The Tax Tamer ® I - First Investors

MORTALITY AND EXPENSE RISKCHARGEWe impose a mortality and expense riskcharge.The mortality risk that We assume arisesfrom Our obligation to continue to makeannuity payments to each Annuitantregardless of (a) how long that person livesand (b) how long all payees as a group live.This assures an Annuitant that neither theAnnuitant's own longevity nor animprovement in life expectancy generally willhave an adverse effect on the annuitypayments the Annuitant will receive underthe Contract. We also assume a riskassociated with the guaranteed death benefitwhich We would pay in the event of deathduring the Accumulation Period.In addition, We assume the risk that thecharges for administrative expenses may notbe adequate to cover such expenses. We willnot increase the amount We charge foradministrative expenses. In consideration forassuming these mortality and expense risks,We deduct an amount equal on an annualbasis to 1.00% of the daily AccumulationUnit value of the Subaccounts.We guarantee that We will not increase themortality and expense risk charge after aContract is issued. If the charge isinsufficient to cover the actual cost of themortality and expense risks, the loss will fallon Us. Conversely, if the deductions provemore than sufficient, the excess will be aprofit to Us. We can use any profits resultingto Us from over-estimates of the actual costsof the mortality and expense risks for anybusiness purpose.OTHER CHARGESAdministrative ChargeWe may deduct an administrative charge of$7.50 annually from the Accumulated Valueof Contracts that have an Accumulated Valueof less than $1,500 because of partialwithdrawals. These charges are tocompensate Us for expenses involved inadministering small Contracts. If the actualexpenses exceed charges, We will bear theloss. We guarantee that We will not increasethe administrative charges.Premium Tax ChargeSome states and municipalities assesspremium taxes at the time You:• make Purchase Payments,• withdraw or surrender, or• begin receiving annuity payments.We currently pay any premium taxes that areassessed. However, We reserve the right todeduct such premium taxes in accordancewith the terms of Your Contract. These taxescurrently range up to 3.5% of PurchasePayments received by Us.FEDERAL TAX INFORMATIONThis section provides a general summary ofthe federal tax law as it pertains to theContract. We believe that the Contract willqualify as a tax deferred annuity Contract forfederal income tax purposes and thefollowing summary assumes so. We do notdiscuss state or local taxes, except as noted.The law described herein could change,possibly retroactively. We have the right tomodify the Contract in response to changesin the law that affect the favorable taxtreatment for annuity owners. We do notoffer this summary as tax advice, for whichYou should consult a qualified tax adviser.Taxation of a Contract will depend, in part,on whether the Contract is purchased as partof a qualified retirement plan or anindividual retirement account (“IRA”).Purchase Payments to a Contract outside of aqualified plan or IRA (“non-qualified”) areon an “after-tax” basis, so You only payincome taxes on Your earnings. Generally,these earnings are taxed when You receivethem from the Contract. The IRS has notreviewed the Contracts for qualification as anIRA.When a non-natural person owns a nonqualifiedContract, the annuity generally willnot be treated as an annuity for tax purposes19