Connecticut Annuity Application Kit

Transcription

1 Connecticut Annuity Application Kit Royal Neighbors of America PO Box Clearwater, FL Overnight Address: Royal Neighbors of America 2650 McCormick Drive Clearwater, FL CT 10/01/2015

2 Royal Neighbors of America 2650 McCormick Drive Clearwater, FL P: (844) F: (844) A Fraternal Benefit Society Application for Individual Market Value Adjustment Annuities To be used for qualified and non-qualified Market Value Adjustment Single Premium Deferred Annuity (SPDA) SECTION 1 Proposed Owner/Annuitant (Annuitant must be Owner if the Annuity is an IRA, Roth, or SEP) Name Street City State ZIP SSN/Tax ID Marital status S M W D Sex M F Phone number ( ) DOB State/Country of birth U.S. driver s license Green Card Passport ID number ID issuer Other ID issue date ID expiration date address Are you a U.S. citizen? Yes No If No, are you a legal U.S. resident? Yes No Resident ID # SECTION 2 Proposed Annuitant or Payor other than Owner (If Applicable) Name SSN/Tax ID Address same as Proposed Owner/Annuitant Street Phone number ( ) DOB City State ZIP Relationship to Proposed Owner address Sex M F SECTION 3 Proposed Owner s Other Insurance 1. EXISTING INSURANCE Does the Proposed Owner have any existing life insurance or annuity contracts with this or any other company? Yes No If Yes, complete and submit state replacement forms, if required, with this application. 2. REPLACEMENT In connection with this application, has there been, or will there be, with this or any other company any: surrender transaction; loan; withdrawal; lapse; reduction or redirection of premium/consideration; or change transaction (except conversions) involving an annuity or other life insurance? Yes No If Yes, complete and submit a replacement questionnaire AND any other state required replacement forms with this application. Company Life Insurance Annuity Year of issue SECTION 4 Beneficiary(ies) Multiple Beneficiaries will receive an equal percentage of proceeds unless otherwise instructed. PRIMARY Percent of proceeds % PRIMARY CONTINGENT Percent of proceeds % Name Name Street Street City State ZIP City State ZIP DOB SSN/Tax ID DOB SSN/Tax ID Relationship to Proposed Owner Relationship to Proposed Owner SECTION 5 Type of Annuity Name of Annuity: Single Premium Deferred Annuity (SPDA) Initial Guarantee Period: 5 year 7 year 10 year Non-Qualified Qualified (Check one): IRA ROTH-IRA Simplified Employee Pension (SEP) If Non-Qualified: If Qualified: New money received with application $ New money received with application: $ For Tax Year: IRC 1035 Exchange $ Rollover funds received with application $ Organization transferring funds: Trustee to Trustee (Direct Transfer) $ Name of Trustee transferring funds: CT Rev CT Page 1 of 4

3 Suitability Statement for Proposed Owner FINANCIAL INFORMATION Annual Gross Income $ Total net worth (excluding home, home furnishings, and auto) $ Liquid assets (checking account, savings account, CDs, etc.) $ FEDERAL INCOME TAX BRACKET: Less than 15% 15% to 28% Greater than 28% FINANCIAL OBJECTIVES Your financial objective in purchasing this annuity certificate (check all that apply) Tax deferred growth Accumulation for retirement income Transfer of funds to beneficiaries Guaranteed interest rate Protection of principal Provide monthly income of interest earnings Receive immediate income DECISION TO PURCHASE ANNUITY Other than your agent, who, if anyone, assisted you in your decision to purchase an annuity? (Check all that apply) Accountant Attorney Family member Financial planner No one Other: AVAILABLE FUNDS Do you have sufficient cash or other liquid funds for living expenses and emergencies, such as unexpected medical expenses, in addition to the money you plan to use to purchase this annuity? Yes No If you checked No this annuity may not be suitable for you. SURRENDER CHARGES, WITHDRAWAL FEES OR PENALTIES If you will incur surrender charges, withdrawal fees or penalties on any existing product used to fund the purchase of this annuity, do you feel comfortable incurring such charges, fees or penalties? Yes No Not applicable If No, please explain why you want to proceed with the purchase: I understand that the proposed annuity certificate contains withdrawal and surrender charges and market value adjustments. I have determined to the best of my knowledge and belief that the annuity, as applied for, is suitable for my investment time horizon, goals and objectives, and financial situation and needs. Corrections and Amendments (For Home Office Use Only) Agreement/Acknowledgement I have read all of the foregoing answers and statements contained in this application, adopt them as my own, whether written by me or not, and to the best of my knowledge and belief, all answers and statements are true, complete, and correctly recorded. This application and any amendment(s) and supplement(s) to this application will be attached to, and along with the articles of incorporation and bylaws of Royal Neighbor of America (Royal Neighbors) become part of the new certificate. I understand and hereby agree that no certificate issued in reliance upon this application shall be effective and no liability of Royal Neighbors shall exist unless and until the certificate shall be issued and delivered to me and the required premium is paid. Corrections, additions, or changes to this application may be made by Royal Neighbors. Any such changes will be shown under Corrections and Amendments. Acceptance of a certificate issued with such changes will constitute acceptance of the changes. No change will be made in classification (including age and gender at issue), plan, amount, or benefits unless agreed to in writing by the Applicant. If not a current member, I the Proposed Owner hereby apply to become a member of Royal Neighbors as indicated by my signature below. As a member, I agree to uphold the principles of Faith, Unselfishness, Courage, Endurance, and Humility upon which Royal Neighbors was founded more than 100 years ago. Taxpayer Identification Number Certification Under penalties of perjury, I, the Proposed Owner, certify that: The number shown in this application is my correct taxpayer identification number, and I am not subject to backup withholding because: a) I have not been notified by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends; OR b) the IRS has notified me that I am not subject to backup withholding. (If you have been notified by the IRS that you are currently subject to backup withholding because of under reporting interest or dividends on your tax return, you must cross out and initial this item.) I am a U.S. citizen or a U.S. resident alien for tax purposes. Please note: The Internal Revenue Service does not require your consent to any provision of this document other than the certification required to avoid backup withholding. FRAUD NOTICE/WARNING: Any person who knowingly presents a false statement in an application for insurance may be guilty of a criminal offense and subject to penalties under state law. I acknowledge that I have read this annuity suitability statement and that the information I have provided is true and complete to the best of my knowledge and belief. SIGNATURES: Signed at city, state Date F Proposed Owner CT Rev CT Page 2 of 4

4 REPLACEMENT: Do you have any knowledge or reason to believe that the Proposed Owner has in-force life insurance or annuity contracts that may be replaced as a result of this transaction? Yes No If Yes, have you completed a replacement questionnaire and/or any other state required replacement forms? Yes No Did you use only written sales material approved for use by Royal Neighbors of America? Yes No I personally viewed documentation verifying the identity of the Proposed Owner and Payor, as applicable. Valid state issued driver s license Passport Other (specify) I certify that I have made a reasonable effort to attain all relevant information necessary to recommend the purchase of the proposed annuity certificate, which I believe is suitable for the applicant based upon the information provided by the applicant regarding her or his needs and financial objectives. Agent no. Agent license no. F Complete for agent split (if applicable): Agent s Report Signature of Writing Agent Date Printed name of Writing Agent Agent Name Agent no. Percent Please print CT Rev CT Page 3 of 4

5 Royal Neighbors of America Home Office th St., Rock Island, IL Royal Neighbors of America 2650 McCormick Drive Clearwater, FL P: (844) F: (844) Royal Neighbors of America 2650 McCormick Drive Clearwater, FL P: (844) F: (844) Receipt A Fraternal Benefit Society Received from on (Date) the sum of $ in connection with an application to Royal Neighbors of America (Royal Neighbors) for an Annuity. F F Signature of Payor Date Signature of Agent Receiving the Payment NOTE: This receipt is to be issued only if the required payment is submitted with the application CT Rev CT Page 4 of 4

6 A Fraternal Benefit Society Incorporated in 1895 Royal Neighbors of America PO Box Clearwater, Florida (844) Benefit Summary - Form Series 1512 Single Premium Multi-Year Guarantee Deferred Annuity with Market Value Adjustment Feature This benefit summary contains important information to consider before you purchase this single premium annuity. Annuity Certificate This annuity is a single premium annuity, which means it is purchased it with one premium payment. It is a fixed annuity which means it earns a specified interest rate during the guaranteed period. This annuity is a deferred annuity that earns taxdeferred interest at a guaranteed minimum rate for a guaranteed period. At the time of issue, the owner can choose a guaranteed period of 5, 7 or 10-years. The guaranteed rate depends on the guaranteed period chosen and current interest rates at the time of issue. IMPORTANT: This annuity is designed to save money for retirement and to receive retirement income payable at the maturity date and is not meant to be used to meet short-term financial goals. If you have questions about this annuity, please ask your agent, or advisor, or contact Royal Neighbors at (844) Interest Crediting and Guaranteed Periods This annuity will provide for two Guaranteed Credited Interest Rate Periods as specified in the annuity. The interest rate (at a rate not less than the Minimum Guaranteed Credited Interest Rate) will be set by Royal Neighbors prior to the beginning of each Guaranteed Credited Interest Rate Period. This rate will be guaranteed for the Guaranteed Credited Interest Rate Period for which the rate has been set. After the end of the Second Guaranteed Credited Interest Rate Period, the interest rate will be not less than the Minimum Guaranteed Credited Interest Rate shown in the Certificate. The Guaranteed Credited Interest Rate for the Initial Guaranteed Credited Interest Rate Period and length of period (five, seven, or ten years) are shown in the Certificate. Notice of the Guaranteed Credited Interest Rate for the Second Guaranteed Credited Interest Rate Period will be sent to the owner not less than 30 days prior to the start of the new Guaranteed Credited Interest Rate Period. Free Withdrawals The Owner may withdraw any accrued interest earned during a Certificate Year without a Surrender Charge or Market Value Adjustment if the withdrawal of interest occurs during that Certificate Year. Any accrued interest not withdrawn during the Certificate Year in which it was earned will be subject to Surrender Charge and Market Value Adjustment if withdrawn in a subsequent year. During the final 30 days of the Initial Guaranteed Credited Interest Rate Period, the Owner may make a full or Partial Withdrawal of the Account Value without incurring a Surrender Charge or Market Value Adjustment. Any withdrawal taken after the Second Guaranteed Credited Interest Rate Period will not be subject to Surrender Charges or Market Value Adjustments. ICC1512-POS Page 1 of 5 A signed copy of this Benefit Summary must be submitted with an annuity application

7 Surrender Charge Schedules The surrender charge equals the amount of the account value surrendered or withdrawn, minus the remaining Free Withdrawal amount for the Certificate Year for which the withdrawal is made, multiplied by the corresponding Certificate Year surrender charge percentage shown below for each of the five, seven or ten year Guaranteed Credited Interest Rate Periods shown below. Surrender Charge Schedules for 5 and 7-Year Guaranteed Interest Rate Annuities 5 Year Guaranteed Interest Rate Annuity Certificate Year Surrender Charge Percentage 9% 8% 7% 6% 5%* 9% 8% 7% 6% 5% 0% 7 Year Guaranteed Interest Rate Annuity Surrender Certificate Charge Year Percentage % 8% 7% 6% 5% 4% 3%* 9% 8% 7% 6% 5% 4% 3% 0% Surrender Charge Schedule for 10-Year Guaranteed Interest Rate Annuity 10 Year Guaranteed Interest Rate Annuity Surrender Certificate Charge Year Percentage % 8% 7% 6% 5% 4% 3% 2% 1% 0.5%* 10 Year Guaranteed Interest Rate Annuity Surrender Certificate Charge Year Percentage % 8% 7% 6% 5% 4% 3% 2% 1% 0.5% 0% *The Surrender Charge Percentage shown above applies for the Certificate Year except for the final 30 days. No Surrender Charge or Market Value Adjustments apply during the final 30 days of this Certificate Year. The Cash Surrender Value for the remainder of the year will be calculated using the stated Surrender Charge Percentage for this Certificate Year and the applicable Market Value Adjustment. ICC1512-POS Page 2 of 5 A signed copy of this Benefit Summary must be submitted with an annuity application

8 Sample Calculation of Surrender Charge Assumptions: 5-Year Guaranteed Interest Rate Annuity, Surrendered at the end of the third Certificate Year, and Account Value of $10, A. Account Value $10, B. Free Withdrawal Amount = Interest Earned in the Third Year $ C. Account Value Subject to the Surrender Charge = A B $10, D. Surrender Charge Percentage for the Third Year 7% E. Surrender Charge = C x D $ F. Account Value Less Surrender Charge = A E $10, Market Value Adjustment (MVA) Market Value Adjustments (MVA) apply to surrender and Partial Withdrawals during each Guaranteed Credited Interest Rate Period. The Market Value Adjustment does not apply to the Free Withdrawal amount. The Market Value Adjustment equals the amount of the Account Value surrendered or withdrawn, minus the remaining Free Withdrawal amount for the certificate year for which the withdrawal is made, less Surrender Charge, if any, multiplied by the Market Value Adjustment factor. The Market Value Adjustment can increase or decrease the Cash Surrender Value or the withdrawal proceeds based on changes in the MVA Index Rate since the Issue Date. If the MVA Index Rate in effect on the day that Royal Neighbors pays the surrender or withdrawal is lower than the MVA Index Rate on the Issue Date, then the Market Value Adjustment will increase the Cash Surrender Value or withdrawal proceeds. If the MVA Index Rate in effect on the day Royal Neighbors pays the surrender or withdrawal is higher than the MVA Index Rate on the Issue Date, then the Market Value Adjustment will reduce the Cash Surrender Value or withdrawal proceeds. Royal Neighbors will not apply a Market Value Adjustment to a surrender or Partial Withdrawal after the end of the Second Guaranteed Credited Interest Rate Period. However, the Market Value Adjustment will never cause the Cash Value to be less than the Guaranteed Minimum Value. Market Value Adjustment (MVA) Index Rate: The MVA Index Rate ( G) will be the U.S. Treasury Constant Maturity rate for the maturity matching the Guaranteed Credited Interest Rate Period rounded up to the nearest year for which a rate is available on the Market Date immediately prior to the commencement of Initial Guaranteed Credited Interest Rate Period. The MVA Index Rate (H) will be the U.S. Treasury Constant Maturity rate for the maturity matching the Guaranteed Credited Interest Rate Period rounded up to the nearest year for which a rate is available on the Market Date immediately prior to the date Royal Neighbors pays the withdrawal or surrender. Sample Calculation of Negative Market Value Adjustment Assumptions: 5-Year Guaranteed Interest Rate Annuity, Surrendered at the end of the third Certificate Year, Account Value of $10, and increase in the MVA Index Rate since issue from 2.00% to 3.00%. A. Account Value $10, B. Free Withdrawal Amount = Interest Earned in the Third Year $ C. Account Value Subject to the Surrender Charge = A B $10, D. Surrender Charge Percentage for the Third Year 7% E. Surrender Charge = C x D $ F. Account Value Less Surrender Charge = A E $10, G. US Treasury Constant Maturity Rate as of the Issue Date 2.00% H. US Treasury Constant Maturity Rate as of the Surrender Date 3.00% I. Remaining Months from the Surrender Date to the End of the Guarantee Period 24 J. MVA Factor = [ (1+G) / (1+H) ] ^ (I/12) 1, where ^ indicates exponentiation K. MVA = F x J $ L. Surrender Value = E K $9, ICC1512-POS Page 3 of 5 A signed copy of this Benefit Summary must be submitted with an annuity application

9 Sample Calculation of Positive Market Value Adjustment Assumptions: 5-Year Guaranteed Interest Rate Annuity, Surrendered at the end of the third Certificate Year, Account Value of $10, and increase in the MVA Index Rate since issue from 3.00% to 2.00%. A. Account Value $10, B. Free Withdrawal Amount = Interest Earned in the Third Year $ C. Account Value Subject to the Surrender Charge = A B $10, D. Surrender Charge Percentage for the Third Year 7% E. Surrender Charge = C x D $ F. Account Value Less Surrender Charge = A E $10, G. US Treasury Constant Maturity Rate as of the Issue Date 3.00% H. US Treasury Constant Maturity Rate as of the Surrender Date 2.00% I. Remaining Months from the Surrender Date to the End of the Guarantee Period 24 J. MVA Factor = [ (1+G) / (1+H) ] ^ (I/12) 1, where ^ indicates exponentiation K. MVA = F x J $ L. Surrender Value = E K $10, Annuitization - Annuity Benefit Payments If a settlement option is elected in lieu of a lump-sum payment, the owner can elect to receive income from this annuity by choosing one of the following settlement options shown in the annuity: Option I - Proceeds at Interest, the proceeds can be left with Royal Neighbors to earn periodic interest payments. Option II - Payments for a Fixed Period, paid in equal annual, semiannual, quarterly, or monthly payments for a fixed period of from five to 30 years. Option III Life Income with Payments for a Period Certain paid in equal annual, semiannual, quarterly, or monthly payments for a period of 10 or 20 years certain and thereafter for the lifetime of the payee. Any amount payable at the death of the payee under a settlement option will be paid in one lump-sum to the estate of the payee, unless another provision has been made. Tax Treatment Federal income tax is deferred on interest credited to this annuity until withdrawn. Full or partial withdrawals from this annuity may be subject to federal income tax on the amount withdrawn. In addition, the owner may be subject to an IRS penalty tax if the withdrawals are made before age 59 1/2. Additional Information Annuity Death Benefit Proceeds: Proceeds paid on the death of the owner will equal the Account Value of the annuity without a Market Value Adjustment. Free Look Period: If for any reason the owner is not satisfied with the annuity, it can be returned within 30-days from the date the owner received it for a full refund of the premium paid. Changes to the Annuity: Royal Neighbors may change this annuity from time to time to follow federal or state laws and regulations. If a change is required, the owner will be notified. Original Maturity Date: This annuity matures on the anniversary of the issue date after the annuitant s 70 th birthday, or 10 years after the issue date, whichever is later, unless the owner elects an optional maturity date. ICC1512-POS Page 4 of 5 A signed copy of this Benefit Summary must be submitted with an annuity application

10 Optional Maturity Date: The owner can select an optional maturity date that is later than the original maturity date, but it may not be later than the first certificate anniversary after the annuitant s 115 th birthday. Compensation: Agents earn a commission on the annuities they sell. The agent may receive more or less compensation for selling this annuity than for selling other annuity contracts. Applicant Signature and Acknowledgement I acknowledge receiving a copy of this benefit summary. I have read the summary, and understand the key features of the annuity, including the surrender charges that may apply and the application of a market value adjustment. I also acknowledge receiving a copy of the Buyer s Guide to Annuities. I understand that this benefit summary is not an offer to contract, or part of the annuity contract. Applicant s Signature Date Applicant Name (Please Print) Agent Signature and Certification I certify that I have provided the applicant stated above a copy of this benefit summary and a copy of the Buyer s Guide to Annuities. I have not made any statements to the applicant that conflict with this benefit summary or made any representations about the future value of any non-guaranteed element of this annuity. I further certify that copies of the marketing materials used in conjunction with this sale have been left with the applicant. Agent s Signature Date Agent s Name (Please Print) Agent Number ICC1512-POS Page 5 of 5 A signed copy of this Benefit Summary must be submitted with an annuity application

11 230 16th Street Rock Island, IL (309) (800) Important Notice: Replacement of Life Insurance or Annuities This document must be signed by the applicant/petitioner and the producer, if there is one, and a copy left with the applicant. You are contemplating the purchase of a life insurance certificate (policy) or annuity contract. In some cases this purchase may involve discontinuing or changing an existing policy or contract. If so, a replacement is occurring. Financed purchases are also considered replacements. A replacement occurs when a new certificate (policy) or contract is purchased and, in connection with the sale, you discontinue making premium payments on the existing policy or contract, or an existing policy or contract is surrendered, forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed purchase. A financed purchase occurs when the purchase of a new life insurance certificate (policy) involves the use of funds obtained by the withdrawal or surrender of or by borrowing some or all of the policy values, including accumulated dividends, of an existing policy to pay all or part of any premium or payment due on the new certificate (policy). A financed purchase is a replacement. You should carefully consider whether a replacement is in your best interests. You will pay acquisition costs and there may be surrender costs deducted from your policy or contract. You may be able to make changes to your existing policy or contract to meet your insurance needs at less cost. A financed purchase will reduce the value of your existing policy and may reduce the amount paid upon the death of the insured. We want you to understand the effects of replacements before you make your purchase decision and ask that you answer the following questions and consider the questions on the back of this form. 1. Are you considering discontinuing making premium payments, surrendering, forfeiting, assigning to the insurer, or otherwise terminating your existing policy or contract? Yes No 2. Are you considering using funds from your existing policies or contracts to pay premiums due on the new certificate (policy) or contract? Yes No If you answered yes to either of the above questions, list each existing policy or contract you are contemplating replacing (include the name of the insurer, the insured or annuitant, and the policy or contract number if available) and whether each policy or contract will be replaced or used as a source of financing: Insurer Name Contract or Policy No. Insured or Annuitant Replaced (R) or Financing (F) Make sure you know the facts. Contact your existing insurer or its agent for information about the old policy or contract. If you request one, an in force illustration, policy summary or available disclosure documents must be sent to you by the existing insurer. Ask for and retain all sales material used by the field representative (agent) in the sales presentation. Be sure that you are making an informed decision. The existing policy or contract is being replaced because I certify that the responses herein are, to the best of my knowledge, accurate: Applicant s/petitioner s Signature and Printed Name Agent s Signature and Printed Name Date Date I do not want this notice read aloud to me. (Applicants or petitioners must initial only if they do not want the notice read aloud.) Submit completed form with the application Provide a copy of completed form to the applicant. Form 1856-NAIC; Rev *1856-NAIC* Page 1 of 2

12 A replacement may not be in your best interest, or your decision could be a good one. You should make a careful comparison of the costs and benefits of your existing policy or contract and the proposed certificate or contract. One way to do this is to ask the insurer or agent that sold you your existing policy or contract to provide you with information concerning your existing policy or contract. This may include an illustration of how your existing policy or contract is working now and how it would perform in the future based on certain assumptions. Illustrations should not, however, be used as a sole basis to compare policies or contracts. You should discuss the following with your agent or field representative to determine whether replacement or financing your purchase makes sense: Premiums: Are they affordable? Could they change? You re older are premiums higher for the proposed new certificate? How long will you have to pay premiums on the new certificate? On the old policy? Certificate (Policy) Values: New certificate(s) usually take longer to build cash values and to pay dividends. Acquisition costs for the old policy may have been paid, you will incur costs for the new one. What surrender charges do the policies have? What expense and sales charges will you pay on the new certificate? Does the new certificate provide more insurance coverage? Insurability: If your health has changed since you bought your old policy, the new one could cost you more, or you could be turned down. You may need a medical exam for a new certificate. Claims on most new certificate(s) for up to the first two years can be denied based on inaccurate statements. Suicide limitations may begin anew on the new coverage. If you are keeping the old policy as well as the new certificate: How are premiums for both policies being paid? How will the premiums on your existing policy be affected? Will a loan be deducted from death benefits? What values from the old policy are being used to pay premiums? If you are surrendering an annuity or interest sensitive life product: Will you pay surrender charges on your old contract? What are the interest rate guarantees for the new contract? Have you compared the contract charges or other policy expenses? Other issues to consider for all transactions: What are the tax consequences of buying the new policy? Is this a tax free exchange? (See your tax advisor) Is there a benefit from favorable grandfathered treatment of the old policy under the federal tax code? Will the existing insurer be willing to modify the old policy? How does the quality and financial stability of the new insurer compare with your existing insurer? Form 1856-NAIC; Rev *1856-NAIC* Page 2 of 2

13 Request for Policy/Account/Certificate Transfer or Exchange Current Trustee/Insurance Company/Financial Institution ( FI ) Policy/Account Owner Name(s) Street Address of Current Trustee/Ins. Co./FI Policy/Account Number(s) at Current Trustee/Ins. Co/FI City, State, ZIP of Current Trustee/ Ins. Co./FI Telephone Number of Current Ins. Co./FI Owner Social Security Number(s) or Tax I.D. Number(s) Annuitant/Insured Name(s) (if other than owner) TRANSFER INSTRUCTIONS: Please transfer the policy/account values indicated below: Partial: Transfer policy/acct/cert value totaling $ or % Complete: Transfer all policy/acct/cert values. Surrender if an annuity policy. FULL 1035 EXCHANGES: I, the owner, assign and transfer to Royal Neighbors all (or such portion as indicated above) rights and interest in the above noted policy/certificate for the sole purpose of effecting a transfer exchange under Section 1035 of the Internal Revenue Code. Approximate Transfer Amount: $ NON-QUALIFIED TYPE OF TRANSFER: Non-Qualified Policy/Account Values, 1035 Exchange Non-Qualified Funds, Non-1035 Exchange from: Mutual Fund Bank CD Other Non-Qualified Asset R E Q U I R E D MINIMU M D I S T R I B U T I O N (RMD) INFORM A T I O N F O R Q U A L I F I E D PLANS O N L Y: A) Have you reached age 70½ or older in this calendar year? YES NO (If the Answer to A, is YES, you are certifying that B is true.) B) I certify that my RMD has been made or will be made prior to transfer. F O R A LL TRANSF E R S: As the owner of the policy/account/certificate indicated above, I request the above transfer to Royal Neighbors of America. I represent and warrant that said policy/account/certificate has not been assigned or pledged as collateral and is not subject to any lien, encumbrance, or legal proceedings of any kind, including bankruptcy. I am responsible for continuing any premium payment for my current policy/account/certificate (if necessary to keep the policy/account/certificate in force) until the surrendering company mails the policy/account/certificate proceeds to Royal Neighbors. I further agree that Royal Neighbors is not responsible for the tax effect of this transfer. I am responsible for all surrender charges and/or fees that result from this transfer. Please do not withhold any amount for taxes from the proceeds unless requested by me to do so or as otherwise required by law. My Annuity/Life policy is: ENCLOSED NOT APPLICABLE LOST/DESTROYED: I/we hereby declare under penalty of perjury that the above numbered contract has been lost or destroyed; that it has not been delivered to any person having any right, title or interest in it. Under penalty of perjury, I certify the following: 1. The number shown on this form is my correct social security number; and 2. That I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and 3. I am a U.S. person (including a U.S. resident alien). You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. X QUALIFIED TYPE OF TRANSFER: Signature of Policy/Account Owner Date Signature of Agent Date From: IRA, SEP Tax-Sheltered Annuity {403(b)} 401(k) Qualified Savings Plan Roth IRA Other To: Type of Qualified Transfer or Rollover:: Direct Transfer Retirement Plan to an IRA: IRA, SEP Roth IRA Other Direct Rollover Non-Direct Rollover ACCEPTANCE BY ROYAL NEIGHBORS OF AMERICA (FOR OFFICE USE ONLY) Royal Neighbors of America acknowledges that an application has been received from the Owner to establish an account for this transaction to the extent shown above. Royal Neighbors will accept the 1035 exchange, transfer or rollover shown to be credited to the account of the Owner. Make check payable to: Royal Neighbors of America FBO the owner(s) noted above. Royal Neighbors Certificate Number Authorized Signature/Title Date Form 2365-AIA ; Rev

14 Royal Neighbors of America th Street Rock Island, IL (309) (800) INDIVIDUAL RETIREMENT ANNUITY DISCLOSURE STATEMENT This Disclosure Statement explains the rules governing a Traditional IRA. The term IRA will be used in this Disclosure Statement to refer to a Traditional IRA (under Internal Revenue Code (Code) section 408(b)) unless specified otherwise. RIGHT TO REVOKE YOUR IRA You have the right to revoke your IRA within seven (7) days of the receipt of the Disclosure Statement. If revoked, you are entitled to a full return of the Premiums you made to your IRA. The amount returned to you would not include an adjustment for such items as sales commissions, administrative expenses, or fluctuation in market value. You may make this revocation only by mailing or delivering a written notice to the Issuer at the address listed on the Application. If you send your notice by first class mail, your revocation will be deemed mailed as of the postmark date. If you have any questions about the procedure for revoking your IRA, please call the Issuer at the telephone number listed on the Application. REQUIREMENTS OF AN IRA A. CASH PREMIUMS Your Premium must be in cash, unless it is a rollover. B. MAXIMUM PREMIUM The total amount of the Premiums to your IRA for any taxable year cannot exceed the lesser of 100 percent of your compensation or $3,000 for years , $4,000 for years , and $5,000 for 2008, with possible cost-of-living adjustments in years 2009 and thereafter. If you also maintain a Roth IRA, the maximum Premium to your Traditional IRAs (i.e., IRAs subject to Code sections 408(a) or 408(b)) is reduced by any Premiums you make to your Roth IRA. Your total annual Premiums to all Traditional IRAs and Roth IRAs cannot exceed the lesser of the dollar amounts described above or 100 percent of your compensation. C. PREMIUM ELIGIBILITY You are eligible to make a regular Premium to your IRA if you have compensation and have not attained age 70½ by the end of the taxable year for which the Premium is made. D. CATCH-UP PREMIUMS If you are age 50 or older by the close of the taxable year, you may make an additional Premium to your IRA. The maximum additional Premium is $500 for years and $1,000 for years 2006 and beyond. E. CATCH-UP CONTRIBUTIONS ALLOWED IN CERTAIN EMPLOYER BANKRUPTCIES You may be eligible to contribute an additional catch-up contribution of up to $3,000 each year in 2006 through To be eligible, the following conditions must be met: 1) you were a participant in a 401(k) plan in which the employer matched at least 50% of your contributions to the plan with employer stock, 2) the employer must have been a debtor in a bankruptcy case in an earlier year and must have been indicted or convicted as a result of the events leading up to the bankruptcy, and 3) you must have been a participant in the 401(k) plan at least six months before the bankruptcy case was filed. If you choose to make these special catch-up contributions, you will not be eligible for the normal catch-up contribution for individuals age 50 and older. F. NONFORFEITABILITY Your interest in your IRA is nonforfeitable. G. COMMINGLING ASSETS The assets of your IRA cannot be commingled with other property except in a common trust fund or common investment fund. H. LIFE INSURANCE No portion of your IRA may be invested in life insurance contracts. I. REFUND OF PREMIUMS Any refund of Premiums must be applied before the close of the calendar year following the year of the refund toward the payment of future Premiums or the purchase of additional benefits. J. COLLECTIBLES You may not invest the assets of your IRA in collectibles (within the meaning of Code section 408(m)). A collectible is defined as any work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage, or any other tangible personal property specified by the Internal Revenue Service (IRS). However, specially minted United States gold and silver coins and certain state-issued coins are permissible investments. Platinum coins and certain gold, silver, platinum or palladium bullion (as described in Code section 408(m)(3)) are also permitted as IRA investments. K. REQUIRED MINIMUM DISTRIBUTIONS You are required to take minimum distributions from your IRA at certain times in accordance with Regulations section Below is a summary of the IRA distribution rules. 1. You are required to take a minimum distribution from your IRA for the year in which you reach age 70½ and for each year thereafter. You must take your first distribution by your required beginning date, which is April 1 of the year following the year you attain age 70½. Minimum distributions may be taken by annuitizing your contract to receive a series of periodic distributions made at intervals not longer than one year. The first distribution that must be made must be the distribution that is required for one payment interval. Payment intervals are the periods for which distributions are made to you (e.g., bimonthly, monthly, etc.). The second distribution need not be made until the end of the next payment interval. The size of your distributions will depend on the rate of return, your age (and the ages of your Beneficiary(ies)), the amount of Premiums you have made to your IRA, and your distribution option. Your distributions must be made at intervals not longer than one year, over your life or the life of you and your Designated Beneficiary. Distributions may also be made over a period certain not longer than your life expectancy or the joint life expectancy of you and your Beneficiary determined using the Uniform Lifetime Table provided by the IRS. 2. If you do not annuitize your IRA, the minimum distribution for any taxable year is equal to the amount obtained by dividing the account balance at the end of the prior year by the applicable divisor. The applicable divisor is generally determined using the Uniform Lifetime Table provided by the IRS. The table assumes a Designated Beneficiary exactly 10 years younger than you, regardless of who is named as your Beneficiary(ies), if any. If your spouse is your sole Designated Beneficiary, and is more than 10 years younger than you, the required minimum distribution is determined annually using the actual joint life expectancy of you and your spouse, obtained from the joint and last survivor table provided by the IRS, rather than the life expectancy divisor from the Uniform Lifetime Table. 3. We reserve the right to do any one of the following by April 1 of the year following the year in which you turn age 70½: (a) make no distribution until you give us a proper withdrawal request, (b) distribute your entire IRA to you in a single sum payment, (c) determine your required minimum distribution each year based on your life expectancy, calculated using the Uniform Lifetime Table, and pay those distributions to you until you direct otherwise, or (d) annuitize your IRA. 4. Your Designated Beneficiary(ies) is determined based on the Beneficiary(ies) designated as of the date of your death, who remains your Beneficiary(ies) as of September 30 of the year following the year of your death. If you die, (a) on or after your required beginning date, distributions must be made to your Beneficiary(ies) under the contract option chosen. If distributions are not made in the form of an annuity, distributions must be made over the longer of the single life expectancy of your Designated Beneficiary(ies), or your remaining life expectancy. If a Beneficiary(ies) other than an individual or qualified trust as defined in the Regulations is named, you will be treated as having no Designated Beneficiary of your IRA for purposes of determining the distribution period. If there is no Designated Beneficiary of your IRA, distributions will commence using your single life expectancy, reduced by one in each subsequent year. (b) before your required beginning date, the entire amount remaining in your account will, at the election of your Designated Beneficiary(ies), either (i) be distributed by December 31 of the year containing the fifth anniversary of your death, or (ii) be distributed over the remaining life expectancy of your Designated Beneficiary(ies). If your spouse is your sole Designated Beneficiary, he or she must elect either option (i) or (ii) by the earlier of December 31 of the year containing the fifth anniversary of your death, or December 31 of the year you would have attained age 70½. Your Designated Beneficiary(ies), other than a spouse who is the sole Designated Beneficiary, must elect either option (i) or (ii) by December 31 of the year following the year of your death. If no election is made, distributions will be calculated in accordance with option (ii). In the case of distributions under option (ii), distributions must commence by December 31 of the year following the year of your death. Generally if your spouse is the Designated Beneficiary, distributions need not commence until December 31 of the year you would have attained age 70½, if later. If a Beneficiary(ies) other than an individual or qualified trust as defined in the Regulations is named, you will be treated as having no Designated Beneficiary(ies) of your IRA for purposes of determining the distribution period. If there is no Designated Beneficiary of 1026 Rev Page 1 of Ascensus, Inc., Brainerd, MN

15 your IRA, the entire IRA must be distributed by December 31 of the year containing the fifth anniversary of your death. A spouse who is the sole Designated Beneficiary of your entire IRA will be deemed to elect to redesignate your IRA as his or her own. Alternatively, the sole spouse Beneficiary will be deemed to elect to treat your IRA as his or her own by either (1) making Premiums to your IRA or (2) failing to timely remove a required minimum distribution from your IRA. Regardless of whether or not the spouse is the sole Designated Beneficiary of your IRA, a spouse Beneficiary may roll over his or her share of the assets to his or her own IRA. L. WAIVER OF 2009 RMD If you are an IRA Owner age 70½ or older, you may not be required to remove an RMD for calendar year 2009 if permitted by the IRA contract. In addition, no Beneficiary life expectancy payments are required for calendar year This waiver will be administered in accordance with applicable law and any additional rules, regulations or other pronouncements released by the IRS. If the five-year rule applies to an IRA with respect to any decedent, the five-year period is determined without regard to calendar year For example, if an IRA Owner died in 2007, the Beneficiary s five-year period ends in 2013 instead of INCOME TAX CONSEQUENCES OF ESTABLISHING AN IRA A. IRA DEDUCTIBILITY If you are eligible to make Premiums to your IRA, the amount of the Premium for which you may take a tax deduction will depend upon whether you (or, in some cases, your spouse) are an active participant in an employer-maintained retirement plan. If you (and your spouse, if married) are not an active participant, the amount of your entire IRA Premium will be deductible. If you are an active participant (or are married to an active participant), the deductibility of your Premium will depend on your modified adjusted gross income (MAGI) and your tax filing status for the tax year for which the Premium was paid. MAGI is determined on your income tax return using your adjusted gross income but disregarding any deductible IRA Premiums. Definition of Active Participant Generally, you will be an active participant if you are covered by one or more of the following employer-maintained retirement plans: 1. a qualified pension, profit sharing, 401(k), or stock bonus plan; 2. a qualified annuity plan of an employer; 3. a simplified employee pension (SEP) plan; 4. a retirement plan established by the federal government, a state, or a political subdivision (except certain unfunded deferred compensation plans under Code section 457); 5. a tax-sheltered annuity for employees of certain tax-exempt organizations or public schools; 6. a plan meeting the requirements of Code section 501(c)(18); 7. a qualified plan for self-employed individuals (H.R. 10 or Keogh Plan); and 8. a SIMPLE IRA plan or a SIMPLE 401(k) plan. If you do not know whether your employer maintains one of these plans, or whether you are an active participant in it, check with your employer or your tax advisor. Also, the IRS Form W-2, Wage and Tax Statement, that you receive at the end of the year from your employer will indicate whether you are an active participant. If you are an active participant, are single, and have MAGI within the applicable phaseout range listed below, the deductible amount of your Premium is determined as follows. (1) Begin with the appropriate phase-out range maximum for the applicable year (specified below), and subtract your MAGI; (2) divide this total by the difference between the phase-out maximum and minimum; (3) multiply this number by the maximum allowable Premium for the applicable year, including catch-up Premiums if you are age 50 or older. The resulting figure will be the maximum IRA deduction you may take. For example, if you are age 30 with MAGI of $36,000 in 2002, your maximum deductible Premium is $2,400 (the 2002 phase-out range maximum of $44,000 minus your MAGI of $36,000, divided by the difference between the maximum and minimum phaseout range limits of $10,000 and multiplied by the Premium limit of $3,000.) If you are an active participant, are married and you file a joint income tax return, and have MAGI within the applicable phaseout range listed below, the deductible amount of your Premium is determined as follows. (1) Begin with the appropriate phase-out maximum for the applicable year (specified below), and subtract your MAGI; (2) divide this total by the difference between the phase-out range maximum and minimum; (3) multiply this number by the maximum allowable Premium for the applicable year, including catch-up Premiums if you are age 50 or older. The resulting figure will be the maximum IRA deduction you may take. For example, if you are age 30 with MAGI of $56,000 in 2002, your maximum deductible Premium is $2,400 (the 2002 phase-out maximum of $64,000 minus your MAGI of $56,000, divided by the difference between the maximum and minimum phase-out limits of $10,000 and multiplied by the Premium limit of $3,000.). If you are an active participant, are married and you file a separate income tax return, your MAGI phase-out range is generally $0 $10,000. However, if you lived apart for the entire tax year, you are treated as a single filer. Tax Year Joint Filers Phase-out Range* (minimum) (maximum) Single Taxpayers Phase-out Range* (minimum)(maximum) 2002 $54,000 $64,000 $34,000 $44, $60,000 $70,000 $40,000 $50, $65,000 $75,000 $45,000 $55, $70,000 $80,000 $50,000 $60, $75,000 $85,000 $50,000 $60, ** $80,000 $100,000 $50,000 $60,000 *MAGI limits are subject to cost-of-living increases for tax years beginning after **The MAGI limits for 2007 listed above may be subject to additional increases. The MAGI phaseout range for an individual that is not an active participant, but is married to an active participant, is $150,000-$160,000. This limit is also subject to cost-of-living increases for tax years beginning after If you are not an active participant in an employer-maintained retirement plan, are married to someone who is an active participant, and you file a joint income tax return with MAGI between the applicable phaseout range for the year, your maximum deductible Premium is determined as follows: (1) begin with the appropriate MAGI phase-out maximum for the year and subtract your MAGI from it; (2) divide this total by the difference between the phase-out range maximum and minimum; (3) multiply this number by the maximum allowable Premium for the applicable year, including catch-up Premiums if you are age 50 or older. The resulting figure will be the maximum IRA deduction you may take. You must round the resulting deduction to the next highest $10 if the number is not a multiple of 10. If your resulting deduction is between $0 and $200 you may round up to $200. B. PREMIUM DEADLINE The deadline for making an IRA Premium is your tax return due date (not including extensions). You may designate a Premium as a Premium for the preceding taxable year in a manner acceptable to us. For example, if you are a calendar year taxpayer, and you make your IRA Premium on or before April 15, your Premium is considered to have been made for the previous tax year if you designate it as such. C. TAX CREDIT FOR PREMIUMS You may be eligible to receive a tax credit for your Traditional IRA Premiums. This credit will be allowed in addition to any tax deduction that may apply, and may not exceed $1,000 in a given year. You may be eligible for this tax credit if you are age 18 or older as of the close of the taxable year, not a dependent of another taxpayer, and not a full-time student. The credit is based upon your income (see chart below) and will range from 0 to 50 percent of eligible Premiums. In order to determine the amount of your Premiums, add all of the Premiums made to your Traditional IRAs and reduce these Premiums by any distributions that you have taken during the testing period. The testing period begins two years prior to the year for which the credit is sought and ends on the tax return due date (including extensions) for the year for which the credit is sought. In order to determine your tax credit, multiply the applicable percentage from the chart below by the amount of your Premiums that do not exceed $2,000. Joint Return $1 30,000 30,001 32,500 32,501 50,000 Over 50,000 Adjusted Gross Income* Head of a Household $1 22,500 22,501 24,375 24,376 37,500 Over 37,500 All Other Cases $1 15,000 15,001 16,250 16,251 25,000 Over 25,000 Applicable Percentage *Adjusted gross income includes foreign earned income and income from Guam, America Samoa, North Mariana Islands and Puerto Rico. AGI limits are subject to cost-of-living adjustments for tax years beginning after D. TAX-DEFERRED EARNINGS The investment earnings of your IRA are not subject to federal income tax until distributions are made (or, in certain instances, when distributions are deemed to be made). E. NONDEDUCTIBLE PREMIUMS You may make nondeductible Premiums to your IRA to the extent that deductible Premiums are not allowed. The sum of your deductible and nondeductible IRA Premiums cannot exceed your Premium Rev Page 2 of Ascensus, Inc., Brainerd, MN

16 limit (the lesser of the allowable Premium limit described previously, or 100 percent of compensation). You may elect to treat deductible IRA Premiums as nondeductible. If you make nondeductible Premiums for a particular tax year, you must report the amount of the nondeductible Premium along with your income tax return using IRS Form 8606, Nondeductible IRAs and Coverdell ESAs. Failure to file IRS Form 8606 will result in a $50 per failure penalty. If you overstate the amount of designated nondeductible Premiums for any taxable year, you are subject to a $100 penalty unless reasonable cause for the overstatement can be shown. F. TAXATION OF DISTRIBUTIONS The taxation of IRA distributions depends on whether or not you have ever made nondeductible IRA Premiums. If you have only made deductible Premiums, any IRA distribution will be fully included in income. If you have ever made nondeductible Premiums to any IRA, other than a Roth IRA, the following formula must be used to determine the amount of any IRA distribution excluded from income. (Aggregate Nondeductible Premiums) x (Amount Withdrawn) Aggregate IRA Balance = Amount Excluded From Income NOTE: Aggregate nondeductible Premiums include all nondeductible Premiums made by you through the end of the year of the distribution (which have not previously been withdrawn and excluded from income). Also note that the aggregate IRA balance includes the total balance of all of your IRAs as of the end of the year of distribution, and any distributions occurring during the year. G. ROLLOVERS AND CONVERSIONS Your IRA may be rolled over to an IRA of yours, may receive rollover Premiums, and may be converted to a Roth IRA, provided that all of the applicable rollover and conversion rules are followed. Rollover is a term used to describe a tax-free movement of cash or other property to your IRA from another IRA, or from your employer s qualified retirement plan, 403(a) annuity plan, 403(b) tax-sheltered annuity, or 457(b) eligible governmental deferred compensation plan. Conversion is a term used to describe the movement of Traditional IRA assets to a Roth IRA. A conversion is generally a taxable event. The rollover and conversion rules are generally summarized below. These transactions are often complex. If you have any questions regarding a rollover or conversion, please see a competent tax advisor. 1. Traditional IRA to Traditional IRA Rollovers Funds distributed from your IRA may be rolled over to an IRA of yours if the requirements of Code section 408(d)(3) are met. A proper IRA to IRA rollover is completed if all or part of the distribution is rolled over not later than 60 days after the distribution is received. You may not have completed another IRA to IRA rollover from the distributing IRA during the 12 months preceding the date you receive the distribution. Further, you may rollover the same dollars or assets only once every 12 months. 2. SIMPLE IRA to Traditional IRA Rollovers Funds may be distributed from your SIMPLE IRA and rolled over to your IRA without IRS penalty, provided two years have passed since you first participated in a SIMPLE IRA plan sponsored by your employer. As with Traditional IRA to Traditional IRA rollovers, the requirements of Code section 408(d)(3) must be met. A proper SIMPLE IRA to IRA rollover is completed if all or part of the distribution is rolled over not later than 60 days after the distribution is received. You may not have completed another SIMPLE IRA to IRA or SIMPLE IRA to SIMPLE IRA rollover from the distributing SIMPLE IRA during the 12 months preceding the date you receive the distribution. Further, you may roll over the same dollars or assets only once every 12 months. 3. Employer-Sponsored Retirement Plan to Traditional IRA Rollovers You may roll over, directly or indirectly, any eligible rollover distribution from an eligible employer-sponsored retirement plan. An eligible rollover distribution is defined, generally, as any distribution from a qualified retirement plan, 403(a) annuity, 403(b) tax-sheltered annuity, or 457(b) eligible governmental deferred compensation plan (other than distributions to nonspouse beneficiaries), unless it is part of a certain series of substantially equal periodic payments, a required minimum distribution, a hardship distribution, or a distribution of Roth 401(k) or Roth 403(b) elective deferrals. If you elect to receive your rollover distribution prior to placing it in an IRA, thereby conducting an indirect rollover, your plan administrator will generally be required to withhold 20 percent of your distribution as a payment of income taxes. When completing the rollover, you may make up the amount withheld, out of pocket, and roll over the full amount distributed from your employersponsored retirement plan. To qualify as a rollover, your eligible rollover distribution must be rolled over to your IRA not later than 60 days after you receive it. Alternatively, you may claim the withheld amount as income, and pay the applicable income tax and, if you are under age 59½, the 10 percent early distribution penalty (unless an exception to the penalty applies). As an alternative to the indirect rollover, your employer generally must give you the option to directly roll over your employer-sponsored retirement plan balance to an IRA. If you elect the direct rollover option, your eligible rollover distribution will be paid directly to the IRA (or other eligible employer-sponsored retirement plan) that you designate. The 20 percent withholding requirement does not apply to direct rollovers. 4. Beneficiary Rollovers from Employer-Sponsored Retirement Plans If you are a spouse, nonspouse, or qualified trust beneficiary of a deceased employer plan participant, you may directly roll over inherited assets from a qualified retirement plan, 403(a) annuity, 403(b) tax-sheltered annuity, or 457(b) governmental deferred compensation plan to an inherited IRA. The IRA must be maintained as an inherited IRA, subject to the beneficiary distribution requirements. 5. Traditional IRA to Employer-Sponsored Retirement Plans You may roll over, directly or indirectly, any eligible rollover distribution from an IRA to an employer s qualified retirement plan, 403(a) annuity, 403(b) tax-sheltered annuity, or 457(b) eligible governmental deferred compensation plan so long as the employer-sponsored retirement plan accepts such rollover Premiums. An eligible rollover distribution is defined as any taxable distribution from an IRA that is not a part of a required minimum distribution. 6. Traditional IRA to Roth IRA Conversions If your modified adjusted gross income is not more than $100,000 and you are not married filing a separate income tax return, you are eligible to convert all or any portion of your existing Traditional IRA(s) into your Roth IRA(s). Beginning in 2010, the $100,000 MAGI limit and the married filing separate tax filing restriction will be eliminated for conversion eligibility. If you are age 70½ or older you must remove your required minimum distribution prior to converting your Traditional IRA. The amount of the conversion from your Traditional IRA to your Roth IRA shall be treated as a distribution for income tax purposes, and is includible in your gross income (except for any nondeductible Premiums). Although the conversion amount is generally included in income, the 10 percent early distribution penalty shall not apply to conversions from a Traditional IRA to a Roth IRA, regardless of whether you qualify for any exceptions to the 10 percent penalty. 7. Qualified HSA Funding Distribution If you are eligible to contribute to a health savings account (HSA), you may be eligible to take a one-time tax-free HSA funding distribution from your IRA and directly deposit it to your HSA. The amount of the qualified HSA funding distribution may not exceed the maximum HSA contribution limit in effect for the type of high deductible health plan coverage (i.e., single or family coverage) that you have at the time of the deposit, and counts toward your HSA contribution limit for that year. For further detailed information, you may wish to obtain IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. 8. Rollover of Exxon Valdez Settlement Payments If you receive a qualified settlement payment from Exxon Valdez litigation, you may roll over the amount of the settlement, up to $100,000, reduced by the amount of any qualified Exxon Valdez settlement income previously contributed to a Traditional or Roth IRA or eligible retirement plan in prior taxable years. You will have until your tax return due date (not including tax extensions) for the year in which the qualified settlement income is received to make the rollover contribution. To obtain more information on this type of rollover, you may wish to visit the IRS website at 9. Written Election At the time you make a proper rollover to an IRA, you must designate in writing to the issuer, your election to treat that Premium as a rollover. Once made, the rollover election is irrevocable. H. TRANSFER DUE TO DIVORCE If all or any part of your IRA is awarded to your spouse or former spouse in a divorce or legal separation proceeding, the amount so awarded will be treated as the spouse s IRA (and may be transferred pursuant to a court-approved divorce decree or written legal separation agreement to another IRA of your spouse), and will not be considered a taxable distribution to you. A transfer is a tax-free direct movement of cash and/or property from one Traditional IRA to another. I. RECHARACTERIZATIONS If you make a Premium to a Traditional IRA and later recharacterize either all or a portion of the original Premium to a Roth IRA along with net income attributable, you may elect to treat the original Premium as having been made to the Roth IRA. The same methodology applies when recharacterizing a Premium from a Roth IRA to a Traditional IRA. If you have converted from a Traditional IRA to a Roth IRA, you may recharacterize the conversion along with net income attributable back to the Traditional IRA. The deadline for completing a recharacterization is your tax filing deadline (including any extensions) for the year for which the original Premium was made or conversion completed. LIMITATIONS AND RESTRICTIONS A. SEP PLANS Under a simplified employee pension (SEP) plan that meets the requirements of Code section 408(k), your employer may make Premiums to your IRA. Your employer is required to provide you with information which describes the terms of your employer s SEP Plan. B. SPOUSAL IRA If you are married and have compensation, you may make Premiums to an IRA established for the benefit of your spouse for any year prior to the year your spouse turns age 70½, regardless of whether or not your spouse has compensation. You may make these spousal Premiums even if you are age 1026 Rev Page 3 of Ascensus, Inc., Brainerd, MN

17 70½ or older. You must file a joint income tax return for the year for which the Premium is made. The amount of the Premiums you may make to your IRA and your spouse s IRA is the lesser of 100 percent of your combined compensation or $6,000 for , $8,000 for , and $10,000 for This amount may be increased with cost-of-living adjustments in 2009 and beyond. However, you may not contribute more than the individual Premium limit to each IRA. If your spouse is age 50 or older by the close of the taxable year, and is otherwise eligible, you may make an additional Premium to your spouse s IRA. The maximum additional Premium is $500 for years , and $1,000 for years 2006 and beyond. C. DEDUCTION OF ROLLOVERS AND TRANSFERS A deduction is not allowed for rollover or transfer Premiums to your IRA. D. GIFT TAX Transfers of your IRA assets to a Beneficiary(ies) made during your life and at your request may be subject to federal gift tax under Code section E. SPECIAL TAX TREATMENT Capital gains treatment and 10-year forward income averaging authorized by Code section 402 do not apply to IRA distributions. F. INCOME TAX TREATMENT Any withdrawal from your IRA is subject to federal income tax withholding. You may, however, elect not to have withholding apply to your IRA withdrawal. If withholding is applied to your withdrawal, not less than 10 percent of the amount withdrawn must be withheld. G. PROHIBITED TRANSACTIONS If you or your Beneficiary(ies) engage in a prohibited transaction with your IRA, as described in Code section 4975, your IRA will lose its tax-deferred status, and you must include the value of your IRA in your gross income for the taxable year you engage in the prohibited transaction. The following transactions are examples of prohibited transactions with your IRA: (1) taking a loan from your IRA; (2) buying property for personal use (present or future) with IRA funds; or (3) receiving certain bonuses or premiums because of your IRA. H. PLEDGING If you pledge any portion of your IRA as collateral for a loan, the amount so pledged will be treated as a distribution, and will be included in your gross income for the taxable year in which you pledge the assets. I. LOANS The policy loans provision of this contract shall not be operative. FEDERAL TAX PENALTIES A. EARLY DISTRIBUTION PENALTY If you are under age 59½ and receive an IRA distribution, an additional tax of 10 percent will generally apply to the amount includible in income, unless made on account of 1) death, 2) disability, 3) a qualifying rollover, 4) the timely withdrawal of an excess Premium, 5) a series of substantially equal periodic payments (at least annual payments) made over your life expectancy or the joint life expectancy of you and your Beneficiary, 6) medical expenses which exceed 7.5 percent of your adjusted gross income, 7) health insurance payments if you are separated from employment and have received unemployment compensation under a federal or state program for at least 12 weeks, 8) certain qualified education expenses, 9) first-home purchases (up to a life-time maximum of $10,000), 10) a levy issued by the IRS, or 11) active military duty (see Qualified Reservist Distributions, below). B. EXCESS PREMIUM PENALTY An additional tax of six percent is imposed upon any excess Premiums you make to your IRA. This additional tax will apply each year in which an excess remains in your IRA. An excess Premium is any Premium that exceeds the amount that you are eligible to make. C. EXCESS ACCUMULATION PENALTY As previously described, you must take a required minimum distribution by your required beginning date for the year you attain age 70½ and by the end of each year thereafter. Your Beneficiary(ies) is required to take certain minimum distributions after your death. An additional tax of 50 percent is imposed on the amount of the required minimum distribution which should have been taken but was not. D. PENALTY REPORTING You must file IRS Form 5329 along with your income tax return to the IRS to report and remit any additional taxes. OTHER A. IRS PLAN APPROVAL The Endorsement used to establish this IRA has been approved by the IRS. The IRS approval is a determination only as to form. It is not an endorsement of the plan in operation or of the investments offered. B. ADDITIONAL INFORMATION You may obtain further information on IRAs from your District Office of the IRS. In particular, you may wish to obtain IRS Publication 590, Individual Retirement Arrangements, by calling TAX- FORM or by visiting on the Internet. C. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ANNUITY To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial organizations to obtain, verify, and record information that identifies each person who opens an annuity. What this means for you: When you open an annuity, you are required to provide your name, residential address, date of birth, and identification number. We may require other information that will allow us to identify you. D. HURRICANE-RELATED RELIEF If you are an individual who sustained an economic loss due to, or are otherwise considered affected by, hurricane Katrina, Rita or Wilma, you may be eligible for favorable tax treatment on distributions and rollovers from your IRA. Qualified distributions include IRA distributions made on or after specified dates for each hurricane and before January 1, 2007 to a qualified individual. For a complete definition of what constitutes a qualified individual and a qualified hurricane distribution for purposes of hurricane relief, refer to IRS Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita and Wilma Percent Penalty Exception on Qualified Distributions Qualified hurricane distributions are not subject to the 10 percent early distribution penalty tax. This penalty exception applies only to the first $100,000 of qualified distributions to each individual. 2. Taxation May be Spread Over Three Years If you receive qualified hurricane distributions, you may elect to include the distribution in your gross income ratably over three years, beginning with the year of the distribution. 3. Repayment of Qualified Hurricane Distributions You may roll over qualified hurricane distributions to an eligible retirement plan, and avoid federal income taxation, within three years of the date of receipt of the distribution. The 60-day rollover rule does not apply to these distributions. For further detailed information on tax relief granted for hurricanes Katrina, Rita and Wilma, and other exceptions which may be granted in the future by the IRS, you may wish to obtain IRS Publication 590, Individual Retirement Arrangements, by calling TAXFORM, or by visiting on the Internet. E. QUALIFIED RESERVIST DISTRIBUTIONS If you are a qualified reservist called to active duty, you may be eligible to take penalty-free distributions from your IRA and recontribute those amounts to an IRA generally within a two-year period from your date of return. For further detailed information you may wish to obtain IRS Publication 590, Individual Retirement Arrangements from the IRS. F. CHARITABLE DISTRIBUTIONS If you are age 70½ or older, you may make tax-free distributions of up to $100,000 per year directly from your IRA to certain charitable organizations. Special tax rules may apply. This provision applies to distributions during tax years 2008 and 2009, or until such later time as extended by Congress. For further detailed information you may wish to obtain IRS Publication 590, Individual Retirement Arrangements from the IRS. G. HEARTLAND DISASTER RELATED TAX RELIEF If you are an individual who has sustained an economic loss due to, or are otherwise considered affected by, the severe storms, tornadoes and flooding that occurred in the Midwestern disaster area, you may be eligible for favorable tax treatment on distributions and rollovers from your IRA. Qualified disaster recovery assistance distributions include IRA distributions made on or after specified dates for each disaster, and before January 1, 2010 to a qualified individual. For more information on this tax relief, refer to IRS Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Area Percent Penalty Exception on Qualified Distributions Qualified disaster recovery assistance distributions are not subject to the 10 percent early distribution penalty tax. This penalty exception applies only to the first $100,000 of qualified distributions to each individual. 2. Taxation May be Spread Over Three Years If you received qualified disaster recovery assistance distributions, you may elect to include the distribution in your gross income ratably over three years, beginning with the year of the distribution. 3. Repayment of Qualified Disaster Recovery Assistance Distributions You may roll over qualified disaster recovery assistance distributions to an eligible retirement plan, and avoid federal income taxation, within three years of the date of receipt of the distribution. The 60-day rollover rule does not apply to these distributions. Executive Vice President 1026 Rev Page 4 of Ascensus, Inc., Brainerd, MN

18 Royal Neighbors of America th Street Rock Island, IL (309) (800) ROTH INDIVIDUAL RETIREMENT ANNUITY DISCLOSURE STATEMENT This Disclosure Statement explains the rules governing a Roth IRA. The term Roth IRA will be used in this Disclosure Statement to refer to a Roth IRA (under Internal Revenue Code (Code) sections 408A) unless specified otherwise. RIGHT TO REVOKE YOUR IRA You have the right to revoke your Roth IRA within seven (7) days of the receipt of the Disclosure Statement. If revoked, you are entitled to a full return of the Premiums you made to your Roth IRA. The amount returned to you would not include an adjustment for such items as sales commissions, administrative expenses, or fluctuation in market value. You may make this revocation only by mailing or delivering a written notice to the Issuer at the address listed on the Application. If you send your notice by first class mail, your revocation will be deemed mailed as of the postmark date. If you have any questions about the procedure for revoking your Roth IRA, please contact the Issuer listed on the Application. REQUIREMENTS OF A ROTH IRA A. CASH PREMIUMS Your Premium must be in cash, unless it is a rollover or conversion. B. MAXIMUM PREMIUM The total amount of the Premiums to your Roth IRA for any taxable year cannot exceed the lesser of 100 percent of your Compensation or $3,000 for years , $4,000 for years , and $5,000 for 2008 with possible cost-of-living adjustments in years 2009 and beyond. If you also maintain a Traditional IRA (i.e., an IRA subject to the limits of Internal Revenue Code (Code) sections 408(a) or 408(b)) the maximum Premium to your Roth IRA is reduced by any Premiums you make to your Traditional IRA. Your total annual Premiums to all Traditional IRAs and Roth IRAs cannot exceed the lesser of the dollar amounts described above or 100 percent of your Compensation. Your Roth IRA Premium is further limited if your modified adjusted gross income (MAGI) equals or exceeds $150,000 if you are a married individual filing a joint income tax return, or equals or exceeds $95,000 if you are a single individual. Married individuals filing a joint income tax return with MAGI equaling or exceeding $160,000 may not fund a Roth IRA. Single individuals with MAGI equaling or exceeding $110,000 may not fund a Roth IRA. Married individuals filing a separate income tax return with MAGI equaling or exceeding $10,000 may not fund a Roth IRA. The MAGI limits described above are subject to cost-of-living increases for tax years beginning after If you are married filing a joint income tax return and your MAGI is between the applicable MAGI phaseout range for the year, your maximum Roth IRA Premium is determined as follows: (1) Begin with the appropriate MAGI phaseout maximum for the applicable year and subtract your MAGI from it; (2) divide the result by the difference between the phase-out range maximum and minimum; and (3) multiply this number by the maximum allowable Premium for the year, including catch-up Premiums if you are age 50 or older. For example, if you are age 30 and your MAGI is $155,000, your maximum Roth IRA Premium for 2002 is $1,500. This amount is determined as follows: [($160,000 minus $155,000) divided by $10,000] multiplied by $3,000. If you are single and your MAGI is between the applicable MAGI phaseout for the year, your maximum Roth IRA Premium is determined as follows: (1) Begin with the appropriate MAGI phase-out maximum for the applicable year and subtract your MAGI from it; (2) divide the result by the difference between the phase-out range maximum and minimum; and (3) multiply this number by the maximum allowable Premium for the year, including catch-up Premiums if you are age 50 or older. For example, if you are age 30 and your MAGI is $98,000, your maximum Roth IRA Premium for 2002 is $2,400. This amount is determined as follows: [($110,000 minus $98,000) divided by $15,000] multiplied by $3,000. C. PREMIUM ELIGIBILITY You are eligible to make a regular Premium to your Roth IRA, regardless of your age, if you have compensation and your MAGI is below the maximum threshold. Your Roth IRA Premium is not limited by your participation in a retirement plan, other than a Traditional IRA. D. CATCH-UP PREMIUMS If you are age 50 or older by the close of the taxable year, you may make an additional Premium to your Roth IRA. The maximum additional Premium is $500 for years and $1,000 for years 2006 and beyond. E. CATCH-UP CONTRIBUTIONS ALLOWED IN CERTAIN EMPLOYER BANKRUPTCIES You may be eligible to contribute an additional catch-up contribution of up to $3,000 each year in 2006 through To be eligible, the following conditions must be met: 1) you were a participant in a 401(k) plan in which the employer matched at least 50% of your contributions to the plan with employer stock, 2) the employer must have been a debtor in a bankruptcy case in an earlier year and must have been indicted or convicted as a result of the events leading up to the bankruptcy, and 3) you must have been a participant in the 401(k) plan at least six months before the bankruptcy case was filed. If you choose to make these special catch-up contributions, you will not be eligible for the normal catch-up contribution for individuals age 50 and older. F. NONFORFEITABILITY Your interest in your Roth IRA is nonforfeitable. G. COMMINGLING ASSETS The assets of your Roth IRA cannot be commingled with other property except in a common trust fund or common investment fund. H. LIFE INSURANCE No portion of your Roth IRA may be invested in life insurance contracts. I. REFUND OF PREMIUMS Any refund of Premiums must be applied before the close of the calendar year following the year of the refund toward the payment of future Premiums, paid-up annuity additions, or the purchase of additional benefits. J. COLLECTIBLES You may not invest the assets of your Roth IRA in collectibles (within the meaning of Code section 408(m)). A collectible is defined as any work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage, or other tangible personal property specified by the Internal Revenue Service (IRS). However, specially minted United States gold and silver coins and certain state-issued coins are permissible investments. Platinum coins and certain gold, silver, platinum or palladium bullion (as described in Code section 408(m)(3)) are also permitted as Roth IRA investments. K. BENEFICIARY PAYOUTS Your Designated Beneficiary is determined based on the Beneficiary(ies) designated as of the date of your death who remains your Beneficiary(ies) as of September 30 of the year following the year of your death. If you die, 1) on or after your distributions have irrevocably commenced due to the annuitization of the Contract, distributions must be made to your Beneficiary(ies) according to the distribution option you chose. 2) before your distributions have irrevocably commenced, distributions will, at the election of your Beneficiary(ies), either (a) be distributed by December 31 of the year containing the fifth anniversary of your death, or (b) be distributed over the remaining life expectancy of your Designated Beneficiary(ies). If your spouse is your sole Designated Beneficiary, he or she must elect either option (a) or (b) by the earlier of December 31 of the year containing the fifth anniversary of your death, or December 31 of the year you would have attained age 70½. Your Designated Beneficiary(ies), other than a spouse who is the sole Designated Beneficiary, must elect either option (a) or (b) by December 31 of the year following the year of your death. If no election is made, distribution will be calculated in accordance with option (b). In the case of a distribution under option (b), distributions must commence by December 31 of the year following the year of your death. Generally if your spouse is the Designated Beneficiary, distributions need not commence until December 31 of the year you would have attained age 70½, if later. If a Beneficiary(ies) other than an individual or qualified trust as defined in the Regulations is named, you will be treated as having no Designated Beneficiary(ies) of your Roth IRA for purposes of determining the distribution period. If there is no Designated Beneficiary of your Roth IRA, the entire Roth IRA must be distributed by December 31 of the year containing the fifth anniversary of your death Rev Page 1 of Ascensus, Inc., Brainerd, MN