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Electing this rider could have a negative effect on policy value and thereby increase the risk of policy lapse.

Partial Surrender: Effect on Death Benefit A partial surrender decreases the variable death benefit by decreasing the policy value.

Increases or Decreases in Target Face Amount You may not increase or decrease the target face amount.

Payment of Proceeds

Surrender and Death Benefit Proceeds We will process death benefits and full or partial surrenders at unit values next computed after we receive the request for surrender or due proof of death, provided such request is complete and in good order. Payment of surrender or death proceeds usually will be made in one lump sum within seven days, unless another payment option has been elected. Payment of the death proceeds, however, may be delayed if the claim for payment of the death proceeds needs to be investigated to ensure payment of the proper amount to the proper payee. Any such delay will not be beyond that reasonably necessary to investigate such claims consistent with insurance practices customary in the life insurance industry.

The cash surrender value is the maximum payable for surrender.

Death Benefit The death benefit is the policy’s variable death benefit, or the minimum face amount, if the Minimum Face Amount Rider is in force.

The variable death benefit is equal to the policy’s cash value on the previous monthly calculation day, multiplied by the applicable “death benefit adjustment rate” on the previous monthly calculation day.

Loans can reduce the policy’s death benefit. We deduct the amount of any outstanding loans plus any accrued loan interest from your policy value before we calculate the death benefit.

Death Benefit Adjustment Rate This rate assumes an interest rate ranging from 4% to 5% depending on the policy’s initial premium and its target face amount. If the net investment rate of return (including the deduction of fees and charges) applied to the policy value exceeds the assumed interest rate, the variable death benefit will be greater than the target face amount. Conversely, if the net investment rate of return in less than the assumed rate, the variable death benefit will be less than the target face amount.

Payment Options All or part of the surrender or death proceeds of a policy may be applied under one or more of the following payment options. We may offer other payment options or alternative versions of these options in future. Your policy will have more information about the payment options.

You may elect a payment option for payment of the death proceeds to the beneficiary. You may revoke or change a prior election, unless you have waived that right. The beneficiary may


make or change an election before payment of the death proceeds, unless you have made an irrevocable election.

A written request in a form satisfactory to us is required to elect, change or revoke a payment option.

If the policy is assigned as collateral security, we will pay any amount due the assignee in one lump sum. Any remaining proceeds will remain under the option elected.

The minimum amount of surrender or death proceeds that may be applied under any payment option is $1,000. You should know that we offer the Phoenix Concierge Account (“PCA”) as the default method of payment for all death claims greater or equal to $5,000 when the beneficiary is an individual, trust or estate. The PCA is generally not offered to corporations or similar entities. The PCA is an interest bearing checking account that is made available to beneficiaries in lieu of a single check. A beneficiary may opt out of the PCA and may elect one of the payment options described below, or another option we are then offering for this policy before payment of the death proceeds.

The PCA is not insured by the FDIC, NSUSIF, or any other state or federal agency which insures deposits. The guarantee of principal is based on the claims-paying ability of the company. Also, if the recipient chooses, death benefit proceeds will be payable in the form of an annuity option. Any such annuity option is subject to certain restrictions (including minimum amount requirements). In addition, there may be legal requirements that limit the recipient’s annuity options and the timing of payments. A recipient should consult a qualified tax adviser before electing to receive an annuity.

Payment Option 1—Lump Sum We pay all proceeds as one sum.

Payment Option 2—Left to Earn Interest We pay interest on the principal for the beneficiary’s lifetime. We guarantee an annual interest rate of at least 3%.

Payment Option 3—Payment for a Specific Period We pay equal installments for a specified period whether the payee lives or dies. We make the first payment on the date of settlement. We guarantee an annual assumed interest rate on the unpaid balance of at least 3%.

Payment Option 4—Life Annuity with Specified Period Certain We will pay equal installments for the specified period certain, and continue to make payments as long as the payee lives. There is a choice of three period certains:

10 years; or 20 years; or

until the installments paid refund the amount applied under this option.

If the payee is not living when the final payment falls due, that payment will be limited to the amount which needs to be added to the payments already made to equal the amount applied under this option.

If, for the age of the payee, a period certain is chosen that is shorter than another period certain paying the same installment

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