receive on that Business Day over
any withdrawal since the later of:
o the Lifetime Income Date, or
o the date of the most recent Additional Purchase Payment
that increased the Reference Value, or
o the date of the most recent reduction in the Reference
Value.
We increase the Reference Value on each Monthly Anniversary to reflect the
current Contract Value if that amount is greater than the most recently
determined Reference Value.
We decrease the Reference Value on any Business Day you take an excess
Withdrawal, (which includes any withdrawal prior to the Lifetime Income Date).
Excess Withdrawals reduce the Reference Value in the same proportion as the
amount of the withdrawal divided by the Contract Value prior to the withdrawal.
The Reference Value will not be decreased for withdrawals on and
40
after the Lifetime Income Date that are less than or equal to the Lifetime
Income Amount or if your withdrawals are made under our Life Expectancy
Distribution program (see "Withdrawals after the Lifetime Income Date," below).
THE REFERENCE VALUE HAS NO CASH VALUE, AND YOU CANNOT WITHDRAW IT. IT IS NOT
DESIGNED TO EQUAL THE BENEFIT BASE OR THE LIFETIME INCOME AMOUNT.
STEP TWO
COMPARISON OF CONTRACT VALUE TO REFERENCE VALUE; IMPACT OF TRANSACTIONS. We
designed the Portfolio Stabilization Process to trigger a review of your
Contract Value and the possibility of an automatic transfer of Contract Value to
and from the Bond PS Subaccount based on:
- the ratio (expressed as a percentage) of your Contract Value to the
Reference Value (the "Reference Value Ratio" or "RV Ratio") or
- the occurrence of certain transactions that we describe below.
We calculate the RV Ratio for your Contract at the end of each Business Day by
dividing the current Contract Value by the current Reference Value. NOTE: The RV
Ratio may change when you take withdrawals up to the Lifetime Income Amount, and
may result in automatic transfers of Contract Value to the Bond PS Subaccount
under STEP FOUR A (see Examples 5(a) and 5(d) in Appendix D: "Examples of the
Portfolio Stabilization Process").
The Portfolio Stabilization Process reviews the allocation of Contract Value
under your Contract (and determines possible transfers to or from the Bond PS
Subaccount, as described in STEP THREE) when the RV Ratio first falls below
92.5% and at certain incremental thresholds after that. The Portfolio
Stabilization Process generally does not review the allocation of Contract Value
under your Contract if the RV Ratio from one Business Day to the next remains
within one of the following bands ("RV Ratio Bands"):
RV Ratio Band RV Ratio
------------- -------------------------------------------------
5 92.5% or more
4 less than 92.5%, but greater than or equal to 90%
3 less than 90%, but greater than or equal to 87.5%
2 less than 87.5%, but greater than or equal to 85%
1 less than 85%, but greater than or equal to 82.5%
0 less than 82.5%
The Portfolio Stabilization Process will proceed to STEP THREE to determine
possible transfer to or from Bond PS Subaccount under the following
circumstances:
- on any Business Day when the RV Ratio Band decreases from the RV
Ratio Band in effect on the date of a previous transfer under the
Portfolio Stabilization Process, or
- in cases previously increased from an RV Ratio Band to a higher RV
Ratio Band and remained at least at the higher RV Ratio Band
for five consecutive Business Days where the RV Ratio previously
increased from an RV Ratio Band to a higher RV Ratio Band and
remained at least at a higher RV Ratio Band for five consecutive
Business Days, or
- if the RV Ratio is less than 82.5% on any Monthly Anniversary, or
- upon the occurrence of a transaction described below.
INCREASES IN RV RATIO. The Portfolio Stabilization Process will not proceed to
STEP THREE, unless:
- the RV Ratio remains within the same RV Ratio Band for 5 consecutive
Business Days (or moves to a higher RV Ratio Band during that 5
Business Day period), and
- there are no transactions, as described below, on the 5th
consecutive Business Day.
At the end of the 5th consecutive Business Day, the Portfolio Stabilization
Process uses the minimum RV Ratio Band calculated during the 5 Business Day
Period to determine the permitted Contract Value allocation described in STEP
THREE, inclusive of amounts held in the Bond PS Subaccount.
41
EXAMPLES: In the next two examples, we illustrate the impact of the daily RV
Ratio Band on transfers from the Bond PS Subaccount. In each example, we assume
that:
- your Contract Value has been allocated to the Lifestyle PS
Subaccounts,
- the Portfolio Stabilization Process previously resulted in a
transfer of Contract Value to the Bond PS Subaccount,
- there are no transactions, as described in STEP TWO, and
- there is Contract Value allocated in the Bond PS Subaccount for each
Business Day shown that exceeds the amount required.
Example 1. RV Ratio Band Increases Then Falls. Assume the RV Ratio at the end of
each Business Day falls within the RV Ratio Band shown:
Business Day: 1 2 3 4 5 6
RV Ratio Band: 2 3 3 3 3 1
Although the RV Ratio Band increased from 2 to 3, it did not remain at 3 for the
required five Business Days so no amounts would be transferred under your
Contract from the Bond PS Subaccount to any Lifestyle PS Subaccounts. Under this
example, the RV Ratio Band on Business Day 6 decreased from RV Ratio Band 3 to
RV Ratio Band 1. Since RV Ratio Band is even lower than the RV Ratio Band on Day
1, it is possible that additional Contract Value might even be transferred to
the Bond PS Subaccount from your selected Lifestyle PS Subaccounts.
42
Example 2. RV Ratio Band Increases. Assume the RV Ratio at the end of each
Business Day falls within the RV Ratio Band shown:
Business Day: 1 2 3 4 5 6
RV Ratio Band: 2 3 3 3 4 5
In this example, the RV Ratio Band increased from 2 to 3 and remained at an RV
Ratio Band of 3 or higher for five consecutive Business Days (i.e., from
Business Day 2 through Business Day 6). The Portfolio Stabilization Process
would result in a transfer of Contract Value from the Bond PS Subaccount at the
end of Business Day 6 based on the RV Ratio Band 3 (i.e., the lowest RV Ratio
Band from Business Day 2 through Business Day 6). Even though the RV Ratio Band
increased from 3 to 4 on Business Day 5, and again increased to RV Ratio Band 5,
it did not remain at either of the higher RV Ratio Bands at the end of Business
Day 6 for the required five consecutive Business Days. The movement to a higher
RV Ratio Band on Day 5 could result in an additional transfer if the RV Ratio
for the next 4 Business Days (i.e., Business Days 6 to 9) remains at RV Ratio
Band 4 or higher.
Once all conditions have been satisfied, the Portfolio Stabilization Process
will transfer Contract Value held in the Bond PS Subaccount, up to the total
amount permitted, on a pro rata basis to each of the Lifestyle PS Subaccounts in
which your Contract currently allocates Contract Value. TRANSFERS FROM YOUR
SELECTED LIFESTYLE PS SUBACCOUNTS TO THE BOND PS SUBACCOUNT MAY OCCUR MORE
FREQUENTLY THAN TRANSFERS FROM THE BOND PS SUBACCOUNT BACK TO YOUR SELECTED
LIFESTYLE PS SUBACCOUNTS.
TRANSACTIONS. We will review the allocation of Contract Value on any Business
Day if one or more of the following transactions occur:
- you make an Additional Purchase Payment, or
- you transfer Contract Value between your selected Variable
Investment Options, or
- an automatic investment program (e.g., Automatic Rebalancing or
Dollar Cost Averaging) transfers Contract Value to any of your
selected Variable Investment Options.
WE PROCEED TO STEP THREE when:
- at least one of the transactions described in the section above has
occurred ,
- the RV Ratio first declines below 92.5%,
- the RV Ratio decreases from the last assigned RV Ratio Band to a
lower RV Ratio Band,
- the RV Ratio is less than 82.5% on the Monthly Anniversary or
- the RV Ratio increases from an RV Ratio Band to a higher RV Ratio
Band and remains at a higher level for five consecutive Business
Days (see STEP FOUR B, below).
Otherwise, no further action is taken under the Portfolio Stabilization
Process for that Business Day.
STEP THREE
REVIEW ALLOCATION OF CONTRACT VALUE. The Portfolio Stabilization Process reviews
the allocation of your Contract Value and determines how much Contract Value, if
any, will be transferred to or from the Bond PS Subaccount. It does this by:
- assigning an assumed equity allocation factor ("Assumed Equity
Allocation Factor" or "AEAF") to each of the Lifestyle PS
Subaccounts that you may select;
- calculating a dollar-weighted AEAF for your Contract Value based on
the Contract Value then allocated to each of your selected Lifestyle
PS Subaccounts;
- determining the amount of Contract Value*, if any, (a) to be
transferred from the Lifestyle PS Subaccounts to the Bond PS
Subaccount; or (b) to be transferred to the Lifestyle PS Subaccounts
from the Bond PS Subaccount.
--------
* The Portfolio Stabilization Process uses the term "Target Bond PS
Subaccount Allocation" in connection with the review of Contract Value
Allocation to describe the target amount required to be maintained in the
Bond PS Subaccount, before adjustment to reflect Contract Value allocated
to the Ultra Short Term Bond Subaccount. We define the term as follows:
Target Bond PS Subaccount Allocation - The sum of (a) plus (b) minus (c) minus
(d) where:
(a) Is the minimum of the Contract Value and 80% of the Reference
Value (
(b) Is the Reference Value Band multiplied by 2.5% of the
Reference Value
(c) Is 20 divided by the weighted average AEAF ("WAEAF")
multiplied by the minimum of the Contract Value and 80% of the
Reference Value
(d) Is the Reference Value Band multiplied by 2.5% of the
Reference Value multiplied by F.
For purposes of the Target Bond PS Subaccount Allocation, "F"
is determined as follows:
F = 32 x WAEAF - 540 + RV Ratio Band x (WAEAF - 20)
-----------------------------------------------
5 x WAEAF
43
ASSUMED EQUITY ALLOCATION FACTORS UNDER THE PORTFOLIO STABILIZATION PROCESS. The
AEAF for each of the Lifestyle PS Subaccounts is a hypothetical value that will
not change once we issue a Contract with an IPFL 6.11 Series Rider. The factor
is based on the underlying Portfolio's investment objective. In general, the
more an underlying Portfolio seeks to invest in equities (or in funds that
invest in equities), the higher the factor. Your selection of other Investment
Options, and the amount of Contract Value allocated to each of your selected
Investment Options will impact the overall factor.
The AEAF for each of the Lifestyle PS Subaccounts on the date of this Prospectus
is:
- Lifestyle Growth PS Subaccount -- 70
- Lifestyle Balanced PS Subaccount -- 50
- Lifestyle Moderate PS Subaccount -- 40
- Lifestyle Conservative PS Subaccount -- 20
If your Contract Value is in more than one Lifestyle PS Subaccount, the
dollar-weighted AEAF for your Contract equals the weighted average of the
factors for each of your selected Lifestyle PS Subaccounts. The dollar-weighted
AEAF does not apply to Contract Value that has been allocated to the Bond PS
Subaccount or the Ultra Short Term Bond Subaccount.
Example 3. If $4,000 of your Contract Value is allocated to the Lifestyle Growth
PS Subaccount, $4,000 of your Contract Value is allocated to the Lifestyle
Balanced PS Subaccount, and $2,000 of your Contract Value is allocated to the
Ultra Short Term Bond Subaccount, only the amounts in the two Lifestyle PS
Subaccounts are considered for application of the AEAFs. Accordingly, since half
of the relevant Contract Value is in each Lifestyle Subaccount, the
dollar-weighted AEAF is calculated as ($4,000 x 70) + ($4,000 x 50) / ($4,000 +
$4,000) = 60 (i.e., (50% x 70) + (50% x 50), or 60).
We may change the AEAF that applies to each Subaccount in the future, and apply
it to Contracts issued after the change. We also may assign an AEAF to any
additional Subaccounts that we may make available.
The Portfolio Stabilization Process calculates the amount of your Contract Value
required to be invested in the Bond PS Subaccount, if any, on any Business Day
based on:
- the dollar-weighted AEAF applicable to your Contract (based on the
specific Lifestyle PS Subaccounts in which your Contract is
invested);
- the RV Ratio; and
- your entire Contract Value on the date of the calculation.
The amount of your Contract Value required to be invested in the Bond PS
Subaccount (if any):
- can differ depending on the Lifestyle PS Subaccounts you select;
- can differ depending on the Contract Value allocated to each of your
Investment Options; and
- can differ from the amounts determined on a previous Business Day
based on changes in the Contract Value allocated to each Investment
Option, changes in the value of the Bond PS Subaccount, and changes
in the RV Ratio.
The Portfolio Stabilization Process does not limit the amount of Contract Value
that you may allocate to:
- the Ultra Short Term Bond Subaccount, or
- the Lifestyle Conservative PS Subaccount if that is the only one of
the Lifestyle PS Subaccounts that you select.
Contract Value in the Ultra Short Term Bond Subaccount will lower any amounts
required to be allocated under the Portfolio Stabilization Process to the Bond
PS Subaccount.
In general, a higher dollar-weighted AEAF for your Contract, and/or a lower RV
Ratio Band, will result in a lower percentage of Contract Value that may be
maintained in the Lifestyle PS Subaccounts. We provide additional information on
calculations under the Portfolio Stabilization Process in the SAI, which is
available at no cost.
EXAMPLES OF PERMITTED ALLOCATIONS IN LIFESTYLE PS SUBACCOUNTS. The examples
illustrate how current allocations of Contract Value, your selection of
Investment Options, and RV Ratio Bands affect the amounts permitted to be
invested in Lifestyle PS Subaccounts under the Portfolio Stabilization Process.
Example 4. 100% Lifestyle PS Subaccount. In the following table, we illustrate
four different hypothetical Contracts where 100% of your Contract Value is
allocated to one of the Lifestyle PS Subaccounts. These examples show how the
Portfolio Stabilization Process limits the percentage of Contract Value that
could remain allocated to that Subaccount under different RV Ratio Bands and
different Assumed Equity Allocation Factors ("AEAF") for each of the Lifestyle
PS Subaccounts.
44
CURRENT CONTRACT VALUE ALLOCATION:
Contract A Contract B Contract C Contract D
------------------------------ ----------------------------- --------------------------- ------------------------------
100% Lifestyle Growth PS 100% Lifestyle Balanced 100% Lifestyle Moderate 100% Lifestyle Conservative
Subaccount PS Subaccount PS Subaccount PS Subaccount
------------------------------ ----------------------------- --------------------------- ------------------------------
CONTRACT VALUE ALLOCATION AFTER THE PORTFOLIO STABILIZATION PROCESS:
--------------------------------------------------------------------------------------------------------------------------
Contract A Contract B Contract C Contract D
------------------------------ ----------------------------- --------------------------- ------------------------------
Lifestyle Growth B Lifestyle Balanced PS Lifestyle Moderate PS Lifestyle Conservative
Subaccount Subaccount Subaccount PS Subaccount
RV ------------------------------ ----------------------------- --------------------------- ------------------------------
Ratio Permitted Contract Value Permitted Contract AEAF Permitted Contract AEAF Permitted Contract Value
Band AEAF Range(1) AEAF Value Range(1) Value Range(1) Range
----- ---- ------------------------ ---- ----------------------- ---- --------------------- ---- -------------------------
5 70 100% 50 100% 40 100% 20 100%
4 70 85.7 - 86.1% 50 88.0 - 88.3% 40 90.0 - 90.3% 20 100%
3 70 71.4 - 72.2% 50 76.0 - 76.7% 40 80.0 - 80.6% 20 100%
2 70 57.1 - 58.4% 50 64.0 - 65.0% 40 70.0 - 70.9% 20 100%
1 70 42.9 - 44.5% 50 52.0 - 53.4% 40 60.0 - 61.2% 20 100%
0 70 28.6 - 30.7% 50 40.0 - 41.8% 40 50.0 - 51.5% 20 100%
-------------
(1) The permitted Contract Value refers to the percentage of Contract Value
that may be allocated to the Investment Option. The permitted Contract
Value percentage will range within the values shown for each RV Ratio
Band. The exact percentage depends on the specific RV Ratio.
45
Example 5. Multiple Investment Options. In the following table, we illustrate
two other hypothetical Contracts where your Contract Value is allocated to more
than one Investment Option. These examples show how your selection of more than
one Investment Option impacts the limits of the percentage of Contract Value
that could remain allocated to a Lifestyle PS Subaccount under the Portfolio
Stabilization Process.
CURRENT CONTRACT VALUE ALLOCATION:
------------------------------------------------------------------------------------------------------------------------
Contract E Contract F
--------------------------------------------------------------------------------------------------------------------------------
50% Lifestyle Growth PS 50% Lifestyle Conservative PS 80% Lifestyle Growth PS 20% Ultra Short Term Bond
Subaccount Subaccount Subaccount Subaccount
------------------------------ ----------------------------- --------------------------- ----------------------------
CONTRACT VALUE ALLOCATION AFTER THE PORTFOLIO STABILIZATION PROCESS:
------------------------------------------------------------------------------------------------------------------------
Contract E Contract F
------------------------------------------------------------------------------------------------------------------------
Lifestyle Growth PS Lifestyle Conservative PS Lifestyle Growth PS Ultra Short Term Bond
RV Subaccount Subaccount Subaccount Subaccount
------------------------------ ----------------------------- --------------------------- ----------------------------
Ratio Permitted Contract Permitted Contract Permitted Contract Permitted Contract
Band AEAF Value Range(1) AEAF Value Range(1) AEAF Value Range(1) AEAF Value Range
----- ---- ------------------------ ---- ----------------------- ---- --------------------- ---- -----------------------
5 45 50% 45 50% 70 80% -- --
4 45 44.4 -- 44.6% 45 44.4 -- 44.6% 70 80% -- --
3 45 38.9 -- 39.2% 45 38.9 -- 39.2% 70 72.2 -- 73.5% -- --
2 45 33.3 -- 33.8% 45 33.3 -- 33.8% 70 61.1 -- 62.8% -- --
1 45 27.8 -- 28.4% 45 27.8 -- 28.4% 70 50.0 -- 52.0% -- --
0 45 22.2 -- 23.1% 45 22.2 -- 23.1% 70 38.9 -- 41.3% -- --
---------
(1) The permitted Contract Value refers to the percentage of Contract Value
that may be allocated to the Investment Option. The permitted Contract
Value percentage will range within the values shown for each RV Ratio
Band. The exact percentage depends on the specific RV Ratio. We do not
transfer Contract value to or from the Ultra Short Term Bond Subaccount,
but the allocation of Contract Value to that Subaccount reduces the amount
that would otherwise be transferred to the Bond PS Subaccount.
WE PROCEED TO STEP FOUR:
- when your current Contract Value allocation in the Lifestyle PS
Subaccounts exceeds the amount permitted under the Portfolio
Stabilization Process (STEP FOUR A); or
- when your current Contract Value allocation in the Bond PS
Subaccount exceeds the amount required under the Portfolio
Stabilization Process ( STEP FOUR B).
- Otherwise, no further action is taken under the Portfolio
Stabilization Process for that Business Day.
Again, the Portfolio Stabilization Process is a non-discretionary, systematic
mathematical process that automatically determines when, and how much, Contract
Value will be transferred between the Lifestyle PS Subaccounts you select and
the Bond PS Subaccount. Transfers can occur under a number of different
conditions. For example, transfers to the Bond PS Subaccount could occur as a
result of:
- declines in your Contract Value as a result of poor investment
performance of the Subaccounts, or
- withdrawals of your Contract Value after the Lifetime Income
Date that are less than or equal to the Lifetime Income
Amount, and which result in a decline of the RV Ratio in
effect at the time of the withdrawal.
STEP FOUR
A. TRANSFERS FROM THE LIFESTYLE PS SUBACCOUNTS TO THE BOND PS
SUBACCOUNT
We are authorized to transfer Contract Value to the Bond PS Subaccount from all
Lifestyle PS Subaccounts in your Contract on a pro rata basis based on the
current ratio of Contract Value in each of your selected Lifestyle PS
Subaccounts. The Portfolio Stabilization Process will determine whether, and how
much, Contract Value must be transferred to the Bond PS Subaccount as described
in STEP THREE.
EXAMPLES OF PRO RATA TRANSFERS FROM LIFESTYLE PS SUBACCOUNTS: In the next two
examples, we illustrate the impact of the current Contract Value allocation in
the Lifestyle PS Subaccounts on possible transfers under your Contract to the
Bond PS Subaccount. In both examples, we assume:
- you purchase a Contract with an IPFL 6.11 Series Rider for a one-time
Purchase Payment of $100,000;
- the Reference Value of your Contract is $100,000; and
- your Contract Value decreases from $93,000 to $91,000 at the end of a
Business Day.
Example 6. Contract Value Allocated to Lifestyle Growth PS Subaccount Only. If
your entire Contract Value is allocated to the Lifestyle Growth PS Subaccount,
the Portfolio Stabilization Process would result in a transfer to the Bond PS
Subaccount of $12,857 (14.1%) of your Contract Value.
46
Example 7. Contract Value Allocated to Lifestyle Growth PS Subaccount and Ultra
Short Term Bond Subaccount. Assume that 50% of your Contract Value is in the
Lifestyle Growth PS Subaccount and 50% of your Contract Value is in the Ultra
Short Term Bond Subaccount. The Portfolio Stabilization Process would calculate
a reallocation to the Bond PS Subaccount of $12,857. However, since the amount
invested in the Ultra Short Term Bond Subaccount (50% x $91,000, or $45,500)
exceeds the target reallocation to the Bond PS Subaccount, no transfer occurs.
The percentages shown in the above Examples are illustrative only, and do not
reflect the impact of daily fluctuations in the values of the Lifestyle Growth
PS Series, the Ultra Short Term Bond Trust and the Bond PS Series, nor does this
example show the impact of daily transfers that may arise under the Portfolio
Stabilization Process. Actual results will differ.
B. TRANSFERS FROM THE BOND PS SUBACCOUNT TO THE LIFESTYLE PS
SUBACCOUNTS
The Portfolio Stabilization Process will determine whether, and how much,
Contract Value must be transferred to the Bond PS Subaccount as described in
STEP THREE. From time to time, the amount of your Contract Value actually
allocated to the Bond PS Subaccount could be in excess of the amount required
under the Portfolio Stabilization Process. In that case, we may transfer
Contract Value from the Bond PS Subaccount to all of the Lifestyle PS
Subaccounts selected in your Contract on a pro rata basis based on the current
ratio of Contract Value in each Lifestyle PS Subaccount. This could happen in
instances involving:
- favorable investment performance in the Ultra Short Term Bond
Subaccount or Bond PS Subaccount relative to your other selected
Investment Options;
- an overall increase in Contract Value that results in a higher RV
Ratio Band for a period of 5 consecutive Business Days; or
- your transfer of Contract Value from a Lifestyle PS Subaccount to
the Ultra Short Term Bond Subaccount or to a different Lifestyle PS
Subaccount with a lower AEAF.
In STEP THREE, the Portfolio Stabilization Process calculates the total limit on
amounts that may be invested in the Lifestyle PS Subaccounts. In most cases, the
calculation uses the RV Ratio Band in effect for that Business Day. However,
where STEP THREE results from an increase in the RV Ratio Band, the Portfolio
Stabilization Process uses the lowest RV Ratio Band during the 5 consecutive
Business Days.
C. TRANSFERS FROM THE BOND PS SUBACCOUNT TO THE ULTRA SHORT TERM
BOND SUBACCOUNT OR THE LIFESTYLE CONSERVATIVE PS SUBACCOUNT.
The Portfolio Stabilization Process will result in a transfer to the Ultra Short
Term Bond Subaccount or the Lifestyle Conservative PS Subaccount if:
- you have instructed us to allocate 100% of your available Contract
Value to ONE OF the Ultra Short Term Bond Subaccount or the
Lifestyle Conservative PS Subaccount, and
- some of your Contract Value is currently allocated to the Bond PS
Subaccount.
In such an event, your Contract Value allocated to the Bond PS Subaccount will
be transferred automatically to the Subaccount you have instructed.
The Portfolio Stabilization Process will result in a transfer to the Lifestyle
Conservative PS Subaccount if:
- you have instructed us to allocate 100% of your available Contract
Value to A COMBINATION OF the Ultra Short Term Bond Subaccount or
the Lifestyle Conservative PS Subaccount, and
- some of your Contract Value is currently allocated to the Bond PS
Subaccount.
In such an event, your Contract Value allocated to the Bond PS Subaccount will
be transferred automatically to the Lifestyle Conservative PS Subaccount.
ADDITIONAL INFORMATION ON THE PORTFOLIO STABILIZATION PROCESS. We provide
additional information on the Portfolio Stabilization Process in the SAI, which
is available to you at no charge.
47
Other Investment Limitations Under an IPFL 6.11 Series Rider
WE RESERVE THE RIGHT TO RESTRICT INVESTMENTS IN ANY VARIABLE INVESTMENT OPTION
AT ANY TIME. If we restrict a Variable Investment Option, you may not be able to
transfer or allocate Purchase Payments to the restricted Variable Investment
Option after the date of the restriction. Any amounts you allocated to a
Variable Investment Option before we imposed restrictions will not be affected
by such restrictions as long as it remains in that Investment Option.
LIMITATIONS ON ALLOCATIONS OF ADDITIONAL PURCHASE PAYMENTS. We will allocate
Additional Purchase Payments in accordance with your instructions, subject to
the restrictions described herein.
Increases in Guaranteed Amounts
ADDITIONAL PURCHASE PAYMENTS. Prior to the Lifetime Income Date, we will
increase the Benefit Base each time you make an Additional Purchase Payment, up
to a maximum Benefit Base of $3 million.
On and after the earliest available Lifetime Income Date, we may increase the
Benefit Base each time you make an Additional Purchase Payment, up to a maximum
Benefit Base of $3 million. The new Benefit Base will be the Benefit Base
immediately before the Additional Purchase Payment, plus the excess, if any, of
the Additional Purchase Payment (subject to our Purchase Payment limits) over
any Withdrawal Amount (reduced by any subsequent Purchase Payment) since the
later of:
- the Lifetime Income Date or
- the latest of:
- the date of a Purchase Payment that we applied to the Benefit
Base,
- the date of a reduction in the Benefit Base, or
- the effective date of a Step-Up.
EXAMPLE: Assume you took a withdrawal of $5,000 after the Lifetime Income Date,
your current Benefit Base is $100,000, and you make an Additional Purchase
Payment of $15,000. Your Benefit Base will increase by $10,000, the excess of
the Additional Purchase Payment over the prior withdrawal ($15,000 - $5,000).
Your new Benefit Base will equal $110,000. Assume that the following year you
take an Excess Withdrawal of $10,000 that reduces your Benefit Base to $105,000.
If you then make an Additional Purchase Payment of $10,000, the entire $10,000
will be added to your current Benefit Base, since the Benefit Base was reduced
by the previous withdrawal. The new Benefit Base will be $115,000 ($105,000 +
$10,000).
Credits may increase one or more of our guarantees when you defer withdrawals.
CREDITS. We offer the IPFL 6.11 Series Riders with the following Credit
features:
- Annual Credit Rate:
Attained Age of Youngest Covered Person Annual Credit Rate
--------------------------------------- ------------------
64 and under 5%
65 and over 6%
- Credit Period (for Annual Credits) -- The initial Credit Period
coincides with the first 10 Contract Years while the Rider is in
effect. We will extend the Credit Period each time a Step-Up occurs
to the lesser of 10 years from the Step-Up Date or the Age 95
Contract Anniversary.
We may change the Credit Rate or Credit Periods for IPFL 6.11 Series Riders that
we may offer in the future. We may offer a Credit Rate that varies, based on a
Contract Anniversary Date, the length of a Credit Period, or a combination of
these factors. We expect the Credit Periods to be between 5 and 15 Contract
Years, and we do not expect the Credit Rates we offer to be less than 3% or more
than 7%, but we provide no assurance that we will continue to offer the Rider
within these ranges. Once you purchase this Rider, however, the Credit Rate and
the Credit Period in effect when we issue the Rider will remain in effect for as
long as the Rider remains in effect.
Annual Credits. We increase the Benefit Base on each Contract Anniversary during
the Credit Period if you did not take any withdrawals during the previous
Contract Year. The Credit is equal to the applicable Credit Rate multiplied by
the total Purchase Payments that have been applied to the Benefit Base. If the
Benefit Base has been increased by a Step-Up or decreased as a result of an
Excess Withdrawal, the Credit will equal the applicable Credit Rate multiplied
by the sum of (a) the Benefit Base immediately following the most recent Step-Up
or decrease and (b) the total Additional Purchase Payments applied to the
Benefit Base since that Step-Up or decrease.
If you take a withdrawal during a Contract Year, you will not be eligible for a
Credit at the end of that Contract Year and Annual Credits for future Contract
Years may be reduced if the withdrawal results in a reduction of the Benefit
Base.
48
EXAMPLE (Income Plus For Life 6.11): Assume that you purchase a Contract with an
Income Plus For Life 6.11 Rider and you, the Covered Person, will attain age 63
during the first Contract Year. Also assume that you purchase the Contract and
Rider for $100,000, make no Additional Purchase Payments, and there is no
increase in Contract Value during the first and second Contract Years. Based on
your age the applicable Annual Credit rate for those years is 5%. If you take no
withdrawals during the first and second Contract Year;
- At the end of the first Contract Year, we will apply an Annual
Credit to the Benefit Base and increase it to $105,000 ($100,000 +
5% x $100,000). The Lifetime Income Amount will increase to $4,200
(4% x $105,000).
- At the end of the second Contract Year, we will apply an Annual
Credit to the Benefit Base and increase it again to $110,000
($105,000 + 5% x $100,000). The Lifetime Income Amount will increase
to $4,400 (4% x $110,000).
Now assume you take an Excess Withdrawal during the third Contract Year that
reduces the Benefit Base to $90,000, and you take no withdrawal and make an
Additional Purchase Payment of $5,000 in the fourth Contract Year.
- At the end of the third Contract Year, there is no Credit since you
took a withdrawal during the year.
- At the end of the fourth Contract Year, we will apply an Annual
Credit to the Benefit Base. The Credit will be based on a Credit
Rate of 6%, since you attain age 66 during the fourth Contract Year,
and the reduced Benefit Base plus the Additional Purchase Payment
(6% x ($90,000 + $5,000) = $5,700). The Benefit Base will increase
to $100,700 ($90,000 + $5,000 + $5,700) and the Lifetime Income
Amount will increase to $5,035 (5% x $100,700).
EXAMPLE (Income Plus For Life -- Joint Life 6.11): Assume that you purchase a
Contract with an Income Plus For Life -- Joint Life 6.11 Rider and the younger
Covered Person will attain age 63 during the first Contract Year. Also assume
that you purchase the Contract and Rider for $100,000, make no Additional
Purchase Payments, and there is no increase in Contract Value during the first
and second Contract Years. Based on the youngest Covered Person's age the
applicable Annual Credit rate is 5%. If you take no withdrawals during the first
and second Contract Year;
- At the end of the first Contract Year, we will apply an Annual
Credit to the Benefit Base and increase it to $105,000 ($100,000 +
5% x $100,000). The Lifetime Income Amount will increase to $3,938
(3.75% x $105,000).
- At the end of the second Contract Year, we will apply an Annual
credit to the Benefit Base and increase it again to $110,000
($105,000 + 5% x $100,000). The Lifetime Income Amount will increase
to $4,125 (3.75% x $110,000).
Now assume you take an Excess Withdrawal during the third Contract Year that
reduces the Benefit Base to $90,000, and you take no withdrawal and make an
Additional Purchase Payment of $5,000 in the fourth Contract Year.
- At the end of the third Contract Year, there is no Credit since you
took a withdrawal during the year.
- At the end of the fourth Contract Year, we will apply an Annual
Credit to the Benefit Base. The Credit will be based on the reduced
Benefit Base plus the Additional Purchase Payment (6% x ($90,000 +
$5,000) = $5,700). The Benefit Base will increase to $100,700
($90,000 + $5,000 + $5,700) and the Lifetime Income Amount will
increase to $4,783 (4.75% x $100,700).
Step-Ups may increase one or more of our guarantees if your Contract has
favorable investment performance.
STEP-UPS. The IPFL 6.11 Series Riders provide Step-Ups. We discuss how the
Step-Up works below. The Step-Up compares your Contract Value, or a percentage
of your Contract Value on a Step-Up Date, to certain previously calculated
guaranteed amounts. Step-Up Dates coincide with the first Contract Anniversary
after you purchase the Rider and every Contract Anniversary thereafter, up to
and including the Age 95 Contract Anniversary.
We may change the Step-Up Dates for IPFL 6.11 Series Riders that we offer in the
future. We may offer the Rider with Step-Up Dates that occur after the Rider has
been in effect for more than one Contract Year, or that occur at intervals
longer than one Contract Year. We also may shorten the period during which we
provide Step-Up Dates. We do not expect the Step-Up Dates we may offer in the
future to begin more than 5 Contract Years from the date you purchase a Rider,
to occur at intervals greater than 5 Contract Years, or to end sooner than on
the Age 75 Contract Anniversary, but we provide no assurance that we will
continue to offer the Rider within these ranges. Once you purchase this Rider,
however, the Step-Up Dates in effect when we issue the Rider will remain in
effect for as long as the Rider remains in effect.
How Step-Ups Work. If the Contract Value on any Step-Up Date is greater than the
Benefit Base (including any Credit) on that date, we will automatically step up
the Benefit Base to equal the Contract Value (subject to the maximum Benefit
Base limit of $3 million). We will also increase the Lifetime Income Amount
(after the Lifetime Income Date) and the dollar amount of the Rider fee (see
"Rider Fees" earlier in this section). The new Lifetime Income Amount will equal
the Benefit Base value after the Step-Up multiplied by the Benefit Rate then in
effect for your Rider, and the Rider fee will be based on the increased Benefit
Base.
EXAMPLE: Assume that you purchase a Contract with an IPFL 6.11 Series Rider when
you, the Covered Person, are 65, you take no withdrawals during the first three
Contract Years and the applicable Annual Credit rate is 6%. Also assume that you
purchase the Contract and Rider for $100,000, make no Additional Purchase
Payments, and that the Contract Value on the third Contract Anniversary is
$125,000. The Benefit Base on the third Contract Anniversary including the
Annual Credits for the first three Contract Years is $118,000. Since the
Contract Value of $125,000 is greater than the current Benefit Base including
the Credit, the
49
Benefit Base will increase to $125,000 and the Lifetime Income
Amount will increase to $6,250 (5% x $125,000). If no withdrawals are taken in
the fourth Contract Year, the Annual Credit on the fourth Contract Anniversary
will equal $7,500 (6% x $125,000).
Impact of Additional Purchase Payments, Credits and Step-Ups on the Portfolio
Stabilization Process. Please see Appendix C: "Impact of Transactions on
Portfolio Stabilization Process" for additional information on the impact of
Additional Purchase Payments, Credits and Step-Ups on the Portfolio
Stabilization Process.
Step-Ups may occur only while an IPFL 6.11 Series Rider is in effect.
Withdrawals, Distributions and Settlements
OVERVIEW. The IPFL 6.11 Series Riders provide a guaranteed minimum withdrawal
benefit during the Accumulation Period. In particular, the Riders will permit
you to withdraw a minimum annual amount, for as long as a Covered Person lives,
subject to the terms and conditions of each Rider. We may determine the amount
of the initial guarantee after we issue your Contract, depending on the age of
the Covered Person when we issue the Contract. We may increase the guarantee:
- by one or more Credits if you make no withdrawals during certain
Contract Years, up to limits described in the "Credits" section,
above;
- as a result of a Step-Up of the guarantee (see preceding section) to
reflect your then-current Contract Value on certain Contract
Anniversary dates; or
- if you make an Additional Purchase Payment (up to specified limits).
Although the Riders guarantee a minimum annual withdrawal amount, you may take
withdrawals of any amount of Contract Value during your Contract's Accumulation
Period. We reduce your Contract Value and your death benefit each time you take
a withdrawal.
EXAMPLE: If you take a withdrawal of $8,000 when your Account Value is $80,000
and your Guaranteed Minimum Death Benefit is $100,000, we will reduce your
Guaranteed Minimum Death Benefit on a pro rata basis. That means we will reduce
the Guaranteed Minimum Death Benefit by 10% ($8,000/$80,000) to $90,000
($100,000 - 10% x $100,000).
PRO RATA WITHDRAWALS ONLY. Through your purchase of an IPFL 6.11 Series Rider
with the Portfolio Stabilization Process, you authorize us to deem any request
to take a withdrawal of Contract Value as a request to withdraw your requested
Contract Value on a pro rata basis from each Investment Option (including the
Bond PS Subaccount). Please read Appendix C: "Impact of Transactions on
Portfolio Stabilization Process" for a description of the impact of pro rata
withdrawals on the Portfolio Stabilization Process.
We will reduce the Benefit Base and Lifetime Income Amount if you take Excess
Withdrawals.
EXCESS WITHDRAWALS. We reduce guaranteed minimum amounts for future withdrawals
if you take withdrawals for more than the amount guaranteed under the terms of
the Rider you select. Your future Lifetime Income Amount could be significantly
reduced if:
- you take withdrawals prior to the Lifetime Income Date, or
- your Contract Value declines due to poor investment performance to
an amount that is less than your Benefit Base, and you then take
Excess Withdrawals.
An Excess Withdrawal is:
- a withdrawal (including applicable withdrawal charges) you take
before the Lifetime Income Date; or
- a withdrawal (including applicable withdrawal charges) you take on
or after the Lifetime Income Date that, together with all other
withdrawals during a Contract Year (including any applicable
withdrawal charges), exceeds the Lifetime Income Amount for that
Contract Year.
If you experience unfavorable investment performance, an Excess Withdrawal could
result in substantial reductions to your Contract Value and Benefit Base. Your
future Lifetime Income Amount could be significantly reduced, and if both your
Contract Value and Benefit Base decline to zero before the Lifetime Income Date,
you will lose your guaranteed minimum withdrawal benefit.
After the Lifetime Income Date, we do not consider withdrawals under our Life
Expectancy Distribution program to result in an Excess Withdrawal unless you
take additional withdrawals outside of that program. Please read Appendix C:
"Impact of Transactions on Portfolio Stabilization Process" for a description of
the impact of Excess Withdrawals on the Portfolio Stabilization Process.
WITHDRAWALS BEFORE THE LIFETIME INCOME DATE. Each time you take a withdrawal
before the Lifetime Income Date, we reduce the Benefit Base on a pro rata basis.
This means that we reduce the Benefit Base in the same proportion that your
Contract Value is reduced by the Withdrawal Amount.
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EXAMPLE: Assume that you purchase a Contract with an IPFL 6.11 Series Rider that
names you as the Covered Person when you are 45. Now assume that in the eighth
Contract Year, when you are 53, the Contract Value is $80,000, the Benefit Base
is $90,000, no withdrawal charges apply under your Contract, and you withdraw
$5,000 of Contract Value.
In this case, you would reduce your Contract Value by 6.25% (i.e.,
$5,000/$80,000) and we would reduce your Benefit Base by the same percentage
($90,000 x 0.0625, or $5,625). The Benefit Base after the Excess Withdrawal
would be $90,000 - $5,625, or $84,375. Please read Appendix C: "Impact of
Transactions on Portfolio Stabilization Process" for a description of the impact
of withdrawals before the Lifetime Income Date on the Portfolio Stabilization
Process.
Note: Withdrawals may be taxable and if made prior to age 59 1/2 may be subject
to a 10% penalty (see "VIII. Federal Tax Matters").
WITHDRAWALS AFTER THE LIFETIME INCOME DATE. Each time you take a withdrawal
after the Lifetime Income Date, we first determine if the Withdrawal Amount is
entirely or partially an Excess Withdrawal (i.e., a withdrawal, including any
withdrawal charges, that exceeds the Lifetime Income Amount when combined with
any other withdrawal(s) for that Contract Year). If so, we will reduce the
Benefit Base on a pro rata basis. We do this by reducing your Benefit Base in
the same proportion that your Contract Value is reduced by the portion of the
withdrawal that is an Excess Withdrawal.
Each time we reduce the Benefit Base, we also reduce the Lifetime Income Amount.
We do this by multiplying the reduced Benefit Base by the Benefit Rate in effect
for your Rider. We also will reduce the Benefit Base and the Lifetime Income
Amount for each subsequent Excess Withdrawal that you take during that Contract
Year.
EXAMPLE: Assume that you purchase a Contract with an IPFL 6.11 Series Rider.
Also assume that when you are age 67, the Contract Value is $100,000, the
Benefit Base is $110,000, and the Lifetime Income Amount is $5,500. If you
withdraw $10,000, we would first reduce your Contract Value by the Lifetime
Income Amount of $5,500 to $94,500. Next, since $4,500 of this withdrawal is an
Excess Withdrawal, we would reduce your Benefit Base by 4.76% ($4,500/$94,500).
The Benefit Base after the Excess Withdrawal would be $104,764 ($110,000 - .0476
x $110,000) and the Lifetime Income Amount would be $5,238 (.05 x $104,764).
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We do not reduce the Benefit Base and/or the Lifetime Income Amount:
- if the withdrawals are taken under our Life Expectancy Distribution
Program (as opposed to those withdrawals taken prior to the Lifetime
Income Date, which do reduce the Benefit Base); or
- if your total Withdrawal Amounts during a Contract Year are less
than or equal to the Lifetime Income Amount.
The IPFL 6.11 Series Rider enters the Settlement Phase in any Contract Year that
your Contract Value declines below the greater of $1,000 or the Lifetime Income
Amount. See "Settlement Phase" below. The guaranteed minimum withdrawal benefit
terminates if both the Contract Value and Benefit Base immediately after a
withdrawal are equal to zero. Please read Appendix C: "Impact of Transactions on
Portfolio Stabilization Process" for a description of the impact of withdrawals
after the Lifetime Income Date on the Portfolio Stabilization Process.
EXCESS WITHDRAWALS LOWER THE LIFETIME INCOME AMOUNT GUARANTEED FOR FUTURE
WITHDRAWALS.
PRE-AUTHORIZED WITHDRAWALS -- THE INCOME MADE EASY PROGRAM. If you purchase a
Contract with an IPFL 6.11 Series Rider, you can pre-authorize periodic
withdrawals to receive amounts guaranteed under the Rider. We currently offer
our Income Made Easy Program for Contracts with the Rider to provide income
payments for the lifetime of the Covered Person. The full allowable amount is
based on the Lifetime Income Amount. You can start taking withdrawals under the
Income Made Easy Program no sooner than the earliest available Lifetime Income
Date for the Rider you purchase.
The Income Made Easy Program allows you to select: (A) the annual guaranteed
amount ("full allowable amount") under your Rider, which will automatically
increase to reflect an increase in the annual guaranteed amount under the Rider
resulting from a Step-Up or an Additional Purchase Payment; (B) the full
allowable amount and any increases in Contract Value above that amount at the
end of a Contract Year resulting from investment gains in your Contract at the
end of that Contract Year (this option will reduce your ability to obtain
Step-Ups after you enroll in the program); (C) the full allowable amount plus
any amount under our Life Expectancy Distribution Program that would exceed the
full allowable amount; (D) the annual amount under our Life Expectancy
Distribution Program (in lieu of the full allowable amount); or (E) a specified
dollar amount that is less than the full allowable amount. We may make
additional options available in the future or upon request.
Your participation in the Income Made Easy Program will be suspended (i.e., we
will not process any further withdrawals under the Program until you re-enroll)
if:
- you select option A, B or C; and
- you take an additional withdrawal outside the Income Made Easy
Program in any Contract Year in which the program is in effect.
Income Made Easy withdrawals, like other withdrawals:
- may be subject to income tax (including withholding for taxes) and,
if your Rider calculates an annual guaranteed amount before age
59 1/2, a 10% penalty tax under the Code;
- reduce the death benefit and other optional benefits;
- cancel your eligibility to earn a Credit under the provisions of
your Income Plus For Life 6.11 Series Rider during any Contract Year
in which you receive a payment under the program; and
- may reduce your ability to obtain Step-Ups.
If you are interested in the Income Made Easy Program, you may obtain a separate
authorization form and full information concerning the program and its
restrictions from your registered representative or our Annuities Service
Center. There is no charge for participation in this program. We will, however,
suspend your participation in the Income Plan (see "Special Withdrawal Services
-- The Income Plan" in "V. Description of the Contract") if you enroll in the
Income Made Easy Program. Please read Appendix C: "Impact of Transactions on
Portfolio Stabilization Process" for a description of the impact of withdrawals
under the Income Made Easy Program on the Portfolio Stabilization Process.
PRE-AUTHORIZED WITHDRAWALS -- LIFE EXPECTANCY DISTRIBUTION PROGRAM. If you
purchase a Contract with an IPFL 6.11 Series Rider, you may request of us in
writing, in a form acceptable to us and received at our Annuities Service
Center, to pay you withdrawals that we determine to be part of a series of
substantially equal periodic payments over your "life expectancy" (or, if
applicable, the joint life expectancy of you and your spouse). The Life
Expectancy Distribution Program may provide one or more of the following:
- Pre-59 1/2 Distributions -- these are payments made at the request
of the Owner that are intended to comply with Code section
72(q)(2)(D) or section 72(t)(2)(A)(iv); or
- Nonqualified Death Benefit Stretch Distributions -- these are
payments made to the Beneficiary that are intended to comply with
and may not deviate from Code section 72(s)(2); or
- Required Minimum Distributions and Qualified Death Benefit Stretch
Distributions -- these are payments we calculate to comply with Code
section 401(a)(9), section 403(b)(10), section 408(a)(6), section
408(b)(3), or section 408A(c)(5)).
52
For further information on such distributions, please see "VIII.
Federal Tax Matters -- Required Minimum Distributions."
Each withdrawal under our Life Expectancy Distribution program will reduce your
Contract Value. We will reduce your Benefit Base proportionally by the amount of
the withdrawal if you take a withdrawal under the Life Expectancy Distribution
program prior to the Lifetime Income Date. We will not reduce your Benefit Base
or Lifetime Income Amount if a withdrawal under the Life Expectancy Distribution
program on or after the Lifetime Income Date (for an amount we calculate based
on our current understanding and interpretation of federal tax law) causes total
withdrawals during a Contract Year to exceed the Lifetime Income Amount and all
withdrawals during that year were under our Life Expectancy Distribution
program. The Life Expectancy Distribution program ends when certain amounts
described in the Rider are depleted to zero. We may make further distributions
as part of the Settlement Phase for the Rider you purchase.
If you are interested in the Life Expectancy Distribution Program, you may
obtain further information concerning the program and its restrictions from your
registered representative or our Annuities Service Center. There is no charge
for participation in this program. To take withdrawals under the Life Expectancy
Distribution Program, you must participate in either the Income Plan (see "V.
Description of the Contract -- Special Withdrawal Services -- The Income Plan")
or the Income Made Easy Program (see "Pre-Authorized Withdrawals -- The Income
Made Easy Program" above).
Under our Life Expectancy Distribution program, each withdrawal will be in an
amount that we determine to be your Contract's share of all life expectancy
distributions, based on information that you provide and our understanding of
the Code. We reserve the right to make any changes we deem necessary to comply
with the Code and Treasury Department regulations. Please read Appendix C:
"Impact of Transactions on Portfolio Stabilization Process" for a description of
the impact of withdrawals under the Life Expectancy Distribution program on the
Portfolio Stabilization Process.
We base our Life Expectancy Distribution calculations on our understanding and
interpretation of the requirements under tax law applicable to Pre-59 1/2
Distributions, Required Minimum Distributions, Nonqualified Death Benefit
Stretch Distributions and Qualified Death Benefit Stretch Distributions. You
should discuss these matters with a qualified tax advisor.
SETTLEMENT PHASE. We automatically begin making payments to you under the
"Settlement Phase" of an IPFL 6.11 Series Rider if your Contract Value reduces
below a minimum required amount and you satisfy the conditions described in the
Rider. During the Settlement Phase, the Contract will continue but all other
rights and benefits under the Contract, including death benefits and any
optional benefit Riders, terminate. We will not accept Additional Purchase
Payments for, apply additional Credits or make any Step-Ups to, or deduct any
charges from an IPFL 6.11 Series Rider during the Settlement Phase. You cannot
annuitize once the Settlement Phase begins.
The minimum required amount to trigger the Settlement Phase under an IPFL 6.11
Series Rider is a Contract Value that is less than or equal to the greater of:
- the Lifetime Income Amount (or, if less, any remaining Lifetime
Income Amount), or
- $1,000.
EXAMPLE: Assume that you purchase a Contract with an IPFL 6.11 Series Rider and
the Lifetime Income Amount is equal to $5,000. Also assume that the Contract
Value declines to $4,950. Since the Contract Value is less than the Lifetime
Income Amount, the Rider will enter its Settlement Phase and we will begin
automatically making payments that total $5,000 per year as long as the Covered
Person (either Covered Person for IPFL -- Joint Life 6.11) remains alive.
There is no Settlement Phase under an IPFL 6.11 Series Rider if you take any
withdrawal before the earliest available Lifetime Income Date and the Contract
Value declines to zero during the Contract Year of the withdrawal.
The settlement amount we pay to you under the Rider varies:
- At the start of the Settlement Phase, we will pay an initial
settlement amount equal to the remaining Lifetime Income Amount for
that Contract Year and make additional annual payments of the
Lifetime Income Amount as long as a Covered Person is living.
- If the Settlement Phase begins before the earliest available
Lifetime Income Date, we will begin making annual settlement
payments following the earliest available Lifetime Income Date as
long as the Covered Person is living. In this case, the annual
amount will equal the Lifetime Income Amount (i.e., the Benefit Base
at the Lifetime Income Date multiplied by the Benefit Rate then in
effect).
- In lieu of annual payments of the settlement amount, we will permit
you to elect monthly, quarterly or semi-annual installment payments
of the Lifetime Income Amount.
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Additional Annuity Options
In addition to the traditional Annuity Options we provide under the Contract, we
provide additional Annuity Options for Contracts issued with an IPFL 6.11 Series
Rider ("IPFL Alternate Annuity Options"). These IPFL Alternate Annuity Options
are only available for Annuity Commencement Dates no earlier than the first day
of the month following the later of the 90th birthday of the oldest Annuitant or
the tenth Contract Anniversary. The IPFL Alternate Annuity Options are designed
so that you will receive annuity payments that are no less than the Lifetime
Income Amount at the time of annuitization, but you could receive larger
payments, depending on your investment experience prior to annuitization. The
Annuity Options available to you are described in detail in "V. Description of
the Contract -- Pay-out Period Provisions."
Comparison between Guaranteed Minimum Withdrawal Benefits and Annuity Payments
If you choose to take withdrawals under one of our IPFL 6.11 Series Riders, it
is not the same as receiving annuity payments upon annuitization (as described
in "Pay-out Period Provisions" in "V. Description of the Contract").
When you take withdrawals:
- you will have the flexibility to start and stop withdrawals;
- you will have the flexibility to choose an amount of your withdrawal
that is less than or equal to your Lifetime Income Amount (without
reducing your future available Lifetime Income Amount);
- you will have the ability to surrender your Contract for the cash
surrender value (Contract Value minus any applicable charges and
premium taxes), if any;
- you reduce the Contract Value available for annuitization; and
- you may receive less favorable tax treatment of your withdrawals
than annuity payments would provide. See "VIII. Federal Tax Matters"
for information on tax considerations related to optional benefit
Riders.
When you annuitize:
- you will receive annuity payments that will be fixed in amount (or
in the number of units paid for Variable Annuity payments);
- your annuity payments will not vary in timing once they commence
(for as long as we are due to pay them to you);
- you will no longer have access to the Contract Value; and
- your Annuity Payments may receive more favorable tax treatment than
guaranteed minimum withdrawal benefits. See "VIII. Federal Tax
Matters" for information on tax considerations related to optional
benefit Riders.
SPECIAL CONSIDERATION ON ANNUITIZATION. The Contract does not permit you to make
a partial annuitization. You must apply your entire Contract Value to an Annuity
Payment Option. You probably will not want to purchase a Contract, with or
without an IPFL 6.11 Series Rider, if you are primarily interested in receiving
the tax treatment available to annuity contracts that permit you to apply a
portion of a deferred annuity contract's cash value to a stream of annuity
payments and retain the balance in the accumulation phase.
Impact of Death Benefits
The IPFL 6.11 Series Rider ends if (a) a death benefit becomes payable during
the Accumulation Period (but before the Settlement Phase under the Rider), and
(b) the Beneficiary takes the death benefit provided under the terms of the
Contract as a lump sum under our current administrative procedures. In cases
where the Rider continues, we will determine the Adjusted Benefit Base and the
Rider fee based on the date we determine the death benefit, and anniversaries of
that date, instead of the initial Contract Anniversary date.
If the Beneficiary does not take the death benefit as a lump sum, the following
will apply:
IF THE DECEASED OWNER IS: THEN THE IPFL 6.11 SERIES RIDER:
-------------------------------------- -------------------------------------------------------------------------------------------
1. Not the Covered Person - may continue if the Beneficiary elects to continue the Contract. We
will automatically increase the Benefit Base to equal the initial death
benefit we determine, if the death benefit is greater than the Benefit
Base prior to our determination. We will also recalculate the Lifetime
Income Amount to equal the Benefit Rate then in effect multiplied by the
recalculated Benefit Base and will assess the Rider Fee based on the
recalculated Benefit Base.
- enters its Settlement Phase if a subsequent withdrawal causes the Contract Value
to fall below a minimum required amount.
- continues to be eligible for any remaining Credits and Step-Ups, but we will
change the date we determine and apply these benefits to future anniversaries of the
date we determine the initial death benefit.
2. The Covered Person - ends without any further benefit.
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If you die during the Settlement Phase, the only death benefits we provide are
the remaining settlement payments that may become due under an IPFL 6.11 Series
Rider. If the Covered Person dies during the Settlement Phase, we reduce the
Lifetime Income Amount to zero and make no further payments.
The entire interest must be distributed within five years of the Owner's death,
except in the case where the Beneficiary is an individual. In that case, the
Beneficiary may choose to receive any remaining settlement payments over a
period not extending beyond the life expectancy of the Beneficiary beginning
within one year of the Owner's death. We continue to assess the mortality and
expense risks charge during this period, even though we bear only the expense
risk and not any mortality risk (see "VII. Charges and Deductions -- Mortality
and Expense Risks Fee").
INCOME PLUS FOR LIFE -- JOINT LIFE 6.11. If the Beneficiary continues a Contract
in force following the death of an Owner, coverage under an Income Plus For Life
-- Joint Life 6.11 Rider ends if the deceased Owner is the last Covered Person
under the Rider. If the Beneficiary continues a Contract in force following the
death of an Owner, coverage under the Rider may continue only if: (a) the
deceased Owner is the first Covered Person under the Rider to die; and either
(b) the surviving Covered Person is a spousal Beneficiary or (c) a Qualified
Plan is the non-spousal Beneficiary and the surviving Covered Person is a spouse
of the deceased Owner. If the death benefit is greater than the Contract Value,
we will increase the Contract Value to equal the amount of the death benefit
(but will not increase the Benefit Base, Lifetime Income Amount, Credits or
Step-Ups).
If the Rider continues, we will determine the Adjusted Benefit Base and the
Rider fee based on the date we determine the death benefit, and anniversaries of
that date, instead of the initial Contract Anniversary date.
Death of First Covered Person. If the first Covered Person to die is an Owner of
the Contract (or deemed to be an Owner if the Owner is a non-natural person),
the surviving Covered Person may elect to continue periodic distributions under
the Contract in lieu of receiving the Contract's death benefit as a lump sum
under our current administrative procedures. (See "Death after Removal of a
Covered Person" below if there is no surviving Covered Person.) If the Contract
continues, the Income Plus For Life -- Joint Life 6.11 Rider will continue. We
will continue to provide the Lifetime Income Amount guarantee only for the
lifetime of the surviving Covered Person and continue to charge the Income Plus
For Life -- Joint Life 6.11 Rider fee (see "Rider Fees -- Fee for Income Plus
For Life 6.11 Series Riders" earlier in this section). If the death benefit is
greater than the Contract Value, we will increase the Contract Value only to
equal the amount of the death benefit (but will not make any adjustments to the
Benefit Base, Lifetime Income Amount, Credits or Step-Ups). We will treat any
distribution of death benefits under a Contract as a "withdrawal" for purposes
of subsequent calculations of the Benefit Base and the Lifetime Income Amount.
If the first Covered Person to die is not the Owner (and is not deemed to be an
Owner if the Owner is a non-natural person), no death benefit is payable under
the Contract. The Rider will continue in effect and we will base the duration of
the Lifetime Income Amount only on the lifetime of the surviving Covered Person.
We will continue to charge the Income Plus For Life -- Joint Life 6.11 Rider
fee; however, we will make no adjustments to the Contract Value or make any
adjustments to the Benefit Base, Lifetime Income Amount, Credits or Step-Ups.
Death of Last Covered Person. If the surviving Covered Person dies while the
Income Plus For Life -- Joint Life 6.11 Rider is in effect, we will reduce the
Lifetime Income Amount to zero and we make no additional payments under the
Rider to the Beneficiary.
Death after Removal of a Covered Person. In certain instances, a person
initially designated as a Covered Person may be removed as a Covered Person from
the Rider. If that happens and:
- if the removed Covered Person subsequently dies, there will be no
impact on the guarantees provided by the Rider in most cases; and
- if the remaining Covered Person subsequently dies, we will consider
that Covered Person to be the "last" Covered Person and the Rider
will terminate.
Death Benefits during the Settlement Phase. If death occurs during an Income
Plus For Life -- Joint Life 6.11 Rider's Settlement Phase, the only death
benefit we provide is the remaining settlement payments that may become due
under that Rider. If the death of the first Covered Person occurs while the
Rider is in its Settlement Phase, no additional death benefit is payable under
the Contract and, in most instances, we will continue to make settlement
payments in the same manner as before the death. If the death occurs before the
Lifetime Income Date, we will compute a Lifetime Income Amount during the
Settlement Phase on the later of the Lifetime Income Date or the date we receive
notice of the death of the first Covered Person. Settlement payments will equal
the Lifetime Income Amount. WE MAY LIMIT THE ABILITY OF THE SURVIVING COVERED
PERSON TO CHOOSE A SETTLEMENT PAYMENT AMOUNT AND DURATION THAT DIFFERS FROM THE
AMOUNT AND DURATION IN EFFECT BEFORE THE DEATH OF THE FIRST COVERED PERSON.
Termination of Rider
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These Riders will terminate upon a change in ownership (or assignment) of the
Contract unless the new owner or assignee meets the qualifications specified in
the Termination provision of the respective Rider. A change of the Annuitant
also could result in termination of these Riders. We will permit you to change
ownership (or make an assignment) of the Contract without terminating the
respective Rider when the existing Owner is a legal entity and the new Owner is
another legal entity if (a) the new Owner has the same taxpayer identification
number as the previous Owner, (b) you transfer ownership from a custodian to the
Annuitant, or vice versa, or (c) you transfer ownership from a legal entity to
another entity that is satisfactory to us.
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You may not terminate an IPFL 6.11 Series Rider once it is in effect. However,
an IPFL 6.11 Series Rider will terminate automatically upon the earliest of:
- the date a death benefit is payable and the Beneficiary takes the
death benefit as a lump sum under the terms of the Contract;
- the date an Annuity Option begins;
- the date the Contract Value and the Benefit Base both equal zero;
- (for IPFL 6.11) the death of the Covered Person;
- (for IPFL -- Joint Life 6.11) the death of the last Covered Person
remaining under the Rider;
- the date a new Rider becomes effective under any exchange program
that we may make available;
- the date the Owner is changed or the Contract is assigned, unless
- the new Owner is a guardian, a custodian or a trust
established for the sole benefit of the previous Owner; or
- the new Owner is an individual and the previous Owner was a
guardian, a custodian or a trust established for the sole
benefit of that individual; or
- the change is from one guardian, custodian or trust
established for the sole benefit of an individual to another
guardian, custodian or trust established for the sole benefit
of that individual; or
- the Ownership is transferred to the Owner's spouse following
the death of the Owner; or.
- the Contract is assigned to a guardian, a custodian or a trust
established for the sole benefit of the previous Owner; or
- the assignment is for purposes of a tax qualified exchange; or
- termination of the Contract.
You should consult with your financial professional to assist you in determining
whether an IPFL 6.11 Series Rider is suited for your financial needs and
investment risk tolerance. The addition of a Rider to a Contract may not always
be in your interest since an additional fee is imposed annually for this benefit
and a Covered Person must reach the Lifetime Income Date and remain living for
you to receive certain benefits. Furthermore, Contracts with an IPFL 6.11 Series
Rider contain different Variable Investment Options and special investment
limitations and conditions than otherwise available under the Contract and
require you to defer taking withdrawals to receive certain benefits; an IPFL
6.11 Series Rider contains age caps and limitations on a Contract Owner's rights
and benefits at certain ages and values; and provides no guaranteed minimum
withdrawal benefits once payments begin under certain Annuity Options described
in the Prospectus. You should carefully consider each of these factors before
deciding if an IPFL 6.11 Series Rider is suitable for your needs, especially at
older ages.
Tax Considerations
Withdrawals may be taxable and may be subject to a 10% penalty tax if made prior
to age 59 1/2. See "VIII. Federal Tax Matters" for additional information on tax
considerations related to optional benefit Riders.
ANNUAL STEP-UP DEATH BENEFIT
If available in your state, you may elect the optional Annual Step-Up Death
Benefit:
- for an additional charge of 0.30% of the value of the Variable
Investment Options;
- as long as the oldest Owner of a Contract is not age 75 or older at
the time of purchase (we impose this restriction because the Annual
Step-Up Death Benefit would be zero if the oldest Owner were age 75
or older on the effective date of the Rider); and
- if you do not intend the Contract to be used with an IRA you
inherited from someone else (sometimes referred to as a "Beneficiary
IRA"), unless you are the spouse of the decedent and own the IRA in
your own name.
Election of this optional benefit may only be made at the time the Contract is
issued and, once made, is irrevocable. If you purchase this Rider but not an
IPFL 6.11 Series Rider, you must limit your investment allocations of Purchase
Payments and Contract Value to the Investment Options we make available with the
Contract, and you may not allocate Purchase Payments or Contract Value to the
Investment Options we make available with our Income Plus For Life 6.11 Series
Riders. If you purchase this Rider and an IPFL 6.11 Series Rider, you must limit
your investment allocations of Purchase Payments and Contract Value to the
Investment Options we make available with the Income Plus For Life Series 6.11
Rider.
Rider Benefit
The amount of the death benefit for the optional Annual Step-Up Death Benefit is
the greater of:
- the death benefit described under "Death Benefit During Accumulation
Period"; or
- the Annual Step-Up Death Benefit.
The Annual Step-Up Death Benefit is the greatest Anniversary Value after the
effective date of the Optional Annual Step-Up Death Benefit up to and including
the Contract Anniversary after the 75th birthday of the oldest Owner at issue of
the Contract
58
(the Contract Anniversary after the oldest Owner's 80th birthday in
California, Guam, Illinois and Puerto Rico), or the date of death of any Owner,
whichever is earliest.
ANNIVERSARY VALUE. For purposes of the Rider, the Anniversary Value is equal to
the Contract Value on each Contract Anniversary, plus any subsequent Purchase
Payments, less any amounts deducted in connection with withdrawals since the
Contract Anniversary. The amount deducted in connection with withdrawals will be
on a pro rata basis and will be equal to (a) multiplied by (b) where:
(a) is equal to the optional Annual Step-Up Death Benefit prior to the
withdrawal; and
(b) is equal to the Withdrawal Amount divided by the Contract Value
prior to the withdrawal.
CONTINUATION OF RIDER UPON DEATH OF OWNER. If the Beneficiary under the Contract
is the Contract Owner's surviving spouse and elects to continue the Contract,
the Contract and the Optional Annual Step-Up Death Benefit will continue with
the surviving spouse as the new Contract Owner, subject to our issue age rules.
For purposes of calculating the Optional Annual Step-Up Death Benefit payable
upon the death of the surviving spouse, the death benefit paid upon the first
Owner's death will be treated as a payment to the Contract. In addition, all
payments made and all amounts deducted in connection with withdrawals prior to
the date the first death benefit is paid will be excluded from consideration in
determining the optional Annual Step-Up Death Benefit. In determining the
optional Annual Step-Up Death Benefit, the Anniversary Values for all prior
Contract Anniversaries are set to zero as of the date the first death benefit is
paid.
Termination of the Optional Annual Step-Up Death Benefit
The Optional Annual Step-Up Death Benefit will terminate upon the earliest to
occur of:
(a) the date the Contract terminates;
(b) the Maturity Date;
(c) the date on which the Optional Annual Step-Up Death Benefit is paid;
or
(d) the date the Owner is changed or the Contract is assigned, unless
(i) the new Owner is a guardian, a custodian or a trust
established for the sole benefit of the previous Owner; or
(ii) the new Owner is an individual and the previous Owner was
a guardian, a custodian or a trust established for the sole
benefit of that individual; or
(iii) the change is from one guardian, custodian or trust
established for the sole benefit of an individual to another
guardian, custodian or trust established for the sole benefit
of that individual; or
(iv) the Ownership is transferred to the Owner's spouse following
the death of the Owner; or.
(v) the Contract is assigned to a guardian, a custodian or a trust
established for the sole benefit of the previous Owner; or
(vi) the assignment is for purposes of a tax qualified exchange.
Annual Step-Up Death Benefit Fee
A daily charge in an amount equal to 0.30% of the value of each variable
Investment Account on an annual basis is deducted from each Subaccount for the
Annual Step-Up Death Benefit.
Qualified Plans
If you intend to use your Contract in connection with a Qualified Plan,
including an IRA, you should consider the effects that the death benefit
provided under the Contract (with or without Annual Step-Up Death Benefit) may
have on your plan. Please consult your own qualified tax advisor.
The addition of the Annual Step-Up Death Benefit to a Contract may not always be
in your interest since an additional fee is imposed for this benefit and we
provide no assurance that investment performance will be sufficient to result in
an increased death benefit.
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VII. Charges and Deductions
We assess charges and deductions under the Contracts against Purchase Payments,
Contract Values, or withdrawal or annuity payments. Currently, there are no
deductions made from Purchase Payments. In addition, there are deductions from
and expenses paid out of the assets of the Portfolios that are described in the
Portfolio prospectus. For information on the optional benefits fees, see "VI.
Optional Benefits."
WITHDRAWAL CHARGES
If you make a withdrawal from your Contract during the Accumulation Period, we
may assess a withdrawal charge. We base the withdrawal charge on Purchase
Payments that have been in the Contract less than 4 complete Contract Years. We
do not assess a withdrawal charge with respect to i) earnings accumulated in the
Contract, ii) certain other "free Withdrawal Amounts" described below, iii)
distributions required to satisfy federal income tax minimum distribution
requirements, or iv) Purchase Payments that have been in the Contract more than
4 complete Contract Years. In no event may the total withdrawal charges exceed
8% of the amount invested.
We first allocate a withdrawal to accumulated earnings as described below, next
to any "free Withdrawal Amount" in excess of accumulated earnings and finally to
"unliquidated Purchase Payments" (i.e., the amount of all Purchase Payments in
the Contract net of any withdrawals in excess of earnings that have been taken
to date). We do not impose a withdrawal charge on amounts allocated to a free
Withdrawal Amount. In any Contract Year, the free Withdrawal Amount for that
year is the greater of:
- 10% of total Purchase Payments (less all prior withdrawals in that
Contract Year); and
- the accumulated earnings of the Contract (i.e., the excess of the
Contract Value on the date of withdrawal over unliquidated Purchase
Payments).
Withdrawals of up to the free Withdrawal Amount may be withdrawn without the
imposition of a withdrawal charge. If the amount of a withdrawal exceeds the
accumulated earnings, the excess will be allocated to Purchase Payments which
will be liquidated on a first-in first-out basis. On any withdrawal request, we
will liquidate Purchase Payments equal to the amount of the withdrawal request
which exceeds the accumulated earnings in the order the Purchase Payments were
made: the oldest unliquidated Purchase Payment first, the next Purchase Payment
second, etc., until all Purchase Payments have been liquidated.
Upon a full surrender of a Contract, we will liquidate the excess of all
unliquidated Purchase Payments over the accumulated earnings for purposes of
calculating the withdrawal charge.
Each Purchase Payment or portion thereof in excess of the Free Withdrawal Amount
that is liquidated in connection with a withdrawal request is subject to a
withdrawal charge based on the length of time the Purchase Payment has been in
the Contract. We calculate the amount of the withdrawal charge by multiplying
the amount of the Purchase Payment being liquidated by the applicable withdrawal
charge percentage shown below.
WITHDRAWAL CHARGE*
(as a percentage of Purchase Payments)
JOHN HANCOCK USA
JOHN HANCOCK NY
First Year 8%
Second Year 7%
Third Year 6%
Fourth Year 5%
Fifth Year & Thereafter 0%
-------
* This charge is taken upon withdrawal or surrender within the specified
period of years measured from the date of each Purchase Payment. The total
withdrawal charge will be the sum of the withdrawal charges for the
Purchase Payments being liquidated.
We deduct from the amount paid to the Contract Owner as a result of the
withdrawal, any applicable withdrawal charge, Contract and Rider fees and any
taxes. In the case of a withdrawal, the amount requested from an Investment
Account may not exceed the value of that Investment Account less any applicable
fees and charges.
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There is generally no withdrawal charge on distributions made as a result of the
death of the Contract Owner or, if applicable, the Annuitant, and we impose no
withdrawal charges on the Annuity Commencement Date if the Contract Owner
annuitizes as provided in the Contract.
Withdrawal charges help to compensate us for the cost of selling the Contracts.
The amount of the charges in any Contract Year does not specifically correspond
to sales expenses for that year. We expect to recover our total sales expenses
over the life of the Contracts. To the extent that the withdrawal charges do not
cover total sales expenses, the sales expenses may be recovered from other
sources, including gains from the asset-based risk charge and other gains with
respect to the Contracts or from our general assets. Similarly, administrative
expenses not fully recovered by the administration fee may also be recovered
from such other sources.
For examples of calculation of the withdrawal charge, see Appendix A: "Examples
of Calculation of Withdrawal Charge."
Waiver of Applicable Withdrawal Charge -- Confinement to Eligible Nursing Home
(John Hancock USA Contracts only; not available in all states)
In states where approved, any applicable withdrawal charge will be waived
on a withdrawal after the "Benefit Eligibility Date" and prior to the Maturity
Date if all of the following apply:
- the Owner has been confined to an "Eligible Medical Care Facility"
for at least 90 days (the waiver does not apply to the confinement
of any Annuitant unless the Owner is a non-natural person);
- the confinement began after the Contract Date, or after the change
to or addition of any Owner for that Owner;
- confinement was prescribed by a "Physician";
- confinement was medically necessary in the judgment of the
"Physician";
- both the Owner and the Annuitant are alive as of the date we pay the
proceeds of such withdrawal; and
- the request for a withdrawal and "Due Proof of Confinement" are
received by us, in Good Order, during confinement or no later than
90 days after discharge unless it was not reasonably possible to
provide proof within this time period and proof is provided as soon
as reasonably possible thereafter.
The "Benefit Eligibility Date" is the 12 months after the Contract Date for any
Owner at issue of the Contract and 12 months after any change or addition of an
Owner for that new Owner.
An "Eligible Medical Care Facility" is a licensed "Nursing Home" or "Hospital"
providing medically necessary inpatient care that is prescribed in writing by a
"Physician" and is based on physical limitations which requires daily living in
an institutional setting. A "Nursing Home" is a facility which: (a) is located
in the United States or its territories; (b) is licensed by the jurisdiction in
which it located; and (c) provides custodial care under the supervision of a
registered nurse (R.N.). A "Hospital" is a facility which: (a) is located in the
United States or its territories; (b) is licensed as a Hospital by the
jurisdiction in which it is located; (c) is supervised by a staff of
"Physicians"; (d) provides nursing services 24 hours a day by, or under the
supervision of, a registered nurse (R.N.); (e) operates primarily for the care
and treatment of sick or injured persons as inpatients for a charge; and (f) has
access to medical, diagnostic and major surgical facilities.
A "Physician" is a person other than you, the Annuitant(s) or a member of your
or the Annuitant's families who is a licensed medical doctor (M.D.) or a
licensed doctor of osteopathy (D.O.), practicing within the scope of that
license.
"Due Proof of Confinement" is a letter signed by a Physician containing: (a) the
date the Owner was confined, (b) the name and location of the Eligible Medical
Care Facility, (c) a statement that the confinement was medically necessary in
the judgment of the Physician, and (d) if applicable, the date the Owner was
released from the Eligible Medical Care Facility.
THE WAIVER DESCRIBED ABOVE IS NOT AVAILABLE IN ALL STATES AND CERTAIN TERMS MAY
VARY DEPENDING ON THE STATE OF ISSUE AS NOTED IN YOUR CONTRACT. WITHDRAWALS MAY
BE TAXABLE AND IF MADE PRIOR TO AGE 59 1/2 MAY BE SUBJECT TO A 10% PENALTY TAX
(SEE "VIII. FEDERAL TAX MATTERS"). YOU SHOULD CONSULT WITH YOUR OWN QUALIFIED
TAX ADVISOR BEFORE REQUESTING THE WAIVER.
There are or may be situations other than those described above or elsewhere in
the Prospectus (see, e.g., "Reduction or Elimination of Charges and Deductions,"
below) that merit waiver of withdrawal charges, which we may consider on a
case-by-case basis.
ANNUAL CONTRACT FEE
We will deduct each year an annual Contract fee of $50 as partial compensation
for the cost of providing all administrative services attributable to the
Contracts and the operations of the Separate Accounts and the Company in
connection with the Contracts. However, if you are registered for electronic
delivery of your transaction confirmations, we will waive the annual Contract
fee. Please contact the John Hancock Annuities Service Center at the applicable
telephone number or Internet address shown on page ii of this Prospectus for
more information on electronic transactions.
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During the Accumulation Period, this administration fee is deducted on the
Contract Anniversary. It is withdrawn from each Investment Option in the same
proportion that the value of such Investment Option bears to the Contract Value.
If the entire Contract Value is withdrawn on a day other than the Contract
Anniversary, the $50 Contract fee will be deducted from the amount paid. During
the Pay-out Period, the fee is deducted on a pro rata basis from each annuity
payment.
ASSET-BASED CHARGES
We deduct asset-based charges daily to compensate us primarily for our
administrative and distribution expenses, and for the mortality and expense
risks we assume under the Contracts.
Administration Fee
We allocate a portion of the asset-based charges, as shown in "III. Fee Tables,"
to help cover our administrative expenses. We deduct from each of the
Subaccounts a daily charge, at an annual effective rate of 0.15% of the value of
each corresponding Variable Investment Option, to reimburse us for
administrative expenses. The charge will be reflected in the Contract Value as a
proportionate reduction in the value of each Variable Investment Option. Even
though administrative expenses may increase, we guarantee that the amount of the
administration fees will not increase as a result.
Mortality and Expense Risks Fee
The mortality risk we assume is the risk that Annuitants may live for a longer
period of time than we estimate. We assume this mortality risk by virtue of
annuity payment rates incorporated into the Contract which cannot be changed.
This assures each Annuitant that his or her longevity will not have an adverse
effect on the amount of annuity payments. We also assume mortality risks in
connection with our guarantee that, if the Contract Owner dies during the
Accumulation Period, we will pay a death benefit (see "V. Description of the
Contract -- Accumulation Period Provisions -- Death Benefit During Accumulation
Period"). The expense risk we assume is the risk that the administration
charges, distribution charge, or withdrawal charge may be insufficient to cover
actual expenses.
To compensate us for assuming these risks, we deduct from each of the
Subaccounts, as a percentage of the value of the Variable Investment Options, a
daily charge at the annual effective rate of 1.00%.
Under each plan, the rate of the mortality and expense risks charge cannot be
increased. The charge was established to continue for the duration of the
contractual obligations consistent with pooling of risks, the persistency of
certain risks, and the unpredictability of the time and nature of their
occurrence. The charge is assessed on all active Contracts, including Contracts
continued by a Beneficiary upon the death of the Contract Owner or continued
under any annuity option payable on a variable basis. If the charge is
insufficient to cover the actual cost of the mortality and expense risks
assumed, we will bear the loss. Conversely, if the charge proves more than
sufficient, the excess will be profit to us and will be available for any proper
corporate purpose including, among other things, payment of distribution
expenses. In cases where no death proceeds are payable (e.g., for Contracts
continued by a Beneficiary upon the death of the Owner), or under the Period
Certain Only Annuity Option, if you elect benefits payable on a variable basis,
we continue to assess the Contractual mortality and expense risks charge,
although we bear only the expense risk and not any mortality risk.
Distribution Fee
We make an additional asset-based charge, as shown in "III. Fee Tables," to
cover our distribution expenses. We deduct a daily charge, at an annual
effective rate of 0.55% of the value of each Variable Investment Option, from
each corresponding Subaccount to reimburse us for distribution expenses. The
charge will be reflected in the Contract Value as a proportionate reduction in
the value of each Variable Investment Option. Even though distribution expenses
may increase, we guarantee that the amount of the distribution fees will not
increase as a result.
REDUCTION OR ELIMINATION OF CHARGES AND DEDUCTIONS
(John Hancock USA Contracts only; not available in New York)
We may reduce or eliminate the amount of withdrawal charges or any
administrative charge or other deductions from Purchase Payments for certain
Contracts where permitted by state law. These Contracts would involve sales that
are made to individuals or to a group of individuals in a manner that results in
savings of sales or maintenance expenses or that we expect may result in
reduction of other risks that are normally associated with the Contracts. We
will determine entitlement to such a reduction in the charges or deductions in
the following manner:
- We will consider the size and type of group to which sales are to be
made. Generally, per-Contract sales expenses for a larger group are
smaller than for a smaller group because of the ability to implement
large numbers of Contracts with fewer sales contacts.
- We will consider the total amount of Purchase Payments to be
received. Per-dollar sales expenses are likely to be less on larger
Purchase Payments than on smaller ones.
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- We will consider the nature of the group or class for which the
Contracts are being purchased including the expected persistency,
mortality or morbidity risks associated with the group or class of
Contracts.
- We will consider any prior or existing relationship with us.
Per-Contract sales expenses are likely to be less when there is a
prior or existing relationship because of the likelihood of
implementing the Contract with fewer sales contacts.
- We will consider the level of commissions paid to selling
broker-dealers. Certain broker-dealers may offer the Contract in
connection with financial planning programs offered on a
fee-for-service basis. In view of the financial planning fees, such
broker-dealers may elect to receive lower commissions for sales of
the Contracts, thereby reducing our sales expenses.
- There may be other circumstances of which we are not presently
aware, which could result in reduced expenses.
If after consideration of the foregoing factors, we determine that there will be
a reduction in expenses, we will provide a reduction in the charges or
deductions. In no event will we permit reduction or elimination of the charges
or deductions where that reduction or elimination will be unfairly
discriminatory to any person. We reserve the right to modify, suspend or
terminate any reductions or waivers of sales charges at any time. For further
information, contact your registered representative.
PREMIUM TAXES
We will charge you for premium taxes to the extent we incur them and reserve the
right to charge you for new taxes we may incur.
We make deductions for any applicable premium or similar taxes. Currently,
certain local jurisdictions assess a tax of up to 4% of each Purchase Payment.
In most cases, and subject to applicable state law, we deduct a charge in the
amount of the tax from the total value of the Contract only at the time of
annuitization, death, surrender, or withdrawal. We reserve the right, however,
to deduct the charge from each Purchase Payment at the time it is made. We
compute the amount of the charge by multiplying the applicable premium tax
percentage by the amount you are withdrawing, surrendering, annuitizing or
applying to a death benefit.
PREMIUM TAX RATE(1)
STATE OR QUALIFIED NONQUALIFIED
TERRITORY CONTRACTS CONTRACTS
CA 0.50% 2.35%
GUAM 4.00% 4.00%
ME(2) 0.00% 2.00%
NV 0.00% 3.50%
PR 1.00% 1.00%
SD(2) 0.00% 1.25%(3)
TX(4) 0.04% 0.04%
WV 1.00% 1.00%
WY 0.00% 1.00%
---------------
(1) Based on the state of residence at the time the tax is assessed.
(2) We pay premium tax upon receipt of Purchase Payment.
(3) 0.80% on Purchase Payments in excess of $500,000.
(4) Referred to as a "maintenance fee."
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VIII. Federal Tax Matters
INTRODUCTION
The following discussion of the federal income tax treatment of the Contract is
not exhaustive, does not purport to cover all situations, and is not intended as
tax advice. The federal income tax treatment of an annuity contract is unclear
in certain circumstances, and you should consult a qualified tax advisor with
regard to the application of the law to your circumstances. This discussion is
based on the Code, Treasury Department regulations, and Internal Revenue Service
("IRS") rulings and interpretations existing on the date of this Prospectus.
These authorities, however, are subject to change by Congress, the Treasury
Department and judicial decisions.
This discussion does not address state or local tax consequences associated with
the purchase of a Contract. IN ADDITION, WE MAKE NO GUARANTEE REGARDING ANY TAX
TREATMENT -- FEDERAL, STATE, OR LOCAL -- OF ANY CONTRACT OR OF ANY TRANSACTION
INVOLVING A CONTRACT.
OUR TAX STATUS
We are taxed as a life insurance company. Under current tax law rules, we
include the investment income (exclusive of capital gains) of a Separate Account
in our taxable income and take deductions for investment income credited to our
"policyholder reserves." We are also required to capitalize and amortize certain
costs instead of deducting those costs when they are incurred. We do not
currently charge a Separate Account for any resulting income tax costs. We also
claim certain tax credits or deductions relating to foreign taxes paid and
dividends received by the Portfolios. These benefits can be material. We do not
pass these benefits through to a Separate Account, principally because: (i) the
deductions and credits are allowed to the Company and not the Contract owners
under applicable tax law; and (ii) the deductions and credits do not represent
investment return on Separate Account assets that is passed through to Contract
owners.
The Contracts permit us to deduct a charge for any taxes we incur that are
attributable to the operation or existence of the Contracts or a Separate
Account. Currently, we do not anticipate making a charge for such taxes. If the
level of the current taxes increases, however, or is expected to increase in the
future, we reserve the right to make a charge in the future. (Please note that
this discussion applies to federal income tax but not to any state or local
taxes.)
SPECIAL CONSIDERATIONS FOR OPTIONAL BENEFITS
At present, the IRS has not provided guidance as to the tax treatment of charges
for optional benefits to an annuity contract. The IRS might take the position
that each charge associated with these optional benefits is deemed a withdrawal
from the contract subject to current income tax to the extent of any gains and,
if applicable, the 10% penalty tax for premature withdrawals. We do not
currently report charges for optional benefits as withdrawals, but we may do so
in the future if we believe that the IRS would require us to report them as
such.
When you take a withdrawal under a Nonqualified Contract, it ordinarily is
taxable only to the extent it does not exceed gain in the Contract, if any, at
the time of the withdrawal. Under current IRS guidance, we expect to determine
gain on a withdrawal, including withdrawals during the "Settlement Phase" of an
IPFL 6.11 Series Rider, using the Contract Value. See "VI. Optional Benefits"
for a description of the IPFL 6.11 Series Riders available under the Contracts.
It is possible, however, that the IRS may take the position that the value of
amounts guaranteed to be available in the future should also be taken into
account in computing the taxable portion of a withdrawal. In that event, you may
be subject to a higher amount of tax on a withdrawal.
Please see "Qualified Contracts -- Conversions and Rollovers to Roth IRAs" below
for additional information on the tax impact of optional benefit Riders on a
conversion to a Roth IRA.
If you purchased a Qualified Contract with an optional death benefit or other
optional benefit Rider, the presence of these benefits may increase the amount
of any required minimum distributions under the requirements of your Qualified
Plan. See "Qualified Contracts" below.
Any annuity payments that you receive under an Annuity Option, including Annuity
Options that only are available when you elect a IPFL 6.11 Series Rider, will be
taxed in the manner described in "Taxation of Annuity Payments" below.
You should consult a qualified tax advisor for information on any optional
benefit Riders.
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CHARITABLE REMAINDER TRUSTS
This federal tax discussion does not address tax consequences of a Contract used
in a charitable remainder trust. The tax consequences of charitable remainder
trusts may vary depending on the particular facts and circumstances of each
individual case. Additionally, the tax rules governing charitable remainder
trusts, or the taxation of a Contract used with a charitable remainder trust,
may be subject to change by legislation, regulatory changes, judicial decrees or
other means. You should consult competent legal or tax counsel regarding the tax
treatment of a charitable remainder trust before purchasing a Contract for use
within it.
NONQUALIFIED CONTRACTS
(Contracts Not Purchased to Fund an Individual Retirement Account or Other
Qualified Plan)
Aggregation of Contracts
In certain circumstances, the IRS may determine the portion of an annuity
payment or a withdrawal from a contract that is includible in income by
combining some or all of the annuity contracts owned by an individual which are
not issued in connection with a Qualified Plan.
For example, if you purchase two or more deferred annuity contracts from the
same insurance company (or its affiliates) during any calendar year, all such
contracts will be treated as one contract for purposes of determining whether
any payment not received as an annuity (including withdrawals prior to the
Maturity Date) is includible in income. Thus, if during a calendar year you buy
two or more of the Contracts offered by this Prospectus (which might be done,
for example, in order to purchase different guarantees and/or benefits under
different contracts), all of such Contracts would be treated as one Contract in
determining whether withdrawals from any of such Contracts are includible in
income. The IRS may also require aggregation in other circumstances and you
should consult a qualified tax advisor if you own or intend to purchase more
than one annuity contract.
The effects of such aggregation are not always clear and depend on the
circumstances. However, aggregation could affect the amount of a withdrawal that
is taxable and the amount that might be subject to the 10% penalty tax described
below.
Exchanges of Annuity Contracts
We may issue the Contract in exchange for all or part of another annuity
contract that you own. Such an exchange will be tax free if certain requirements
are satisfied. If the exchange is tax free, your investment in the Contract
immediately after the exchange will generally be the same as that of the annuity
contract exchanged, increased by any Additional Purchase Payment made as part of
the exchange. Your Contract Value immediately after the exchange may or may not
exceed your investment in the Contract. Any excess may be includible in income
should amounts subsequently be withdrawn or distributed from the Contract (e.g.,
as a partial surrender, full surrender, annuity payment, or death benefit.).
If you exchange part of an existing contract for the Contract, and within 12
months of the exchange you receive a payment (e.g., you make a withdrawal) from
either contract, the exchange may not be treated as a tax-free exchange. Rather,
the exchange may be treated as if you had made a partial surrender from the
existing contract and then purchased the Contract. In these circumstances, some
or all of the amount exchanged into the Contract could be includible in your
income and subject to a 10% penalty tax. There are various circumstances in
which a partial exchange followed by receipt of a payment within 12 months of
the exchange is unlikely to affect the tax free treatment of the exchange. You
should consult with your own qualified tax advisor in connection with an
exchange of all or part of an annuity contract for the Contract, especially if
you make a withdrawal from either contract within 12 months after the exchange.
Loss of Interest Deduction Where Contracts are Held by or for the Benefit of
Certain Non-Natural Persons
In the case of Contracts issued after June 8, 1997 to a non-natural taxpayer
(such as a corporation or a trust), or held for the benefit of such an entity, a
portion of otherwise deductible interest may not be deductible by the entity,
regardless of whether the interest relates to debt used to purchase or carry the
Contract. However, this interest deduction disallowance does not affect
Contracts where the income on such Contracts is treated as ordinary income that
is received or accrued by the Owner during the taxable year. Entities that are
considering purchasing the Contract, or entities that will be beneficiaries
under the Contract, should consult a qualified tax advisor.
Undistributed Gains
Except where the Owner is not an individual, we expect our Contracts to be
considered annuity contracts under section 72 of the Code. This means that,
ordinarily, you pay no federal income tax on any gains in your Contract until we
actually make a distribution to you or you assign or pledge an interest in your
Contract.
However, a Contract held by an Owner other than a natural person (for example, a
corporation, partnership, limited liability company, trust, or other such
entity) does not generally qualify as an annuity contract for tax purposes. Any
increase in value therefore would constitute ordinary taxable income to such an
Owner in the year earned. Notwithstanding this general rule, a Contract will
ordinarily be treated as held by a natural person if the nominal Owner is a
trust or other entity which holds the Contract as an agent for a natural person.
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Taxation of Annuity Payments
When we make payments under a Contract in the form of an annuity, normally a
portion of each annuity payment is taxable as ordinary income. The taxable
portion of an annuity payment is equal to the excess of the payment over the
exclusion amount.
In the case of variable annuity payments, the exclusion amount is the investment
in the Contract when payments begin to be made divided by the number of payments
expected to be made (taking into account the Annuitant's life expectancy and the
form of annuity benefit selected). In the case of Fixed Annuity payments, the
exclusion amount is based on the investment in the Contract and the total
expected value of Fixed Annuity payments for the term of the Contract
(determined under Treasury Department regulations). In general, your investment
in the Contract equals the aggregate amount of premium payments you have made
over the life of the Contract, reduced by any amounts previously distributed
from the Contract that were not subject to tax. (A simplified method of
determining the taxable portion of annuity benefit payments applies to Contracts
issued in connection with certain Qualified Plans other than IRAs.)
Once you have recovered your total investment in the Contract tax free, further
annuity payments will be fully taxable. If annuity payments cease because the
Annuitant dies before all of the investment in the Contract is recovered, the
unrecovered amount generally will be allowed as a deduction on the Annuitant's
last tax return or, if there is a beneficiary entitled to receive further
payments, will be distributed to the Beneficiary as described more fully below
under "Taxation of Death Benefit Proceeds."
Surrenders, Withdrawals and Death Benefits
When we make a single sum payment consisting of the entire value of your
Contract, you have ordinary taxable income to the extent the payment exceeds
your investment in the Contract (discussed above). Such a single sum payment can
occur, for example, if you surrender your Contract before the Maturity Date or
if no extended payment option is selected for a death benefit payment.
When you take a withdrawal from a Contract before the Maturity Date (or Annuity
Commencement Date if earlier), including a payment under a systematic withdrawal
plan or guaranteed minimum withdrawal benefit, all or part of the payment may
constitute taxable ordinary income to you. If, on the date of withdrawal, the
total value of your Contract exceeds the investment in the Contract, the excess
will be considered gain and the withdrawal will be taxable as ordinary income up
to the amount of such gain. Taxable withdrawals may also be subject to a penalty
tax for premature withdrawals as explained below. When there is no gain included
in the Contract's value and only the investment in the Contract remains, any
subsequent withdrawal made before the Maturity Date will be a tax-free return of
investment, until you have recovered your entire investment in the Contract. Any
additional withdrawals based upon a Rider guarantee will be subject to income
tax. If you assign or pledge any part of your Contract Value, the value so
pledged or assigned is taxed the same way as if it were a withdrawal.
For purposes of determining the amount of taxable income resulting from a single
sum payment or a withdrawal, all nonqualified annuity contracts issued by us or
our affiliates to the Owner within the same calendar year will be treated as if
they were a single contract.
There may be special income tax issues present in situations where the Owner and
the Annuitant are not the same person and are not married to each other. A
qualified tax advisor should be consulted in those situations.
Taxation of Death Benefit Proceeds
All or part of any death benefit proceeds may constitute a taxable payout of
earnings. A death benefit payment generally results in taxable ordinary income
to the extent there is gain in the Contract.
Amounts may be distributed from a Contract because of the death of an Owner or
the Annuitant. During the Accumulation Period, death benefit proceeds are
includible in income as follows:
- if distributed in a single sum payment under our current
administrative procedures, they are taxed in the same manner as a
full withdrawal, as described above; or
- if distributed under an Annuity Option, they are taxed in the same
manner as annuity payments, as described above; or
- if distributed as a series of withdrawals over the Beneficiary's
life expectancy, they are taxable to the extent there is gain in the
Contract.
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After a Contract matures and annuity payments begin, if the Contract guarantees
payments for a stated period and the Owner dies before the end of that period,
payments made to the Beneficiary for the remainder of that period are includible
in the Beneficiary's income as follows:
- if received in a single sum under our current administrative
procedures, they are includible in income to the extent that they
exceed the unrecovered investment in the Contract at that time; or
- if distributed in accordance with an existing Annuity Option other
than the Period Certain Only Annuity Option, they are fully
excludible from income until the remaining investment in the
Contract has been recovered, and all annuity benefit payments
thereafter are fully includible in income; or
- if distributed in accordance with an existing Period Certain Only
Annuity Option, the payments are taxed the same as the annuity
payments made before death. A portion of each annuity payment is
includible in income and the remainder is excluded from income as a
return of the investment in the Contract.
Penalty Tax on Premature Distributions
There is a 10% penalty tax on the taxable portion of any payment from a
Nonqualified Contract. Exceptions to this penalty tax include distributions:
- received on or after the date on which the Contract Owner reaches
age 59 1/2;
- attributable to the Contract Owner becoming disabled (as defined in
the tax law);
- made to a Beneficiary on or after the death of the Contract Owner
or, if the Contract Owner is not an individual, on or after the
death of an Annuitant;
- made as a series of substantially equal periodic payments for the
life (or life expectancy) of the Owner or for the joint lives (or
joint life expectancies) of the Owner and designated individual
Beneficiary;
- made under a single-premium immediate annuity contract; or
- made with respect to certain annuities issued in connection with
structured settlement agreements.
Note that when a series of substantially equal periodic payments (Life
Expectancy Distribution) is used to avoid the penalty, if the Contract Owner
then modifies the payment pattern (other than by reason of death or disability)
before the LATER of the Contract Owner's attaining age 59 1/2 and the passage of
five years after the date of the first payment, such modification may cause
retroactive imposition of the penalty plus interest on it.
Diversification Requirements
Your Contract will not qualify for the tax benefits of an annuity contract
unless the Separate Account follows certain rules requiring diversification of
investments underlying the Contract. In addition, the rules require that the
Contract Owner not have "investment control" over the underlying assets.
In certain circumstances, the owner of a variable annuity contract may be
considered the owner, for federal income tax purposes, of the assets of the
separate account used to support the contract. In those circumstances, income
and gains from the separate account assets would be includible in the Contract
Owner's gross income. The IRS has stated in published rulings that a variable
contract owner will be considered the owner of separate account assets if the
contract owner possesses incidents of ownership in those assets, such as the
ability to exercise investment control over the assets. A Treasury Decision
issued in 1986 stated that guidance would be issued in the form of regulations
or rulings on the "extent to which Policyholders may direct their investments to
particular subaccounts of a separate account without being treated as owners of
the underlying assets." As of the date of this Prospectus, no comprehensive
guidance on this point has been issued. In Rev. Rul. 2003-91, however, the IRS
ruled that a contract holder would not be treated as the owner of assets
underlying a variable annuity contract despite the owner's ability to allocate
funds among as many as twenty subaccounts.
The ownership rights under your Contract are similar to, but different in
certain respects from, those described in IRS rulings in which it was determined
that contract owners were not owners of separate account assets. Since you have
greater flexibility in allocating premiums and Contract Values than was the case
in those rulings, it is possible that you would be treated as the owner of your
Contract's proportionate share of the assets of the Separate Account.
We do not know what future Treasury Department regulations or other guidance may
require. We cannot guarantee that an underlying Portfolio will be able to
operate as currently described in its prospectus, or that a Portfolio will not
have to change any of its investment objectives or policies. We have reserved
the right to modify your Contract if we believe doing so will prevent you from
being considered the owner of your Contract's proportionate share of the assets
of the Separate Account, but we are under no obligation to do so.
Health Care and Education Reconciliation Act of 2010
On March 30, 2010, President Barack Obama signed the Health Care and Education
Reconciliation Act of 2010 (the "Act") into law. The Act contains provisions for
a new Medicare tax to be imposed at a maximum rate of 3.8% in taxable years
beginning in 2013. The tax will be imposed on an amount equal to the lesser of
(a) "net investment income" or (b) the excess of the taxpayer's modified
adjusted gross income over a specified income threshold ($250,000 for married
couples filing jointly, $125,000 for married couples
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filing separately, and $200,000 for everyone else). "Net investment income," for
these purposes, includes the excess (if any) of gross income from annuities,
interest, dividends, royalties and rents, and certain net gain, over allowable
deductions, as such terms are defined in the Act or as may be defined in future
Treasury Regulations or IRS guidance. The term "net investment income" does not
include any distribution from a plan or arrangement described in Code sections
401(a), 403(a), 403(b), 408 (i.e., IRAs), 408A (i.e., Roth IRAs) or 457(b).
You should consult a qualified tax advisor for further information about the
impact of the Act on your individual circumstances.
Puerto Rico Nonqualified Contracts
IF YOU ARE A RESIDENT OF PUERTO RICO, YOU SHOULD CONSULT A QUALIFIED TAX ADVISOR
BEFORE PURCHASING AN ANNUITY CONTRACT.
Distributions from Puerto Rico annuity contracts issued by us are subject to
federal income taxation, withholding and reporting requirements as well as
Puerto Rico tax laws. Both jurisdictions impose a tax on distributions. Under
federal requirements, distributions are deemed to be income first. Under the
Puerto Rico tax laws, however, distributions from a Contract not purchased to
fund a Qualified Plan ("Nonqualified Contract") are generally treated as a
nontaxable return of principal until the principal is fully recovered.
Thereafter, all distributions under a Nonqualified Contact are fully taxable.
Puerto Rico does not currently impose an early withdrawal penalty tax. The Code,
however, does impose such a penalty and bases it on the amount that is taxable
under federal rules.
Distributions under a Nonqualified Contract after annuitization are treated as
part taxable income and part nontaxable return of principal. After
annuitization, the annual amount excluded from gross income under Puerto Rico
tax law is equal to the amount of the distribution in excess of 3% of the total
Purchase Payments paid, until an amount equal to the total Purchase Payments
paid has been excluded. Thereafter, the entire distribution from a Nonqualified
Contract is included in gross income. For federal income tax purposes, however,
the portion of each annuity payment that is subject to tax is computed on the
basis of investment in the Contract and the Annuitant's life expectancy.
Generally Puerto Rico does not require income tax to be withheld from
distributions of income from annuity contracts. Although Puerto Rico allows a
credit against its income tax for taxes paid to the federal government, you may
not be able to use the credit fully.
QUALIFIED CONTRACTS
(Contracts Purchased to Fund an Individual Retirement Account or Other Qualified
Plan)
The Contracts are also available for use in connection with certain types of
retirement plans that receive favorable treatment under the Code ("Qualified
Plans"). Numerous special tax rules apply to the participants in Qualified Plans
and to the Contracts used in connection with these plans. We provide a brief
description of types of Qualified Plans in Appendix B of this Prospectus and in
the SAI, but make no attempt to provide more than general information about use
of the Contracts with the various types of Qualified Plans in this Prospectus.
We may limit the availability of the Contracts to certain types of Qualified
Plans and may discontinue making Contracts available to any Qualified Plan in
the future. If you intend to use a Contract in connection with a Qualified Plan
you should consult a qualified tax advisor.
We have no responsibility for determining whether a particular retirement plan
or a particular contribution to the plan satisfies the applicable requirements
of the Code, or whether a particular employee is eligible for inclusion under a
plan. In general, the Code imposes limitations on the amount of annual
compensation that can be contributed into a Qualified Plan and contains rules to
limit the amount you can contribute to all of your Qualified Plans. Trustees and
administrators of Qualified Plans may, however, generally invest and reinvest
existing plan assets without regard to such Code imposed limitations on
contributions. Certain distributions from Qualified Plans may be transferred
directly to another plan, unless funds are added from other sources, without
regard to such limitations.
The tax rules applicable to Qualified Plans vary according to the type of plan
and the terms and conditions of the plan itself. For example, for both
withdrawals and annuity benefit payments under certain Qualified Contracts,
there may be no "investment in the Contract" and the total amount received may
be taxable. Both the amount of the contribution that may be made and the tax
deduction or exclusion that you may claim for that contribution are limited
under Qualified Plans. Under the tax rules, the Owner and the Annuitant may not
be different individuals if a Contract is used in connection with a Qualified
Plan. If a co-Annuitant is named, all distributions made while the Annuitant is
alive must be made to the Annuitant. Also, if a co-Annuitant is named who is not
the Annuitant's spouse, the Annuity Options which are available may be limited,
depending on the difference in ages between the Annuitant and co-Annuitant.
Additionally, for Contracts issued in connection with Qualified Plans subject to
the Employee Retirement Income Security Act of 1974 (ERISA), the spouse or
ex-spouse of the Owner will have rights in the Contract. In such a case, the
Owner may need the consent of the spouse or ex-spouse to change Annuity Options
or make a withdrawal from the Contract.
Required Minimum Distributions
Treasury Department regulations prescribe required minimum distribution ("RMD")
rules governing the time at which distributions to the Owner and beneficiaries
must commence and the form in which the distributions must be paid. These
special rules may also require the length of any guarantee period to be limited.
They also affect the restrictions that the Owner may impose on the timing
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and manner of payment of death benefits to beneficiaries or the period of time
over which a Beneficiary may extend payment of the death benefits under the
Contract. In addition, the presence of the death benefit or a benefit provided
under an optional rider may affect the amount of the required minimum
distributions that must be made under the Contract. Failure to comply with RMD
requirements will result in the imposition of an excise tax, generally 50% of
the amount by which the amount required to be distributed exceeds the actual
distribution. In the case of IRAs (other than Roth IRAs), distributions of
minimum amounts (as specified in the tax law) to the Owner must generally
commence by April 1 of the calendar year following the calendar year in which
the Owner attains age 70 1/2. In the case of certain other Qualified Plans, such
distributions of such minimum amounts must generally commence by the later of
this date or April 1 of the calendar year following the calendar year in which
the employee retires. Distributions made under certain Qualified Plans,
including IRAs and Roth IRAs, after the Owner's death must also comply with RMD
requirements, and different rules governing the timing and the manner of
payments apply, depending on whether the designated Beneficiary is an individual
and, if so, the Owner's spouse, or an individual other than the Owner's spouse.
If you wish to impose restrictions on the timing and manner of payment of death
benefits to your designated beneficiaries or if your Beneficiary wishes to
extend over a period of time the payment of the death benefits under your
Contract, please consult your own qualified tax advisor.
Penalty Tax on Premature Distributions
There is also a 10% penalty tax on the taxable amount of any payment from
certain Qualified Contracts (but not section 457 plans). (The amount of the
penalty tax is 25% of the taxable amount of any payment received from a SIMPLE
retirement account during the 2-year period beginning on the date the individual
first participated in any qualified salary reduction arrangement maintained by
the individual's employer.) There are exceptions to this penalty tax which vary
depending on the type of Qualified Plan. In the case of an Individual Retirement
Annuity or an IRA, including a SIMPLE IRA, the penalty tax does not apply to a
payment:
- received on or after the date on which the Contract Owner reaches
age 59 1/2;
- received on or after the Owner's death or because of the Owner's
disability (as defined in the tax law); or
- made as a series of substantially equal periodic payments (not less
frequently than annually) for the life (or life expectancy) of the
Owner or for the joint lives (or joint life expectancies) of the
Owner and "designated beneficiary" (as defined in the tax law).
Note that when a series of substantially equal periodic payments is used to
avoid the penalty, if the Contract Owner then modifies the payment pattern
(other than by reason of death or disability) before the LATER of the Contract
Owner's attaining age 59 1/2 or the passage of five years after the date of the
first payment, such modification may cause retroactive imposition of the penalty
plus interest on it.
These exceptions generally apply to taxable distributions from other Qualified
Plans (although, in the case of plans qualified under sections 401 and 403 of
the Code, the exception for substantially equal periodic payments applies only
if the Owner has had a severance from employment). In addition, the penalty tax
does not apply to certain distributions from IRAs that are used for first time
home purchases or for higher education expenses, or for distributions made to
certain eligible individuals called to active duty after September 11, 2001.
Special conditions must be met to qualify for these three exceptions to the
penalty tax. If you wish to take a distribution from an IRA for these purposes,
you should consult your own qualified tax advisor.
When we issue a Contract in connection with a Qualified Plan, we will amend the
Contract as necessary to conform to the requirements of the plan. However, your
rights to any benefits under the plan may be subject to the terms and conditions
of the plan itself, regardless of the terms and conditions of the Contracts.
Rollovers and Transfers If permitted under your plan, you may
make a distribution:
- from a traditional IRA and make a "tax-free rollover" to another
traditional IRA;
- from a traditional IRA and make a "tax-free rollover" to a
retirement plan qualified under section 401(a), 403(a), or 403(b) of
the Code or a governmental deferred compensation plan described in
section 457(b) of the Code;
- from any Qualified Plan (other than a section 457 deferred
compensation plan maintained by a tax-exempt organization) and make
a "tax-free rollover" to a traditional IRA; or
- from a retirement plan qualified under section 401(a), 403(a), or
403(b) of the Code or a governmental deferred compensation plan
described in section 457(b) of the Code and make a "tax-free
rollover" to any such plans.
In addition, if your spouse survives you, he or she is permitted to take a
distribution from your tax-qualified retirement account and make a "tax-free
rollover" to another tax-qualified retirement account in which your surviving
spouse participates, to the extent permitted by your surviving spouse's plan. A
beneficiary who is not your surviving spouse may, if permitted by the plan, make
a direct transfer to a traditional IRA of the amount otherwise distributable to
him or her upon your death under a Contract that is held as part of a retirement
plan described in section 401(a), 403(a), or 403(b) of the Code or a
governmental deferred compensation plan described in section 457(b) of the Code.
The IRA is treated as an inherited IRA of the non-spouse beneficiary. A
beneficiary who is
68
not your spouse may make a direct transfer to an inherited
IRA of the amount otherwise distributable to him or her under a Contract which
is a traditional IRA.
You may also make a taxable rollover from a traditional IRA to a Roth IRA. In
addition, distributions that you receive from a retirement plan described in
section 401(a), 403(a), or 403(b) of the Code or a governmental deferred
compensation plan described in section 457(b) of the Code may be rolled over
directly to a Roth IRA. This type of rollover is taxable. You may make a
"tax-free rollover" to a Roth IRA from a Roth IRA or from a Roth account in a
retirement plan described in section 401(a) or section 403(b) of the Code.
Although we allow a beneficiary of an IRA who is eligible to roll the IRA over
to a Contract as a traditional or Roth IRA to do so, we do not allow such an IRA
beneficiary to purchase any of our optional benefit Riders on that Contract.
In lieu of taking a distribution from your plan (including a section 457
deferred compensation plan maintained by a tax-exempt organization), your plan
may permit you to make a direct trustee-to-trustee transfer from the plan.
Withholding on Rollover Distributions
Eligible rollover distributions from a retirement plan that is qualified under
section 401(a), 403(a), or 403(b) of the Code, or a governmental deferred
compensation plan described in section 457(b) of the Code are subject to
mandatory withholding. An eligible rollover distribution generally is any
taxable distribution from such plans except (i) minimum distributions required
under section 401(a)(9) of the Code, (ii) certain distributions for life, life
expectancy, or for 10 years or more which are part of a "series of substantially
equal periodic payments," and (iii) if applicable, certain hardship withdrawals.
Federal income tax of 20% will be withheld from an eligible rollover
distribution. The withholding is mandatory and you cannot elect to have it not
apply. This 20% withholding will not apply, however, if instead of receiving the
eligible rollover distribution, you choose to have it directly transferred to an
applicable plan, a traditional IRA, or a Roth IRA.
If you take a distribution from a Qualified Contract, we may have to withhold a
portion of the distribution and remit it to the IRS. The amount we may be
required to withhold can be up to 20% of the taxable portion of your
distribution. We treat any amount we withhold as a withdrawal from your
Contract, which could result in an Excess Withdrawal or other type of reduction
in guarantees and benefits that you may have purchased under an optional
benefits Rider to your Contract. Please read "VI. Optional Benefits" for
information about the impact of withdrawals on optional benefit Riders.
We do not need to withhold any amounts if you provide us with information, on
the forms we require for this purpose, that you wish to assign a Qualified
Contract and/or transfer amounts from that Contract directly to another
Qualified Plan. Similarly, if you wish to purchase a Qualified Contract, you may
find it advantageous to instruct your existing retirement plan to transfer
amounts directly to us in lieu of making a distribution to you. YOU SHOULD SEEK
INDEPENDENT TAX ADVICE IF YOU INTEND TO PURCHASE A CONTRACT FOR USE WITH A
QUALIFIED PLAN.
Conversions and Rollovers to Roth IRAs
You can convert a traditional IRA to a Roth IRA or directly roll over
distributions that you receive from a retirement plan described in sections
401(a), 403(a), or 403(b) of the Code or a governmental deferred compensation
plan described in section 457(b) of the Code to a Roth IRA. The Roth IRA annual
contribution limit does not apply to converted or rollover amounts.
You must, however, pay tax on any portion of the converted or rollover amount
that would have been taxed if you had not converted or rolled over to a Roth
IRA. No similar limitations apply to rollovers to one Roth IRA from another Roth
IRA or from a Roth account in a retirement plan described in section 401(a) or
section 403(b) of the Code. Please note that the amount deemed to be the
"converted amount" for tax purposes may be higher than the Contract Value
because of the deemed value of guarantees.
If you convert a Contract issued as a traditional IRA (or other type of
Qualified Contract, if permitted under your plan) to a Roth IRA, or instruct us
to transfer a rollover amount from a Qualified Contract to a Roth IRA, you may
instruct us to not withhold any of the conversion for taxes and remittance to
the IRS. A direct rollover or conversion is not subject to mandatory tax
withholding, even if the distribution is includible in gross income. If you do
instruct us to withhold for taxes when converting an existing Contract to a Roth
IRA, we will treat any amount we withhold as a withdrawal from your Contract,
which could result in an Excess Withdrawal or other reduction of the guarantees
and benefits you may have purchased under an optional benefits Rider to your
Contract. Please read "VI. Optional Benefits" for information about the impact
of withdrawals on optional benefit Riders.
The adjusted gross income limit for converting traditional IRAs and other
qualified retirement accounts to a Roth IRA was repealed effective January 1,
2010. Accordingly, taxpayers with more than $100,000 of adjusted gross income
may now convert such assets
69
without an early distribution penalty at the time of the conversion. However,
the early distribution penalty may still apply if amounts converted to a Roth
IRA are distributed within the 5-taxable year period beginning in the year the
conversion is made. Generally, the amount converted to a Roth IRA is included in
ordinary income for the year in which the account was converted. Given the
potential for taxation of Roth IRA conversions and early distribution penalties,
you should consider the resources that you have available, other than your
retirement plan assets, for paying any taxes that would become due the year of
any such conversion or a subsequent year. You should seek independent qualified
tax advice if you intend to use the Contract in connection with a Roth IRA.
Section 403(b) Qualified Plans
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations to have their employers purchase
annuity contracts for them and, subject to certain limitations, to exclude the
Purchase Payments from gross income for tax purposes. We currently are not
offering this Contract for use in a retirement plan intended to qualify as a
Section 403(b) Qualified Plan (a "Section 403(b) Qualified Plan" or the "Plan")
unless (a) we (or an affiliate of ours) previously issued annuity contracts to
that retirement plan, (b) the initial purchase payment for the new Contract is
sent to us directly from the Section 403(b) Qualified Plan through your
employer, the Plan's administrator, the Plan's sponsor or in the form of a
transfer acceptable to us, (c) we have entered into an agreement with your
Section 403(b) Qualified Plan concerning the sharing of information related to
your Contract (an "Information Sharing Agreement"), and (d) unless contained in
the Information Sharing Agreement, we have received a written determination by
your employer, the Plan administrator or the Plan sponsor of your Section 403(b)
Qualified Plan that the plan qualifies under section 403(b) of the Code and
complies with applicable Treasury Department regulations (a "Certificate of
Compliance") (Information Sharing Agreement and Certificate of Compliance,
together, the "Required Documentation").
We may accept, reject or modify any of the terms of a proposed Information
Sharing Agreement presented to us, and make no representation that we will enter
into an Information Sharing Agreement with your Section 403(b) Qualified Plan.
In the event that we do not receive the Required Documentation and you
nonetheless direct us to proceed with a rollover transfer of initial Purchase
Payment funds, the transfer may be treated as a taxable transaction.
If you are considering making a rollover transfer from a retirement plan
described in section 403(b) of the Code to a traditional IRA or a Roth IRA, you
should consult with a qualified tax advisor regarding possible tax consequences.
If you have a loan outstanding under the Section 403(b) Qualified Plan, the
transfer may subject you to income taxation on the amount of the loan balance.
Please see Appendix B or request a copy of the SAI from the Annuities Service
Center for more detailed information regarding Section 403(b) Qualified Plans.
Puerto Rico Contracts Issued to Fund Retirement Plans
The tax laws of Puerto Rico vary significantly from the provisions of the
Internal Revenue Code of the United States that are applicable to various
Qualified Plans. With regard to Qualified Plans, although we may offer variable
annuity contracts in Puerto Rico in connection with Puerto Rican "tax qualified"
retirement plans, the text of this Prospectus addresses federal tax law only and
is inapplicable to the tax laws of Puerto Rico.
Designated Roth Accounts within Qualified Plans
The Small Business Jobs Act of 2010 authorizes: (1) participants in 457(b) plans
to contribute deferred amounts to designated Roth accounts within their 457(b)
plan; and (2) participants in 401(k), 403(b) and certain other plans to roll
over qualified distributions into a designated Roth account within their plans,
if allowed by their plans. The Contract, however, was not designed to separately
account for any Contract Value in a single Contract that is split between Roth
and non-Roth accounts, even if your 401(k) Plan, 403(b) Plan or 457 Plan allows
you to split your account. If your plan allows it, and you split your Contract
Value into Roth and non-Roth accounts, you or your plan administrator (in the
case of 401(k) Plans) will be responsible for the accounting of your Contract
Value for tax purposes: calculating withholding, income tax reporting, and
verifying Required Minimum Distribution distributions made under our Life
Expectancy Distribution Program. We are not responsible for the calculations of
any service provider that you may use to split Contract Value between Roth and
non-Roth accounts. We will deny any request that would create such a split.
SEE YOUR OWN TAX ADVISOR
The foregoing description of federal income tax topics and issues is only a
brief summary and is not intended as tax advice. It does not include a
discussion of federal estate and gift tax or state tax consequences. The rules
under the Code governing Qualified Plans are extremely complex and often
difficult to understand. Changes to the tax laws may be enforced retroactively.
Anything less than full compliance with the applicable rules, all of which are
subject to change from time to time, can have adverse tax consequences. The
taxation of an Annuitant or other payee has become so complex and confusing that
great care must be taken to avoid pitfalls. For further information you should
always consult a qualified tax advisor.
69
IX. General Matters
ASSET ALLOCATION SERVICES
We are aware that certain third parties offer asset allocation services ("Asset
Allocation Services") in connection with the Contracts through which a third
party may transfer amounts among Investment Options from time to time on your
behalf. In certain cases we have agreed to honor transfer instructions from such
Asset Allocation Services where we have received powers of attorney, in a form
acceptable to us, from the Contract Owners participating in the service and
where the Asset Allocation Service has agreed to the trading restrictions
imposed by us. These trading restrictions include adherence to a Separate
Account's policies that we have adopted to discourage disruptive frequent
trading activity. (See "Transfers Among Investment Options.") WE DO NOT ENDORSE,
APPROVE OR RECOMMEND SUCH SERVICES IN ANY WAY, AND YOU SHOULD BE AWARE THAT FEES
PAID FROM YOUR CONTRACT VALUE FOR SUCH SERVICES: (1) ARE TREATED AS WITHDRAWALS
UNDER THE TERMS DESCRIBED EARLIER IN THIS PROSPECTUS; AND (2) IF ANY SUCH
WITHDRAWALS INCUR A FEE UNDER THE TERMS DESCRIBED IN THIS PROSPECTUS, SUCH FEES
WOULD BE SEPARATE AND IN ADDITION TO ANY OTHER FEES PAID UNDER THE CONTRACTS.
(See "V. Description of the Contract -- Accumulation Period Provisions --
Withdrawals" for information about the treatment of withdrawals under the
Contract, and "VI. Optional Benefits -- Features of Income Plus For Life 6.11
Series Riders -- Withdrawals, Distributions and Settlements" for information
about the treatment of withdrawals under Contracts with our optional guaranteed
minimum withdrawal benefit Riders.)
DISTRIBUTION OF CONTRACTS
We pay compensation for sales of the Contracts.
John Hancock Distributors, LLC ("JH Distributors"), a Delaware limited liability
company that we control, is the principal underwriter and distributor of the
Contracts offered by this Prospectus and of other annuity and life insurance
products we and our affiliates offer. JH Distributors also acts as the principal
underwriter of the John Hancock Variable Insurance Trust, whose securities are
used to fund certain Variable Investment Options under the Contracts and under
other annuity and life insurance products we offer.
JH Distributors' principal address is 200 Bloor Street East, Toronto, Canada M4W
1E5. It also maintains offices with us at 601 Congress Street, Boston,
Massachusetts 02210. JH Distributors is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended (the "1934 Act") and is a member of
the Financial Industry Regulatory Authority ("FINRA").
We offer the Contracts for sale through select broker-dealers (firms) that have
entered into selling agreements with JH Distributors and us. Broker-dealers sell
the Contracts through their registered representatives who have been appointed
by us to act as our insurance agents. JH Distributors, or any of its affiliates
that is registered under the 1934 Act and a member of FINRA, may also offer the
Contracts directly to potential purchasers. Signator Investors, Inc. is an
affiliated broker-dealer.
JH Distributors pays compensation to broker-dealers for the promotion and sale
of the Contracts. Contract Owners do not pay this compensation directly. These
payments are made from JH Distributors' and our own revenues, profits or
retained earnings, which may be derived from a number of sources, such as fees
received from an underlying portfolio's or fund of funds' (but not both)
distribution plan ("12b-1 fees"), the fees and charges imposed under the
Contract, and other sources.
The individual representative who sells you a Contract typically will receive a
portion of the compensation, under the representative's own arrangement with his
or her broker-dealer. A limited number of broker-dealers may also be paid
commissions or overrides to "wholesale" the Contract; that is, to provide
marketing support and training services to the broker-dealer firms that do the
actual selling. We may also provide compensation to broker-dealers for providing
ongoing service in relation to Contract(s) that have already been purchased.
Standard Compensation
The amount and timing of compensation JH Distributors may pay to broker-dealers
may vary depending on the selling agreement, but compensation with respect to
Contracts sold through our selected broker-dealers (inclusive of wholesaler
overrides and expense allowances) and paid to broker-dealers is not expected to
exceed 8.00% of Purchase Payments. In addition, JH Distributors may pay ongoing
compensation at an annual rate of up to 1.50% of the values of the Contracts
attributable to such Purchase Payments. The greater the amount of compensation
paid by JH Distributors at the time you make a Purchase Payment, the less it
will pay as ongoing compensation.
Revenue Sharing and Additional Compensation
In addition to standard compensation arrangements and to the extent permitted by
SEC and FINRA rules and other applicable laws and regulations, we, either
directly or through JH Distributors, may enter into special compensation or
reimbursement arrangements ("revenue sharing") with selected firms. We determine
which firms to support and the extent of the payments that are made. Under these
arrangements, the form of payment may be any one or a combination of a flat fee,
a percentage of the assets we hold that are attributable to Contract
allocations, a percentage of sales revenues, reimbursement of administrative
expenses (including ticket charges), conference fees, or some other type of
compensation.
71
We hope to benefit from these revenue sharing arrangements through increased
sales of our annuity products. In consideration of these arrangements, a firm
may feature the Contract in its sales system or give us preferential access to
members of its sales force. In addition, the firm may agree to participate in
our marketing efforts by allowing JH Distributors or its affiliates to
participate in conferences, seminars or other programs attended by the firm's
sales force.
These arrangements may not be offered to all firms, and the terms of such
arrangements may differ between firms. We provide additional information on
special compensation or reimbursement arrangements, including a list of firms to
whom we paid annual amounts greater than $5,000 under these arrangements in
2010, in the SAI, which is available upon request. Any such compensation, which
may be significant at times, will not result in any additional direct charge to
you by us.
Selling broker-dealers may receive additional payments from us, either directly
or through JH Distributors, in the form of cash, other special compensation or
reimbursement of expenses. These additional compensation or reimbursement
payments may include, for example, payments for providing conferences or
seminars, sales or training programs for invited registered representatives and
other employees, payments for travel expenses, including lodging, incurred by
registered representatives and other employees for such seminars or training
programs, seminars for the public, advertising and sales campaigns regarding the
Contract, and payments to assist a firm in connection with its marketing
expenses and/or other events or activities sponsored by the firms. We may
contribute to, as well as sponsor, various educational programs, sales
promotions and/or contests in which participating firms and their sales persons
may receive gifts and prizes such as merchandise, cash, or other awards, as may
be permitted by applicable FINRA rules and other applicable laws and
regulations.
In an effort to promote the sale of our products, our affiliated broker-dealer
may pay its registered representatives additional cash incentives such as bonus
payments, expense payments, health and retirement benefits or the waiver of
overhead costs or expenses in connection with the sale of the Contracts that
they would not receive in connection with the sale of contracts issued by
unaffiliated companies.
Differential Compensation
Compensation negotiated and paid by JH Distributors pursuant to a selling
agreement with a broker-dealer may differ from compensation levels that the
broker-dealer receives for selling other variable contracts. In addition, under
their own arrangements, broker-dealer firms may pay a portion of any amounts
received from us to their registered representatives. As a result, registered
representatives may be motivated to sell the Contracts of one issuer over
another issuer or one product over another product.
You should contact your registered representative for more information on
compensation arrangements in connection with the sale and purchase of your
Contract.
TRANSACTION CONFIRMATIONS
We will send you confirmation statements for certain transactions in your
Investment Accounts. You should carefully review these transaction confirmations
to verify their accuracy. You should report any mistakes immediately to our
Annuities Service Center. If you fail to notify our Annuities Service Center of
any mistake within 60 days of the delivery of the transaction confirmation, we
will deem you to have ratified the transaction. We encourage you to register for
electronic delivery of your transaction confirmations, and we will waive the $50
annual Contract fee if you are registered. Please contact the John Hancock
Annuities Service Center at the applicable telephone number or Internet address
shown on page ii of this Prospectus for more information on electronic
transactions.
REINSURANCE ARRANGEMENTS
From time to time we may utilize reinsurance as part of our risk management
program. Under any reinsurance agreement, we remain liable for the contractual
obligations of the Contracts' guaranteed benefits and the reinsurer(s) agree to
reimburse us for certain amounts and obligations in connection with the risks
covered in the reinsurance agreements. The reinsurer's contractual liability
runs solely to us, and no Contract Owner shall have any right of action against
any reinsurer. In evaluating reinsurers, we consider the financial and claims
paying ability ratings of the reinsurer. Our philosophy is to minimize
incidental credit risk. We do so by engaging in secure types of reinsurance
transactions with high quality reinsurers and diversifying reinsurance
counterparties to limit concentrations. Some of the benefits that may be
reinsured include living benefits, guaranteed death benefits, or other
obligations.
STATEMENTS OF ADDITIONAL INFORMATION
Our Statements of Additional Information provide additional information about
the Contract, including the optional benefit Riders and the Separate Accounts,
including information on our history, services provided to the Separate Accounts
and legal and regulatory matters. We filed the Statements of Additional
Information with the SEC on the same date as this Prospectus and incorporate
them herein by reference. You may obtain a copy of the current Statements of
Additional Information without charge by contacting us at the Annuities Service
Center shown on page ii of this Prospectus. The SEC also maintains a Web site
(http://www.sec.gov) that contains the Statements of Additional Information and
other information about us, the Contracts and the Separate Accounts. We list the
Table of Contents of the Statements of Additional Information below.
73
JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) SEPARATE ACCOUNT H
Statement of Additional Information
Table of Contents
General Information and History........................................................... 1
John Hancock Variable Insurance Trust Portfolio Holdings Currently Posted on a Website.... 1
Accumulation Unit Value Tables............................................................ 1
Services.................................................................................. 1
Independent Registered Public Accounting Firm........................... 1
Servicing Agent......................................................... 1
Principal Underwriter................................................... 2
Special Compensation and Reimbursement Arrangements..................... 2
State Variations Regarding Recognition of Same-Sex Couples................................ 5
Additional Information about the Portfolio Stabilization Process.......................... 6
Qualified Plan Types...................................................................... 8
Legal and Regulatory Matters.............................................................. 13
Appendix A: Audited Financial Statements.................................................. A-1
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A
Statement of Additional Information
Table of Contents
General Information and History........................................................... 1
John Hancock Variable Insurance Trust Portfolio Holdings Currently Posted on a Website.... 1
Accumulation Unit Value Tables............................................................ 1
Services.................................................................................. 1
Independent Registered Public Accounting Firm........................... 1
Servicing Agent......................................................... 1
Principal Underwriter................................................... 2
Special Compensation and Reimbursement Arrangements..................... 2
State Variations Regarding Recognition of Same-Sex Couples................................ 5
Additional Information about the Portfolio Stabilization Process.......................... 6
Qualified Plan Types...................................................................... 8
Legal and Regulatory Matters.............................................................. 13
Appendix A: Audited Financial Statements.................................................. A-1
Financial Statements
The Statements of Additional Information also contain the Company's financial
statements as of the years ended 2009 and 2010, and its Separate Accounts'
financial statements as of the year ended 2010 (the "Financial Statements"). Our
Financial Statements provide information on our financial strength as of the
year ended 2010, including information on our general account assets that were
available at that time to support our guarantees under the Contracts and any
optional benefit Riders. The Company's general account consists of securities
and other investments, the value of which may decline during periods of adverse
market conditions.
74
Appendix A: Examples of Calculation of Withdrawal Charge
The following examples assume an initial Purchase Payment of $30,000 and an
Additional Purchase Payment of $20,000 during the second Contract Year.
EXAMPLE 1. If you surrender the Contract during Contract Year 3, the Contract
Value is $60,000 and there have been no prior withdrawals, we will calculate the
withdrawal charge as follows:
a) First we will calculate the free Withdrawal Amount, which equals the
greater of:
- 10% of all Purchase Payments = .10 x ($30,000 + $20,000) =
$5,000, or
- Accumulated earnings equal to the Contract Value minus
unliquidated Purchase Payments = $60,000 - $50,000 = $10,000.
b) Next we determine the amount of Purchase Payments to be liquidated
as the greater of the Contract Value or the unliquidated Purchase
Payments, reduced by the accumulated earnings, or $60,000 - $10,000
= $50,000.
c) Finally we calculate the withdrawal charge by applying the
appropriate withdrawal charge percentage for each Purchase Payment
liquidated based on the length of time the payment has been in the
Contract.
- The initial Purchase Payment is in the third year, so the
applicable withdrawal charge is .06 x $30,000 = $1,800.
- The subsequent payment of $20,000 is in the second year, so
the applicable withdrawal charge is .07 x $20,000 = $1,400.
- The total withdrawal charge is $1,800 + $1,400 = $3,200.
EXAMPLE 2. If you surrender the Contract during Contract Year 3, the Contract
Value is $35,000 and there have been no prior withdrawals, we will calculate the
withdrawal charge as follows:
a) First we will calculate the free Withdrawal Amount, which equals the
greater of:
- 10% of all Purchase Payments = .10 x ($30,000 + $20,000) =
$5,000, or
- Earnings equal to the Contract Value minus unliquidated
Purchase Payments = $35,000 - $50,000 = $- 15,000.
b) Next we determine the amount of Purchase Payments to be liquidated
as the greater of the Contract Value or the unliquidated Purchase
Payments, reduced by the accumulated earnings, or $50,000 - $0 =
$50,000.
c) Next we allocate a portion of the Purchase Payments to be liquidated
to the excess of the free amount over the accumulated earnings,
$5,000.
d) Finally we calculate the withdrawal charge by applying the
appropriate withdrawal charge percentage for the remainder of each
Purchase Payment liquidated based on the length of time the Payment
has been in the Contract.
- The initial Purchase Payment is in the third year, so the
applicable withdrawal charge is .06 x $25,000 = $1,500.
- The subsequent payment of $20,000 is in the second year, so
the applicable withdrawal charge is .07 x $20,000 = $1,400.
- The total withdrawal charge is $1,500 + $1,400 = $2,900.
EXAMPLE 3. If you withdraw $5,000 during Contract Year 3 when the Contract Value
is $52,000 and then surrender the Contract later in Contract Year 3 when the
Contract Value is $49,000, we will calculate the withdrawal charge as follows:
a) First we will calculate the free Withdrawal Amount for the
withdrawal, which equals the greater of:
- 10% of all Purchase Payments = .10 x ($30,000 + $20,000) =
$5,000, or
- Accumulated earnings equal to the Contract Value minus
unliquidated Purchase Payments = $52,000 - $50,000 = $2,000.
b) Since the withdrawal is equal to the free Withdrawal Amount, we
liquidate Purchase Payments equal to $3,000, the excess of the free
Withdrawal Amount over the accumulated earnings, but there will not
be any withdrawal charge.
c) When the Contract is surrendered, we will calculate the free
Withdrawal Amount for the surrender, which equals the greater of:
- 10% of all Purchase Payments reduced by prior withdrawals
during the year = .10 x ($30,000 + $20,000) - $5,000 = $0, or
- Earnings equal to the Contract Value minus unliquidated
Purchase Payments = $49,000 - $47,000 = $2,000.
d) Next we determine the amount of Purchase Payments to be liquidated
as the greater of the Contract Value or the unliquidated Purchase
Payments, reduced by the accumulated earnings, or $49,000 - $2,000 =
$47,000.
e) Finally we calculate the withdrawal charge by applying the
appropriate withdrawal charge percentage for each Purchase Payment
liquidated based on the length of time the payment has been in the
Contract.
- The initial Purchase Payment is in the third year, so the
applicable withdrawal charge is .06 x $27,000 = $1,620.
- The subsequent payment of $20,000 is in the second year, so
the applicable withdrawal charge is .07 x $20,000 = $1,400.
- The total withdrawal charge is $1,620 + $1,400 = $3,020.
A-1
Appendix B: Qualified Plan Types
For more detailed information about these plan types, you may request an SAI.
PLAN TYPE
---------------------------------
TRADITIONAL IRAS Section 408 of the Code permits eligible individuals to contribute to an individual
retirement program known as an Individual Retirement Annuity or IRA (sometimes
referred to as a traditional IRA to distinguish it from the Roth IRA discussed
below). IRAs are subject to limits on the amounts that may be contributed and
deducted, the persons who may be eligible and the time when distributions may
commence. Also, distributions from certain other types of qualified retirement plans
may be rolled over on a tax-deferred basis into an IRA. The Contract may not,
however, be used in connection with an Education IRA under section 530 of the Code.
In general, unless you have made non-deductible contributions to your IRA, all
amounts paid out from a traditional IRA contract (in the form of an annuity, a
single sum, death benefits or withdrawal), are taxable to the payee as ordinary
income.
ROTH IRAS Section 408A of the Code permits eligible individuals to contribute to a type of IRA
known as a Roth IRA. Roth IRAs are generally subject to the same rules as non-Roth
IRAs, but they differ in certain significant respects. Among the differences are that
contributions to a Roth IRA are not deductible and qualified distributions from a
Roth IRA are excluded from income.
SIMPLE IRA PLANS In general, under section 408(p) of the Code a small business employer may establish
a SIMPLE IRA retirement plan if the employer employed no more than 100 employees
earning at least $5,000 during
the preceding year. Under a SIMPLE IRA plan both employees and the
employer make deductible contributions. SIMPLE IRAs are subject to various
requirements, including limits on the amounts that may be contributed, the persons
who may be eligible, and the time when distributions may commence. The requirements
for minimum distributions from a SIMPLE IRA retirement plan are generally the same
as those discussed above for distributions from a traditional IRA. The rules on
taxation of distributions are also similar to those that apply to a traditional IRA
with a few exceptions.
SIMPLIFIED EMPLOYEE PENSIONS Section 408(k) of the Code allows employers to establish simplified employee pension
(SEP -- IRAS) plans for their employees, using the employees' IRAs for such purposes, if certain
criteria are met. Under these plans the employer may, within specified
limits, make deductible contributions on behalf of the employees to IRAs. The
requirements for minimum distributions from a SEP - IRA, and rules on taxation of
distributions from a SEP - IRA, are generally the same as those discussed above for
distributions from a traditional IRA.
SECTION 403(b) QUALIFIED PLANS OR Section 403(b) of the Code permits public school employees and employees of certain
TAX-SHELTERED ANNUITIES types of tax-exempt organizations to have their employers purchase annuity contracts
for them and, subject to certain limitations, to exclude the Purchase
Payments from gross income for tax purposes. There also are limits on the amount of
incidental benefits that may be provided under a tax-sheltered
annuity. These Contracts are commonly referred to as "tax-sheltered
annuities." We currently are not offering this Contract for use in a Section 403(b)
Qualified Plan except under limited circumstances.
CORPORATE AND SELF-EMPLOYED Sections 401(a) and 403(a) of the code permit corporate employers to establish
PENSION AND PROFIT-SHARING various types of tax-deferred retirement plans for employees. The Self-Employed
PLANS (H.R. 10 AND KEOGH) Individuals' Tax Retirement Act of 1962, as amended, commonly referred to as "H.R.
10" or "Keogh," permits self-employed individuals to establish tax-favored
retirement plans for themselves and their employees. Such retirement plans
may permit the purchase of annuity contracts in order to provide benefits under the
plans, but there are limits on the amount of incidental benefits that may be
provided under pension and profit sharing plans.
DEFERRED COMPENSATION PLANS OF Section 457 of the Code permits employees of state and local governments and
STATE AND LOCAL GOVERNMENTS AND tax-exempt organizations to defer a portion of their compensation without paying
TAX-EXEMPT ORGANIZATIONS current taxes. The employees must be
participants in an eligible deferred compensation plan. A section 457 plan must
satisfy several conditions, including the requirement that it must not permit
distributions prior to the participant's severance from employment
(except in the case of an unforeseen emergency). When we make payments under a
section 457 Contract, the payment is taxed as ordinary income.
B-1
APPENDIX C: IMPACT OF TRANSACTIONS ON PORTFOLIO STABILIZATION PROCESS
The following tables are applicable to Contracts issued with an IPFL 6.11 Series
Rider. They illustrate the impact of various types of transactions on the
Portfolio Stabilization Process. In Table A-1, we illustrate the impact of
Additional Purchase Payments, Credits and Step-Ups. In Table A-2, we illustrate
the impact of various types of withdrawals of Contract Value.
TABLE A-1. IMPACT OF ADDITIONAL PURCHASE PAYMENTS, STEP-UPS AND CREDITS
TYPE OF TRANSACTION IMPACT ON THE PORTFOLIO STABILIZATION PROCESS
--------------------------------- ---------------------------------------------------------------------------------
Additional Purchase Payments:
A) Before Lifetime Income Date An Additional Purchase Payment will increase the Contract Value and the Reference
Value on a dollar for dollar basis. The Portfolio Stabilization Process will
calculate the ratio of the new Contract Value to the new Reference Value to
determine a Reference Value Ratio. (See "Portfolio Stabilization Process -- STEP
TWO.") After that, the Portfolio Stabilization Process will review your Contract
Value Allocation to determine if a transfer will be made. (See "Portfolio
Stabilization Process -- STEP THREE.") Any other change in Contract Value on the
date of the Additional Purchase Payment, however, may result in all, some or none
of your Contract Value being transferred under the Portfolio Stabilization
Process.
B) On and after the Lifetime An Additional Purchase Payment will increase the Contract Value and may increase
Income Date the Reference Value. Unlike an Additional Purchase Payment before the Lifetime
Income Date, we may offset the Additional Purchase Payment by your withdrawals
(see "Portfolio Stabilization Process -- STEP ONE"). In any event, the Portfolio
Stabilization Process will calculate the ratio of the new Contract Value to the
Reference Value to determine a Reference Value Ratio. (See "Portfolio
Stabilization Process -- STEP TWO.") After that, the Portfolio Stabilization
Process will review your Contract Value Allocation to determine if a transfer will
be made. (See "Portfolio Stabilization Process -- STEP THREE.") Any other change
in Contract Value on the date of the Additional Purchase Payment, however, may
result in all, some or none of your Contract Value being transferred under the
Portfolio Stabilization Process.
Increases in Guaranteed Amounts: A Credit will increase the Benefit Base and Lifetime Income Amount under an
Credit IPFL 6.11 Series Rider. It does not increase Contract Value or the Reference
Value. As a result, a Credit will not change the Reference Value Ratio and will
not automatically trigger a transfer under the Portfolio Stabilization Process.
Any other change in Contract Value on the date of a Credit, however, may result in
all, some or none of your Contract Value being transferred under the Portfolio
Stabilization Process.
Step-Up A Step-Up will increase the Benefit Base and Lifetime Income Amount under
an IPFL Series 6.11 Series Rider. It does not increase Contract Value or the
Reference Value. As a result, a Step-Up will not change the Reference Value Ratio
and will not automatically trigger a transfer under the Portfolio Stabilization
Process. Any other change in Contract Value on the date of the Step-Up, however,
may result in all, some or none of your Contract Value being transferred under the
Portfolio Stabilization Process.
TABLE A-2. IMPACT OF WITHDRAWALS
TYPE OF WITHDRAWAL IMPACT ON THE PORTFOLIO STABILIZATION PROCESS
--------------------------------- -------------------------------------------------------------------------------------
From a selected Investment Option The IPFL 6.11 Series Rider does not permit you to withdraw Contract Value
from a specific Investment Option if your Contract Value is allocated to more
than one Investment Option.
Pro rata from each Investment Your Contract Value will reduce and your Contract's Reference Value may change
Option in which your Contract depending on the specific type of withdrawal transaction, as described below.
Value is allocated The Portfolio Stabilization Process will calculate the ratio of remaining
Contract Value to Reference Value (as may be adjusted) to determine if the
withdrawal will result in a review of your Contract Value allocation. (See
"Portfolio Stabilization Process -- STEP TWO") Since the withdrawal under your
Contract will be taken pro rata from each Investment Option, the dollar-weighted
Assumed Equity Allocation Factor for your Contract does not change. Your
withdrawal may, however, result in a transfer of remaining Contract Value to the
Bond PS Subaccount if the RV Ratio Band declines (See "Portfolio Stabilization
Process -- STEP THREE").
Withdrawals before the Lifetime Your withdrawal is an Excess Withdrawal. It will reduce the remaining Contract
Income Date Value and the Reference Value on a pro rata basis. It will not reduce the
Reference Value Ratio, and will not
TYPE OF WITHDRAWAL IMPACT ON THE PORTFOLIO STABILIZATION PROCESS
--------------------------------- -------------------------------------------------------------------------------------
result in an additional transfer of Contract Value to the Bond PS Subaccount
under the Portfolio Stabilization Process. Any other change in Contract Value on
the date of your withdrawal, however, may result in all, some, or none of your
remaining Contract Value being transferred under the Portfolio Stabilization
Process.
Withdrawals of the Lifetime Your withdrawal reduces the Contract Value but does not reduce the Reference
Income Amount after the Lifetime Value.. As a result, your withdrawal will change the Reference Value Ratio,
Income Date which may lead to a transfer of a portion of remaining Contract Value to the
Bond PS Subaccount under the Portfolio Stabilization Process. Any other change
in Contract Value on the date of your withdrawal, however, may result in all,
some, or none of your remaining Contract Value being transferred under the
Portfolio Stabilization Process.
Excess Withdrawals after the Your withdrawal exceeds the Lifetime Income Amount. It will reduce the Contract
Lifetime Income Date Value and the Reference Value on a pro rata basis. It will not reduce the
Reference Value Ratio, and will not result in an additional transfer of Contract
Value to the Bond PS Subaccount under the Portfolio Stabilization Process. Any
other change in Contract Value on the date of your withdrawal, however, may
result in all, some, or none of your remaining Contract Value being transferred
under the Portfolio Stabilization Process.
Withdrawals after the Lifetime Income Date under the Income Made Easy Program:
(A) full allowable amount Same as "Withdrawals of the Lifetime Income Amount after the Lifetime Income Date," above.
(B) the full allowable amount Your withdrawals during a Contract Year reduce the Contract Value, but not the Reference
plus any increases in Contract Value. Your withdrawal of investment gains at the end of a Contract Year reduces the
Value resulting from investment Reference Value in proportion to the reduction of Contract Value. Each withdrawal
gains at the end of a Contract of the full allowable amount will change the Reference Value Ratio, which may result in a
Year transfer of a portion of remaining Contract Value to the Bond PS Subaccount under the Portfolio
Stabilization Process. Your withdrawal of investment gains, if any, at the end of a Contract
Year will not change the Reference Value Ratio and will not trigger an automatic transfer.
(C) the full allowable amount Your withdrawal reduces the Contract Value but does not reduce the Reference Value.
plus any amount under our Life As a result, each withdrawal will change the Reference Value Ratio, which may lead to
Expectancy Distribution Program a transfer of a portion of remaining Contract Value to the Bond PS Subaccount under
that would exceed the full the Portfolio Stabilization Process. Any other change in Contract Value on the date
allowable amount; of your withdrawal, however, may result in all, some, or none of your remaining
Contract Value being transferred under the Portfolio Stabilization Process.
(D) the annual amount under our Your withdrawal reduces the Contract Value but does not reduce the Reference Value.
Life Expectancy Distribution As a result, each withdrawal will change the Reference Value Ratio, which may lead to
Program (in lieu of the full a transfer of a portion of remaining Contract Value to the Bond PS Subaccount under
allowable amount) the Portfolio Stabilization Process. Any other change in Contract Value on the date
of your withdrawal, however, may result in all, some, or none of your remaining
Contract Value being transferred under the Portfolio Stabilization Process.
(E) a specified dollar amount Your withdrawal reduces the Contract Value. Because the specified dollar amount is
that is less than the full less than the Lifetime Income Amount, the Reference Value will not be reduced. As a
allowable amount result, your withdrawal will change the Reference Value Ratio, which may lead to a
transfer of a portion of remaining Contract Value to the Bond PS Subaccount under the
Portfolio Stabilization Process. Any other change in Contract Value on the date of
your withdrawal, however, may result in all, some, or none of your remaining Contract
Value being transferred under the Portfolio Stabilization Process.
Withdrawals under the Life
Expectancy Distribution Program Same as Income Made Easy selection (D), above.
APPENDIX D: EXAMPLES OF THE PORTFOLIO STABILIZATION PROCESS
The following examples assume four separate Contracts are purchased on the same
day. The initial Purchase Payment for each Contract is $100,000. The examples
are based on hypothetical performance that varies by Subaccount.
OWNER A allocates the entire $100,000 to Lifestyle Growth PS Subaccount.
OWNER B allocates the entire $100,000 to Lifestyle Conservative PS
Subaccount
OWNER C allocates $50,000 to Lifestyle Balanced PS Subaccount and $50,000
to Lifestyle Conservative PS Subaccount.
OWNER D allocates $90,000 to Lifestyle Growth PS Subaccount and $10,000 to
Ultra Short Term Bond Subaccount.
The examples also assume there are no transactions other than the ones described
in each example, and all days are Business Days. All Contract Values are rounded
to the nearest dollar, which may cause some calculations to appear slightly
incorrect.
INITIAL REFERENCE VALUE, RV RATIO AND RV RATIO BAND
The initial Reference Value is equal to the initial Contract Value of $100,000
for each of the four Contracts. The Reference Value Ratio (RV Ratio) is equal to
the Contract Value divided by the Reference Value $100,000/$100,000 which is
100%. Since the RV Ratio is greater than 92.5%, the RV Ratio Band is set at 5.
OVERVIEW. The table below highlights the results illustrated in the examples
that follow.
PORTFOLIO STABILIZATION PROCESS RESULT
---------------------------------------------------------------
TRANSFER TO BOND PS TRANSFER FROM BOND PS
TYPE OF TRANSACTION NO TRANSFER SUBACCOUNT SUBACCOUNT
------------------- ----------------- ------------------- ---------------------
Monthly Review of Reference Value 1(a), 1(b), 1(c),
1(d)
Decrease in RV Ratio Band 2(b) 2(a), 2(c) , 2(d)
Increase in RV Ratio Band 3(b) 3(a), 3(c), 3(d)
Monthly Anniversary Review of Allocation
while RV Ratio is less than 82.5% 4(b) 4(c) 4(a), 4(d)
Withdrawal of Lifetime Income Amount 5(a), 5(d)
Excess Withdrawal 5(b)
Withdrawal Prior to Lifetime Income Date 5(c)
Additional Purchase Payment 6(a), 6(b) 6(c), 6(d)
Owner-directed Transfer between Subaccounts 7(b) 7(a), 7(b), 7(d)
EXAMPLE 1: MONTHLY REVIEW OF REFERENCE VALUE
Assume that at the end of the day on the first Monthly Anniversary of the
Contracts, we compare the Contract Value of each of the four Contracts to the
Reference Value for the Contract.
a) Assume that the Contract Value on Owner A's Contract has increased to
$101,241. We increase the Reference Value to $101,241. The RV Ratio is
100% and the RV Ratio Band is 5.
D-1
b) Assume that the Contract Value on Owner B's Contract has decreased to
$99,274. Since the Contract Value is less than the current Reference
Value, the Reference Value remains $100,000. The RV Ratio is 99.27%
and the RV Ratio Band is still 5.
c) Assume that the Contract Value on Owner C's Contract has decreased to
$99,937. Since the Contract Value is less than the current Reference
Value, the Reference Value remains $100,000. The RV Ratio is 99.94%
and the RV Ratio Band is still 5.
d) Assume that the Contract Value on Owner D's Contract has increased to
$101,015. We increase the Reference Value to $101,015. The RV Ratio is
100% and the RV Ratio Band is 5.
EXAMPLE 2: DECREASES IN RV RATIO BAND
a) Assume that the Contract Value of Owner A's Contract increases over
the first four months to $107,166. We increase the Reference Value on
the fourth Monthly Anniversary to equal the Contract Value. Then
assume that the Contract Value begins to decrease as a result of
declining market performance. The Portfolio Stabilization Process
proceeds through Step One and Step Two every day, but does not proceed
to Step Three unless the RV Ratio Band decreases to 4 or lower. Assume
that the Contract Value decreases to $98,608. The RV Ratio is 92.01%
($98,608/$107,166) and the RV Ratio Band is 4. Since the RV Ratio Band
has decreased, the Portfolio Stabilization Process proceeds to Step
Three. 100% of the Contract Value is in the Lifestyle Growth PS
Subaccount, so the dollar-weighted Assumed Equity Allocation Factor
(AEAF) is 70 - the AEAF for the Lifestyle Growth PS Subaccount. Based
on the Contract Value of $98,608, the RV Ratio Band of 4 and the
dollar-weighted AEAF of 70, the Portfolio Stabilization Process
calculates that $13,779 MUST BE ALLOCATED TO THE BOND PS SUBACCOUNT.
We transfer this amount from the Lifestyle Growth PS Subaccount,
leaving a balance of $84,829 in that Subaccount.
b) Assume that the Contract Value of Owner B's Contract increases over
the first four months to $101,961. We increase the Reference Value on
the fourth Monthly Anniversary to equal the Contract Value. Then
assume that the Contract Value begins to decrease as a result of
declining market performance. The Portfolio Stabilization Process
proceeds through Step One and Step Two every day, but does not proceed
to Step Three unless the RV Ratio Band decreases to 4 or lower. Assume
that the Contract Value decreases to $93,996. The RV Ratio is 92.19%
($93,996/$101,961) and the RV Ratio Band is 4. Since the RV Ratio Band
has decreased, the Portfolio Stabilization Process proceeds to Step
Three. 100% of the Contract Value is in the Lifestyle Conservative PS
Subaccount, so the AEAF is 20 - the AEAF for the Lifestyle
Conservative PS Subaccount. Based on the Contract Value of $93,996,
the RV Ratio Band of 4 and the dollar-weighted AEAF of 20, the
Portfolio Stabilization Process calculates that there is NO REQUIRED
ALLOCATION TO THE BOND PS SUBACCOUNT. As long as the Contract Value
remains allocated 100% to the Lifestyle Conservative PS Subaccount,
the AEAF of 20 will result in no required allocation to the Bond PS
Subaccount, regardless of the value of the RV Ratio Band.
c) Assume that the Contract Value of Owner C's Contract increases over
the first four months to $103,878. We increase the Reference Value on
the fourth Monthly Anniversary to equal the Contract Value. Then
assume that the Contract Value begins to decrease as a result of
declining market performance. The Portfolio Stabilization Process
proceeds through Step One and Step Two every day, but does not proceed
to Step Three unless the RV Ratio Band decreases to 4 or lower. Assume
that the Contract Value decreases to $95,651 ($47,405 in the Lifestyle
Balanced PS Subaccount and $48,246 in the Lifestyle Conservative
Subaccount). The RV Ratio is 92.08% ($95,651/$103,878)
D-2
and the RV Ratio Band is equal to 4. Since the RV Ratio Band has
decreased, the Portfolio Stabilization Process proceeds to Step Three.
The Contract Value is in both the Lifestyle Balanced PS and the
Lifestyle Conservative PS Subaccounts, so the AEAF is 34.87 ((50 x
$47,405 + 20 x $48,246)/$95,651). Based on the Contract Value of
$95,651, the RV Ratio Band of 4 and the dollar-weighted AEAF of 34.87,
the Portfolio Stabilization Process calculates that $7,973 must be
allocated to the Bond PS Subaccount. WE TRANSFER THE $7,973
PROPORTIONALLY FROM THE LIFESTYLE BALANCED PS AND LIFESTYLE
CONSERVATIVE PS SUBACCOUNTS. The amount transferred from the Lifestyle
Balanced PS Subaccount is $3,951 and the amount transferred from the
Lifestyle Conservative PS Subaccount is $4,022.
d) Assume that the Contract Value of Owner D's Contract increases over
the first four months to $106,461. We increase the Reference Value on
the fourth Monthly Anniversary to equal the Contract Value. Then
assume that the Contract Value begins to decrease as a result of
declining market performance. The Portfolio Stabilization Process
proceeds through Step One and Step Two every day, but does not proceed
to Step Three unless the RV Ratio Band decreases to 4 or lower. Assume
that the Contract Value decreases to $98,357 ($88,746 in the Lifestyle
Growth PS Subaccount and $9,611 in the Ultra Short Term Bond
Subaccount). The RV Ratio is 92.39% ($98,357/$106,461) and the RV
Ratio Band is 4. Since the RV Ratio Band has decreased, the Portfolio
Stabilization Process proceeds to Step Three. The dollar-weighted AEAF
is based only on the portion of the Contract Value allocated to the
Lifestyle Growth PS Subaccount, so the AEAF is 70. Based on the
Contract Value of $98,357, the RV Ratio Band of 4 and the
dollar-weighted AEAF of 70, the Portfolio Stabilization Process
calculates that $13,688 must be allocated to the Bond PS Subaccount.
The Portfolio Stabilization Process proceeds to Step Four. THE $9,611
IN THE ULTRA SHORT TERM BOND SUBACCOUNT IS CREDITED TOWARD THE TOTAL
THAT MUST BE ALLOCATED TO THE BOND PS SUBACCOUNT, REDUCING THE
REQUIRED TRANSFER AMOUNT TO $4,077, WHICH WE TRANSFER FROM THE
LIFESTYLE GROWTH PS SUBACCOUNT.
EXAMPLE 3: INCREASES IN RV RATIO BAND
After Contract Value has been transferred to the Bond PS Subaccount, the
Portfolio Stabilization Process will transfer Contract Value back to the
Lifestyle PS Subaccounts if the RV Ratio Band increases to a higher level and
remains at least at that level for 5 days.
a) Assume that the RV Ratio Band for Owner A's Contract is 3. If the RV
Ratio Bands calculated for the next 10 days are 3, 3, 4, 4, 3, 4, 4,
4, 4, 4, the Portfolio Stabilization Process proceeds to Step Three on
the 10th day since the RV Ratio Band increased from 3 to 4 and
remained at 4 for five consecutive days. Assume that the Contract
Value on that day is $96,878 ($70,142 in the Lifestyle Growth PS
Subaccount and $26,736 in the Bond PS Subaccount). The Lifestyle
Growth PS Subaccount AEAF is 70. Based on the Contract Value of
$96,878, the RV Ratio Band of 4 and the dollar-weighted AEAF of 70,
the Portfolio Stabilization Process calculates that $13,779 must be
allocated to the Bond PS Subaccount. Since $26,736 is already in the
Bond PS Subaccount, WE TRANSFER THE EXCESS AMOUNT OF $12,957 FROM THE
BOND PS SUBACCOUNT TO THE LIFESTYLE GROWTH PS SUBACCOUNT.
b) Since Owner B's Contract is allocated 100% to the Lifestyle
Conservative PS Subaccount, THERE IS NO IMPACT FROM AN INCREASE IN THE
RV RATIO BAND.
c) Assume that the RV Ratio Band for Owner C's Contract is 4. If the RV
Ratio Bands for the next 5 days are 5, 5, 5, 5, 5, the Portfolio
Stabilization Process proceeds to Step Three on the 5th day, since the
RV Ratio Band increased from 4 to 5 and remained at 5 for five
consecutive days. Assume that the Contract Value on that day is
$96,747 ($44,559 in the
D-3
Lifestyle Balanced PS Subaccount, $44,323 in the Lifestyle
Conservative PS Subaccount, and $7,865 in the Bond PS Subaccount). The
dollar-weighted AEAF is 35.04 ((50 x $44,559 + 20 x $44,323)/($44,559
+ $44,323)). Based on the RV Ratio Band of 5, the Portfolio
Stabilization Process does not require any transfer to the Bond PS
Subaccount. Since $7,865 is already in the Bond PS Subaccount, WE
TRANSFER THE $7,865 FROM THE BOND PS SUBACCOUNT PROPORTIONALLY TO THE
LIFESTYLE BALANCED AND LIFESTYLE CONSERVATIVE PS SUBACCOUNTS. The
amount transferred to the Lifestyle Balanced PS Subaccount is $3,943
and the amount transferred to the Lifestyle Conservative PS Subaccount
is $3,922.
d) Assume that the RV Ratio Band for Owner D's Contract is 3. If the RV
Ratio Bands for the next 10 days are 3, 3, 4, 4, 3, 4, 4, 4, 4, 4, the
Portfolio Stabilization Process proceeds to Step Three on the 10th day
since the RV Ratio Band increased from 3 to 4 and remained at 4 for
five consecutive days. Assume that the Contract Value on that day is
$96,374 ($69,966 in the Lifestyle Growth PS Subaccount, $9,467 in the
Ultra Short Term Bond Subaccount and $16,941 in the Bond PS
Subaccount). 100% of the Contract Value in the Lifestyle PS
Subaccounts is in the Lifestyle Growth PS Subaccount, so the AEAF is
70. Based on the Contract Value of $96,374, the RV Ratio Band of 4 and
the dollar-weighted AEAF of 70, the Portfolio Stabilization Process
calculates that $13,688 must be allocated to the Bond PS Subaccount.
Since $9,467 is allocated to the Ultra Short Term Bond Subaccount and
$16,941 is allocated to the Bond PS Subaccount, WE TRANSFER THE EXCESS
AMOUNT OF $12,720 ($9,467 + $16,941 - $13,688) FROM THE BOND PS
SUBACCOUNT TO THE LIFESTYLE GROWTH PS SUBACCOUNT. The Portfolio
Stabilization Process does not transfer money from the Ultra Short
Term Bond Subaccount.
EXAMPLE 4: RV RATIO IS LESS THAN 82.5%
a) Assume that the RV Ratio reduces to less than 82.5%, resulting in an
RV Ratio Band of 0 for Owner A's Contract. $61,238 is in the Bond PS
Subaccount and the remainder of the total Contract Value of $87,237 is
in the Lifestyle Growth PS Subaccount. On the next Monthly
Anniversary, the portion of the Contract Value in the Bond PS
Subaccount decreases to $58,070 while the portion in the Lifestyle
Growth PS Subaccount decreases to $21,975, for a total Contract Value
of $80,045. The Reference Value is still $107,145 so the RV Ratio is
74.71% and the RV Ratio Band is 0. Based on the Contract Value of
$80,045, the RV Ratio Band of 0 and the AEAF of 70, the Portfolio
Stabilization Process requires $57,175 to be allocated to the Bond PS
Subaccount. As described in Step Four of the Portfolio Stabilization
Process, WE WILL TRANSFER $895 FROM THE BOND PS SUBACCOUNT TO THE
LIFESTYLE GROWTH PS SUBACCOUNT.
b) Since Owner B's Contract is allocated 100% to the Lifestyle
Conservative PS Subaccount, even when the RV Ratio Band is 0 on a
Monthly Anniversary, the Portfolio Stabilization Process will
determine that there is NO REQUIRED ALLOCATION TO THE BOND PS
SUBACCOUNT.
c) Assume that the RV Ratio reduces to less than 82.5% resulting in an RV
Ratio Band of 0 for Owner C's Contract. $34,389 is in the Bond PS
Subaccount, $23,779 in the Lifestyle Balanced PS Subaccount and
$26,773 in the Lifestyle Conservative PS Subaccount. On the next
Monthly Anniversary the portion of the Contract Value in the Bond PS
Subaccount decreases to $33,068, the portion in the Lifestyle Balanced
PS Subaccount decreases to $22,969 and the portion in the Lifestyle
Conservative PS decreases to $25,784, for a total Contract Value of
$81,821. The Reference Value is still $103,878 so the RV Ratio is
78.77% and the RV Ratio Band is 0. The dollar weighted AEAF is 34.13.
Based on the Contract Value of $81,821, the RV Ratio Band of 0 and the
AEAF of 34.13, the Portfolio Stabilization Process requires $33,880 to
be allocated to the Bond PS
D-4
Subaccount. As described in Step Four of the Portfolio Stabilization
Process, WE TRANSFER $812 TO THE BOND PS SUBACCOUNT PROPORTIONALLY
FROM THE LIFESTYLE MODERATE PS AND LIFESTYLE CONSERVATIVE PS
SUBACCOUNTS ($383 from the Lifestyle Moderate PS Subaccount and $430
from the Lifestyle Conservative PS Subaccount).
d) Assume that the RV Ratio reduces to less than 82.5% resulting in an RV
Ratio Band of 0 for Owner D's Contract. $51,870 is in the Bond PS
Subaccount, $25,694 in the Lifestyle Growth PS Subaccount and $8,965
in the Ultra Short Term Bond Subaccount. On a subsequent Monthly
Anniversary the portion of the Contract Value in the Bond PS
Subaccount increases to $52,694, the portion in the Lifestyle Growth
PS Subaccount decreases to $25,373 and the portion in the Ultra Short
Term Bond Subaccount increases to $9,008, for a total Contract Value
of $87,074. The Reference Value is still $106,461 so the RV Ratio is
81.79% and the RV Ratio Band is 0. The dollar weighted AEAF is 70.
Based on the Contract Value of $87,074, the RV Ratio Band of 0 and the
AEAF of 70, the Portfolio Stabilization Process requires $60,835 to be
allocated to the Bond PS Subaccount. As described in Step Four, the
Portfolio Stabilization Process will determine that the $9,008 already
in the Ultra Short Term Bond Subaccount reduces the required
allocation to the Bond PS Subaccount to $51,827. THEREFORE, WE
TRANSFER $867 FROM THE BOND PS SUBACCOUNT TO THE LIFESTYLE GROWTH PS
SUBACCOUNT since there is an excess in the Bond PS Subaccount.
EXAMPLE 5: WITHDRAWALS
a) Assume that Owner A takes a withdrawal of the Lifetime Income Amount
on a day when the Contract Value is $95,268 ($68,358 in the Lifestyle
Growth PS Subaccount and $26,910 in the Bond PS Subaccount), the
Reference Value is $107,166, the RV Ratio Band is 3 and the Lifetime
Income Amount is $5,000. We withdraw the $5,000 proportionally from
the Lifestyle Growth PS and Lifestyle Bond PS Subaccounts. The balance
in the Lifestyle Growth PS Subaccount following the withdrawal is
$64,770 ($68,358 - $5,000 x $68,358/$95,268). The balance in the Bond
PS Subaccount is $25,497 ($26,910 - $5,000 x $26,910/$95,268). The
total Contract Value after the withdrawal is $90,268. The withdrawal
of the Lifetime Income Amount does not reduce the Reference Value so
the RV Ratio is now 84.23% ($90,268/$107,166). The RV Ratio Band is 1.
Based on the Contract Value of $90,268, the RV Ratio Band of 1 and the
AEAF of 70, the Portfolio Stabilization Process requires $50,521 to be
allocated to the Bond PS Subaccount, and THEREFORE WE TRANSFER $25,024
FROM THE LIFESTYLE GROWTH PS SUBACCOUNT TO THE BOND PS SUBACCOUNT.
b) Assume that Owner B takes a withdrawal of $10,000 on a day when the
Contract Value is $98,723 (100% in the Lifestyle Conservative PS
Subaccount), the Reference Value is $101,961, the RV Ratio Band is 5
and the Lifetime Income Amount is $5,000. We first reduce the Contract
Value to $93,723 due to the withdrawal of the $5,000. This portion of
the withdrawal does not reduce the Reference Value. The remaining
$5,000 of the withdrawal reduces the Contract Value to $88,723. This
Excess Withdrawal reduces the Reference Value in the same proportion
as it reduces the Contract Value. The reduced Reference Value is
$96,522 ($101,961 - $5,000/$93,723 x $101,961). The RV Ratio is now
91.92% ($88,723/$96,522). The RV Ratio Band is 4. Based on the
Contract Value of $88,723, the RV Ratio Band of 4 and the AEAF of 20,
there is NO REQUIRED ALLOCATION TO THE BOND PS SUBACCOUNT.
c) Assume that Owner C takes a withdrawal of $5,000 prior to the Lifetime
Income Date when the Contract Value is $95,409 ($41,687 in the
Lifestyle Balanced PS Subaccount, $45,946 in the Lifestyle
Conservative PS Subaccount, and $7,776 in the Bond PS Subaccount), the
Reference Value is $103,878 and the RV Ratio Band is 4. The total
D-5
Contract Value after the withdrawal is $90,409. The withdrawal is an
Excess Withdrawal since it is prior to the Lifetime Income Date, and
therefore it reduces the Reference Value proportionally. Since the
Reference Value is reduced in the same proportion as the Contract
Value, the RV Ratio and RV Ratio Band do not change. Since the RV
Ratio Band is still equal to 4, the PORTFOLIO STABILIZATION PROCESS
DOES NOT PROCEED TO STEP THREE.
d) Assume that Owner D takes a withdrawal of the Lifetime Income Amount
when the Contract Value is $93,947 ($64,676 in the Lifestyle Growth PS
Subaccount, $9,665 in the Ultra Short Term Bond Subaccount and $29,605
in the Bond PS Subaccount), the Reference Value is $106,461, the RV
Ratio Band is 3 and the Lifetime Income Amount is $5,000. The $5,000
is withdrawn proportionally from the Lifestyle Growth PS, Ultra Short
Term Bond and Bond PS Subaccounts. The balance in the Lifestyle Growth
PS Subaccount following the withdrawal is $51,766 ($64,676 - $5,000 x
$64,676/$93,947). The balance in the Ultra Short Term Bond Subaccount
is $9,150 ($9,665 - $5,000 x $9,665/$93,947). The balance in the Bond
PS Subaccount is $28,030 ($29,605 - $5,000 x $29,605/$93,947). The
total Contract Value after the withdrawal is $88,947. The withdrawal
of the Lifetime Income Amount does not reduce the Reference Value, so
the RV Ratio is now 83.55% ($88,947/$106,461). The RV Ratio Band is 1.
Based on the Contract Value of $88,947, the RV Ratio Band of 1 and the
AEAF of 70, the Portfolio Stabilization Process requires $50,189 to be
allocated to the Bond PS Subaccount. The $9,150 in the Ultra Short
Term Bond Subaccount is credited toward that amount, reducing it to
$41,038. THEREFORE WE TRANSFER $13,009 ($41,038 - $28,030) FROM THE
LIFESTYLE GROWTH PS SUBACCOUNT TO THE BOND PS SUBACCOUNT.
EXAMPLE 6: ADDITIONAL PURCHASE PAYMENTS
a) Assume Owner A makes an Additional Purchase Payment of $10,000 when
the Contract Value is $90,763 ($39,604 in the Lifestyle Growth PS
Subaccount and $51,159 in the Bond PS Subaccount), the Reference Value
is $107,145 and the RV Ratio Band is 1. The Contract Value increases
to $100,763 ($49,604 in the Lifestyle Growth PS Subaccount and $51,159
in the Bond PS Subaccount). The Reference Value increases by $5,000 -
the excess of the Additional Purchase Payment over the prior
withdrawal of $5,000 that did not reduce the Reference Value. The new
Reference Value is $112,145. The RV Ratio is 89.88%
($100,763/$112,115) and the RV Ratio Band is 3. Based on the Contract
Value of $100,763, the RV Ratio Band of 3 and the AEAF of 70, the
Portfolio Stabilization Process requires $52,878 to be allocated to
the Bond PS Subaccount. THEREFORE WE TRANSFER $1,720 FROM THE
LIFESTYLE GROWTH PS SUBACCOUNT TO THE BOND PS SUBACCOUNT. In this
example, although the RV Ratio Band increases as a result of the
Additional Purchase Payment, a transfer to the Bond PS Subaccount is
required because the entire Additional Purchase Payment went into the
Lifestyle Growth PS Subaccount.
b) Assume Owner B makes an Additional Purchase Payment of $10,000
allocated to the Lifestyle Moderate PS Subaccount when the Contract
Value is $88,387 (100% in the Lifestyle Conservative PS Subaccount),
the Reference Value is $96,522 and the RV Ratio Band is 4. The
Contract Value increases to $98,387 ($88,387 in the Lifestyle
Conservative PS Subaccount and $10,000 in the Lifestyle Moderate PS
Subaccount). The Reference Value increases by the total Additional
Purchase Payment of $10,000 since the prior withdrawal reduced the
Reference Value. The new Reference Value is $106,522. The RV Ratio is
92.36% ($98,387/$106,522) and the RV Ratio Band is 4. The
dollar-weighted AEAF is based on the portions of the Contract Value in
the Lifestyle Conservative PS and Lifestyle Moderate PS Subaccounts,
and is 22.03 ((20 x $88,387 + 40 x $10,000)/$98,387). Based on the
Contract Value of $98,387, the RV Ratio Band of 4 and the AEAF of
22.03, the Portfolio Stabilization Process requires $1,769 to be
D-6
allocated to the Bond PS Subaccount. THEREFORE WE TRANSFER $1,769
PROPORTIONALLY FROM THE LIFESTYLE CONSERVATIVE PS AND THE LIFESTYLE
MODERATE PS SUBACCOUNTS TO THE BOND PS SUBACCOUNT. The amount
transferred from the Lifestyle Conservative PS Subaccount is $1,589
($1,769 x $88,387/$98,387) and the amount transferred from the
Lifestyle Moderate PS Subaccount is $180 ($1,769 x $10,000/$98,387).
c) Assume Owner C makes an Additional Purchase Payment of $10,000
allocated 50% to the Lifestyle Balanced PS Subaccount and 50% to the
Lifestyle Conservative PS Subaccount. The Contract Value prior to the
Additional Purchase Payment is $90,957 ($39,829 in the Lifestyle
Balanced PS Subaccount, $43,748 in the Lifestyle Conservative PS
Subaccount and $7,380 in the Bond PS Subaccount). The Reference Value
is $98,434 and the RV Ratio Band is 4. The Contract Value increases to
$100,957 ($44,829in the Lifestyle Balanced PS Subaccount, $48,748 in
the Lifestyle Conservative PS Subaccount and $7,380 in the Bond PS
Subaccount). Next, the Reference Value increases by the total
Additional Purchase Payment of $10,000 since the prior withdrawal
reduced the Reference Value. The new Reference Value is $108,434. The
RV Ratio is 93.10% ($100,957/$108,434) and the RV Ratio Band is 5. The
dollar-weighted AEAF, calculated based on the portions of the Contract
Value allocated to the Lifestyle Balanced PS and Lifestyle
Conservative PS Subaccounts, is 34.37 ((50 x $44,829 + 20 x
$48,748)/($44,829 + $48,748)). Based on the RV Ratio Band of 5 the
Portfolio Stabilization Process does not require any amount to be
allocated to the Bond PS Subaccount. WE PROCEED TO STEP FOUR AND
TRANSFER THE $7,380 FROM THE BOND PS SUBACCOUNT PROPORTIONALLY TO THE
LIFESTYLE BALANCED PS AND THE LIFESTYLE CONSERVATIVE PS SUBACCOUNTS.
The amount transferred to the Lifestyle Balanced PS Subaccount is
$3,536 ($7,380 x $44,829/($44,829 + $48,748)), and the amount
transferred to the Lifestyle Conservative PS Subaccount is $3,845
($7,380 x $48,748/($44,829 + $48,748)).
d) Assume Owner D makes an Additional Purchase Payment of $5,000
allocated 90% to the Lifestyle Growth PS Subaccount and 10% to the
Ultra Short Term Bond Subaccount. The Contract Value prior to the
Additional Purchase Payment is $89,413 ($39,096 in the Lifestyle
Growth PS Subaccount, $9,214 in the Ultra Short Term Bond Subaccount
and $41,103 in the Bond PS Subaccount). The Reference Value is
$106,461 and the RV Ratio Band is 1. The Contract Value increases to
$94,413 ($43,596 in the Lifestyle Growth PS Subaccount, $9,714 in the
Ultra Short Term Bond Subaccount and $41,103 in the Bond PS
Subaccount). Since the prior $5,000 withdrawal did not reduce the
Reference Value, that withdrawal is subtracted from the $5,000
Additional Purchase Payment, resulting in no increase to the Reference
Value. The RV Ratio is 88.68% ($94,413/$106,461), and the RV Ratio
Band is 3. The dollar-weighted AEAF is equal to the AEAF for the
Lifestyle Growth PS Subaccount, or 70. Based on the Contract Value of
$94,413, the RV Ratio Band of 3 and the AEAF of 70, the Portfolio
Stabilization Process requires $26,615 to be allocated to the Bond PS
Subaccount. The total Contract Value allocated to both the Ultra Short
Term Bond Subaccount and the Bond PS Subaccount is $50,818. THEREFORE
WE TRANSFER THE EXCESS ALLOCATION OF $24,202 ($50,818 - $26,615) FROM
THE BOND PS SUBACCOUNT TO THE LIFESTYLE GROWTH PS SUBACCOUNT.
EXAMPLE 7: TRANSFERS
a) Assume that two days after the Additional Purchase Payment, when the
Contract Value is $100,767 ($48,399 in the Lifestyle Growth PS
Subaccount and $52,368 in the Bond PS Subaccount), Contract Owner A
elects to transfer the balance from the Lifestyle Growth PS Subaccount
to the Lifestyle Balanced PS Subaccount. There is no change to the RV
Ratio or the RV Ratio Band. As a result of the transfer the AEAF is
now 50. Based on the Contract Value of $100,767, the RV Ratio Band of
3 and the AEAF of 50, the
D-7
Portfolio Stabilization Process requires $44,418 to be allocated to
the Bond PS Subaccount. THEREFORE WE PROCEED TO STEP FOUR AND TRANSFER
$7,950 FROM THE BOND PS SUBACCOUNT TO THE LIFESTYLE BALANCED PS
SUBACCOUNT.
b) Assume that two days after the Additional Purchase Payment, when the
Contract Value is $97,241 ($85,509 in the Lifestyle Conservative PS
Subaccount, $9,961 in the Lifestyle Moderate PS Subaccount, and $1,770
in the Bond PS Subaccount), Contract Owner B elects to transfer
$20,000 from the Lifestyle Conservative PS Subaccount to the Lifestyle
Moderate PS Subaccount. The RV Ratio Band of 4 does not change as a
result of the transfer. As a result of the transfer the AEAF in now
26.28 ((40 x $29,961 + 20 x $65,509)/($29,961 + $65,509)). Based on
the Contract Value of $97,241, the RV Ratio Band of 4 and the AEAF of
26.28, the Portfolio Stabilization Process requires $4,580 to be
allocated to the Bond PS Subaccount. THEREFORE WE PROCEED TO STEP FOUR
AND TRANSFER $2,810 PROPORTIONALLY FROM THE LIFESTYLE MODERATE PS
SUBACCOUNT AND THE LIFESTYLE CONSERVATIVE PS SUBACCOUNT TO THE BOND PS
SUBACCOUNT.
c) Assume that two days after the Additional Purchase Payment, when the
Contract Value is $100,295 ($47,719 in the Lifestyle Balanced PS
Subaccount and $52,576 in the Lifestyle Conservative PS Subaccount),
Contract Owner C elects to transfer the balance from the Lifestyle
Moderate PS Subaccount to the Lifestyle Conservative PS Subaccount.
There is no change to the RV Ratio or the RV Ratio Band as a result of
the transaction. As a result of the transfer the AEAF is now 20. Based
on the Contract Value of $100,295, the RV Ratio Band of 4 and the AEAF
of 20, THERE IS NO REQUIRED ALLOCATION TO THE BOND PS SUBACCOUNT.
d) Assume that two days after the Additional Purchase Payment, when the
Contract Value is $94,517 ($67,794 in the Lifestyle Growth PS
Subaccount, $9,763 in the Ultra Short Term Bond Subaccount, and
$16,960 in the Bond PS Subaccount), Contract Owner D elects to
transfer $20,000 from the Lifestyle Growth PS Subaccount to the Ultra
Short Term Bond Subaccount. There is no change to the RV Ratio or the
RV Ratio Band. The AEAF is still 70. Based on the Contract Value of
$94,517, the RV Ratio Band of 3 and the AEAF of 70, the Portfolio
Stabilization Process requires $26,615 to be allocated to the Bond PS
Subaccount. Therefore we proceed to Step Four. The total Contract
Value in the Ultra Short Term Bond Subaccount is now $29,763, which
exceeds the required allocation. WE TRANSFER THE $16,960 BALANCE IN
THE BOND PS SUBACCOUNT TO THE LIFESTYLE GROWTH PS SUBACCOUNT. No
portion of the Ultra Short Term Bond Subaccount will be transferred.
D-8
[JOHN HANCOCK LOGO]
the future is yours(R)
To obtain a Venture(R) 4 Series Variable Annuity
Account Statement of Additional Information ("SAI")
Send this request to:
FOR CONTRACTS ISSUED IN A STATE/JURISDICTION OTHER THAN THE STATE OF
NEW YORK:
Venture(R) 4 Series SAI
John Hancock Annuities Service Center
Post Office Box 9505
Portsmouth, NH 03802-9505
FOR CONTRACTS ISSUED IN THE STATE OF NEW YORK:
Venture(R) 4 Series NY SAI
John Hancock Annuities Service Center
Post Office Box 9506
Portsmouth, NH 03802-9506
CUT ALONG DOTTED LINE [LOGO]
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Please send me a VENTURE(R) 4 SERIES VARIABLE ANNUITY Statement of Additional
Information dated June 1, 2011, for
[ ] Contracts issued in a state/jurisdiction other than the State of
New York (Separate Account H).
[ ] Contracts issued in the State of New York (Separate Account A).
Please check one box. If no box is checked, we will mail the Statement of
Additional Information applicable to contracts with the address of record
written below. If no contracts are listed with the address of record written
below, we may be unable to fulfill the request.
Name
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---------------------- --------------- ---------------
Venture(R) is a registered service mark of John Hancock Life Insurance
Company (U.S.A.) and is used under license by John Hancock Life
Insurance Company of New York
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
[FILED HEREWITH]
Statement of Additional Information
dated June 1, 2011
[GRAPHIC]
Statement of Additional Information
John Hancock Life Insurance Company of New York Separate Account A
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. This Statement of
Additional Information should be read in conjunction with the Prospectus dated
the same date as this Statement of Additional Information. This Statement of
Additional Information describes additional information regarding the flexible
purchase payment deferred variable annuity contracts (singly, a "Contract" and
collectively, the "Contracts" issued by JOHN HANCOCK LIFE INSURANCE COMPANY OF
NEW YORK ("John Hancock New York") in the state of New York as follows:
CONTRACT ISSUED BY JOHN HANCOCK NEW YORK
Venture(R) Frontier Variable Annuity
Venture(R) 7 Series Variable Annuity
Venture(R) 4 Series Variable Annuity
You may obtain a copy of the Prospectus for the Contract or Contracts listed
above by contacting us at the following addresses:
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
John Hancock Annuities Service Center ......... Mailing Address
164 Corporate Drive ........................... Post Office Box 9506
Portsmouth, NH 03801-6815 ..................... Portsmouth, NH 03802-9506
(800) 551-2078 ................................ www.jhannuitiesnewyork.com
JHNY SEP ACCT A SAI Venture(R) Series Chassis 06/11
Table of Contents
GENERAL INFORMATION AND HISTORY .............. 1
JOHN HANCOCK VARIABLE INSURANCE TRUST
PORTFOLIO HOLDINGS CURRENTLY POSTED
ON A WEBSITE ................................. 1
ACCUMULATION UNIT VALUE TABLES ............... 1
SERVICES ..................................... 1
Independent Registered Public Accounting
Firm ...................................... 1
Servicing Agent ............................. 2
Principal Underwriter ....................... 2
Special Compensation and Reimbursement
Arrangements ................................ 2
STATE VARIATIONS REGARDING RECOGNITION
OF SAME-SEX COUPLES .......................... 5
ADDITIONAL INFORMATION ABOUT THE
PORTFOLIO STABILIZATION PROCESS .............. 6
QUALIFIED PLAN TYPES ......................... 8
LEGAL AND REGULATORY MATTERS ................. 13
APPENDIX A: AUDITED FINANCIAL
STATEMENTS ................................... A-1
General Information and History
John Hancock Life Insurance Company of New York Separate Account A (the
"Separate Account") (formerly, The Manufacturers Life Insurance Company of New
York Separate Account A) is a separate investment account of John Hancock Life
Insurance Company of New York ("we" or "us"), a stock life insurance company
organized under the laws of New York in 1992. John Hancock New York's principal
office is located at 100 Summit Lake Drive, Valhalla, New York 10595. It also
has an Annuities Service Center located at 164 Corporate Drive, Portsmouth, New
Hampshire 03801-6815. John Hancock New York is a wholly-owned subsidiary of
John Hancock Life Insurance Company (U.S.A.) ("John Hancock USA") (formerly,
The Manufacturers Life Insurance Company of New York), a stock life insurance
company incorporated in Maine on August 20, 1955 by a special act of the Maine
legislature and redomesticated under the laws of Michigan. The ultimate parent
of John Hancock USA is Manulife Financial Corporation ("MFC") based in Toronto,
Canada. MFC is the holding company of The Manufacturers Life Insurance Company
and its subsidiaries, collectively known as Manulife Financial.
John Hancock New York established the Separate Account on March 4, 1992 as a
separate account under the laws of New York.
Our financial statements which are included in this Statement of Additional
Information should be considered only as bearing on our ability to meet our
obligations under the Contracts. They should not be considered as bearing on
the investment performance of the assets held in the Separate Account.
John Hancock Variable Insurance Trust Portfolio Holdings Currently Posted on a
Website
Each of the John Hancock Variable Insurance Trust's Fund of Funds that are
available under the Contracts invests in shares of other funds. The John
Hancock Variable Insurance Trust has adopted a policy to post each of these
Fund of Funds' holdings in other funds on a website within 30 days after each
calendar quarter end and within 30 days after any material changes are made to
the holdings of a Fund of Fund. In addition, the ten largest holdings of each
fund will be posted to the website 30 days after each calendar quarter end. The
information described above will remain on the website until the date the John
Hancock Variable Insurance Trust files its Form N-CSR or Form N-Q with the SEC
for the period that includes the date as of which the website information is
current. John Hancock Variable Insurance Trust's Form N-CSR and Form N-Q will
contain each fund's entire portfolio holdings as of the applicable calendar
quarter end.
You may access information on holdings for the Funds of Funds available under
your Contract on the following website:
http://www.jhannuities.com/Marketing/Portolios/PortfoliosManagement
TeamPage.aspx?globalNavID=21
We provide this information in connection with our Contracts, but the John
Hancock Variable Insurance Trust is responsible for the accuracy and validity
of the information on holdings for the Funds of Funds posted on the
website.
Accumulation Unit Value Tables
The Accumulation Unit Value Tables are located in Appendix U of the product
prospectus.
Services
Independent Registered Public Accounting Firm
The financial statements of John Hancock Life Insurance Company of New York at
December 31, 2010 and 2009, and for each of the three years in the period ended
December 31, 2010, and the financial statements of John Hancock Life Insurance
Company of New York Separate Account A at December 31, 2010, and for each of
the two years in the period ended December 31, 2010, appearing in this
Statement of Additional Information of the Registration Statement have been
audited by Ernst & Young LLP, independent
1
registered public accounting firm, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance upon such reports
given on the authority of such firm as experts in accounting and auditing.
Servicing Agent
Computer Sciences Corporation Financial Services Group ("CSC FSG") provides to
us a computerized data processing recordkeeping system for variable annuity
administration. CSC FSG provides various daily, semimonthly, monthly,
semiannual and annual reports including:
- daily updates on accumulation unit values, variable annuity
participants and transactions, and agent production and
commissions;
- semimonthly commission statements;
- monthly summaries of agent production and daily transaction reports;
- semiannual statements for Contract Owners; and
- annual Contract Owner tax reports.
We pay CSC FSG approximately $7.80 per Contract per year, plus certain other
fees for the services provided.
Principal Underwriter
John Hancock Distributors, LLC, ("JH Distributors"), an indirect wholly owned
subsidiary of MFC, serves as principal underwriter of the Contracts. Contracts
are offered on a continuous basis. The aggregate dollar amounts of underwriting
commissions paid to JH Distributors in 2010, 2009, and 2008 were $369,132,052,
$421,625,749, and $597,650,909, respectively.
Special Compensation and Reimbursement Arrangements
The Contracts are primarily sold through selected firms. The Contracts'
principal distributor, JH Distributors, and its affiliates (collectively, "JHD")
pay compensation to broker-dealers (firms) for the promotion and sale of the
Contracts. The compensation JHD pays may vary depending on each firm's selling
agreement and the specific Contract(s) distributed by the firm, but compensation
(inclusive of wholesaler overrides and expense allowances) paid to the firms for
sale of the Contracts is not expected to exceed the standard compensation
amounts referenced in the Prospectus for the applicable Contract. The amount and
timing of this compensation may differ among firms.
The registered representative through whom your Contract is sold will be
compensated pursuant to that registered representative's own arrangement with
his or her broker-dealer. The registered representative and the firm may have
multiple options on how they wish to allocate their commissions and/or
compensation. We are not involved in determining your registered
representative's compensation. You are encouraged to ask your registered
representative about the basis upon which he or she will be personally
compensated for the advice or recommendations provided in connection with the
sale of your Contract.
Compensation to firms for the promotion and sale of the Contracts is not paid
directly by Contract owners, but we expect to recoup it through the fees and
charges imposed under the Contract.
We may, directly or through JHD, make additional payments to firms, either from
12b-1 distribution fees received from the Contracts' underlying investment
Portfolios or out of our own resources. These payments are sometimes referred to
as "revenue sharing." Revenue sharing expenses are any payments made to
broker-dealers or other intermediaries to either (i) compensate the intermediary
for expenses incurred in connection with the promotion and/or sale of John
Hancock investment products, or (ii) obtain promotional and/or distribution
services for John Hancock investment products. Many firms that sell the
Contracts receive one or more types of these cash payments.
We are among several insurance companies that pay additional payments to certain
firms to receive "preferred" or recommended status. These privileges include:
additional or special access to sales staff; opportunities to provide and/or
attend training and other conferences; advantageous placement of our products on
customer lists ("shelf-space arrangements"); and other improvements in sales by
featuring our products over others.
Revenue sharing payments assist in our efforts to promote the sale of the
Contracts and could be significant to a firm. Not all firms, however, receive
additional compensation. We determine which firms to support and the extent of
the payments we are willing to make, and generally choose to compensate firms
that are willing to cooperate with our promotional efforts and have a strong
capability to distribute the Contracts. We do not make an independent assessment
of the cost of providing such services. Instead, we agree with the firm on the
methods for calculating any additional compensation. The methods, which vary by
firm and are further described below, may include different categories to
measure the amount of revenue sharing payments, such as the level of sales,
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assets attributable to the firm and the variable annuity contracts covered under
the arrangement (including contracts issued by any of our affiliates). The
categories of revenue sharing payments that we may provide to firms, directly or
through JHD, are not mutually exclusive and may vary from Contract to Contract.
We or our affiliates may make additional types of revenue sharing payments for
other products, and may enter into new revenue sharing arrangements in the
future. The following list includes the names of member firms of the Financial
Industry Regulatory Authority ("FINRA,") (or their affiliated broker-dealers)
that we are aware (as of December 31, 2010) received a revenue sharing payment
of more than $5,000 with respect to annuity business during the latest calendar
year:
NAME OF FIRM
DISTRIBUTOR
1st Global Capital Corp.
AIG - FSC Securities Corporation
AIG - SagePoint, Inc
American Porfolios Financial Services
AXA Advisors, LLC
Banc of America Investment Serv., Inc
Cadaret, Grant & Co., Inc.
Cambridge Investment Research
CCO Investment Servies Co
Centaurus Financial
Citigroup Global Markets, Inc.
Comerica Securities
Commonwealth Financial Network
Crown Capital Securities, L.P.
CUSO Financial Services, L.P.
Edward Jones Co., L.P.
Fifth Third Securities, Inc.
First Allied Securities
Founders Financial
Geneos Wealth Management, Inc.
H.D. Vest Investment Services
Harbour Investments Inc.
Independent Financial Group, LLC
ING - Financial Network Investment Corp.
ING - Multi-Financial Securities Corporation
ING - PrimeVest Financial Services, Inc.
ING Financial Partners
Investacorp, Inc.
Investors Capital
J.J.B. Hilliard, W.L. Lyons, Inc
James T Borello & Co
Janney Montgomery Scott, LLC
John Hancock Financial Network
Key Investment Services, LLC
Lasalle St. Securities, LLC
Lincoln Financial Advisors Corporation
Lincoln Financial Securities Corp.
LPL Financial Corp.
M & T Bank
M Holdings Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith, Inc.
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DISTRIBUTOR
MML Investors Services, Inc.
Money Concepts Capital Corporation
Morgan Keegan & Co., Inc.
Morgan Stanley & Co., Inc.
Next Financial
NFP Securities
NPH - Invest Financial Corporation
PAC - United Planners Financial Services
People's Securities, Inc
ProEquities, Inc.
Raymond James Associates
Raymond James Financial Services
RBC Dain Capital, Inc.
Securities America, Inc.
Sigma Financial Corporation
Stifel, Nicolaus & Company, Inc.
SunTrust Investment Services Inc.
The Huntington Investment Company
Tower Square Securities, Inc.
Transamerica Financial Advisors, Inc.
UBS Financial Services, Inc.
Walnut Street Securities, Inc.
Wells Fargo Investments, LLC
Wells Fargo Sec. Financial Network
Wells Fargo Securities LLC, (ISG)
Wells Fargo Securities LLC, (PCG)
Woodbury Financial Services, Inc.
Your registered representative can provide you with more information about the
compensation arrangements that apply upon the sale of a variable annuity
contract.
Inclusion on this list does not imply that these sums necessarily constitute
"special cash compensation" as defined by NASD Conduct Rule 2830(l)(4). We will
endeavor to update this listing annually; interim arrangements may not be
reflected. We assume no duty to notify any investor whether his or her
registered representative is or should be included in any such listing. You are
encouraged to review the prospectus for each Portfolio for any other
compensation arrangements pertaining to the distribution of Portfolio shares.
We may, directly or through JHD, also have arrangements with intermediaries that
are not members of FINRA.
Sales and Asset Based Payments. We may, directly or through JHD, make revenue
sharing payments as incentives to certain firms to promote and sell the
Contracts. We hope to benefit from revenue sharing by increasing Contract sales.
In consideration for revenue sharing, a firm may feature the Contracts in its
sales system or give us additional access to members of its sales force or
management. In addition, a firm may agree to participate in our marketing
efforts by allowing us to participate in conferences, seminars or other programs
attended by the firm's sales force. Although a firm may seek revenue sharing
payments to offset costs incurred by the firm in servicing its clients that have
purchased the Contracts, the firm may earn a profit on these payments. Revenue
sharing payments may provide a firm with an incentive to favor the Contracts in
its sales efforts.
The revenue sharing payments we make may be calculated on sales of our products
by the firm ("Sales-Based Payments"). These payments are based upon a percentage
of the total amount of money received, or anticipated to be received, for sales
through a firm of some or all of the insurance products that we and/or our
affiliates offer. We make these payments on a periodic basis.
Such payments also may be calculated based upon the "assets under management"
attributable to a particular firm ("Asset-Based Payments"). These payments are
based upon a percentage of the contract value of some or all of our (and/or our
affiliates') insurance products that were sold through the firm. We make these
payments on a periodic basis.
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Sales-Based Payments primarily create incentives to make new sales of our
insurance products and Asset-Based Payments primarily create incentives to
service and maintain previously sold Contracts. We may pay a firm either or both
Sales-Based Payments and Asset-Based Payments.
Administrative and Processing Support Payments. We may, directly or through JHD,
also make payments to certain firms that sell our products for certain
administrative services, including record keeping and sub-accounting Contract
owner accounts, and in connection with account maintenance support, statement
preparation and transaction processing. The types of payments that we may make
under this category include, among others, payment of ticket charges per
purchase or exchange order placed by a firm, payment of networking fees in
connection with certain mutual fund trading systems, or one-time payments for
ancillary services such as setting up funds on a firm's mutual fund trading
system.
Other Payments. We may, directly or through JHD, also provide, either from the
12b-1 distribution fees received from the Portfolios underlying the Contracts or
out of our own resources, additional compensation to firms that sell or arrange
for the sale of Contracts. Such compensation may include seminars for the
public, advertising and sales campaigns regarding the Contracts to assist a firm
in connection with its systems, operations and marketing expenses, or for other
activities of a selling firm or wholesaler. We may contribute to, as well as
sponsor, various educational programs, sales contests and/or promotions in which
participating firms and their sales persons may receive prizes such as
merchandise, cash, or other awards.
Other compensation may be offered to the extent not prohibited by federal or
state laws or any self-regulatory agency, such as FINRA. We make payments for
entertainment events we deem appropriate, subject to our guidelines and
applicable law. These payments may vary widely, depending upon the nature of the
event or the relationship. We may make these payments upon the initiation of a
relationship with a firm, and at any time thereafter.
We may have other relationships with firms relating to the provisions of
services to the Contracts, such as providing omnibus account services,
transaction processing services, or effecting portfolio transactions for
Portfolios. If a firm provides these services, we may compensate the firm for
these services. In addition, a firm may have other compensated or uncompensated
relationships with us that are not related to the Contracts.
Signator Investors, Inc. may pay their respective registered representatives
additional cash incentives in the form of bonus payments, expense payments,
employment benefits or the waiver of overhead costs or expenses in connection
with the sale of the Contracts that they would not receive in connection with
the sale of contracts issued by unaffiliated companies.
State Variations Regarding Recognition of Same-Sex Couples
The federal Defense of Marriage Act ("DOMA") does not recognize civil unions or
same-sex marriages. Therefore, the federal tax treatment available to spouses
who fall within the definition of DOMA may not be available to civil union or
same-sex marriage partners. However, the following table identifies the states
that may, pursuant to state law, extend to civil union and same-sex marriage
partners the same benefits (other than federal tax benefits) that are granted to
spouses who fall within the definition of DOMA:
STATE TYPE OF JURISDICTION RELATED RULE
California Domestic Partnership
Colorado Designated Beneficiary Agreements May recognize spouses of civil unions from other jurisdictions
Connecticut Same-Sex Marriage
Domestic Partnership,
District of Columbia Same-Sex Marriage
Hawaii Reciprocal Beneficiary Relationship
Illinois Civil Union
Iowa Same-Sex Marriage
Maine Domestic Partnerships
Maryland Domestic Partnership Also recognizes spouses of same-sex marriages who
Massachusetts Same-Sex Marriage were married in another jurisdiction
Nevada Domestic Partnership
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STATE TYPE OF JURISDICTION RELATED RULE
New Hampshire Same-Sex Marriage
Civil Union, Also recognizes spouses of civil unions who were married in
New Jersey Domestic Partnership another jurisdiction
New York -- Recognizes spouses of civil unions and same-sex marriages
Oregon Domestic Partnership who were married in another jurisdiction
Rhode Island Domestic Partnership Recognizes spouses of civil unions and same-sex marriages who
Vermont Same-Sex Marriage were married in another jurisdiction
Washington Domestic Partnership
Wisconsin Domestic Partnerships
The table above is current only as of the date of this Statement of Additional
Information. Please consult with your own qualified tax advisor for information
on: (1) how federal tax rules may affect Contracts where civil union or same-sex
marriage partners either singularly or jointly own the Contract, or are
designated Annuitant(s), Beneficiary(ies) and/or Covered Person(s); and (2) your
state's regulations regarding civil unions and same-sex marriages.
Additional Information about the Portfolio Stabilization Process
Please read the applicable Prospectus for [Venture(R) Frontier Variable Annuity,
Venture(R) 7 Series Variable Annuity or Venture 4 Series Variable Annuity]
Contracts for general information on Contracts issued with an IPFL 6.11 Series
Rider. We provide additional information in this section about the Portfolio
Stabilization Process we use to monitor Contract Value and to make automatic
transfers between the Lifestyle PS Subaccounts and the Bond PS Subaccount.
Determination of Reference Value under STEP ONE of the Portfolio Stabilization
Process
Contract Inception
The initial Reference Value is equal to the Contract Value on the Contract Date.
Determination of Monthly Anniversary Dates
The Reference Value will be adjusted on each Monthly Anniversary to equal the
greater of (a) the current Reference Value or (b) the Contract Value on that
day.
Adjustments for Additional Purchase Payments
Additional Purchase Payments that we accept on any Business Day prior to the
Lifetime Income Date increase the Reference Value by the amount of the
Additional Purchase Payment.
Additional Purchase Payments that we accept on any Business Day coincident with
or after the Lifetime Income Date increase the Reference Value by the excess, if
any, of the Additional Payment over any withdrawal since the later of:
(a) the Lifetime Income Date, or
(b) the later of:
(i) the date of an Additional Purchase Payment that increased the
Reference Value, or
(ii) the date of a reduction in the Reference Value.
Adjustments for Excess Withdrawals
The Reference Value will not be adjusted for withdrawals that are less than or
equal to the Lifetime Income Amount.
Excess Withdrawals, including all withdrawals prior to the Lifetime Income Date,
will reduce the Reference Value in the same proportion as the amount of the
withdrawal divided by the Contract Value prior to the withdrawal.
As an example, assume that you own a Contract with an IPFL 6.11 Series Rider on
a Business Day, where:
- the Business Day is after the Lifetime Income Date,
- no withdrawal charges apply,
- the Contract Value is $100,000,
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- the Lifetime Income Amount is $5,000,
- the Reference Value is $120,000, and
- you withdraw $15,000.
Under these assumptions, the Portfolio Stabilization Process will adjust the
Reference Value as follows:
- the Excess Withdrawal amount is $15,000 - $5,000, or $10,000,
- the Contract Value immediately before the Excess Withdrawal is
$100,000 - $5,000, or $95,000,
- the Contract Value immediately after the Excess Withdrawal is $95,000
- $10,000, or $85,000, and
- the adjusted Reference Value is ($120,000 x ($85,000 / $95,000)), or
$107,368.
Review of Contract Value Allocation under STEP TWO of the Portfolio
Stabilization Process
The Portfolio Stabilization Process uses the term "Target Bond PS Subaccount
Allocation" in connection with the review of Contract Value Allocation to
describe the target amount required to be maintained in the Bond PS Subaccount,
before adjustment to reflect Contract Value allocated to the Ultra Short Term
Bond Subaccount. We define the term as follows: Target Bond PS Subaccount
Allocation - The sum of (a) plus (b) minus (c) minus (d) where:
(a) Is the minimum of the Contract Value and 80% of the Reference Value
(b) Is the Reference Value Band multiplied by 2.5% of Reference Value
(c) Is 20 divided by the weighted average AEAF ("WAEAF") multiplied by the
minimum of the Contract Value and 80% of the Reference Value
(d) Is the Reference Value Band multiplied by 2.5% of the Reference Value
multiplied by F.
For purposes of the Target Bond PS Subaccount Allocation, "F" is determined
as follows:
32 x WAEAF - 540 + RV Band x (WAEAF - 20)
F = ----------------------------------------------------
5 x WAEAF
Automatic Transfers under STEP THREE of the Portfolio Stabilization Process
Whenever a Target Bond PS Subaccount Allocation is calculated, the Portfolio
Stabilization Process will compare that amount to the combined Contract Value in
the Bond PS Subaccount and the Ultra Short Term Bond Subaccount (the "Combined
Contract PS Value").
A. TRANSFERS FROM THE LIFESTYLE PS SUBACCOUNTS. If there is an excess of the
Target Bond PS Subaccount Allocation over the Combined Contract PS Value, the
excess will be transferred automatically from the Lifestyle PS Subaccounts with
current Contract Value to the Bond PS Subaccount. The excess will be transferred
on a pro-rata basis from the Lifestyle PS Subaccounts, based on the Contract
Value in each Lifestyle PS Subaccount before such transfer.
B. TRANSFERS FROM THE BOND PS SUBACCOUNT TO THE LIFESTYLE PS SUBACCOUNTS. The
Portfolio Stabilization Process will result in a transfer to the Lifestyle PS
Subaccounts if:
- the Combined Contract PS Value exceeds the Target Bond PS Subaccount
Allocation, and
- some or all of your Contract Value is currently allocated to the Bond
PS Subaccount and any of the Lifestyle PS Subaccounts.
In such an event, your Contract Value allocated to the Bond PS Subaccount, up to
the amount of the excess, will be transferred automatically from the Bond PS
Subaccount to the Lifestyle PS Subaccounts. The transfer will be on a pro-rata
basis into the Lifestyle PS Subaccounts based on the Contract Value in each
Lifestyle PS Subaccount before such transfer.
C. TRANSFERS FROM THE BOND PS SUBACCOUNT TO THE ULTRA SHORT TERM BOND SUBACCOUNT
OR THE LIFESTYLE CONSERVATIVE PS SUBACCOUNT. The Portfolio Stabilization Process
will result in a transfer to the Ultra Short Term Bond Subaccount or the
Lifestyle Conservative PS Subaccount if:
- the Combined Contract PS Value exceeds the Target Bond PS Subaccount
Allocation, and
- you have instructed us to allocate 100% of your available Contract
Value to ONE OF the Ultra Short Term Bond Subaccount or the Lifestyle
Conservative PS Subaccount, and
- some of your Contract Value is currently allocated to the Bond PS
Subaccount.
7
In such an event, your Contract Value allocated to the Bond PS Subaccount, up to
the amount of the excess, will be transferred automatically to the Subaccount
you have instructed.
The Portfolio Stabilization Process will result in a transfer to the Lifestyle
Conservative PS Subaccount if:
- the Combined Contract PS Value exceeds the Target Bond PS Subaccount
Allocation. and
- you have instructed us to allocate 100% of your available Contract
Value to A COMBINATION of the Ultra Short Term Bond Subaccount or the
Lifestyle Conservative PS Subaccount, and
- some of your Contract Value is currently allocated to the Bond PS
Subaccount.
In such an event, your Contract Value allocated to the Bond PS Subaccount, up to
the amount of the excess, will be transferred automatically to the Lifestyle
Conservative PS Subaccount.
Processing Transactions Before Performing the Portfolio Stabilization Process
At the end of each Business Day, we will perform the Portfolio Stabilization
Process after we process any other transactions under your Contract for that
Business Day. The other transactions include any requests for withdrawals,
transfers or other Contract benefits received before the end of that Business
Day, Additional Purchase Payments received on that Business Day, and any
Step-Ups, Credits, deduction of Contract fees and charges or other automated
transactions scheduled for that Business Day.
Qualified Plan Types
TRADITIONAL IRAS
Individual Retirement Annuities
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity or IRA
(sometimes referred to as a traditional IRA to distinguish it from the Roth IRA
discussed below). IRAs are subject to limits on the amounts that may be
contributed and deducted, the persons who may be eligible and the time when
distributions may commence. Also, distributions from certain other types of
qualified retirement plans may be rolled over on a tax-deferred basis into an
IRA. The Contract may not, however, be used in connection with an Education IRA
under section 530 of the Code.
The Contract may be issued with a death benefit or certain benefits provided by
an optional Rider. The presence of such benefits may increase the amount of any
required minimum distributions for IRAs and other Contracts subject to the
required minimum distribution rules.
Distributions
In general, unless you have made non-deductible contributions to your IRA, all
amounts paid out from a traditional IRA contract (in the form of an annuity, a
single sum, death benefits or partial withdrawal), are taxable to the payee as
ordinary income. As in the case of a Contract not purchased under a Qualified
Plan, you may incur an additional 10% penalty tax if you make a surrender or
withdrawal before you reach age 59 1/2 (unless certain exceptions apply as
specified in section 72(t)) of the Code. If you have made any non-deductible
contributions to an IRA contract, all or part of any withdrawal or surrender
distribution, single sum death benefit or annuity payment, may be excluded
from your taxable income when you receive the distribution.
The tax law requires that annuity payments or other distributions under a
traditional IRA contract begin no later than April 1 of the year following the
year in which the Owner attains age 70 1/2. The amount that must be distributed
each year is computed on the basis of the Owner's age and the value of the
Contract, taking into account both the account balance and, in 2006 and
subsequent years, the actuarial present value of other benefits provided under
the Contract.
ROTH IRAS
Section 408A of the Code permits eligible individuals to contribute to a type of
IRA known as a Roth IRA. Roth IRAs are generally subject to the same rules as
non-Roth IRAs, but they differ in certain significant respects.
Among the differences are that contributions to a Roth IRA are not deductible
and qualified distributions from a Roth IRA are excluded from income. A
qualified distribution is a distribution that satisfies two requirements. First,
the distribution must be made in
8
a taxable year that is at least five years after the first taxable year for
which a contribution to any Roth IRA established for the Owner was made. Second,
the distribution must be:
- made after the Owner attains age 59 1/2;
- made after the Owner's death;
- attributable to the Owner being disabled; or
- a qualified first-time homebuyer distribution within the meaning
of section 72(t) (2) (F) of the Code.
In addition, distributions from Roth IRAs need not commence when the Owner
attains age 70 1/2. Distributions must, however, begin after the Owner's death.
A Roth IRA may (subject to constraints explained below under "Conversion or
Direct Rollover to a Roth IRA") accept a "qualified rollover contribution" from
another Roth IRA, a traditional IRA, a qualified retirement plan described in
section 401(a) or 403(a) of the Code, a tax-sheltered annuity contract described
in section 403(b) of the Code, or an eligible deferred compensation plan
maintained by a governmental employer under section 457(b) of the Code.
If the Contract is issued with certain death benefits or benefits provided by an
optional Rider, the presence of these benefits may increase the amount of any
required minimum distributions for IRAs (which include Roth IRAs) and other
Contracts subject to the minimum distribution rules. Also, the state tax
treatment of a Roth IRA may differ from the federal income tax treatment of a
Roth IRA. YOU SHOULD SEEK INDEPENDENT TAX ADVICE IF YOU INTEND TO USE THE
CONTRACT IN CONNECTION WITH A ROTH IRA.
Conversion or Direct Rollover to a Roth IRA
You can convert a traditional IRA to a Roth IRA or directly roll over
distributions that you receive from a retirement plan described in sections
401(a), 403(a), or 403(b) of the Code or a governmental deferred compensation
plan described in section 457(b) of the Code to a Roth IRA. The Roth IRA annual
contribution limit does not apply to converted or rollover amounts.
You must, however, pay tax on any portion of the converted or rollover amount
that would have been taxed if you had not converted or rolled over to a Roth
IRA. No similar limitations apply to rollovers to a Roth IRA from another Roth
IRA or from a designated Roth account within a qualified retirement plan. Please
note that the amount deemed to be the "converted amount" for tax purposes may be
higher than the Contract Value because of the deemed value of guarantees. If the
converted or rollover amount is held in an annuity contract issued by us, we may
have to withhold (make a contract withdrawal and remit to the IRS) up to 20% of
the taxable gain in the contract. This amount withheld could reduce the benefit
value of any elected optional guarantee Rider, in a proportion determined by the
Rider. You may find it advantageous to pay the tax due on the conversion from
resources outside of the annuity contract in order to avoid any benefit
reduction. YOU SHOULD SEEK INDEPENDENT TAX ADVICE IF YOU INTEND TO USE THE
CONTRACT IN CONNECTION WITH A ROTH IRA.
SIMPLE IRA PLANS
In general, under section 408(p) of the Code a small business employer may
establish a SIMPLE IRA retirement plan if the employer employed no more than 100
employees earning at least $5,000 during the preceding year. Under a SIMPLE IRA
plan both employees and the employer make deductible contributions. SIMPLE IRAs
are subject to various requirements, including limits on the amounts that may be
contributed, the persons who may be eligible, and the time when distributions
may commence. If the Contract is issued with certain death benefits or benefits
provided by an optional Rider, the presence of these benefits may increase the
amount of any required minimum distributions for IRAs (which would include
SIMPLE IRAs) and other Contracts subject to the minimum distribution rules. The
requirements for minimum distributions from a SIMPLE IRA retirement plan are
generally the same as those discussed above for distributions from a traditional
IRA. The rules on taxation of distributions are also similar to those that apply
to a traditional IRA, except that (i) tax free rollovers may be made from a
SIMPLE IRA plan only to another SIMPLE IRA plan during the first two years of
participation in the plan; and (ii) the penalty tax on early distribution from a
SIMPLE IRA plan that occurs during the first two years of participation is 25%,
instead of 10%. EMPLOYERS INTENDING TO USE THE CONTRACT IN CONNECTION WITH SUCH
PLANS SHOULD SEEK INDEPENDENT TAX ADVICE.
SIMPLIFIED EMPLOYEE PENSIONS (SEP-IRAS)
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees, using the employees' IRAs for such purposes,
if certain criteria are met. Under these plans the employer may, within
specified limits, make deductible contributions on behalf of the employees to
IRAs. If the Contract is issued with certain death benefits or benefits provided
by an optional Rider, the presence of these benefits may increase the amount of
any required minimum distributions for IRAs (which would include SEP - IRAs) and
other Contracts subject to the minimum distribution rules. The requirements for
minimum
9
distributions from a SEP - IRA, and rules on taxation of distributions
from a SEP - IRA, are generally the same as those discussed above for
distributions from a traditional IRA.
SECTION 403(B) QUALIFIED PLANS OR TAX-SHELTERED ANNUITIES
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations to have their employers purchase
annuity contracts for them and, subject to certain limitations, to exclude the
Purchase Payments from gross income for tax purposes. These Contracts are
commonly referred to as "tax-sheltered annuities." PURCHASERS OF THE CONTRACTS
FOR SUCH PURPOSES SHOULD SEEK INDEPENDENT ADVICE AS TO ELIGIBILITY, LIMITATIONS
ON PURCHASE PAYMENTS, AND OTHER TAX CONSEQUENCES. In particular, purchasers
should note that the Contract provides death benefit options that may exceed the
greater of the Purchase Payments and Contract Value. It is possible that the
presence of the death benefit could be characterized by the IRS as an
"incidental death benefit" and result in currently taxable income to the Owner.
There also are limits on the amount of incidental benefits that may be provided
under a tax-sheltered annuity. If a Contract is issued with a death benefit or
benefits provided by an optional Rider, the presence of these benefits may
increase the amount of any required minimum distributions that must be made.
Final regulations concerning tax sheltered annuity contracts became effective on
July 26, 2007, but are generally applicable for tax years beginning after
December 31, 2008. These regulations require the employer to adopt a written
defined contribution plan which, in both form and operation, satisfies the
requirements of the regulations. The regulations specify that any exchange of a
403(b) annuity contract for another 403(b) annuity contract occurring after
September 24, 2007 will not be treated as a taxable distribution provided the
employer and the company issuing the new contract have agreed to share
information concerning the employee's employment status, hardship distributions
and loans, if any.
Restrictions on Section 403(b) Qualified Plans
AVAILABILITY. We currently are not offering this Contract for use in a
retirement plan intended to qualify as a section 403(b) Qualified Plan (a
"Section 403(b) Qualified Plan" or the "Plan") unless (a) we (or an affiliate of
ours) previously issued annuity contracts to that retirement plan, (b) the
initial purchase payment for the new Contract is sent to us directly from the
Section 403(b) Qualified Plan through your employer, the Plan's administrator,
the Plan's sponsor or in the form of a transfer acceptable to us, (c) we have
entered into an agreement with your Section 403(b) Qualified Plan concerning the
sharing of information related to your Contract (an "Information Sharing
Agreement"), and (d) unless contained in the Information Sharing Agreement, we
have received a written determination by your employer, the Plan administrator
or the Plan sponsor of your Section 403(b) Qualified Plan that the plan
qualifies under Section 403(b) of the Code and complies with applicable Treasury
regulations (a "Certificate of Compliance") (Information Sharing Agreement and
Certificate of Compliance, together the "Required Documentation").
We may accept, reject or modify any of the terms of a proposed Information
Sharing Agreement presented to us, and make no representation that we will enter
into an Information Sharing Agreement with your Section 403(b) Qualified Plan.
In the event that we do not receive the Required Documentation and you
nonetheless direct us to proceed with a rollover transfer of initial Purchase
Payment funds, the transfer may be treated as a taxable transaction.
OWNERSHIP. You may not sell, assign, transfer, discount or pledge (as collateral
for a loan or as security for the performance of an obligation, or for any other
purpose) a 403(b) Qualified Contract or some or all of such a Contract's value
to any person other than us without the consent of an employer, a Plan
administrator or a Plan sponsor. A request to transfer ownership must be
accompanied by the Required Documentation. In the event we do not receive the
Required Documentation and you nonetheless direct us to proceed with a transfer
of ownership, the transfer may be treated as a taxable transaction and your
Contract may no longer be qualified under section 403(b), which may result in
additional adverse tax consequences to you.
ADDITIONAL PURCHASE PAYMENTS. We will not accept Additional Purchase Payments in
the form of salary reduction, matching or other similar contributions in the
absence of the Required Documentation. Matching or other employer contributions
to Contracts issued on or after January 1, 2009, will be subject to restrictions
on withdrawals specified in the Section 403(b) Qualified Plan.
We will not knowingly accept transfers, in the absence of the Required
Documentation, from another existing annuity contract or other investment under
a Section 403(b) Qualified Plan to a previously issued Contract used in a
Section 403(b) Qualified Plan. Such transfers shall be made directly from a Plan
through an employer, a Plan administrator or a Plan sponsor, or by a transfer
acceptable to us.
10
In the event that we do not receive the Required Documentation and you
nonetheless direct us to proceed with the Additional Purchase Payments, the
Additional Purchase Payment may be treated as a taxable transaction and your
Contract may no longer be qualified under section 403(b), which may result in
additional adverse tax consequences to you.
WITHDRAWALS. Tax-sheltered annuity contracts must contain restrictions on
withdrawals of:
- contributions made pursuant to a salary reduction agreement in
years beginning after December 31, 1988;
- earnings on those contributions; and
- earnings after 1988 on amounts attributable to salary reduction
contributions (and earnings on those contributions) held as of
the last day of 1988.
These amounts can be paid only if the employee has reached age 59 1/2, separated
from service, died, or become disabled (within the meaning of the tax law), or
in the case of hardship (within the meaning of the tax law). Amounts permitted
to be distributed in the event of hardship are limited to actual contributions
for elective contributions made after 1988; earnings thereon cannot be
distributed on account of hardship. Amounts subject to the withdrawal
restrictions applicable to section 403(b)(7) custodial accounts may be subject
to more stringent restrictions.
Exercise of the withdrawal right for each withdrawal under the Contract may be
subject to the terms of the Section 403(b) Qualified Plan and may require the
consent of the employer, the Plan administrator or the Plan sponsor, as well as
the participant's spouse, under section 403(b) of the Code and applicable
Treasury Regulations.
In the event that we do not receive the Required Documentation and you
nonetheless direct us to proceed with the withdrawal, your Contract may no
longer be qualified under section 403(b), which may result in additional adverse
tax consequences to you. Employer consent is not required when we have received
documentation in a form acceptable to us confirming that you have reached age
59 1/2, separated from service, died or become disabled. (These limitations on
withdrawals do not apply to the extent we are directed to transfer some or all
of the Contract Value to the issuer of another tax-sheltered annuity or into a
section 403(b)(7) custodial account.)
LOANS. Loans from Qualified Contracts intended for use under Section 403(b)
Qualified Plans, where allowed, are subject to a variety of limitations,
including restrictions as to the amount that may be borrowed, the duration of
the loan and the manner in which the loan must be repaid. We currently offer a
loan privilege to Owners of Contracts issued in connection with Section 403(b)
Qualified Plans: (1) that were issued prior to January 1, 2009; (2) that are not
subject to Title 1 of ERISA, and (3) that have not elected a guaranteed minimum
withdrawal benefit Rider. We will not permit nor support loans from Contracts
issued on or after January 1, 2009 in connection with Section 403(b) Qualified
Plans.
COLLECTING AND USING INFORMATION. Through your participation in a retirement
plan intended to qualify under section 403(b), the Company, your employer, your
Plan administrator, and your Plan sponsor collect various types of confidential
information you provide in your agreements, such as your name and the name of
any Beneficiary, Social Security Numbers, addresses, and occupation information.
The Company, your employer, the Plan administrator, and your Plan sponsor also
collect confidential information relating to your Plan transactions, such as
contract values, purchase payments, withdrawals, transfers, loans and
investments. In order to comply with IRS regulations and other applicable law in
servicing your Contract, the Company, your employer, the Plan administrator and
the Plan sponsor may be required to share such confidential information among
themselves, other current, former or future providers under the Section 403(b)
Qualified Plan, and among their employees. By applying for or purchasing a
Contract for use in a Section 403(b) Qualified Plan or by intending to make an
additional purchase payment, transfer of ownership, transfer, withdrawal or loan
on an existing Contract for use in a Section 403(b) Qualified Plan, you consent
to such sharing of confidential information. The Company will not disclose any
such confidential information to anyone, except as permitted by law or in
accordance with your consent.
--------------------------------------------------------------------------------
If you are considering making a rollover transfer from a retirement plan
described in section 403(b) of the Code to a traditional IRA or a Roth IRA, you
should consult with a tax advisor regarding possible tax consequences. If you
have a loan outstanding under the section 403(b) plan, the transfer may subject
you to income taxation on the amount of the loan balance.
--------------------------------------------------------------------------------
11
Restrictions under the Texas Optional Retirement Program
Section 830.105 of the Texas Government Code permits participants in the Texas
Optional Retirement Program ("ORP") to withdraw their interest in a variable
annuity contract issued under the ORP only upon:
- termination of employment in all Texas public institutions of
higher education;
- retirement;
- death; or
- the participant's attainment of age 70 1/2.
Accordingly, before you withdraw any amounts from the Contract, you must furnish
proof to us that one of these four events has occurred. For these purposes a
change of company providing ORP benefits or a participant's transfer between
institutions of higher education is not a termination of employment.
Consequently there is no termination of employment when a participant in the ORP
transfers the Contract Value to another Contract or another qualified custodian
during the period of participation in the ORP.
CORPORATE AND SELF-EMPLOYED ("H.R. 10" AND "KEOGH") PENSION AND PROFIT-SHARING
PLANS
Sections 401(a) and 403(a) of the code permit corporate employers to establish
various types of tax-deferred retirement plans for employees. The Self-Employed
Individuals' Tax Retirement Act of 1962, as amended, commonly referred to as
"H.R. - 10" or "Keogh," permits self-employed individuals to establish
tax-favored retirement plans for themselves and their employees. Such retirement
plans may permit the purchase of annuity contracts in order to provide benefits
under the plans. The Contract provides death benefit options that in certain
circumstances may exceed the greater of the Purchase Payments and Contract
Value. It is possible that the presence of the death benefit could be
characterized by the IRS as an "incidental death benefit" and result in
currently taxable income to the participant. There also are limits on the amount
of incidental benefits that may be provided under pension and profit sharing
plans. If the Contract is issued with certain death benefits or benefits
provided under an optional Rider, the presence of these benefits may increase
the amount of any required minimum distributions that must be made. EMPLOYERS
INTENDING TO USE THE CONTRACT IN CONNECTION WITH SUCH PLANS SHOULD SEEK
INDEPENDENT ADVICE.
Minimum distributions to the employee under an employer's pension and profit
sharing plan qualified under section 401(a) of the Code must begin no later than
April 1 of the year following the calendar year in which the employee reaches
age 70 1/2 or, if later, retires. In the case of an employee who is a 5 percent
Owner as defined in section 416 of the Code, the required beginning date is
April 1 of the year following the calendar year in which employee reaches age
70 1/2.
DEFERRED COMPENSATION PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT
ORGANIZATIONS
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current taxes. The employees must be participants in an eligible deferred
compensation plan. Generally, a Contract purchased by a state or local
government or a tax-exempt organization will not be treated as an annuity
contract for federal income tax purposes.
A section 457 plan must satisfy several conditions, including the requirement
that it must not permit distributions prior to your separation from service
(except in the case of an unforeseen emergency).
When we make payments under your Contract, the payment is taxed as ordinary
income. Minimum distributions under a section 457 plan must begin no later than
April 1 of the year following the year in which the employee reaches age 70 1/2
or, if later, retires.
12
Legal and Regulatory Matters
There are no legal proceedings to which we, the Separate Account or the
principal underwriter is a party, or to which the assets of the Separate Account
are subject, that are likely to have a material adverse effect on:
- the Separate Account; or
- the ability of the principal underwriter to perform its contract with
the Separate Account; or
- on our ability to meet our obligations under the variable annuity
contracts funded through the Separate Account.
On June 25, 2007, John Hancock Investment Management Services, LLC (the
"Adviser") and John Hancock Distributors LLC (the "Distributor") and two of
their affiliates (collectively, the "John Hancock Affiliates") reached a
settlement with the Securities and Exchange Commission ("SEC") that resolved an
investigation of certain practices relating to the John Hancock Affiliates'
variable annuity and mutual fund operations involving directed brokerage and
revenue sharing. Under the terms of the settlement, each John Hancock Affiliate
was censured and agreed to pay a $500,000 civil penalty to the United States
Treasury. In addition, the Adviser and the Distributor agreed to pay
disgorgement of $14,838,943 and prejudgment interest of $2,001,999 to the John
Hancock Trust Portfolios that participated in the Adviser's commission recapture
program during the period from 2000 to April 2004. Collectively, all John
Hancock Affiliates agreed to pay a total disgorgement of $16,926,420 and
prejudgment interest of $2,361,460 to the entities advised or distributed by
John Hancock Affiliates. The Adviser discontinued the use of directed brokerage
in recognition of the sale of Portfolio shares in April 2004.
13
APPENDIX A: Audited Financial Statements
A-1
PART C
OTHER INFORMATION
Guide to Name Changes and Successions:
NAME CHANGES
DATE OF CHANGE OLD NAME NEW NAME
------------------ ----------------------------------------------- ----------------------------------------
October 1, 1997 FNAL Variable Account The Manufacturers Life Insurance Company
of New York Separate Account A
October 1, 1997 First North American Life Assurance Company The Manufacturers Life Insurance Company
of New York
November 1, 1997 NAWL Holding Co., Inc. Manulife-Wood Logan Holding Co., Inc.
September 24, 1999 Wood Logan Associates, Inc. Manulife Wood Logan, Inc
January 1, 2005 The Manufacturers Life Insurance Company of New John Hancock Life Insurance Company of
York Separate Account A New York Separate Account A
January 1, 2005 The Manufacturers Life Insurance Company of New John Hancock Life Insurance Company of
York New York Separate Account A.
January 1, 2005 Manulife Financial Securities LLC John Hancock Distributors LLC
January 1, 2005 Manufacturers Securities Services LLC John Hancock Investment Management
Services LLC
On September 30, 1997, Manufacturers Securities Services, LLC ("MSSLLC")
succeeded to the business of NASL Financial Services, Inc.
The following changes became effective January 1, 2002: (a) The Manufacturers
Life Insurance Company of North America ("Manulife North America") merged into
The Manufacturers Life Insurance Company (U.S.A.) with the latter becoming the
owner of all of Manulife North America's assets; (b) Manulife Financial
Securities LLC became the successor broker-dealer to Manufacturers Securities
Services, LLC.
* * * * *
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Financial Statements of the Registrant, John Hancock Life
Insurance Company of New York Separate Account A, incorporated by
reference to Exhibit 24(a)(1) to Pre-Effective Amendment No. 1
to this Registration Statement, File No. 333-172474, filed on
March 30, 2011.
(2) Financial Statements of the Depositor, John Hancock Life
Insurance Company of New York, incorporated by reference to
Exhibit 24(a)(2) to Pre-Effective Amendment No. 1 to this
Registration Statement, File No. 333-172474, filed on March 30,
2011.
(b) Exhibits
(1) (a) Resolution of the Board of Directors of First North American
Life Assurance Company establishing the FNAL Variable
Account - incorporated by reference to Exhibit (b)(1)(a) to
Form N-4, File No. 33-46217, filed on February 25, 1998.
(b) Resolution of the Board of Directors of First North American
Life Assurance Company establishing the Fixed Separate
Account - incorporated by reference to Exhibit (b)(1)(b) to
Form N-4, File No. 33-46217, filed on February 25, 1998.
(c) Resolution of the Board of Directors of First North American
Life Assurance Company establishing The Manufacturers Life
Insurance Company of New York Separate Account D and The
Manufacturers Life Insurance Company of New York Separate
Account E - incorporated by reference to Exhibit (b)(1)(c)
to Form N-4, File No. 33-46217, filed on February 25, 1998.
(2) Agreements for custody of securities and similar investments -
NOT APPLICABLE.
(3) (a) Underwriting and Distribution Agreement dated January 1,
2002, incorporated by reference to Exhibit (3)(a) to Form
N-4, File No. 033-79112, filed on April 30, 2009.
(b) General Agent and Broker-Dealer Selling Agreement,
incorporated by reference to Exhibit (3)(b) to Form N-4,
File No. 033-79112, filed on April 30, 2009.
(c) Amended and Restated Underwriting and Distribution Agreement
dated December 1, 2009, incorporated by reference to Exhibit
24(b)(3)(c) to Post-Effective Amendment No. 4 to
Registration Statement, File No. 333-146590, filed on
February 1, 2010.
(4) (a) (i) Form of Specimen Flexible Payment Individual Deferred
Variable Annuity Contract and Form of Specifications
Page (Venture-B.11-NY). [FILED HEREWITH]
(b) (i) Form of Income Plus For Life 6.11 Rider - single life
Qual (BR001Q.11-NY), incorporated by reference to
Exhibit 24(b)(4)(b)(i) to Pre-Effective Amendment No. 3
to Registration Statement, File No. 333-169797, filed
on May 17, 2011.
(ii) Form of Income Plus For Life 6.11 Rider - single life
NQ (BR001NQ.11-NY), incorporated by reference to
Exhibit 24(b)(4)(b)(ii) to Pre-Effective Amendment No.
3 to Registration Statement, File No. 333-169797, filed
on May 17, 2011.
(iii) Form of Income Plus For Life 6.11 Rider - joint life
Qual (BR002Q.11-NY), incorporated by reference to
Exhibit 24(b)(4)(b)(iii) to Pre-Effective Amendment No.
3 to Registration Statement, File No. 333-169797, filed
on May 17, 2011.
(iv) Form of Income Plus For Life 6.11 Rider - joint life NQ
(BR002NQ.11-NY), incorporated by reference to Exhibit
24(b)(4)(b)(iv) to Pre-Effective Amendment No. 3 to
Registration Statement, File No. 333-169797, filed on
May 17, 2011.
(v) Form of Annual Death Benefit Rider (BR010-R.11),
incorporated by reference to Exhibit 24(b)(4)(b)(v) to
Pre-Effective Amendment No. 3 to Registration
Statement, File No. 333-169797, filed on May 17, 2011.
(c) (i) Form of DCA Endorsement (END002.11-NY), incorporated by
reference to Exhibit 24(b)(4)(c)(ii) to Pre-Effective
Amendment No. 3 to Registration Statement, File No.
333-169797, filed on May 17, 2011.
(ii) Form of Endorsement for Section 401a Plans
(END401A.11-NY), incorporated by reference to Exhibit
24(b)(4)(c)(iii) to Pre-Effective Amendment No. 3 to
Registration Statement, File No. 333-169797, filed on
May 17, 2011.
(iii) Form of Endorsement for IRAs (ENDIRA.11-NY),
incorporated by reference to Exhibit 24(b)(4)(c)(iv) to
Pre-Effective Amendment No. 3 to Registration
Statement, File No. 333-169797, filed on May 17, 2011.
(iv) Form of Endorsement for Roth IRAs (ENDROTH.11-NY ),
incorporated by reference to Exhibit 24(b)(4)(c)(v) to
Pre-Effective Amendment No. 3 to Registration
Statement, File No. 333-169797, filed on May 17, 2011.
(v) Form of Endorsement for Simple IRAs (ENDSIMPLE.11-NY ),
incorporated by reference to Exhibit 24(b)(4)(c)(vi) to
Pre-Effective Amendment No. 3 to Registration
Statement, File No. 333-169797, filed on May 17, 2011.
(5) (a) (i) Form of Specimen Application for Flexible Purchase
Payment Individual Deferred Combination Variable
Annuity Contract. [FILED HEREWITH]
(6) (a) (i) Declaration of Intention and Charter of First North
American Life Assurance Company - incorporated by
reference to Exhibit 24(b)(6)(a)(i) to Post-Effective
Amendment No. 7 to Registrant's Registration Statement,
File No. 33-46217, filed on February 25, 1998.
(ii) Certificate of Amendment of the Declaration of
Intention and Charter of First North American Life
Assurance Company - incorporated by reference to
Exhibit 24(b)(6)(a)(ii) to Post-Effective Amendment No.
7 to Registrant's Registration Statement, File No.
33-46217, filed on February 25, 1998.
(iii) Certificate of Amendment of the Declaration of
Intention and Charter of The Manufacturers Life
Insurance Company of New York - incorporated by
reference to Exhibit 24(b)(6)(a)(iii) to Post-Effective
Amendment No. 7 to Registrant's Registration Statement,
File No. 33-46217, filed on February 25, 1998.
(iv) Certificate of Amendment of the Declaration of
Intention and Charter of John Hancock Life Insurance
Company of New York dated as of January 1, 2005
-incorporated by reference to Exhibit 24(b)(6)(a)(iv)
to Post-Effective Amendment No. 1 to Form N-4
Registration Statement, File No. 333-138846, filed on
May 1, 2007.
(v) Certificate of Amendment of the Declaration of
Intention and Charter of John Hancock Life Insurance
Company of New York dated as of August 10, 2006 -
incorporated by reference to Exhibit 24(b)(6)(a)(v) to
Post-Effective Amendment No. 1 to Registration
Statement, File No. 333-138846, filed on May 1, 2007.
(vi) Certificate of Amendment of the Declaration of
Intention and Charter of John Hancock Life Insurance
Company of New York dated as of December 17, 2009 -
incorporated by reference to Exhibit 24(b)(6)(a)(vi) to
Post Effective Amendment No. 41, to Registration
Statement, File No. 033-79112, filed on May 3, 2010.
(b) (i) By-Laws of John Hancock Life Insurance Company of New
York, as amended and restated as of July 31, 2006,
incorporated by reference to Exhibit 24(b)(6)(b)(i) to
Post-Effective Amendment No. 1, to Registration
Statement, File No. 333-138846, filed on May 1, 2007.
(ii) John Hancock Life Insurance Company of New York,
Amended and Restated By-Laws, as adopted on November
19, 2009 - incorporated by reference to Exhibit
24((b)(6)(b)(ii) to Post-Effective Amendment 41 to
Registration Statement, File No. 033-79112, filed on
May 3, 2010.
(ii) John Hancock Life Insurance Company of New York,
Amended and Restated By-Laws, as adopted on December
14, 2010 - incorporated by reference to Exhibit
24(b)(6)(b)(iii) to Pre-Effective Amendment No. 1 to
Registration Statement, File No. 333-169797, filed on
February 22, 2011.
(7) (a) Contracts of Reinsurance - NOT APPLICABLE.
(8) Other material contracts not made in the ordinary course of
business which are to be performed in whole or in part on or
after the date the registration statement is filed:
(a) Administrative Services Agreement between The Manufacturers
Life Insurance Company of New York and The Manufacturers
Life Insurance Company (U.S.A.), effective January 1, 2001,
incorporated by reference to Exhibit 24(b)(8)(a) to
Post-Effective Amendment No. 5 to Registration Statement,
File No. 333-61283, filed on April 30, 2002.
(b) Investment Services Agreement between The Manufacturers Life
Insurance Company and The Manufacturers Life Insurance
Company of New York - incorporated by reference to Exhibit
1(A)(8)(c) to pre-effective amendment no. 1 to The
Manufacturers Life Insurance Company of New York Separate
Account B Registration Statement on Form S-6, filed March
16, 1998.
(c)(i) Participation Agreement among John Hancock Life Insurance
Company (U.S.A.), John Hancock Life Insurance Company of New
York, John Hancock Life Insurance Company, John Hancock
Variable Life Insurance Company and John Hancock Trust dated
April 20, 2005. Incorporated by reference to pre-effective
amendment no. 1 file number 333-126668 filed with the
Commission on October 12, 2005.
(ii) Shareholder Information Agreement between John Hancock Life
Insurance Company (U.S.A.), John Hancock Life Insurance
Company of New York, John Hancock Life Insurance Company,
John Hancock Variable Life Insurance, and John Hancock Trust
portfolios (except American Funds Insurance Series) dated
April 16, 2007. Incorporated by reference to post-effective
amendment number 9 file number 333-85284 filed with the
Commission in April, 2007.
(9) Opinion of Counsel and consent to its use as to the legality of
the securities being registered, incorporated by reference to
Exhibit 24(b)(9) to this Registration Statement, File No.
333-172474, filed on February 28, 2011.
(10) Written consent of Ernst & Young LLP, independent registered
public accounting firm, incorporated by reference to Exhibit
24(b)(10) to Pre-Effective Amendment No. 1 to this Registration
Statement, File No. 333-172474, filed on March 30, 2011.
(11) All financial statements omitted from Item 23, Financial
Statements - NOT APPLICABLE.
(12) Agreements in consideration for providing initial capital between
or among Registrant, Depositor, Underwriter or initial contract
owners - NOT APPLICABLE.
(13) Schedules of computations - Incorporated by reference to Exhibit
(b)(13) to Post Effective Amendment No. 2 to Form N-4, File
Number 33-76162, filed on March 1, 1996.
(14) (a) Powers of Attorney for Thomas Borshoff, James R. Boyle,
Steven Finch, Ruth Ann Fleming,, James D. Gallagher, Scott
S. Hartz, Rex Schlaybaugh, Jr., and John G. Vrysen,
incorporated by reference to Exhibit 24(b)(14) to this
Registration Statement, File No. 333-172474, filed on
February 28, 2011.
(b) Power of Attorney for Paul M. Connolly. [FILED HEREWITH]
Item 25. Directors and Officers of the Depositor.
OFFICERS AND DIRECTORS OF JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
EFFECTIVE AS OF MARCH 1, 2011
NAME AND PRINCIPAL BUSINESS ADDRESS POSITION WITH DEPOSITOR
----------------------------------- -----------------------
James R. Boyle*** Chairman
James D. Gallagher* Director and President
Thomas Borshoff* Director
Paul M. Connolly* Director
Steven Finch*** Director and Executive Vice President
Ruth Ann Fleming* Director
Scott S. Hartz*** Director, Executive Vice President, and Chief
Investment Officer - U.S. Investments
Rex Schlaybaugh, Jr.* Director
John G. Vrysen* Director and Senior Vice President
Jonathan Chiel* Executive Vice President and General Counsel
- John Hancock
Marc Costantini* Executive Vice President
Peter Levitt** Executive Vice President and Treasurer
Katherine MacMillan** Executive Vice President
Stephen R. McArthur** Executive Vice President
Hugh McHaffie* Executive Vice President
Bob Diefenbacher+ Senior Vice President
Peter Gordon*** Senior Vice President
Allan Hackney* Senior Vice President and Chief Information
Officer
Gregory Mack* Senior Vice President
Ronald J. McHugh* Senior Vice President
Lynne Patterson* Senior Vice President and Chief Financial
Officer
Craig R. Raymond* Senior Vice President, Chief Actuary, and
Chief Risk Officer
Diana L. Scott* Senior Vice President
Alan R. Seghezzi*** Senior Vice President
Bruce R. Speca* Senior Vice President
Tony Teta*** Senior Vice President
Brooks Tingle*** Senior Vice President
Emanuel Alves* Vice President, Counsel, and Corporate
Secretary
John C. S. Anderson*** Vice President
Roy V. Anderson* Vice President
Arnold Bergman* Vice President
Stephen J. Blewitt*** Vice President
Robert Boyda* Vice President
John E. Brabazon*** Vice President
George H. Braun*** Vice President
Thomas Bruns* Vice President
Tyler Carr* Vice President
Robert T. Cassato* Vice President
Kevin J. Cloherty* Vice President
Brian Collins+ Vice President
Art Creel* Vice President
George Cushnie** Vice President
John J. Danello* Vice President
Willma Davis*** Vice President
Anthony J. Della Piana*** Vice President
Brent Dennis*** Vice President
Robert Donahue++ Vice President
Edward Eng** Vice President
Carol Nicholson Fulp* Vice President
Paul Gallagher+++ Vice President
Wayne A. Gates++ Vice President
Ann Gencarella*** Vice President
OFFICERS AND DIRECTORS OF JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
EFFECTIVE AS OF MARCH 1, 2011
NAME AND PRINCIPAL BUSINESS ADDRESS POSITION WITH DEPOSITOR
----------------------------------- -----------------------
Richard Harris** Vice President and Appointed Actuary
John Hatch* Vice President
Kevin Hill*** Vice President
E. Kendall Hines*** Vice President
Eugene Xavier Hodge, Jr.*** Vice President
James C. Hoodlet*** Vice President
Roy Kapoor** Vice President
Mitchell Karman*** Vice President, Chief Compliance Officer,
and Counsel
Frank Knox* Vice President, Chief Compliance Officer -
Retail Funds/Separate Accounts
David Kroach* Vice President
Jonathan Kutrubes* Vice President
Cynthia Lacasse*** Vice President
Denise Lang** Vice President
Robert Leach* Vice President
David Longfritz* Vice President
Nathaniel I. Margolis*** Vice President
John Maynard+ Vice President
Steven McCormick** Vice President
Janis K. McDonough*** Vice President
Scott A. McFetridge*** Vice President
William McPadden*** Vice President
Maureen Milet*** Vice President and Chief Compliance Officer -
Investments
Peter J. Mongeau+ Vice President
Steven Moore** Vice President
Curtis Morrison*** Vice President
Tom Mullen* Vice President
Scott Navin*** Vice President
Nina Nicolosi* Vice President
Jacques Ouimet+ Vice President
Gary M. Pelletier*** Vice President
Steven Pinover* Vice President
Krishna Ramdial** Vice President, Treasury
S. Mark Ray*** Vice President
Jill Rebman** Vice President
Mark Rizza* Vice President
Ian R. Roke* Vice President
Andrew Ross** Vice President
Thomas Samoluk* Vice President
Jonnie Smith**** Vice President
Yiji S. Starr* Vice President
Gaurav Upadhya** Vice President
Simonetta Vendittelli++ Vice President
Peter de Vries* Vice President
Karen Walsh* Vice President
Linda A. Watters* Vice President
Joseph P. Welch+ Vice President
Jeffery Whitehead* Vice President and Controller
Henry Wong*** Vice President
Randy Zipse*** Vice President
* Principal business office is 601 Congress Street, Boston, MA 02210
** Principal business office is 200 Bloor Street, Toronto, Canada M4W 1E5
*** Principal business office is 197 Clarendon Street, Boston, MA 02117
**** Principal business office is 164 Corporate Drive Portsmouth, NH 03801
+ Principal business office is 200 Berkeley Street, Boston, MA 02116
OFFICERS AND DIRECTORS OF JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
EFFECTIVE AS OF MARCH 1, 2011
++ Principal business office is 380 Stuart Street, Boston, MA 02116
+++ Principal business office is 200 Clarendon Street, Boston, MA 02116
Item 26. Persons Controlled by or Under Common Control with Depositor or
Registrant.
Registrant is a separate account of John Hancock Life Insurance Company (U.S.A.)
(the "Company"), operated as a unit investment trust. Registrant supports
certain benefits payable under the Company's variable annuity contracts by
investing assets allocated to various investment options in shares of John
Hancock Trust (the "Trust"), which is a "series" type of mutual fund registered
under the Investment Company Act of 1940 (the "Act") as an open-end management
investment company. The purchasers of variable annuity and variable life
insurance contracts, in connection with which the Trust is used, will have the
opportunity to instruct the Company with respect to the voting of the shares of
the Series Fund held by Registrant as to certain matters. Subject to the voting
instructions, the Company directly controls Registrant.
On the effective date of this Pre-Effective Amendment to the Registration
Statement, the Company and its affiliates are controlled by Manulife Financial
Corporation ("MFC"). A list of other persons controlled by MFC as of December
31, 2010 appears below:
MANULIFE FINANCIAL CORPORATION
PRINCIPAL SUBSIDIARIES - DECEMBER 31, 2010
__________________
| |
|Manulife Financial|
| Corporation |
| (Canada) |
|__________________|
|
|........................................................
| .
________|_________ _____._______
| | | |
| The Manufacturers| | John Hancock|
| Life Insurance | | Reassurance |
| Company | | Company Ltd.|
| (Canada) | | (Bermuda) |
|__________________| |_____________|
|
|
|_________________________________________________________________
| |
______________________________________________________________|______________________ |
| | | . | | |
| | | . | | |
| | | . | | |
| ___________ | ____________ | ______________ . | _______________ | ____________ |
| | | | | | | | | . | | | | | | |
| | NAL | | | Manulife | | | Manulife | . | | Manulife | |__| MLI | |
| | Resources | | | Asset | | | Insurance | . | | Holdings | | Resources | |
|___|Management | |__| Management | | | (Thailand) | . |__| (Bermuda) | | Inc. | |
| | Limited | | | (North | | | Public |... | Limited | | (Alberta) | |
| | (Canada) | | | America) | | | Company |94.7%|__| (Bermuda) | |____________| |
| |___________| | | Limited | | | Limited | | |_______________| . |
| | | (Canada) | | | (Thailand) | | . |
| | |____________| | |______________| | ...................... |
| | | | | . . |
| | | |99.9999% | . . 58.72% |
| __________ | ____________ | ______|_______ | _______________ _____.______ ____.________ |
| | | | | | | | | | | | | | | | |
| | Manulife | | | MFC Global | | | Manulife | | | Manufacturers | | Manulife | | Manulife | |
|___| Bank of | | | Fund | | | Asset | |__| P&C Limited | | Life | ____| Holdings | |
| | Canada | |__| Management | | | Management | | | (Barbados) | | Insurance | | | Berhad* | |
| | (Canada) | | | (Europe) | | | (Thailand) | | |_______________| | Company | | | (Malaysia) | |
| |__________| | | Limited(2) | | | Company | | | (Japan) | | |_____________| |
| | | (England) | | | Limited | | |____________| | |
| | |____________| | | (Thailand) | | | | |
| | | | |______________| | | | |
| | | | | | |
| __________ | _____|______ | ______________ | _______________ _____|______ | _____________ |
| | | | | | | | | | | | | | | | | |
| | Manulife | | | Manulife | | | Manulife | | | Manufacturers | | MFC Global | | | Manulife | |
|___| Canada | | | Asset | |____| (Vietnam) | |__| Life | | Investment | |____| Insurance | |
| | Ltd. | |__| Management | | | Limited | | | Reinsurance | | Management | | | Berhad | |
| | (Canada) | | | (Europe) | | | (Vietnam) | | | Limited | | (Japan) | | | (Malaysia) | |
| |__________| | | Limited | | |______________| | | (Barbados) | | Limited(3)| | |_____________| |
| | | (England) | | | | |_______________| | (Japan) | | |
| | |___________ | | | | |____________| | ______________ |
| | | | | | | | |
| | | | | | |Manulife Asset| |
| ___________ | ____________ | ______|_______ | _______________ |____| Management | |
| | | | | | | | | | | | | (Malaysia) | |
| | First | | | Berkshire | | | Manulife | | | Manulife | | Sdn Bhd | |
| | North | | | Insurance | | | Asset | | | International | | (Malaysia) | |
|___| American | |__| Services | | | Management | |__| Holdings | |______________| |
| | Insurance | | | Inc. | | | (Vietnam) | | Limited | |
| | Company | | | (Ontario) | | | Company | | (Bermuda) | |
| | (Canada) | | |____________| | | Ltd. | |_______________| |
| |___________| | | | | (Vietnam) | | |
| | | | |______________| |_____________________ |
| | | | | | |
| ___________ | _____|______ | _____________ ______|________ ______|______ |
| | | | | | | | | | | | | |
| | FNA | | | JH | | | Manulife | | Manulife | | Manulife | |
|___| Financial | | | Investments| |____| (Singapore) | |(International)| | Asset | |
| | Inc. | | | (Delaware) | | | Pte. Ltd. | | Limited | | Management | |
| | (Canada) | | | LLC | | | (Singapore) | | (Bermuda) | |International| |
| |___________| | | (Delaware) | | |______________| |_______________| | Holdings | |
| | | |____________| | | | Limited | |
| | | | | | (Barbados) | |
| | | | | 51% |_____________| |
| | | | | | |
| _____|_____ | ____________ | ______________ ______|________ _____|_______ |
| | | | | | | | | | | | | |
| | Manulife | | | Manulife | | | Manulife | | Manulife- | | Manulife | |
| | Asset | | | Securities | | | Asset | | Sinochem | | Asset | |
| | Management| |__| Investment | | | Management | | Life | | Management | |
| | Limited | | | Services | |____| (Singapore) | | Insurance Co. | | (Hong Kong)| |
| | (Ontario) | | | Inc. | | | Pte. | | Ltd. (China) | | Limited | |
| |___________| | | (Canada) | | | Ltd. | |_______________| | (Hong Kong)| |
| | |____________| | | (Singapore) | |_____________| |
| | | |______________| | |
| | | | |
| ___________ | ____________ | ______________ _____|_______ |
| | | | | | | | | | | |
| | EIS | | | Manulife | | | The | | Manulife | |
| | Services | |__| Securities | | | Manufacturers| | Asset | |
|___| (Bermuda) | |Incorporated| |____| Life | | Management | |
| Limited | | (Ontario) | | | Insurance Co.| |(Taiwan) Co.,| |
| (Bermuda) | |____________| | | (Phils.), | | Ltd. | |
|___________| | | Inc. | | (Taiwan) | |
| | (Philippines)| |_____________| |
| |______________| |
| |
| _______________ |
| | | |
| | PT Asuransi | |
|____| Jiwa Manulife | |
95%| Indonesia (1)| |
| (Indonesia) | |
|_______________| |
. |
. |
_______._______ |
| | |
| PT Manulife | |
| Aset | |
| Manajemen | |
| Indonesia | |
| (Indonesia) | |
|_______________| |
|
|
|
|
|
_________________________________________________________________________________________|
|
|
_______|______
| |
| Manulife |
| Holdings |
| (Alberta) |
| Limited |
| (Alberta) |
|______________|
|
|
______|_______
| |
| John Hancock |
| Holdings |
| (Delaware) |
| LLC |
| (Delaware) |
|______________|
|
|
______|_______
| |
| The |
| Manufacturers|
| Investment |
| Corporation |
| (Michigan) |
|______________|
|
|____________________________________________________________________________
______|_______ ____|______ _______|_________
| | | | | |
| John Hancock | | Manulife | | John Hancock |
| Life | |Reinsurance| |Insurance Agency,|
_____| Insurance |_______________________ | Limited | | Inc. |
| | Company | | | (Bermuda) | | (Delaware) |
| | (U.S.A.) | | |___________| |_________________|
| | (Michigan) | | |
| |______________| | |
| | _____|_____
| | | |
| _______________ ________|_______ | Manulife |
| | | | | |Reinsurance|
| | John Hancock | | John Hancock | | (Bermuda) |
| | Life & Health | ______|Subsidiaries LLC| | Limited |
|_____| Insurance | | | (Delaware) | | (Bermuda) |
| | Company | | |________________| |___________|
| |(Massachusetts)| |
| |_______________| |
| |
| |
| ______________ | ________________
| | | | | |
| | John Hancock | | | John Hancock |
|_____| Distributors | |______| Financial |
| | LLC | | | Network, Inc. |
| | (Delaware) | | | (Massachusetts)|
| |______________| | |________________|
| |
| |
| ______________ | ________________
| | | | | |
| | John Hancock | | | Hancock Natural|
| | Life | |______| Resource Group,|
|_____| Insurance | | | Inc. (Delaware)|
| | Company | | |________________|
| | of New York | |
| | (New York) | |
| |______________| |
| | |
| | 38% |
| ______|_______ | ________________
| | | | | |
| | John Hancock | | | Declaration |
|_____| Investment | |______| Management & |
57% | Management | | | Research LLC |
| Services, LLC| | | (Delaware) |
| (Delaware) | | |________________|
|______________| |
/.\ |
. | ________________
. | | |
. | | The Berkeley |
. |______| Financial |
. | Group, LLC |
.......................| (Delaware) |
5% |________________|
.
.
_______.________
| |
| John Hancock |
| Advisers, LLC |
| (Delaware) |
|________________|
.
.
_______.________
| |
| John Hancock |
| Funds, LLC |
| (Delaware) |
|________________|
........ Indirect Control
_______ Direct Control
(1) The remaining 5% equity of PT Asuransi Jiwa Manulife Indonesia is
indirectly held by The Manufacturers Life Insurance Company
(2) MFC Global Fund Management (Europe) Limited changed its name to Manulife
Asset Management (Europe) Holdings Limited effective January 6, 2011.
(3) MFC Global Investment Management (Japan) Limited changed its name to
Manulife Asset Management (Japan) Limited effective January 11, 2011.
This chart displays voting shares. All entities are 100% controlled unless
otherwise indicated.
Item 27. Number of Contract Owners.
As of APRIL 30, 2011, there were 0 qualified and 0 non-qualified contracts of
the series offered hereby outstanding.
Item 28. Indemnification.
Article 10 of the Charter of the Company provides as follows:
TENTH: No director of the Corporation shall be personally liable to the
Corporation or any of its shareholders for damages for any breach of duty as a
director; provided, however, the foregoing provision shall not eliminate or
limit (i) the liability of a director if a judgment or other final adjudication
adverse to such director established his or her such acts or omissions were in
bad faith or involved intentional misconduct or were acts or omissions (a) which
he or she knew or reasonably should have known violated the New York Insurance
Law or (b) which violated a specific standard of care imposed on directors
directly, and not by reference, by a provision of the New York Insurance Law (or
any regulations promulgated thereunder) or (c) which constituted a knowing
violation of any other law, or establishes that the director personally gained
in fact a financial profit or other advantage to which the director was not
legally entitled or (ii) the liability of a director for any act or omission
prior to the adoption of this Article by the shareholders of the Corporation.
Any repeal or modification of this Article by the shareholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Corporation existing
at the time of such repeal or modification.
Article VII of the By-laws of the Company provides as follows:
Section VII.1. Indemnification of Directors and Officers. The Corporation may
indemnify any person made, or threatened to be made, a party to an action by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he or she, his or her testator, testatrix or intestate, is or was
a director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of any other corporation of any type or
kind, domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him or her in connection with the defense or settlement of such
action, or in connection with an appeal therein, if such director or officer
acted, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interests of the Corporation, except that no indemnification under this
Section shall be made in respect of (1) a threatened action, or a pending action
which is settled or is otherwise disposed of, or (2) any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
Corporation, unless and only to the extent that the court in which the action
was brought, or , if no action was brought, any court of competent jurisdiction,
determines upon application that, in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for such portion of
the settlement amount and expenses as the court deems proper.
The Corporation may indemnify any person made, or threatened to be made, a party
to an action or proceeding (other than one by or in the right of the Corporation
to procure a judgment in its favor), whether civil or criminal, including an
action by or in the right of any other corporation of any type or kind, domestic
or foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any director or officer of the Corporation served in any
capacity at the request of the Corporation, by reason of the fact that he or
she, his or her testator, testatrix or intestate, was a director or officer of
the Corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he or she reasonably believed to be in, or, in the
case of service for any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise, not opposed to, the best
interests of the Corporation and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his or her conduct was
unlawful.
The termination of any such civil or criminal action or proceeding by judgment,
settlement, conviction or upon a plea of nolo contendere, of its equivalent,
shall not in itself create a presumption that any such director or officer did
not act, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interest of the Corporation or that he or she had reasonable cause to
believe that his or her conduct was unlawful.
Notwithstanding the foregoing, Registrant hereby makes the following undertaking
pursuant to Rule 484 under the Securities Act of 1933:
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 29. Principal Underwriters.
(a) Set forth below is information concerning other investment companies
for which John Hancock Distributors, LLC ("JHD LLC"), the principal
underwriter of the contracts, acts as investment adviser or principal
underwriter.
NAME OF INVESTMENT COMPANY CAPACITY IN WHICH ACTING
------------------------------------------------------------------ ------------------------
John Hancock Life Insurance Company (U.S.A.) Separate Account H Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account A Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account N Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account I Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account L Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account M Principal Underwriter
John Hancock Life Insurance Company of New York Separate Account A Principal Underwriter
John Hancock Life Insurance Company of New York Separate Account B Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account Q Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account W Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account X Principal Underwriter
John Hancock Variable Life Account UV Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account R Principal Underwriter
John Hancock Life Insurance Company (U.S.A.) Separate Account T Principal Underwriter
John Hancock Variable Life Account S Principal Underwriter
John Hancock Variable Life Account U Principal Underwriter
John Hancock Variable Life Account V Principal Underwriter
(b) John Hancock Life Insurance Company (U.S.A.) is the sole member of
John Hancock Distributors LLC (JHD LLC). The management of JHD LLC is
vested in its board of managers (consisting of Edward Eng**, Steve
Finch***, Lynne Patterson*, Christopher M. Walker**, and Karen Walsh*)
who have authority to act on behalf of JHD LLC.
* Principal business office is 601 Congress Street, Boston, MA 02210
** Principal business office is 200 Bloor Street, Toronto, Canada M4W 1E5
*** Principal business office is 197 Clarendon St, Boston, MA 02116
(c) None.
Item 30. Location of Accounts and Records.
All books and records are maintained at 100 Summit Lake Drive, Second Floor,
Valhalla, New York 10595.
Item 31. Management Services.
The Company has entered into an Administrative Services Agreement with The
Manufacturers Life Insurance Company ("Manulife"). This Agreement provides that
under the general supervision of the Board of Directors of the Company, and
subject to initiation, preparation and verification by the Chief Administrative
Officer of the Company, Manulife shall provide accounting services related to
the provision of a payroll support system, general ledger, accounts payable, tax
and auditing services.
Item 32. Undertakings.
(a) Representation of Insurer pursuant to Section 26 of the Investment
Company Act of 1940.
John Hancock Life Insurance Company of New York (the "Company") hereby
represents that the fees and charges deducted under the Contracts
issued pursuant to this registration statement, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected
to be incurred and the risks assumed by the Company.
(b) Representation of Registrant Pursuant to Section 403(b) of the
Internal Revenue Code of 1986, as amended
The Company is relying on a no-action letter issued in connection with
funding vehicles for retirement plans meeting the requirements of
Section 403(b) of the Internal Revenue Code of 1986, as amended, on
November 28, 1988, SEC Reference No. IP-6-88, and is complying with
the provisions of paragraphs 1-4 of such no action letter.
(c) Undertakings Pursuant to Item 32 of Form N-4
(1) The Depositor and Registrant will file a post-effective amendment
to this registration statement as frequently as is necessary to
insure that the audited financial statements in the registration
statement are never longer than 16 months old for so long as
payments under the variable annuity contracts may be accepted;
(2) The Depositor and Registrant will include either (1) as part of
any application to purchase a contract offered by the prospectus,
a space that an applicant can check to request a Statement of
Additional Information, or (2) a post card or similar
communication affixed to or included in the prospectus that the
applicant can remove to send for a Statement of Additional
Information; and
(3) The Depositor and Registrant will deliver any Statement of
Additional Information and any financial statements required to
be made available under this form promptly upon written or oral
request.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant and the Depositor have caused
this Pre-Effective Amendment to the Registration Statement to be signed on their
behalf in the City of Boston, Massachusetts, on this 17th day of May, 2011.
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT A
(Registrant)
By: JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
(Depositor)
By: /s/ James D. Gallagher
-----------------------------------------------
James D. Gallagher
Director and President
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ James D. Gallagher
-----------------------------------------------
James D. Gallagher
Director and President
SIGNATURES
As required by the Securities Act of 1933, this Pre-Effective Amendment to
the Registration Statement has been signed by the following persons in their
capacities with the Depositor on this 17th day of May, 2011.
Signature Title
------------------------------------- -------------------------------------------------
/s/ James D. Gallagher Director and President
------------------------------------- (Principal Executive Officer)
James D. Gallagher
/s/ Lynne Patterson Senior Vice President and Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Lynne Patterson
/s/ Jeffery J. Whitehead Vice President and Controller
------------------------------------- (Principal Accounting Officer)
Jeffery J. Whitehead
* Chairman
-------------------------------------
James R. Boyle
* Director
-------------------------------------
Thomas Borshoff
* Director
-------------------------------------
Paul M. Connolly
* Director
-------------------------------------
Steven Finch
* Director
-------------------------------------
Ruth Ann Fleming
* Director
-------------------------------------
Scott S. Hartz
* Director
-------------------------------------
Rex Schlaybaugh, Jr.
* Director
-------------------------------------
John G. Vrysen
*/s/ Thomas J. Loftus Senior Counsel - Annuities
-------------------------------------
Thomas J. Loftus
Pursuant to Power of Attorney
EXHIBIT INDEX
ITEM NO. DESCRIPTION
-------- --------------------------------------------------------------
24(b)(4)(a)(i) Form of Specimen Flexible Payment Individual Deferred Variable
Annuity Contract and Form of Specifications Page
24(b)(5)(a)(i) Form of Specimen Application for Flexible Purchase Payment
Individual Deferred Combination Variable Annuity
Contract (APPVENL11)
24(b)(14)(b) Power of Attorney for Paul M. Connolly
EX-99.24(B)(4)(A)(I)
2
b86614a1exv99w24xbyx4yxayxiy.txt
FORM OF SPECIFICATIONS FLEXIBLE PAYMENT INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT AND FORM OF SPECIFICATIONS PAGE
Exhibit 24(b)(4)(a)(i)
(JOHN HANCOCK(R) LOGO) JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE: [100 Summit Lake Drive, 2nd Floor
Valhalla, NY 10595]
THIS IS A LEGAL CONTRACT - READ IT CAREFULLY.
This Contract is issued in consideration of the Payments. John Hancock Life
Insurance Company of New York, a stock company, agrees to pay the benefits of
this Contract in accordance with its terms.
VARIABLE ACCOUNT PROVISIONS
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE, MAY INCREASE OR
DECREASE IN ACCORDANCE WITH THE FLUCTUATIONS IN THE INVESTMENT RESULTS, AS
APPLICABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. DETAILS OF THE VARIABLE
ACCOUNT PROVISIONS BEGIN ON PAGE 6.
The smallest annual rate of investment return which is required to be earned on
the assets of the separate account so that the dollar amount of variable annuity
payments will not decrease is [2.73%]. Explicit annual charges against the
assets of the separate account are as follows:
Contract Asset Fee Charge: Not greater than [1.70%]
RIGHT TO REVIEW
You may cancel the Contract by returning it to our Annuities Service Center or
the registered representative who sold it to you at any time within [10] days
after receipt of the Contract. Within 7 days of receipt of the Contract by us,
we will pay the Contract Value computed at the end of the Business Day on which
the Contract is delivered to us plus the sum of all fees and charges deducted
from the gross Payments to the Owner.
When the Contract is issued as an individual retirement annuity, during the
first 7 days of this [10] day period, we will return the greater of (i) Contract
Value computed at the end of the Business Day on which the Contract is delivered
to us plus the sum of all fees and charges deducted from the gross Payments or
(ii) sum of all Payments less any Withdrawals. If you return the Contract to us
after the first 7 days and before the [10]-day period has elapsed, we will
refund an amount determined as described in the paragraph above.
SIGNED FOR THE COMPANY at its Main Administration Office in Boston,
Massachusetts, on the Contract Date.
/s/ James D. Gallagher /s/ Emanuel Alves
[James D. Gallagher, President] [Emanuel Alves, Secretary]
INDIVIDUAL FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY
Variable Accumulation prior to Annuity Commencement Date
Variable and Fixed Annuity Options
Death Benefit Proceeds Payable prior to Annuity Commencement Date
Withdrawal Charge Waiver Benefit
Non-Participating
DOLLAR COST AVERAGING (DCA) ACCOUNT OPTIONS MAY NOT BE AVAILABLE ON THE ISSUE
DATE. REFER TO THE AVAILABLE INVESTMENT OPTIONS ON THE SPECIFICATIONS PAGES FOR
DETAILS.
ANNUITIES SERVICE CENTER:
[P.O. Box 9506 Portsmouth, NH 03802-9506] [1-800-551-2078] [www.jhannuitiesnew
york.com]
OVERNIGHT MAILING ADDRESS:
[164 Corporate Drive Portsmouth, NH 03801-6815]
VENTURE-L.11-NY SAMPLE
Table of Contents
Specifications Pages ..................................................... S.1
Part 1 - Definitions ..................................................... 1
Part 2 - Parties to the Contract ......................................... 4
Part 3 - Payments ........................................................ 5
Part 4 - Fees And Deductions ............................................. 6
Part 5 - Variable Account Provisions ..................................... 6
Part 6 - Transfers ....................................................... 8
Part 7 - Withdrawal Provisions ........................................... 9
Part 8 - Death Benefits .................................................. 11
Part 9 - Contract Maturity ............................................... 13
Part 10 - Annuity Payments ............................................... 13
Part 11 - Annuity Options ................................................ 15
Part 12 - General Provisions ............................................. 15
Part 13 - Contract Termination ........................................... 17
INTRODUCTION
This is an individual flexible payment deferred variable annuity contract. This
Contract provides that, prior to the Annuity Commencement Date, the Contract
Value will accumulate on a variable basis. You allocate Payments among one or
more Investment Options. The initial Investment Options are identified on the
Specifications Pages. The Contract Value will vary with the investment
performance of your Investment Account. Subject to the provisions of the
Contract, you may take withdrawals and transfer amounts among the Investment
Options.
After the Annuity Commencement Date, Annuity Payments may be either fixed or
variable, or a combination of fixed and variable. If you select Annuity Payments
on a variable basis, the payment amount will vary with the investment
performance of the Variable Account.
If the Owner (Annuitant if the Owner is not an individual) dies while this
Contract is in effect prior to the Annuity Commencement Date, we will pay a
Death Benefit to the Beneficiary upon receipt of all required claim forms and
proof of death of the Owner at the Annuities Service Center.
VENTURE-L.11-NY SAMPLE
Specifications Page
TYPE OF CONTRACT: [Qualified] CONTRACT DATE: [06/15/2011]
CONTRACT NUMBER: [000000005] ISSUE STATE: NY
OWNER: [John X. Doe] OWNER'S AGE & SEX: [55] [Male]
ANNUITANT: [John X. Doe] ANNUITANT'S AGE & SEX: [55] [Male]
[CO-OWNER:] [ ] [CO-OWNER'S AGE & SEX:] [ ] [ ]
[CO-ANNUITANT:] [ ] [CO-ANNUITANT'S AGE & SEX:] [ ] [ ]
PLAN [VENTURE 4 Series]
FEES AND CHARGES
CONTRACT ASSET FEE [1.70%]
ANNUAL CONTRACT FEE Electronic-Delivery of Financial
Owner Elects Electronic Delivery of Transaction Confirmations is
Financial Transaction Confirmations Not Elected by Owner
------------------------------------------ ---------------------------------
[$0] [$50]
[RIDER FEE(S) See Optional Riders section on page S.[4]]
PAYMENT LIMITS
PAYMENT LIMITS - Minimum Additional Payment Amount:
[$30]
- Total Additional Payments: [$100,000]
- Maximum Amount: [$1,000,000]
VENTURE-L.11-NY S.1 SAMPLE
LIMITS--TRANSFERS AND AMOUNT OF PARTIAL WITHDRAWALS
TRANSFER CHARGES AND LIMITATIONS-- - Minimum Transfer Amount: $300
BEFORE ANNUITY COMMENCEMENT
DATE - Minimum Investment Account Value:
$100
- Number of Transfers Per Contract
Year: two per month
- Transfer Charge: the lesser of $25 or
2% of the amount of each transfer in
excess of 12 per Contract Year
TRANSFER LIMITATIONS - ON OR AFTER - Number of Transfers Per Contract
ANNUITY COMMENCEMENT DATE Year: 4
LIMITATIONS ON AMOUNT OF - Minimum Amount of Partial Withdrawal:
PARTIAL WITHDRAWALS [$300]
- Minimum Investment Account Balance:
$100
- Minimum Remaining Contract Value:
$1,000
WITHDRAWALS CHARGES
TABLE OF WITHDRAWAL CHARGES Number of Complete Years Withdrawal Charge
Payment has been in Contract Percentage
---------------------------- -----------------
0 8%
1 7%
2 6%
3 5%
4+ 0%
[Withdrawal Charges will be waived for any
contract issued to an employee of the
Company.]
INITIAL ALLOCATION OF NET PAYMENT (See Following Page for All Available
Investment Options)
INITIAL PAYMENT [$100,000.00]
[DCA ACCOUNT OPTIONS:] [INITIAL INTEREST RATE] [INITIAL GUARANTEE PERIOD EXPIRES]
[6 Month DCA Account] [25.00%] [1.00%] [12/15/2011]
[THE INTEREST RATE FOR THE DCA ACCOUNT OPTION ABOVE MAY CONTAIN AN ENHANCEMENT
THAT MAY NOT BE PROVIDED IN SUBSEQUENT GUARANTEE PERIODS.]
VARIABLE INVESTMENT OPTIONS:
[Lifestyle Balanced PS] [75.00%]
TOTAL 100.00%
VENTURE-L.11-NY S.2 SAMPLE
AVAILABLE INVESTMENT OPTIONS
VARIABLE ACCOUNT: JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK SEPARATE
ACCOUNT A
VARIABLE INVESTMENT OPTIONS:
[Lifestyle Balanced]
[Lifestyle Balanced PS]
[Lifestyle Conservative]
[Lifestyle Conservative PS]
[Lifestyle Growth]
[Lifestyle Growth PS]
[Lifestyle Moderate]
[Lifestyle Moderate PS]
[Ultra Short Term Bond]
DOLLAR COST AVERAGING (DCA) ACCOUNT INVESTMENT OPTIONS:
6 Month DCA Account
[6 Month DCA Not Currently Available] NO6MODCA03
12 Month DCA Account
[12 Month DCA Not Currently Available] NO12MODCA03
VENTURE-L.11-NY S.3 SAMPLE
OPTIONAL RIDERS
[ENHANCED DEATH BENEFIT RIDER: MARKETING NAME]
[Rider Date:] [06/15/2011]
[Rider Fee Percentage:] [0.30%]
[Total Asset Fee Percentage [2.00%]
(Contract Asset Fee from Pg S.1 +
Rider Fee Percentage):]
[GUARANTEED MINIMUM WITHDRAWAL BENEFIT RIDER: MARKETING NAME]
[Rider Date:] [06/15/2011]
[Maximum Rider Fee Percentage:] [1.50%]
ANNUITY BENEFITS
MATURITY DATE: [10/25/2046]
ANNUITY OPTION: Life 10-Year Certain
ANNUITY PAYMENTS -- GENERAL The rates for Annuity Payments are
INFORMATION determined based on:
- Mortality Table: Annuity 2000 Table
projected from 2002 to date of
annuitization at Scale G, 100% female
blend
- Fixed Annuity Payment Interest Rate:
1.00% interest per year
- Variable Annuity Payment Assumed
Interest Rate: 1.00%
The amount of each Annuity Payment will
depend upon the age of the Annuitant, the
Co-Annuitant, if any, or other payee.
VENTURE-L.11-NY S.4 SAMPLE
AMOUNT OF FIRST MONTHLY PAYMENT
PER $1000 OF CONTRACT VALUE
FOR AN ANNUITANT BORN IN 1952
OPTION 1: LIFE ANNUITY
Option 1(A): Non-Refund Option 1(B): 10 Year Certain
----------------------- ----------------------------
Age of Age of
Annuitant Annuitant
--------- ---------
55 N/A 55 N/A
60 3.08 60 3.06
65 3.50 65 3.47
70 4.07 70 3.99
75 4.85 75 4.66
80 5.91 80 5.46
85 7.40 85 6.35
OPTION 2: JOINT AND SURVIVOR LIFE ANNUITY
Option 2(A): Non-Refund
Age of Co-Annuitant
----------------------------------------------
Age of 10 Years 5 Years Same 5 Years 10 Years
Annuitant Younger Younger Age Older Older
--------- -------- ------- ---- ------- --------
55 N/A N/A N/A N/A N/A
60 2.29 2.46 2.62 2.77 2.88
65 2.51 2.72 2.93 3.11 3.26
70 2.78 3.05 3.33 3.57 3.77
75 3.13 3.49 3.86 4.19 4.45
80 3.59 4.08 4.58 5.03 5.38
85 4.22 4.88 5.57 6.17 6.62
Option 2(B): 10 Year Certain
Age of Co-Annuitant
----------------------------------------------
Age of 10 Years 5 Years Same 5 Years 10 Years
Annuitant Younger Younger Age Older Older
--------- -------- ------- ---- ------- --------
55 N/A N/A N/A N/A N/A
60 2.29 2.46 2.62 2.77 2.88
65 2.51 2.72 2.93 3.11 3.26
70 2.78 3.05 3.32 3.57 3.75
75 3.13 3.49 3.85 4.16 4.40
80 3.58 4.06 4.53 4.93 5.20
85 4.18 4.80 5.38 5.83 6.12
Monthly installments for ages not shown and other years of birth will be
furnished on request.
VENTURE-B.11-NY S.5 SAMPLE
BENEFICIARY INFORMATION
[Jane Doe]
DISCLOSURES
PURSUANT TO SECTION 3 OF THE FEDERAL DEFENSE OF MARRIAGE ACT ("DOMA"), SAME
SEX-MARRIAGES, DOMESTIC PARTNERSHIPS AND CIVIL UNIONS CURRENTLY ARE NOT
RECOGNIZED FOR PURPOSES OF FEDERAL LAW. THEREFORE, THE FAVORABLE INCOME-DEFERRAL
OPTIONS AFFORDED BY FEDERAL TAX LAW TO AN OPPOSITE-SEX SPOUSE UNDER INTERNAL
REVENUE CODE SECTIONS 72(S) AND 401(A)(9) ARE CURRENTLY NOT AVAILABLE TO A
SAME-SEX SPOUSE, DOMESTIC PARTNER OR CIVIL UNION PARTNER. SAME-SEX SPOUSES,
DOMESTIC PARTNERS OR CIVIL UNION PARTNERS WHO OWN OR ARE CONSIDERING THE
PURCHASE OF ANNUITY PRODUCTS THAT PROVIDE BENEFITS BASED UPON STATUS AS A SPOUSE
SHOULD CONSULT A TAX ADVISOR. TO THE EXTENT THAT AN ANNUITY CONTRACT ACCORDS TO
SPOUSES OTHER RIGHTS OR BENEFITS THAT ARE NOT AFFECTED BY DOMA, SAME-SEX
SPOUSES, DOMESTIC PARTNERS AND CIVIL UNION PARTNERS RECOGNIZED BY THE ISSUE
STATE REMAIN ENTITLED TO SUCH RIGHTS OR BENEFITS TO THE SAME EXTENT AS ANY
ANNUITY HOLDER'S SPOUSE.
[THIS PLAN IS INTENDED TO QUALIFY UNDER THE INTERNAL REVENUE CODE FOR
TAX-FAVORED STATUS. LANGUAGE CONTAINED IN THIS CONTRACT REFERRING TO FEDERAL TAX
STATUS OR RULES IS INFORMATIONAL AND INSTRUCTIONAL. PLEASE SEEK THE ADVICE OF
YOUR OWN TAX ADVISOR REGARDING YOUR INDIVIDUAL TAX TREATMENT.]
VENTURE-L.11-NY S.6 SAMPLE
PART 1 DEFINITIONS
WE AND YOU "We", "us" and "our" means the Company. "You" or "your"
means the Owner of this Contract.
ACCUMULATION UNIT A unit of measure that is used to calculate the value of
the Variable Account of this Contract before the Annuity
Commencement Date.
ANNUITANT Any individual person or persons whose life is used to
determine the duration of Annuity Payments involving life
contingencies. The Annuitant is as designated on the
Specifications Pages, unless changed.
ANNUITIES SERVICE CENTER Any office designated by us for the receipt of Payments
and processing of Owner requests.
ANNUITY COMMENCEMENT DATE The date Annuity Payments begin. This date may not be
earlier than six months following the Contract Date or
later than the Maturity Date. Annuity Payments may not be
scheduled under the Contract to begin earlier than 12
months from the Contract Date.
ANNUITY OPTION The method selected by you for Annuity Payments made by
us.
ANNUITY PAYMENT(S) Payment(s) by us to you, in accordance with the Annuity
Option elected under the terms of this Contract.
ANNUITY UNIT A unit of measure that is used after the Annuity
Commencement Date to calculate Variable Annuity payments.
BENEFICIARY The person, persons or entity to whom certain benefits are
payable following the death of an Owner, or in certain
circumstances, an Annuitant. For purposes of section 72(s)
of the Internal Revenue code, the "designated beneficiary"
under the Contract shall be the individual who is entitled
to receive the amounts payable on death of an Owner, or if
any Owner is not an individual, on any change in, or death
of, of an Annuitant
BUSINESS DAY Any date on which the New York Stock Exchange is open for
business and the net asset value of a Portfolio is
determined.
COMPANY The insurance company named on the first page of this
Contract (or any successor insurance company named by
endorsement to this Contract) that will pay benefits in
accordance with this Contract.
CONTRACT ANNIVERSARY The annual anniversary of the Contract beginning twelve
months from the Contract Date and each year thereafter.
CONTRACT DATE The date of issue of this Contract as designated on the
Specifications Pages.
CONTRACT VALUE The total of your Investment Account Values.
CONTRACT YEAR The period of time measured twelve consecutive months from
the Contract Date or any Contract Anniversary thereafter.
CONTINGENT BENEFICIARY The person, persons or entity who becomes entitled to
receive the Contract proceeds if all Beneficiaries die
before the Owner dies.
VENTURE-L.11-NY 1 SAMPLE
ENDORSEMENT An Endorsement modifies the contract to which it is
attached. Endorsements must be signed by an officer of the
Company in order to be effective.
FIXED ANNUITY An Annuity Option with payments which are predetermined
and guaranteed as to dollar amount.
GOOD ORDER The standard we apply when we determine whether an
instruction is satisfactory. An instruction will be
considered in Good Order if it is received at our
Annuities Service Center: (a) in a manner that is
satisfactory to us such that it is sufficiently complete
and clear that we do not need to exercise any discretion
to follow such instruction and complies with all relevant
laws and regulations and Company requirements; (b) on
specific forms, or by other means we then permit (such as
via telephone or electronic submission); and/or (c) with
any signatures and dates we may require. We will notify
you if an instruction is not in Good Order.
INTERNAL REVENUE CODE (IRC) The Internal Revenue Code of 1986, as amended from time to
time, and any successor statute of similar purpose.
INVESTMENT ACCOUNT An account established by us which represents your
interest in an Investment Option prior to the Annuity
Commencement Date.
INVESTMENT ACCOUNT VALUE The value of your investment in an Investment Account.
INVESTMENT OPTIONS The Subaccount(s) of the Variable Account. The Investment
Options available under this Contract at issue are shown
on the Specifications Pages.
MATURITY DATE The latest date on which annuity benefits may commence. It
is the date listed on the Specifications Pages, unless
changed. Any extension of the maximum Maturity Date beyond
age 90 of the oldest Annuitant or the 10th Conract Year
will be subject to the laws and regulations then in effect
and our prior approval.
NET PAYMENT The Payment less the amount of premium tax, if any,
deducted from the Payment.
NET SURRENDER VALUE The Surrender Value less any amount withheld by us for
income taxes.
NON-QUALIFIED CONTRACTS Contracts which are not issued under Qualified Plans.
OWNER The person, persons or entity entitled to the ownership
rights under this Contract. The Owner is as designated on
the Specifications Pages, unless changed.
PORTFOLIO The investment choices available to the Variable Account.
PAYMENT An amount paid to us by you as consideration for the
benefits provided by this Contract.
QUALIFIED CONTRACTS Contracts issued under Qualified Plans.
QUALIFIED PLANS Retirement plans which receive favorable tax treatment
under sections 401, 403, 408 or 457, of the Internal
Revenue Code of 1986, as amended.
RIDER A rider provides an optional benefit, which may result in
an additional charge to the Contract. A rider supplements
the contract to which it is attached. Riders must be
signed by an officer of the Company in order to be
effective.
VENTURE-L.11-NY 2 SAMPLE
SEPARATE ACCOUNT A segregated account of the Company that is not commingled
with our general assets and obligations.
SUBACCOUNT(S) A division of the Variable Account. Each Subaccount is
invested in shares of a different Portfolio.
SURRENDER VALUE The Contract Value on any Valuation Date, less, if
applicable, any contract fees, any rider charges, any
deduction for premium taxes or similar taxes, and any
Withdrawal Charge.
VALUATION PERIOD Any period from one Business Day to the next, measured
from the time on each such day that the net asset value of
each Portfolio is determined.
VARIABLE ACCOUNT The Company's Separate Account as shown on the
Specifications Pages.
VARIABLE ANNUITY An Annuity Option with payments which: (1) are not
predetermined or guaranteed as to dollar amount; and (2)
vary in relation to the investment experience of one or
more specified variable Subaccounts.
WITHDRAWAL AMOUNT The amount deducted from the Contract Value when you take
a withdrawal. This amount is the total of the amount paid
to you plus the following, if applicable: any contract
fees, any rider charges, any deduction for premium taxes
or similar taxes, any amount for income taxes resulting
from the withdrawal, and any Withdrawal Charges. The
Withdrawal Amount may not exceed the Contract Value.
WRITTEN REQUEST A notice provided in a form acceptable to Us based on the
type of request and received in Good Order at our
Annuities Service Center.
VENTURE-L.11-NY 3 SAMPLE
PART 2 PARTIES TO THE CONTRACT
OWNER Before the Annuity Commencement Date, the Owner of this
Contract shall be the person, persons or entity designated
on the Specifications Pages or the latest change filed
with us. A co-Owner is not permitted under this Contract
if any Owner is an entity. On the Annuity Commencement
Date the Annuitant will become the Owner of this Contract,
unless the Owner is a trust or custodian. If amounts
become payable to the Beneficiary under this Contract, the
Beneficiary becomes the Owner of this Contract. Unless
indicated otherwise, references to the Owner will also
include the co-Owner.
ANNUITANT The Annuitant is the person designated as such on the
Specifications Pages or the latest change filed with us.
If you name more than one Annuitant, the second Annuitant
is referred to as the co-Annuitant. Unless indicated
otherwise, references to the Annuitant will also include
the co-Annuitant.
BENEFICIARY The Beneficiary is as designated on the Specifications
Pages, unless changed. However, if there is a surviving
Owner, that person will be treated as the Beneficiary. If
no such Beneficiary is living, the Beneficiary is the
Contingent Beneficiary. If no Beneficiary or Contingent
Beneficiary is living, the Beneficiary is the estate of
the deceased Owner.
CHANGE OF OWNER, ANNUITANT, Subject to the rights of an irrevocable Beneficiary, you
BENEFICIARY may change the Owner, Annuitant, or Beneficiary by Written
Request. Any change will take effect on the date the
request is signed. Any change of Owner or Annuitant is
subject to our issue age limitations based on age at the
date of the change. The Annuitant may not be changed after
the Annuity Commencement Date. You need not send us the
Contract unless we request it. We will not be liable for
any payments or actions we take before the Written Request
is received.
The addition of any Owner may result in the resetting of
the Guaranteed Minimum Death Benefit to an amount equal
to the Contract Value as of the date of such change. For
purposes of subsequent calculations of the Guaranteed
Minimum Death Benefit, we will treat the Contract Value
on the date of the change as a Payment made on that date.
In addition, all anniversary values, all Payments made
and all amounts deducted in connection with partial
withdrawals prior to the date of the addition of the
Owner will not be considered in the determination of the
Guaranteed Minimum Death Benefit.
If any Annuitant is changed and any Owner is not an
individual, the entire interest in the Contract must be
distributed to the Owner within five years of the change.
ASSIGNMENT You may assign this Contract, except as otherwise
provided, at any time prior to the Annuity Commencement
Date. No assignment will be binding on us unless it is in
the form of a Written Request. We will not be liable for
any payments made or actions we take before the assignment
is received by us. An absolute assignment will revoke the
interest of any revocable Beneficiary. We will not be
responsible for the validity of any assignment.
If this Contract is issued in a Qualified Plan, this
Contract is subject to assignment restrictions for Federal
Income Tax purposes. In such event, this Contract shall
not be sold, assigned, discounted, or pledged as
collateral for a loan or as security for the performance
of an obligation or for any other purpose, to any person
other than us.
VENTURE-L.11-NY 4 SAMPLE
PART 3 PAYMENTS
GENERAL The Contract is not effective until the Initial Payment is
received by us at our Annuities Service Center or such
other place designated by us. All Payments under this
Contract are payable at our Annuities Service Center or
such other place as we may designate.
PAYMENT LIMITS The Initial Payment is shown on the Specifications Pages.
Each additional Payment must be at least equal to the
Minimum Additional Payment Amount shown on the
Specifications Pages. No additional payment will be
accepted, without our prior approval, after the first
Contract Year that causes the total of all additional
Payments received after the first Contract Year to exceed
the Total Additional Payments amount shown on the
Specifications Pages. If a Payment would cause the
Contract Value on the date of such Payment to exceed the
Maximum Amount shown on the Specifications Pages, or the
Contract Value on the date of such Payment already exceeds
the Maximum Amount, no additional Payments will be
accepted without our prior approval.
ALLOCATION OF NET PAYMENTS When we receive Payments, the Net Payments will be
allocated among Investment Options in accordance with the
allocation percentages shown on the Specifications Pages.
You may change the allocation of subsequent Net Payments
at any time, without charge, by Written Request.
VENTURE-L.11-NY 5 SAMPLE
PART 4 FEES AND DEDUCTIONS
CONTRACT ASSET FEE To compensate us for assuming mortality and expense risks,
and administration expenses, we deduct from each variable
Investment Option a fee each Valuation Period at an annual
rate set forth on the Specifications Pages. A portion of
this Asset Fee may also be used to reimburse us for
distribution expenses. This fee is reflected in the Net
Investment Factor used to determine the value of
Accumulation Units and Annuity Units of the Contract.
ANNUAL CONTRACT FEE To compensate us for assuming administration expenses, we
charge an Annual Contract Fee as set forth on the
Specifications Pages. Prior to the Annuity Commencement
Date, the Annual Contract Fee is deducted on each Contract
Anniversary. We withdraw the Annual Contract Fee from each
Investment Option in the same proportion that the value of
the Investment Accounts of each Investment Option bears to
the Contract Value. If the Contract Value is totally
withdrawn on any date other than the Contract Anniversary,
we will deduct the total amount of the Annual Contract Fee
from the amount paid. After the Annuity Commencement Date,
we deduct the Annual Contract Fee on a pro rata basis from
each Annuity Payment.
TAXES We reserve the right to charge certain taxes against your
Payments (either at the time of payment or liquidation due
to withdrawals, annuitization or death benefit), or
against the Contract Value, Death Benefit proceeds, or
Annuity Payments, as appropriate. Such taxes may include
premium taxes or other taxes levied by any government
entity which we, in our sole discretion, determine have
resulted from the establishment or maintenance of the
Variable Account, or from the receipt by us of Payments,
or from the issuance of this Contract, or from the
commencement or continuance of Annuity Payments under this
Contract.
RIDER FEE(S) We charge an additional fee to compensate us for the
additional benefits provided by any optional benefit
riders elected by you. The Rider Fee for each rider you
elect is shown on the Specifications Pages or in the
Rider. Rider Fees are deducted as described in the
applicable benefit Rider issued by us.
PART 5 VARIABLE ACCOUNT PROVISIONS
INVESTMENT ACCOUNT We will establish a separate Investment Account for you
for each variable Investment Option to which you allocate
amounts. The Investment Account represents the number of
your Accumulation Units in an Investment Option.
INVESTMENT ACCOUNT VALUE The Investment Account Value of an Investment Account is
determined by (a) times (b) where:
(a) equals the number of Accumulation Units credited to
the Investment Account; and;
(b) equals the value of the appropriate Accumulation
Unit.
ACCUMULATION UNITS We will credit Net Payments to your Investment Accounts in
the form of Accumulation Units. The number of Accumulation
Units we will credit to each Investment Account of the
Contract will be determined by dividing the Net Payment
allocated to that Investment Account by the Accumulation
Unit value for that Investment Account.
VENTURE-L.11-NY 6 SAMPLE
Accumulation Units will be adjusted for any transfers and
will be canceled on payment of a death benefit,
withdrawal, maturity or assessment of certain charges
based on their value for the Business Day on which such
transaction occurs.
VALUE OF ACCUMULATION UNIT We will determine the Accumulation Unit value for a
particular Investment Account for any Business Day by
multiplying the Accumulation Unit value for the
immediately preceding Business Day by the net investment
factor for the Valuation Period for which the value is
being determined. The value of an Accumulation Unit may
increase, decrease or remain the same from one Business
Day to the next.
NET INVESTMENT FACTOR The net investment factor is an index that measures the
investment performance of a Subaccount from one Business
Day to the next (" the Valuation Period"). The net
investment factor for any Valuation Period is determined
by dividing (a) by (b) and subtracting (c) from the result
where:
(a) is the net result of:
(i) the net asset value per share of a Portfolio
share held in the Subaccount determined as of
the end of the current Valuation Period, plus
(ii) the per share amount of any dividend or capital
gain distributions made by the Portfolio on
shares held in the Subaccount and received
during the current Valuation Period; and
(b) is the net asset value per share of a Portfolio share
held in the Subaccount determined as of the end of
the immediately preceding Valuation Period; and
(c) is the Contract Asset Fee shown on the Specifications
Pages divided by 365 and multiplied by the number of
calendar days in the Valuation Period.
The net investment factor may be greater or less than, or
equal to, one.
ADDITION, DELETION, SUBSTITUTION We reserve the right, subject to prior approval of the New
OR RESTRICTION OF INVESTMENT York Superintendent of Insurance and in compliance with
OPTIONS applicable law, to make additions to, deletions from, or
substitutions for the Portfolio shares that are held by
the Variable Account or that the Variable Account may
purchase. We reserve the right to eliminate the shares of
any of the eligible Portfolios and to substitute shares of
another Portfolio. We will not substitute any shares
attributable to your interest in a Subaccount without
notice to you and prior approval of the Securities and
Exchange Commission to the extent required by the
Investment Company Act of 1940. Nothing contained herein
shall prevent the Variable Account from purchasing other
securities for other series or classes of contracts, or
from effecting a conversion between shares of another
open-end investment company.
We reserve the right, subject to prior approval of the New
York Superintendent of Insurance and in compliance with
applicable law, to establish additional Subaccounts which
would invest in shares of a new Portfolio. We also reserve
the right to eliminate existing Subaccounts, to restrict
or prohibit additional allocations to a Subaccount, to
combine Subaccounts or to transfer assets in a Subaccount
to another Separate Account established by us or an
affiliated company. In the event of any such substitution
or change, we may, by appropriate endorsement, make such
changes in this and other Contracts as may be necessary or
appropriate to reflect such substitutions or change. If
deemed by us to be in the best interests of persons having
voting rights under the Contracts, the Variable Account
may be operated as a management company under the
Investment Company Act of 1940 or it may be de-registered
under such Act in the event such registration is no longer
required.
VENTURE-L.11-NY 7 SAMPLE
INSULATION The portion of the assets of the Variable Account equal to
the reserves and other contract liabilities with respect
to such account shall not be charged with liabilities
arising out of any other business we may conduct.
Moreover, the income, gains and losses, realized or
unrealized, from assets allocated to the Variable Account
shall be credited to or charged against such account
without regard to our other income, gains or losses.
SEPARATE ACCOUNT ASSETS We will maintain, in the Separate Account, assets with a
value at least equal to the amounts accumulated in
accordance with the terms of the applicable agreements
with respect to the Separate Account and the reserves for
annuities, in the course of payment that vary with the
investment experience of the Separate Account.
PART 6 TRANSFERS
TRANSFERS BEFORE ANNUITY While this Contract is in effect prior to the Annuity
COMMENCEMENT DATE Commencement Date, you may transfer amounts among the
Investment Accounts of the Contract, subject to the
limitations below. Amounts will be canceled from the
Investment Accounts from which amounts are transferred and
credited to the Investment Account to which amounts are
transferred. We will effect such transfers so that the
Contract Value on the date of transfer will not be
affected by the transfer.
You must transfer at least the Minimum Transfer Amount
shown on the Specifications Pages or, if less, the entire
amount in the Investment Account each time you make a
transfer. If, after the transfer, the amount remaining in
the Investment Account from which the transfer is made is
less than Minimum Investment Account Value shown on the
Specifications Pages, then we will transfer the entire
amount instead of the requested amount.
We limit the number of transfers you may make each
Contract Year among each Variable Investment Option as
shown in the Transfers Before Annuity Commencement Date
section on the Specifications Pages.
We do not impose a charge for the first 12 transfers in a
Contract Year. For each additional transfer during a
Contract Year, the Transfer Charge is shown on the
Specifications Pages.
TRANSFERS ON OR AFTER ANNUITY Once variable Annuity Payments have begun, you may
COMMENCEMENT DATE transfer all or part of the investment upon which your
variable Annuity Payments are based from one Subaccount to
another. To do this, we will convert the number of
variable Annuity Units you hold in the Subaccount from
which you are transferring to a number of variable Annuity
Units of the Subaccount to which you are transferring so
that the next Annuity Payment, if it were made at that
time, would be the same amount that it would have been
without the transfer. After the transfer, the variable
Annuity Payments will reflect changes in the values of
your new variable Annuity Units. You must give us notice
at least 30 days before the due date of the first variable
Annuity Payment to which the transfer will apply.
We reserve the right, upon notice, to limit the number of
transfers that can be made after variable annuity
payments have begun. If such a limit is imposed, the
number of transfers per Contract Year will be no less
than the Minimum Number of Transfers Per Contract Year
shown in the Transfers On Or After Annuity Commencement
Date section on the Specifications Pages.
VENTURE-L.11-NY 8 SAMPLE
After the Annuity Commencement Date, transfers will not be
allowed from a fixed to a variable Annuity Option, or from
a variable to a fixed Annuity Option.
DEFERRAL, MODIFICATION OR We reserve the right to defer, modify or terminate the
TERMINATION OF TRANSFER PRIVILEGE transfer privilege at any time that we are unable to
purchase or redeem shares of the Portfolios. Transfer
charges and limitations are identified above and in the
Suspension of Payments provision in the Withdrawals
Provisions section.
PART 7 WITHDRAWAL PROVISIONS
PAYMENTS OF WITHDRAWALS You may withdraw part or all of the Surrender Value, at
any time before the earlier of the death of an Owner, the
Annuity Commencement Date or the Maturity Date, by sending
us a Written Request. We will pay all withdrawals within
seven days of receipt at the Annuities Service Center
subject to postponement in certain circumstances, as
specified below.
TOTAL WITHDRAWAL Upon receipt of your request to withdraw the entire
Contract Value, we will terminate the Contract and pay you
the Net Surrender Value.
PARTIAL WITHDRAWAL If you request to withdraw an amount less than the
Surrender Value, we will pay you the amount requested and
deduct the Withdrawal Amount from the Contract Value.
Unless you specify the amount to be withdrawn from each
Investment Option, the Withdrawal Amount will be withdrawn
from each Investment Option on a pro rata basis.
Partial withdrawals will reduce the Death Benefit, as
described in the Death Benefit section.
FREQUENCY AND AMOUNT OF PARTIAL You may make as many partial withdrawals as you wish.
WITHDRAWALS Limitations on the amount of partial withdrawals are as
follows.
(a) Any withdrawal from an Investment Account must be at
least equal to the Minimum Amount of Partial
Withdrawal shown on the Specifications Pages or the
entire balance in the Investment Account, if less.
(b) If after the withdrawal, the amount remaining in the
Investment Account is less than the Minimum
Investment Account Balance shown on the
Specifications Pages, then we will consider the
withdrawal request to be a request for withdrawal of
the entire amount held in the Investment Account.
(c) If a partial withdrawal reduces the Contract Value to
less than the Minimum Remaining Contract Value shown
on the Specifications Pages, or if the amount
requested is greater than or equal to the amount
available as a total withdrawal, then we will treat
the partial withdrawal as a total withdrawal of the
Contract Value.
SUSPENSION OF PAYMENTS We may defer the right of withdrawal from, or postpone the
date of payments from, the variable Investment Accounts
for any period when: (1) the New York Stock Exchange is
closed (other than customary weekend and holiday
closings); (2) trading on the New York Stock Exchange is
restricted; (3) an emergency exists as a result of which
disposal of securities held in the Variable Account is not
reasonably practicable or it is not reasonably practicable
to determine the value of the Variable Account's net
assets; or (4) the Securities and Exchange Commission, by
order, so permits for the protection of security holders;
provided that applicable rules and regulations of the
Securities and Exchange Commission
VENTURE-L.11-NY 9 SAMPLE
shall govern as to whether the conditions described in (2)
and (3) exist.
WITHDRAWAL CHARGE If a withdrawal is made from the Contract we may assess a
Withdrawal Charge against Payments. The amount of the
Withdrawal Charge and when it is assessed is discussed
below.
(a) A Free Withdrawal Amount may be withdrawn free of a
Withdrawal Charge. The Free Withdrawal Amount is the
greater of:
(i) Earnings, which for purposes of these Withdrawal
Charge provisions, means the excess of the
Contract Value on the date of withdrawal over
the unliquidated Payments; or
(ii) the excess of a. over b. where
a. equals 10% times the total Payments;
and
b. equals 100% of all prior partial
withdrawals in that Contract Year.
(b) Amounts will be withdrawn from the Contract in the
following order for purposes of calculating the
Withdrawal Charge:
(i) Earnings; then
(ii) any Free Withdrawal Amount in excess of
Earnings; then
(iii) Payments not previously liquidated, in the
order such Payments were received.
(c) Payments are liquidated when the Withdrawal Amount
exceeds Earnings. The amount of Payments liquidated
equals
(i) the lesser of the Withdrawal Amount or the total
unliquidated Payments; minus
(ii) Earnings.
(d) A total withdrawal will liquidate all unliquidated
Payments. Any Payments liquidated may be subject to a
Withdrawal Charge based on the length of time the
Payment has been in the Contract. The Withdrawal
Charge is determined by multiplying the amount of the
Payment being liquidated by the applicable Withdrawal
Charge percentage obtained from the table shown on
the Specifications Pages.
(e) The total Withdrawal Charge will be the sum of the
Withdrawal Charges for the Payments being liquidated.
WAIVER OF WITHDRAWAL CHARGE A Withdrawal Charge is not applied if the withdrawal is:
(a) payment of the Death Benefit; or
(b) due to the application of the Contract Value to an
Annuity Option; or
(c) taken at the Maturity Date of the Contract; or
(d) a distribution required to satisfy Federal Income Tax
minimum distribution requirements that apply to this
Contract; or
(e) a withdrawal guaranteed under certain riders attached
to the Contract, as specified in the rider.
VENTURE-L.11-NY 10 SAMPLE
PART 8 DEATH BENEFITS
DEATH BENEFIT BEFORE ANNUITY Prior to the Maturity Date or Annuity Commencement Date,
COMMENCEMENT DATE if earlier, we will determine the Death Benefit as of the
date on which written notice and proof of death and all
required claim forms are received in Good Order at the
Company's Annuities Service Center as follows:
The Death Benefit will be determined as the greater of the
Contract Value or the Guaranteed Minimum Death Benefit.
The Guaranteed Minimum Death Benefit is the sum of all
Payments made, less any amount deducted in connection with
partial withdrawals. For purposes of calculating the
Guaranteed Minimum Death Benefit, the amount deducted in
connection with partial withdrawals will be equal to (i)
times (ii), where (i) is equal to the Guaranteed Minimum
Death Benefit prior to the withdrawal, and (ii) is equal
to the amount of the partial withdrawal divided by the
Contract Value prior to the partial withdrawal.
We will permit the Owner to limit the Death Benefit
option(s) to be offered any named Beneficiary, if the
Owner provides written notice to the Company prior to
death and the desired option(s) is one provided for in
this Contract.
Death benefit distributions prior to the Annuity
Commencement Date are governed by Internal Revenue Code
Section 72(s). Pursuant to Section 72(s) any reference in
this provision to "spouse" means a spouse as defined in
federal law.
DEATH OF ANNUITANT: On the death of the last surviving
Annuitant, the Owner becomes the new Annuitant, if the
Owner is an individual. If the Owner is not an individual
the death of any Annuitant is treated as the death of an
Owner and the Death Benefit will be determined by
substituting the Annuitant for the Owner as described
below.
DEATH OF OWNER: We will pay the Death Benefit to the
Beneficiary if any Owner dies prior to the Maturity Date
or Annuity Commencement Date, if earlier. The Death
Benefit may be taken in one sum immediately, in which case
the Contract will terminate. If the Death Benefit is not
taken in one sum immediately, the Contract will continue
subject to the following provisions:
(a) The Beneficiary becomes the Owner.
(b) The excess, if any, of the Death Benefit over the
Contract Value will be allocated to and among the
Investment Accounts in proportion to their values as
of the date on which the Death Benefit is determined.
(c) No additional Payments may be applied to the
Contract.
(d) If the Beneficiary is not the deceased Owner's
spouse, the entire interest in the Contract must be
distributed under one of the following options:
(i) The entire interest in the Contract must be
distributed over the life of the Beneficiary, or
over a period not extending beyond the life
expectancy of the Beneficiary, with
distributions beginning within one year of the
Owner's death; or
VENTURE-L.11-NY 11 SAMPLE
(ii) the entire interest in the Contract must be
distributed within 5 years of the Owner's Death,
or
(iii) as Annuity Payments under one of the options
described in the Annuity Options section.
If the Beneficiary dies before the distributions
required by (i) or (ii) are complete, the entire
remaining Contract Value must be distributed in a
lump sum immediately.
(e) If the Beneficiary is the deceased Owner's spouse,
the Contract will continue with the surviving spouse
as the new Owner, subject to the provisions of
Internal Revenue Code Section 72(s). The surviving
spouse may name a new Beneficiary (and, if no
Beneficiary is so named, the surviving spouse's
estate will be the Beneficiary).
The spouse may also elect distributions under one of
the following options:
(i) the entire interest in the Contract may be
distributed over the life of the Beneficiary, or
over a period not extending beyond the life
expectancy of the Beneficiary, with
distributions beginning within one year of the
Owner's death; or
(ii) as Annuity Payments under one of the options
described in the Annuity Options section.
(f) We will waive Withdrawal Charges on any withdrawals.
If there is more than one Beneficiary, the foregoing
provisions will independently apply to each Beneficiary,
to the extent of that Beneficiary's share.
DEATH BENEFIT ON OR AFTER ANNUITY If Annuity Payments have been selected based on an Annuity
COMMENCEMENT DATE Option providing for payments for a guaranteed period, and
the Annuitant dies on or after the Annuity Commencement
Date, we will make the remaining guaranteed payments to
the Beneficiary. Any remaining payments will be made at
least as rapidly as under the method of distribution being
used as of the date of the Annuitant's death. If no
Beneficiary is living, we will commute any unpaid
guaranteed payments to a single sum (on the basis of the
interest rate used in determining the payments) and pay
that single sum to the estate of the last to die of the
Annuitant and the Beneficiary.
PROOF OF DEATH We will require Proof of death upon the death of the
Annuitant or the Owner. Proof of death is one of the
following received at the Annuities Service Center:
(a) A certified copy of a death certificate;
(b) A certified copy of a decree of a court of competent
jurisdiction as to the finding of death; or
(c) Any other proof satisfactory to us.
VENTURE-L.11-NY 12 SAMPLE
PART 9 CONTRACT MATURITY
CHANGE IN MATURITY DATE Prior to the Maturity Date, an Owner may make a Written
Request to change the Maturity Date. Any extension of the
Maturity Date will be subject to our prior approval and
any applicable law or regulation then in effect.
OPTIONS AT MATURITY DATE We will send You information about Your available options
prior to the Maturity Date. If by the Maturity Date, you
do not choose an Annuity Option, make a total withdrawal
of the Surrender Value, or ask us to change the Maturity
Date, we will automatically pay you Annuity Payments under
the Annuity Option shown on the Specifications Pages and
the Annuity Commencement Date is considered to be the
Maturity Date.
We will provide variable Annuity Payments unless
otherwise elected. You can change the Annuity Option at
any time before the Annuity Commencement Date.
PART 10 ANNUITY PAYMENTS
GENERAL The entire Contract Value or the entire amount of the
Beneficiary's portion of the Death Benefit may be applied
in accordance with one or more of the Annuity Options
described below, subject to any restrictions of Internal
Revenue Code section 72(s). Once Annuity Payments
commence, the Annuity Option may not be changed. The "Life
10-Year Certain" Annuity Option described under Part 11,
Option 1 is the default Annuity Option unless you request
another option on or prior to the Maturity Date or unless
otherwise required by the Internal Revenue Code.
You may select a Fixed or Variable Annuity. We will
provide variable Annuity Payments unless otherwise
elected. Once Annuity Payments commence, the Annuity
Option may not be changed.
The method used to calculate the amount of the initial and
subsequent Annuity Payments is described below.
We may pay the Contract Value or Death Benefit, on the
Annuity Commencement Date in one lump sum if the
corresponding monthly income is less than $20.
VARIABLE ANNUITY PAYMENTS We will determine the amount of the first Variable Annuity
Payment by applying the portion of the Contract Value used
to effect a Variable Annuity (minus any applicable premium
taxes) to the Annuity Option elected based on the
mortality table and assumed interest rate shown in the
Specifications Pages. We will provide a table of the
annuity factors upon Written Request. If the current rates
in use by us on the Annuity Commencement Date are more
favorable to you, we will use the current rates. The
portion of the Contract Value used to effect a Variable
Annuity will be measured as of a date not more than 10
business days prior to the Annuity Commencement Date.
VENTURE-L.11-NY 13 SAMPLE
Subsequent payments will be based on the investment
performance of one or more Subaccounts as you select. The
amount of such payments is determined by the number of
Annuity Units credited for each Subaccount. Such number is
determined by dividing the portion of the first payment
allocated to that Subaccount by the Annuity Unit value for
that Subaccount determined as of the same date that the
Contract Value used to effect Annuity Payments was
determined. We then multiply this number of Annuity Units
for each Subaccount by the appropriate Annuity Unit value
for each subsequent determination date, which is a
uniformly applied date not more than 10 business days
before the payment is due.
Variable Annuity payments, at the time of their
commencement, will not be less than those that would be
provided by the application of the amount described below
to purchase a single premium immediate annuity then
offered to the same class of annuitants by us or a company
affiliated with us. Since no such annuity currently
exists, we will apply rates that are reasonable in
relation to the market single premium immediate annuity
rates. The amount applied would be equal to the greater
of;
(a) the Contract Value less applicable Withdrawal
Charges; or
(b) 95% of the Contract Value.
MORTALITY AND EXPENSE GUARANTEE We guarantee that the dollar amount of each Variable
Annuity payment will not be affected by changes in
mortality and expense experience.
ANNUITY UNIT VALUE The value of an Annuity Unit for each Subaccount for any
Business Day is determined as follows:
(a) The net investment factor for the Subaccount for the
Valuation Period ending on the Business Day for which
the Annuity Unit value is being calculated is
multiplied by the value of the Annuity Unit for the
preceding Business Day; and
(b) The result is adjusted to compensate for the interest
rate used to determine the first Variable Annuity
payment.
The dollar value of Annuity Units may increase, decrease
or remain the same from one Valuation Period to the next.
FIXED ANNUITY PAYMENTS We will determine the amount of each Fixed Annuity payment
by applying the portion of the Contract Value used to
effect a Fixed Annuity measured as of a date not more than
10 business days prior to the Annuity Commencement Date
(minus any applicable premium taxes) to the Annuity Option
elected based on the mortality table and interest rate
shown on the Specifications Pages. The Fixed Annuity
payment will not be less than that available by applying
the amount described below to purchase a single premium
immediate annuity then offered to the same class of
annuitants by us or a company affiliated with us. Such an
amount would be equal to the greater of:
(c) the Contract Value less applicable Withdrawal
Charges; or
(d) 95% of the Contract Value.
We guarantee the dollar amount of Fixed Annuity payments.
VENTURE-L.11-NY 14 SAMPLE
PART 11 ANNUITY OPTIONS
DESCRIPTION OF ANNUITY OPTIONS Option 1: Life Annuity
a) Life Non-Refund. We will make Annuity Payments during
the lifetime of the Annuitant. No payments are due
after the death of the Annuitant.
b) Life with 10-Year Certain. We will make Annuity
Payments for 10 years and after that during the
lifetime of the Annuitant. No payments are due after
the death of the Annuitant or, if later, the end of
the 10-year period.
Option 2: Joint and Survivor Life Annuity
The second Annuitant named shall be referred to as the
Co-Annuitant.
a) Joint and Survivor Non-Refund. We will make Annuity
Payments during the joint lifetime of the Annuitant
and Co-Annuitant. Payments will then continue during
the remaining lifetime of the survivor. No payments
are due after the death of the last survivor of the
Annuitant and Co-Annuitant.
b) Joint and Survivor with 10-Year Certain. We will make
Annuity Payments for 10 years and after that during
the joint lifetime of the Annuitant and Co-Annuitant.
Payments will then continue during the remaining
lifetime of the survivor. No payments are due after
the death of the survivor of the Annuitant and
Co-Annuitant or, if later, the end of the 10-year
period.
ALTERNATE ANNUITY OPTIONS Instead of settlement in accordance with the Annuity
Options described above, you may choose an alternate form
of settlement acceptable to us. Once Annuity Payments
commence, the form of settlement may not be changed.
PART 12 GENERAL PROVISIONS
ENTIRE CONTRACT The entire Contract consists of this Contract,
Endorsements and Riders, if any, and the application, if
one is attached to this Contract.
BENEFITS AND VALUES The benefits and values available under this Contract are
not less than the minimum required by any statute of the
state in which this Contract is delivered. We have filed a
detailed statement of the method used to calculate the
benefits and values with the Department of Insurance in
the state in which this Contract is delivered, if required
by law.
MODIFICATION Only the President, a Vice President, or the Secretary of
the Company has authority to agree on our behalf to any
alteration of the Contract or to any waiver of our rights
or requirements. The change or waiver must be in writing.
We will not change or modify this Contract without prior
approval of the New York Superintendent of Insurance. No
change that reduces benefits will be made without your
written consent.
VENTURE-L.11-NY 15 SAMPLE
CLAIMS OF CREDITORS All benefits and payments under this Contract shall be
exempt from the claims of creditors to the extent
permitted by law.
MISSTATEMENT AND PROOF OF AGE We may require proof of age or survival of any person upon
OR SURVIVAL whose age or survival any Annuity Payments or other
benefits provided by this Contract or any Rider attached
thereof depend. If the age of the Annuitant has been
misstated, the benefits will be those which would have
been provided for the correct age. If we have made
incorrect benefit payments, we will immediately pay the
amount of any underpayment adjusted with interest at 3%
per annum. We will deduct the amount of any overpayment
from future benefit payments without adjustment for
interest.
INCONTESTABILITY This Contract is not contestable.
NON-PARTICIPATING Your Contract is non-participating and will not share in
our profits or surplus earnings. We will pay no dividends
on your Contract.
REPORTS We provide periodic reports no less frequently than
annually without charge, containing the Investment Account
Value, the Contract Value and Death Benefit. The report
will include the number of Accumulation Units credited to
the Variable Account, the Accumulation Unit value and the
dollar value of the Accumulation Unit of the Variable
Account no more than 4 months prior to the date of the
delivery of the report. We will provide annual calendar
year reports concerning the status of the Contract and
such information concerning required minimum distributions
as is prescribed by the Commissioner of Internal Revenue.
We will provide additional status reports upon request for
a charge not to exceed $25 per request.
CURRENCY AND PLACE OF PAYMENTS All payments made to or by us shall be made in the lawful
currency of the United States of America at the Annuities
Service Center or elsewhere if we consent.
NOTICES AND ELECTIONS To be effective, all notices and elections you make under
this Contract must be in the form of a Written Request.
All notices, requests and elections will be effective when
signed. We will not be liable for any payments made or
actions taken before the Written Request is received by
us.
GOVERNING LAW This Contract will be governed by the laws of the
jurisdiction indicated on the Specifications Pages.
SECTION 72(S) The provisions of this Contract shall be interpreted so as
to comply with the requirements of Section 72(s) of the
Internal Revenue Code.
VENTURE-L.11-NY 16 SAMPLE
PART 13 CONTRACT TERMINATION
CANCELLATION FOR NONPAYMENT & If, prior to the Annuity Commencement Date, no Payments
MINIMUM ACCOUNT VALUE have been made for two consecutive Contract Years, and if
both:
(a) the total Payments made, less any partial
withdrawals, are less then $2,000; and
(b) the Contract Value at the end of such two year period
is less than $2,000;
we may cancel this Contract and pay you the Contract
Value (measured as of the Valuation Period during which
the cancellation occurs), less the Annual Contract Fee.
OTHER This Contract will terminate on the earliest of:
(a) receipt of your request to withdraw the entire
Contract Value;
(b) the date a Death Benefit is payable and the
Beneficiary takes the Death Benefit as a lump sum; or
(c) the date the Contract Value reduces to zero, subject
to the provisions of any benefit rider attached to
this Contract.
VENTURE-L.11-NY 17 SAMPLE
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK (JOHN HANCOCK(R) LOGO)
HOME OFFICE: Valhalla, New York
VENTURE-L.11-NY SAMPLE
EX-99.24(B)(5)(A)(I)
3
b86614a1exv99w24xbyx5yxayxiy.txt
FORM OF SPECIMEN APPLICATION FOR FLEXIBLE PURCHASE PAYMENT INDIVIDUAL DEFERRED COMBINATION VARIABLE ANNUITY CONTRACT (APPVENL11)
[JOHN HANCOCK ANNUITIES LOGO] FOR USE IN NEW YORK ONLY
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
P.O. Box 9506, Portsmouth, NH 03802-9506
Overnight mail: 164 Corporate Drive, Portsmouth, NH 03801-6815
800-551-2078 www.jhannuitiesnewyork.com
Home Office: Valhalla, NY
Venture(R) 4 Series
VARIABLE ANNUITY APPLICATION (Revised on 5/11)
ANNUITY PAYMENTS AND TERMINATION VALUES PROVIDED BY THIS CONTRACT ARE VARIABLE
AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNTS.
------------------------------------------------------------------------------------------------------------------------------------
1 ACCOUNT REGISTRATION AND FUNDING (complete A or B)
A. NONQUALIFIED (minimum $5,000)
REGISTRATION: [ ] Individual [ ] Trust [ ] Corporation [ ] Other ________________________
-------------------------------------------------------------------------------------------------------------------------------
B. QUALIFIED (MINIMUM $2,000)
REGISTRATION: [ ] Traditional IRA (Tax year _________) [ ] Roth IRA (Tax year _________) [ ] SEP IRA [ ] SIMPLE IRA
[ ] Inherited/Beneficiary IRA (Optional [ ] Individual 401(k) [ ] Other
death benefits and living benefit
riders not permitted.)
-------------------------------------------------------------------------------------------------------------------------------
FUNDING: DIRECT PAYMENT $________________ [ ] Check (Payable to John Hancock Life Insurance Company of New York
(Payment must accompany application if [ ] Wire (Please see sales kit or jhannuitiesnewyork.com for wire
selected) instructions)
TRANSFER/EXCHANGE* $______________ [ ] Direct Transfer [ ] Rollover [ ] 1035 [ ] Mutual Fund
*Original transfer/exchange paperwork must accompany application. See forms booklet.
------------------------------------------------------------------------------------------------------------------------------------
2 OWNER (oldest)
___________________________________________________________________________ [ ] Male [ ] Female [ ] Trust/Entity
Name (First, Middle, Last or Name of Trust/Entity)
____________________________ ____________________________________________ _________________________________________________
Date of Birth (mm/dd/yyyy) Social Security/Tax Identification Number EMAIL
_____________________________________________________________________________ _______________________________________________
Mailing Address City, State, Zip
_____________________________________________________________________________ _______________________________________________
Residential Address (Required if different from mailing or address is PO Box) Client Brokerage Account Number
-------------------------------------------------------------------------------------------------------------------------------
CO-OWNER
___________________________________________________________________________ [ ] Male [ ] Female
Name (First, Middle, Last or Name of Trust/Entity)
____________________________ ____________________________________________ _________________________________________________
Date of Birth (mm/dd/yyyy) Social Security/Tax Identification Number EMAIL
_____________________________________________________________________________ _______________________________________________
Mailing Address City, State, Zip
_____________________________________________________________________________
Residential Address (Required if different from mailing or address is PO Box)
------------------------------------------------------------------------------------------------------------------------------------
3 ANNUITANT (if different from owner)
___________________________________________________________________________ [ ] Male [ ] Female
Name (First, Middle, Last or Name of Trust/Entity)
____________________________ ____________________________________________ _________________________________________________
Date of Birth (mm/dd/yyyy) Social Security/Tax Identification Number EMAIL
_____________________________________________________________________________ _______________________________________________
Mailing Address City, State, Zip
_____________________________________________________________________________
Residential Address (Required if different from mailing or address is PO Box)
-------------------------------------------------------------------------------------------------------------------------------
CO-ANNUITANT (if different from co-owner)
___________________________________________________________________________ [ ] Male [ ] Female
Name (First, Middle, Last or Name of Trust/Entity)
____________________________ ____________________________________________ _________________________________________________
Date of Birth (mm/dd/yyyy) Social Security/Tax Identification Number EMAIL
_____________________________________________________________________________ _______________________________________________
Mailing Address City, State, Zip
_____________________________________________________________________________
Residential Address (Required if different from mailing or address is PO Box)
APPVENL11 Page 1 of 5 0511:70213
Venture(R) 4 Series Application
4 BENEFICIARIES
If a co-owner was selected in Section 2, the surviving owner will be the
primary beneficiary. Contingent beneficiaries receive proceeds only if all
primary beneficiaries pre-decease the owner. If you wish to restrict the
death payment options for any of the beneficiaries listed below, please
complete the Restricted Beneficiary Payout form located in our forms
booklet or on www.jhannuitiesnewyork.com.
THE PRIMAY BENEFICIARIES AND CONTINGENT BENEFICIARIES MUST EACH EQUAL 100% OF
PROCEEDS. PLEASE USE WHOLE PERCENTAGES ONLY.
DATE MALE STATE
SOCIAL SECURITY/ % OF OF BIRTH FEMALE OR RELATIONSHIP (where BENEFICIARY
NAME TAX ID NUMBER PROCEEDS (mm/dd/yyyy) TRUST/ENTITY TO OWNER living) ROLE
--------------------------------------------------------------------------------------------------
1 First [ ] Male [ ] Primary
[ ] Female [ ] Contingent
Last [ ] Trust/Entity
2 First [ ] Male [ ] Primary
[ ] Female [ ] Contingent
Last [ ] Trust/Entity
3 First [ ] Male [ ] Primary
[ ] Female [ ] Contingent
Last [ ] Trust/Entity
4 First [ ] Male [ ] Primary
[ ] Female [ ] Contingent
Last [ ] Trust/Entity
5 First [ ] Male [ ] Primary
[ ] Female [ ] Contingent
Last [ ] Trust/Entity
6 First [ ] Male [ ] Primary
[ ] Female [ ] Contingent
Last [ ] Trust/Entity
NOTE: TO NAME ADDITIONAL BENEFICIARIES, PLEASE USE THE SPACE IN SPECIAL
INSTRUCTIONS (SECTION 8).
5 OPTIONAL RIDERS AND BENEFITS
OPTIONAL BENEFIT RIDERS CANNOT BE CANCELLED ONCE ELECTED. CERTAIN RESTRICTIONS
APPLY; SEE PROSPECTUS FOR DETAILS.
LIVING BENEFIT RIDERS
The Living Benefit may have limited usefulness in connection with contracts
funding tax-qualified programs because partial withdrawals made to satisfy U.S.
Treasury minimum distribution rules might result in a proportional reduction in
the rider's benefit base or the inability to exercise the benefit altogether if
such partial withdrawals are not qualifying Life Expectancy Distributions, as
defined in the rider. If you plan to exercise the Living Benefit before or after
your required minimum distribution beginning date under the contract, consider
whether the Living Benefit is appropriate for your circumstances. You should
consult your tax advisor.
The Living Benefit may be increased by additional payments you make (as limited
by the rider) and decreased by partial withdrawals that are not taken according
to the terms of the rider.
Payments you make may be allocated only to the investment options we make
available with the Living Benefit rider. By electing the rider, you are giving
us authority to make automatic transfers of your contract value according to the
terms of the rider.
PLEASE CHOOSE ONLY ONE RIDER:
[ ] INCOME PLUS FOR LIFE [ ] INCOME PLUS FOR LIFE-JOINT LIFE*
DEATH BENEFIT RIDER
[ ] ANNUAL STEP-UP DEATH BENEFIT
----------
* For nonqualified registrations (Section 1A), the spouse must be either the
co-owner (Section 2) or sole primary beneficiary (Section 4). For qualified
registrations (Section 1B), the spouse must be the sole primary beneficiary
(Section 4).
APPVENL11 Page 2 of 5 0511:70213
Venture(R) 4 Series Application
6 A. INITIAL INVESTMENT OPTIONS
INVESTMENT OPTIONS IF INVESTMENT OPTIONS IF
NO LIVING BENEFIT IS ELECTED LIVING BENEFIT IS ELECTED
Lifestyle Balanced(1,2) ______% Lifestyle Balanced PS(1,2)
Lifestyle Conservative(1,2) ______% Lifestyle Conservative PS(1,2)
Lifestyle Growth(1,2) ______% Lifestyle Growth PS(1,2)
Lifestyle Moderate(1,2) ______% Lifestyle Moderate PS(1,2)
Ultra Short Term Bond(2) ______% Ultra Short Term Bond PS(2)
100 % TOTAL INITIAL INVESTMENT OPTIONS (MUST EQUAL 100%)
DOLLAR COST AVERAGING (Section 6B must be completed if 6 or 12 month DCA is
elected)
------------------------- -------------------------
[ ] 6 Month DCA Fund --|-> 6 month DCA not | OR [ ] 12 Month DCA Fund --|-> 12 month DCA not |
NO6MODCA03 | currently available | NO12MODCA03 | currently available |
------------------------- -------------------------
(1) John Hancock Asset Management
(2) John Hancock Asset Management (North America)
B. DOLLAR COST AVERAGING INSTRUCTIONS
Dollar Cost Averaging (DCA) is an optional program which involves the
systematic transfer of specific dollar amounts each month from a Source
Fund to one or more of the portfolios listed below. Automatic transfers run
until the Source Fund has been depleted.
START DATE [ ] IMMEDIATE OR [ ] 30 DAYS FROM ISSUE OR [ ] ______* DAY OF MONTH (1-28)
(DEFAULT IF NONE SELECTED)
If the transfer day is a weekend, holiday or the 29th - 31st, then the
transfer will occur on the next business day.
--------
* If funds are received after the requested start date, transfers
will begin on the requested day of the following month.
-------------------------- --------------------------
SOURCE FUND [ ] 6 MONTH DCA FUND --|--> 6 month DCA not | OR [ ] 12 MONTH DCA FUND --|--> 12 month DCA not |
NO6MODCA03 | currently available | NO12MODCA03 | currently available |
-------------------------- --------------------------
(Selected in 6A) [ ] VARIABLE PORTFOLIO ___________________________________
MONTHLY TRANSFER AMOUNT $__________________
DESTINATION FUND(S) AND % TO ALLOCATE
_____% ___________________________ _____% _____________________________
_____% ___________________________ _____% _____________________________
_____% ___________________________ _____% _____________________________
_____% ___________________________ _____% _____________________________
_____% ___________________________ _____% _____________________________
_____% ___________________________ _____% _____________________________
100 % TOTAL DCA OPTIONS (MUST EQUAL 100%)
APPVENL11 Page 3 of 5 0511:70213
Venture(R) 4 Series Application
7 AUTOMATIC REBALANCING
If marked, the Contract Value, will be automatically rebalanced as
indicated by the Variable Investment Allocations elected in the Initial
Investment Allocations section of the application, unless subsequently
changed. Initial Payment must be allocated to at least 2 variable
investment options in order to participate in the Automatic Rebalancing.
If the contract holder elects to participate in Automatic Rebalancing,
the total value of the variable portfolios must be included in the
program. Therefore, fund exchanges and subsequent payments received and
applied to portfolios in percentages different from the current
rebalancing allocation will be rebalanced at the next date of
rebalancing. NOTE: IF A LIVING BENEFIT RIDER IS ELECTED, THE CONTRACT
VALUE MAY BE REALLOCATED TO PERCENTAGES THAT DIFFER FROM THE AUTOMATIC
REBALANCING PERCENTAGES.
Rebalancing will occur on the 25th of the month (or next business day);
please indicate frequency. If no frequency is indicated, then Automatic
Rebalancing will occur Quarterly.
[ ] Quarterly [ ] Semi-Annually [ ]Annually (December)
(June & December)
8 STATE DISCLOSURE
Any person who knowingly presents a false or fraudulent claim for payment
of a loss or benefit or knowingly presents false information in an
application for insurance is guilty of a crime and may be subject to
fines and confinement in prison.
Pursuant to Section 3 of the Federal Defense of Marriage Act ("DOMA"),
same sex-marriages, domestic partnerships and civil unions currently are
not recognized for purposes of Federal law. Therefore, the favorable
income-deferral options afforded by Federal tax law to an opposite-sex
spouse under Internal Revenue Code Sections 72(s) and 401(a)(9) are
currently not available to a same-sex spouse, domestic partner or civil
union partner. Same-sex spouses, domestic partners or civil union
partners who own or are considering the purchase of annuity products that
provide benefits based upon status as a spouse should consult a tax
advisor. To the extent that an annuity contract accords to spouses other
rights or benefits that are not affected by DOMA, same-sex spouses,
domestic partners and civil union partners recognized by the Issue State
remain entitled to such rights or benefits to the same extent as any
annuity holder's spouse.
9 ACKNOWLEDGMENTS/SIGNATURES
STATEMENT OF APPLICANT: I/We agree that the contract I/we have applied
for shall not take effect until the later of: (1) the issuance of the
contract or (2) receipt by the company at its Annuity Service Office of
the first payment required under the contract. The information herein is
true and complete to the best of my/our knowledge and belief and is
correctly recorded.
(a) [ ] YES [X] NO Is the annuitant or owner an active member of the U.S.
Armed Forces?
If you answered "Yes", please complete and attach a
"Military Personnel Financial Services Disclosure"
form (available on www.jhannuitiesnewyork.com). This
product is not specifically designed for or marketed
to active duty military personnel. Applications not
complying with our military sales procedures will not
be accepted.
(b) [ ] YES [ ] NO Does the annuitant or owner have existing individual
life insurance policies or annuity contracts?
(c) [ ] YES [ ] NO Will this contract replace or change any existing life
insurance or annuity in this or any other company?
If you answered "Yes" to either questions b or c,
Stage One of the Reg 60 should already be completed.
Also, a Definition of Replacement Form is required.
ISSUING COMPANY: [ ] ANNUITY [ ] LIFE INSURANCE
____________________________ ________________________
Name of Issuing Company Contract Number
SPECIAL INSTRUCTIONS:
Please use this space to name additional beneficiaries or to provide any
additional instructions.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
APPVENL11 Page 4 of 5 0511:70213
Venture(R) 4 Series Application
9 ACKNOWLEDGMENTS/SIGNATURES (CONTINUED)
- I/WE ACKNOWLEDGE RECEIPT OF THE CURRENT PROSPECTUS UNDER ONE OF THE
FOLLOWING FORMATS:
A. On compact disc (the "CD Prospectus"). I/We acknowledge that:
(i) I/we have access to a personal computer or similar
device;
(ii) I/we have the ability to read the CD Prospectus using
that technology; and
(iii) I/we understand that there may be costs associated
with using and maintaining that technology and I/we
am/are willing to incur any such costs.
I/We understand that a copy of the CD Prospectus may be retained
indefinitely by printing it or saving a copy to a computer or
similar device. I/we understand that this acknowledgement relates
to my/our receipt of the CD Prospectus and that a printed paper
copy of the Prospectus for this variable annuity will be sent to
me/us with my/our Contract. I/we understand that Prospectus
supplements, other amended/updated Prospectuses and other
documents related to this variable annuity will be sent to me/us
in printed paper format in the future, including the Prospectus
that will be delivered with my/our Contract, unless I/we
otherwise elect to receive such documents in electronic format.
I/We understand that we also may request a current Prospectus for
this variable annuity in printed paper format at any time,
without charge, by calling 800-551-2078.
B. In printed paper format.
- I/We confirm a review of my/our investment objectives, tax,
liquidity, and financial statuses was offered to me/us.
- I/We have read the applicable fraud statement contained in the State
Disclosures Section.
- To the best of my knowledge and belief, the statements in this
application are true and complete.
- I/We am/are either a citizen or resident alien of the United States
of America.
- I/We understand that unless I/We elect otherwise, the Maturity Date
will be the later of the first of the month following the Annuitant's
90th retirement plans may require distributions to begin by age
70 1/2). Alternate Maturity Date________________.
- I/WE UNDERSTAND THAT ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY
THE CONTRACT APPLIED FOR, WHEN BASED ON THE INVESTMENT EXPERIENCE OF
THE VARIABLE INVESTMENT OPTIONS ARE VARIABLE AND ARE NOT GUARANTEED AS
TO FIXED DOLLAR AMOUNT.
SIGN OWNER: ________________________________________ _________________________ __________
HERE Signature City, State (signed in) Date
SIGN CO-OWNER: ________________________________________ _________________________ __________
HERE Signature City, State (signed in) Date
SIGN ANNUITANT: ________________________________________ _________________________ __________
HERE (If different from owner) Signature City, State (signed in) Date
SIGN CO-ANNUITANT: ________________________________________ _________________________ __________
HERE (If different from co-owner) Signature City, State (signed in) Date
10 FINANCIAL ADVISOR INFORMATION
A. CERTIFICATION: I HAVE TRULY AND ACCURATELY RECORDED THE INFORMATION
PROVIDED BY THE APPLICANT AND I HAVE DETERMINED THAT THE ANNUITY
CONTRACT APPLIED FOR IS A SUITABLE INVESTMENT FOR THE APPLICANT.
[ ] YES [ ] NO Does the annuitant or owner have existing individual
life insurance policies or annuity contracts?
[ ] YES [ ] NO Will this contract replace or change any existing
life insurance or annuity in this or any other
company?
B. OPTION [ ] A [ ] B1 [ ] B2 [ ] C (If left blank, option will
default to your firm's Selling
Agreement.)
C. FINANCIAL ADVISOR (PRIMARY)
__________ % __________________________________ ________________________ _______________________
Percentage Printed Name Telephone Number State License ID
SIGN _____________________________________ __________________________ ________________________________
HERE Broker/Dealer Firm Broker/Dealer Rep Number Email Address
_________________________________________________________________
Signature
D. FINANCIAL ADVISOR (SECONDARY)
__________ % __________________________________ ________________________ _______________________
Percentage Printed Name Telephone Number State License ID
SIGN _____________________________________ __________________________ ________________________________
HERE Broker/Dealer Firm Broker/Dealer Rep Number Email Address
_________________________________________________________________
Signature
APPVENL11 Page 5 of 5 0511:70213
Additional Considerations
AUTHORIZATIONS FOR TELEPHONE/ELECTRONIC TRANSACTIONS
FOR THE OPTIONS SELECTED BELOW, I authorize John Hancock to act on instructions
given via telephone or electronically from any person who can furnish proper
identification. By electing either option, you understand that John Hancock will
use reasonable procedures to confirm that these instructions are authorized and
genuine. As long as these procedures are followed, John Hancock and its
employees will be held harmless for any claim, loss, liability, or expense.
FUND TRANSFER: Provides properly identified persons, other than the owner,
with the ability to request exchanges between available funds. ACCEPT [ ] DECLINE [ ]
NOTE: OWNERS RECEIVE THIS PRIVILEGE AUTOMATICALLY.
WITHDRAWAL AUTHORIZATION: Provides the owner, and other properly
identified persons, with the ability to request withdrawals. ACCEPT [ ] DECLINE [x] (default)
OTHER SPECIAL PROGRAMS OFFERED BY JOHN HANCOCK
The enrollment forms for the following Special Programs are located in the forms
booklet or on www.jhannuities.com.
INCOME MADE EASY Systematic Withdrawal Program specially designed to work with our Guaranteed
Minimum Withdrawal Benefits.
SYSTEMATIC WITHDRAWALS Systematic Withdrawal Program for use without Guaranteed Minimum Withdrawal
Benefits accounts. (www.jhannuities.com only)
RESTRICTED BENEFICIARY Restrict the payout options for one or more of your designated beneficiaries.
AUTOMATIC REBALANCING Reallocate the value in your annuity on an established schedule so you maintain a
predetermined investment mix among the variable funds. (www.jhannuities.com only)
AUTOMATIC INVESTMENT PROGRAM Periodically debits your bank account to make payments into this annuity contract.
Good Order Checklist
5 STEPS TO EXPEDITE YOUR ANNUITY BUSINESS
1 IS THE POLICY BEING FUNDED WITH AN EXCHANGE, A "1035 Exchange/Rollover/Transfer Form"*
ROLLOVER OR TRANSFER? is required.
2 IS THE OWNER/CO-OWNER A TRUST OR ENTITY? A "Certificate For Trust or Entity Ownership"*
form is required.
3 DOES THE OWNER OR ANNUITANT OWN AN EXISTING A State Replacement form* may be needed. See the
ANNUITY CONTRACT OR LIFE INSURANCE POLICY? list of applicable states in our Forms booklet.
4 ARE THE STATES LISTED IN SECTIONS 2 AND 8 DIFFERENT? An "Alternate Issue State Verification"* form
is required.
5 HAVE THE CONTRACT OWNER(S), ANNUITANT(S) AND See sections 8 and 9.
FINANCIAL ADVISOR(S) SIGNED AND DATED ALL OF THE
REQUIRED PAPERWORK?
--------
* Please see the business forms booklet or log on to www.jhannuities.com.
APPVENL11-CL 0511:70213
EX-99.24(B)(14)(B)
4
b86614a1exv99w24xbyx14yxby.txt
POWER OF ATTORNEY FOR PAUL M. CONNOLLY
POWER OF ATTORNEY
I, Paul M. Connolly, in my capacity as a Director of John Hancock Life
Insurance Company of New York (the "Company"), do hereby constitute and appoint
Lynne Patterson, Emanuel Alves, John J. Danello, Arnold R. Bergman, Thomas J.
Loftus and James C. Hoodlet or any of them individually, my true and lawful
attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statement
listed below filed with the Securities and Exchange Commission ("SEC") under the
Securities Act of 1933 and the Investment Company Act of 1940, and any and all
amendments to the Registration Statement listed below filed with the SEC, and
the undersigned hereby ratifies and confirms as his or her own act and deed all
that each of said attorneys and agents shall do or cause to have done by virtue
hereof.
Variable Annuity Registration Statement filed under the Securities Act of
1933: 333-172474 (Venture 4 Series)
Each of said attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
This Power of Attorney is intended to supersede any and all prior Powers of
Attorney in connection with the above mentioned acts, and is effective April 28,
2011 and remains in effect until revoked or revised.
SIGNATURE TITLE DATE
--------- -------- --------------
/s/ Paul M. Connolly Director April 28, 2011
-------------------------------------
Paul M. Connolly
COVER
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filename5.txt
JOHN HANCOCK FINANCIAL SERVICES [JOHN HANCOCK LOGO]
U.S. Wealth Management Law Department
601 Congress Street
Boston, MA 02210-2805
(617) 663-3192
Fax: (617) 663-2197
E-Mail: tloftus@jhancock.com
May 17, 2011
VIA E-MAIL
Alison T. White
Senior Counsel
Office of Insurance Products
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549-4644
Re: John Hancock Life Insurance Company (U.S.A.) Separate Account H
Registration Statement on Form N-4 (File No. 333-172473)
John Hancock Life Insurance Company of New York Separate Account A
Registration Statement on Form N-4 (File No. 333-172474)
Dear Ms. White:
On behalf of John Hancock Life Insurance Company (U.S.A.) and John Hancock Life
Insurance Company of New York (the "Companies"), and on behalf of John Hancock
Life Insurance Company (U.S.A.) Separate Account H and John Hancock Life
Insurance Company of New York Separate Account A (the "Registrants"), we
transmit for filing via EDGAR Pre-Effective Amendment No. 2 (the "Pre-Effective
Amendment") to the Registration Statement on Form N-4 under the Securities Act
of 1933 for the above-referenced registration of a of a flexible purchase
payment deferred variable annuity contract to be issued by the Companies (the
"Contract").
This Pre-Effective Amendment is being filed to incorporate changes based on your
comment letter dated March 15, 2011, with respect to our February 28, 2011
filings of initial Registration Statements on Form N-4 (Accession Numbers
0000950123-11-018985 and 0000950123-11-018992), and other changes. The changes
include responses to two of your March 15 comments, requesting illustrative
examples that were not included in our response letter dated April 29, 2011.
Your comments were as follows:
Comment 11. c. Step Two (Bottom of page 39) - You state that the "RV Ratio may
change when you take withdrawals up to the Lifetime Income Amount, and may
result in automatic transfers of Contract Value to the Bond PS Subaccount under
STEP FOUR A." Please add an example to the prospectus (or refer the reader to an
Appendix) illustrating this concept.
Comment 11. f. General - Please include an Appendix to the prospectus in which
you provide numeric examples illustrating as many scenarios under the Portfolio
Stabilization Process as possible.
These comments have been addressed in the prospectus to the Registration
Statements, which includes Appendix D: "Examples of the Portfolio Stabilization
Process."
JOHN HANCOCK FINANCIAL SERVICES [JOHN HANCOCK LOGO]
U.S. Wealth Management Law Department
601 Congress Street
Boston, MA 02210-2805
(617) 663-3192
Fax: (617) 663-2197
E-Mail: tloftus@jhancock.com
On behalf of the Registrants, I have been authorized to request an order to
accelerate the effectiveness of the above-referenced registration statement to
the earliest possible time on June 1, 2011. I intend to make such request orally
within one business day of your receipt of this letter. As required by Rule
461(a) of the Act, the Registrants certify that they are aware of their
obligations under the Act.
The Commission staff has requested that the Registrants acknowledge and agree,
and the Registrants do hereby acknowledge and state, that:
- should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
- the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the Registrant from its full responsibility for the adequacy
and accuracy of the disclosure in the filing; and
- the Registrant may not assert this action as defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
If you have any questions with respect to this letter, the Contracts or the
Registration Statements, please contact me at (617) 663-3192, or in my absence,
please contact Arnold R. Bergman, Chief Counsel, at (617) 663-2184. Thank you.
Sincerely,
Thomas J. Loftus
Senior Counsel - Annuities