EquiTrust Life Insurance Company [5400 University Avenue] [West Des Moines, Iowa 50266-5997] [1-888-349-4656]

Flexible Premium Fixed and Equity Indexed Deferred Annuity Policy

EquiTrust Life Insurance Company (hereinafter “We”, “Our”, “Us”, or “The Company”) will pay the benefits of this policy subject to all of its terms. In this policy, “You” or “Your” will refer to the Owner. Read Your policy carefully. This is a legal contract between You and The Company. Interest credited to this policy may be affected by an external index; however, this policy does not directly participate in any stock, bond or equity investments. No dividends are paid on this policy.

Right To Examine and Return This Policy You may cancel this policy within [10] days after You receive it. Simply mail or deliver the policy to Us at the address shown below. If You return the policy by mail, it will be deemed returned on being postmarked, properly addressed and postage prepaid. Canceling this policy will void it from the beginning and we will refund to You the premium paid. Signed for and on behalf of EquiTrust Life Insurance Company as of the Policy Date.

President Secretary

This policy contains a Market Value Adjustment which may cause the benefits and values of this policy to increase or decrease. Annuity Benefit payable on the Income Date Death Benefit payable in the event of the Owner’s death prior to the Income Date Nonparticipating (no dividends)

ET-BIA-2000(01-04)

This policy is a legal contract between You and EquiTrust Life Insurance Company. READ YOUR POLICY CAREFULLY INDEX OF MAJOR POLICY PROVISIONS Section 7 – Index Interest Methodologies . . . . . . . . . . . . . . . . . . 9 7.1 Terminology 7.2 Index Interest Averaging Methodology 7.3 Index Interest Point-to-Point Methodology Section 8 -- Death Benefits . . . . . . . . 10 8.1 Amount of Death Benefit 8.2 Death of Owner Prior to Income Date 8.3 Payment to Beneficiary 8.4 Continuation by Spouse after the Owner’s Death 8.5 Death of Annuitant Prior to Income Date 8.6 Death of Owner on or After Income Date Section 9 – Policy Values . . . . . . . . 11 9.1 Accumulated Value 9.2 Cash Surrender Value 9.3 Guaranteed Minimum Cash Surrender Value 9.4 Market Value Adjustment 9.5 Surrender Charge 9.6 Free Partial Withdrawal Privilege 9.7 Partial Withdrawal 9.8 Periodic Report Section 10 – Payment Options . . . . 13 10.1 Choosing an Option 10.2 Payment Option Choices 10.3 Interest and Mortality 10.4 Payment Option Agreement; Effective Date 10.5 Death of Payee 10.6 Withdrawal of Proceeds 10.7 Claims of Creditors Payment Option Tables. . . . . . . . . . . 15

Policy Data . . . . . . . . . . . . . . . . . . . . . . 3 Section 1 -- Definitions . . . . . . . . . . . . 5 1.1 Accounts 1.2 Annuitant 1.3 Age 1.4 Fixed Account 1.5 Home Office 1.6 Income Date 1.7 Index 1.8 Index Account 1.9 Index Value 1.10 Owner 1.11 Payee 1.12 Policy Anniversary 1.13 Policy Date 1.14 Policy Year 1.15 Premium Bonus Section 2 -- The Contract . . . . . . . . . . . 6 2.1 Annuity Benefit 2.2 Contract 2.3 Modification 2.4 Incontestable Clause 2.5 Misstatement of Age or Sex 2.6 Return of Policy and Policy Settlement 2.7 Nonparticipation Section 3 -- Ownership and Beneficiary . . . . . . . . . . . . . . . . . . . . . . . 6 3.1 Ownership 3.2 Beneficiary 3.3 Change of Owner or Beneficiary 3.4 Assignment Section 4 – Premiums and Transfers . . 7 4.1 Premium Payments 4.2 Allocation of Premiums 4.3 Transfers Section 5 – Fixed Account . . . . . . . . . . 8 5.1 Fixed Account Value 5.2 Current Interest Rate Section 6 – Index Account . . . . . . . . . . 8 6.1 Index Account Value 6.2 Index Interest

ET-BIA-2000(01-04)

Any additional benefits and endorsements which apply to this policy are listed on the Policy Data pages and are described in the forms which follow the last page of this policy. 2

POLICY DATA Annuitant[, Joint Annuitant] Annuitant’s Age[, Joint Annuitant’s Age] Annuitant’s Sex[, Joint Annuitant’s Sex] Policy Number Policy Date Owner(s) [John Doe] Owner(s) [Jane Doe] Income Date Guaranteed Minimum Cash Surrender Value Interest Rate Initial Premium [Premium Bonus Percentage (applies to all premium received in the [first] policy year)]

[JOHN DOE], [JANE DOE] [35], [35] [Male], [Female] [0999901] [05-01-2004] Age [35] Sex [M] Age [35] Sex [F] [05-01-2074] [1.5%] [$20,000] [10%]

[Premium Bonus Amount for Initial Premium]

[$2,000]

FIXED ACCOUNT: Initial Premium and any Premium Bonus Allocated to the Fixed Account: [$11,000] Guaranteed Minimum Interest Rate [1.5%] Current Interest Rate: [3.45%]* *Guaranteed for one Policy Year on the Initial Premium and any Premium Bonus allocated to the Fixed Account. INDEX ACCOUNT: Index Index At Issue

S&P 500® [1,400]

Crediting Methodology

Initial Premium and any Premium Bonus Allocated to the Index Account

Averaging Point-to-Point

[$5,500.00] [$5,500.00]

Index Cap Rate** Initial

Minimum

Participation Rate

[14.0%] [14.0%]

[7.0]% [5.0]%

[60%-100%] [60%-100%]

**The Index Cap Rate is guaranteed for [one] Policy Year[s].

Form Number ET-BIA-2000(01-04) Policy Number [0999901] [Print Date] [05/01/04]

ET-BIA-2000(01-04)

3

Index Margin [0%-15%] [0%-15%]

THE STANDARD & POOR’S 500® COMPOSITE STOCK PRICE INDEX This Index does not include dividends paid by the underlying companies. Standard & Poor’s 500® is a trademark of the McGraw-Hill Companies, Inc. and has been licensed for use by EquiTrust Life Insurance Company. This product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of purchasing this annuity policy.

SCHEDULE OF SURRENDER CHARGES The Surrender Charge Percentage will be as shown in the following table: Policy Year [1 2 3 4 5 6 7 8

Surrender Charge Percentage 20% 20% 19% 19% 18% 17% 16% 14%

Policy Year 9 10 11 12 13 14 15+

Surrender Charge Percentage 12% 10% 8% 6% 4% 2% 0%]

The Surrender Charge Percentage is measured from the beginning of each Policy Year. The Surrender Charge equals the amount of the Accumulated Value surrendered or withdrawn, times the applicable Surrender Charge Percentage. The Accumulated Value is equal to the sum of the value of the Fixed Account and the Index Account as defined in the policy.

**************** SCHEDULE OF FORMS *************** Form No. [ET-BIA-2000(01-04) [430-NHW(08-03)

Description Flexible Premium Fixed and Equity Indexed Deferred Annuity Policy] Nursing Home Waiver]

Form Number ET-BIA-2000(01-04) Policy Number [0999901] [Print Date] [05/01/04]

ET-BIA-2000(01-04)

4

1.9 Index Value means the Index Value on any specified date and is the closing value on the previous trading day of the Index shown on the Policy Data page.

Section 1 -- Definitions 1.1 Account(s) means the Fixed Account or the Index Account.

1.10 Owner means the person (or persons) who is designated in Our records as the Owner of the policy and who is entitled to exercise all rights and privileges provided in the policy. The original Owner is shown on the Policy Data pages. The term “person” includes a trust, corporation, partnership, association or like entity for this purpose.

1.2 Annuitant means the person(s) whose life determines the annuity benefit. Reference to Annuitant in this policy includes any Joint Annuitant. 1.3 Age means Age at the last birthday. 1.4 Fixed Account means the account which will earn interest at the Current Interest Rate.

1.11 Payee means any person receiving payments under this policy.

1.5 Home Office means EquiTrust Life Insurance Company's office located at 5400 University Avenue, West Des Moines, Iowa, 50266-5997.

1.12 Policy Anniversary means the same date in each year as the Policy Date.

1.6 Income Date means the date when the annuity benefits begin. The income date is shown on the Policy Data page.

1.13 Policy Date means the Policy Date shown on the Policy Data pages. This date is used to determine Policy Years and anniversaries.

1.7 Index means the Index We use to determine the Index Value. The Index is shown on the Policy Data page.

1.14 Policy Year means the 12-month period that begins on the Policy Date or on a Policy Anniversary.

1.8 Index Account means an account which will earn Index Interest based on changes in the Index listed on the Policy Data page. The Index Interest crediting methodologies are described in Section 7.

ET-BIA-2000(01-04)

1.15 Premium Bonus means the amount, if any, equal to the premium (received in the [first] Policy Year only) multiplied by the Premium Bonus Percentage as shown on the Policy Data page.

5

2.3 Modification No one can change any part of this policy except You and one of Our officers. Both must agree to the change, and it must be in writing. No agent may change this policy or waive any of its provisions.

Section 2 -- The Contract 2.1 Annuity Benefit On the Income Date, if the Annuitant (or either Joint Annuitant) is living and this policy is in force, We will apply the Accumulated Value, as defined in Section 9.1, to the payment option elected.

2.4 Incontestable Clause This policy is incontestable from its Policy Date.

If a payment option is not elected and you have not elected a lump sum payment, We will apply the Accumulated Value under payment option C for the Annuitant’s Age and sex, (or in the event of Joint Annuitants, both Annuitants’ age and sex). Under this option, We will make at least 120 monthly payments. After 120 payments, the Annuitant must be living to receive further payments. If the Annuitant (or the last surviving Joint Annuitant) dies before 120 payments have been paid, any remaining payments will be paid in accordance to the terms of the payment option agreement issued at the time the payments began.

2.5 Misstatement of Age or Sex We have the right to correct benefits for misstated Age or sex. In such an event, benefits will be the amount the premium actually paid would have bought at the correct Age and sex. 2.6 Return of Policy and Policy Settlement We reserve the right to require this policy to be sent to Us for any: a. modification; b. death settlement; c. surrender; d. assignment; e. change of Owner or Beneficiary; f. election; or g. exercise of any policy privilege.

2.2 Contract This policy is a legal contract. We issue this policy in consideration of the initial premium and the statements in the application. The entire contract consists of:

2.7 Nonparticipation This policy does not share in Our surplus or profits. Section 3 -- Ownership and Beneficiary

a. the basic policy; b. any endorsements or additional benefit riders; c. the attached copy of Your application; and d. any amendments, supplemental applications or other attached papers.

3.1 Ownership You have all rights, title and interest in this policy prior to the Income Date (see Section 10 for rights on or after the Income Date). You may exercise all rights and options stated in the policy. Upon the death of any Owner, the interest of any surviving Owner will take precedence over the interest of any Beneficiary.

We rely on statements made in the application for the policy. These statements, in the absence of fraud, are deemed representations and not warranties. ET-BIA-2000(01-04)

6

If this policy is owned by a trust, corporation, partnership, association or other like entity the Annuitant is considered the Owner for purposes of the death benefit provision.

we make or other action taken by Us before We receive and record the change; and e. a change of beneficiary designation will automatically revoke any previous designations.

3.2 Beneficiary Beneficiaries are as named in the application, unless changed by You or altered under Section 8.2.

3.4 Assignment No assignment of this policy will bind Us unless: a. it is in writing on a form acceptable to Us; b. it is signed by all persons named as Owner; and c. it is received and recorded by Us at Our Home Office.

Unless the beneficiary designation provides otherwise, if any Beneficiary in a class dies before You, that Beneficiary's interest will pass to the other Beneficiaries in the class. Secondary or contingent Beneficiaries will have the right to receive the Death Benefit only if no primary Beneficiary survives.

An assignment will not affect any payment we make or other action taken by Us before We receive and record it. We will not be responsible for the validity of an assignment.

If no Beneficiary survives You, or if no Beneficiary is named, the Death Benefit will be paid in one sum to Your estate.

Section 4 – Premiums and Transfers

In finding and identifying Beneficiaries We may rely on sworn statements, other facts, or evidence We deem satisfactory. Any benefits We pay based on such information will be a valid discharge of Our duty up to the amount paid.

4.1 Premium Payments The initial premium payment must be made on or before the Policy Date. However, We reserve the right to limit or restrict the amount of a premium payment as We deem appropriate. Premiums received after the first Policy Year cannot total more than [300]% of premiums received in the first Policy Year. Premiums are to be paid to Our Home Office.

3.3 Change of Owner or Beneficiary You may change ownership or the beneficiary designation unless otherwise provided in the current designation. Any change is subject to the following rules: a. the change must be made in writing on a form acceptable to Us; b. if the Owner is more than one person, the written notice for change must be signed by all persons named as Owner; c. the form must be sent to Our Home Office ; d. the change will take effect on the date signed, subject to any payment ET-BIA-2000(01-04)

4.2 Allocation of Premiums You select how You want Your premiums allocated among the Fixed Account and Index Account methodologies. Any Premium Bonus will be allocated proportionately in the same manner as the premium. Your allocation instructions as of the Policy Date are shown on the Policy Data page. The 7

amount allocated to an account or methodology must be at least $2,000. All premiums after the initial premium will be allocated to the Fixed Account at the time of receipt. On each Policy Anniversary, the Accumulated Value associated with any premium received since the prior Policy Anniversary will be reallocated among the Accounts according to Your most recent instructions.

is a portion of the Accumulated Value and earns interest at the Current Interest Rate. The Fixed Account Value is calculated as: a. all premiums and Premium Bonus allocated to the Fixed Account; plus (minus) b. any transfers into (out of) the Fixed Account; less c. any Partial Withdrawals (before any Market Value Adjustment or Surrender Charges); plus d. interest credited at the Current Interest Rate.

You may change Your allocation instructions at any time by sending a written request on a form acceptable to Us to Our Home Office. Your written request must be received by Us at least five business days prior to the Policy Anniversary. The change to Your allocations will be effective on the Policy Anniversary next following Our receipt of written notice.

5.2 Current Interest Rate The Current Interest Rate on the Policy Date is shown in the Policy Data page and is applicable to the initial premium and any associated Premium Bonus You have allocated to the Fixed Account. The rate is guaranteed for the duration shown on the Policy Data page.

4.3 Transfers You may transfer amounts on the Policy Anniversary between the Fixed Account and Index Account methodologies by sending a written request on a form acceptable to Us to Our Home Office. A transfer will be effective on the Policy Anniversary next following Your request subject to the following: a.

b. c.

We may declare a different interest rate on a Policy Anniversary or for subsequent premium or amounts transferred to the Fixed Account. We will notify You of any new rate and its guaranteed duration.

Your written request for transfer is received five business days prior to the Policy Anniversary; the amount transferred is not less than [$2000]; any remaining account balance after a transfer is not less than $2000.

Section 6 – Index Account 6.1 Index Account Value You may allocate all or a portion of the premium(s) to the Index Account. Any Premium Bonus will be allocated proportionately in the same manner as the premium. The Index Account Value is a portion of the Accumulated Value and earns Index Interest. Index Interest is based on changes in the Index listed on the Policy Data page.

Section 5 – Fixed Account 5.1 Fixed Account Value You may allocate all or a portion of the premium(s) to the Fixed Account. Any Premium Bonus will be allocated proportionately in the same manner as the premium. The Fixed Account Value ET-BIA-2000(01-04)

8

The Index Account Value equals: a. all premiums and any Premium Bonus allocated to the Index Account; plus (minus) b. any transfers into (out of) the Index Account; less c. any Partial Withdrawals (before any Market Value Adjustment or Surrender Charges); plus d. Index Interest calculated by Your chosen crediting methodology.

Index Increase – The Index Increase is the percentage excess of the applicable Index Average or end-of-year Index Value over the beginning-of-year Index Value. Index Average – The Index Average for a Policy Year equals: a. the sum of the Index Values from each trading day during the Policy Year; divided by b. the number of trading days during the Policy Year.

6.2 Index Interest Index Interest will be added to the Index Account at the end of each Policy Year. At the beginning of each Policy Year, You may allocate the Index Account Value to the Averaging methodology, the Point-to-Point methodology, or a portion to each.

Index Cap Rate – The Index Cap Rate is used in the calculation of the Index Interest. The Index Cap Rate is the maximum Index Increase. The initial Index Cap Rate is declared at issue and for the duration shown on the Policy Data page. The Index Cap Rate for future durations will be declared on each Policy Anniversary and is guaranteed for the following Policy Year. The minimum Index Cap Rate is shown on the Policy Data page.

The Index Interest in any Policy Year will never be less than zero. Section 7 – Methodologies

Index

Interest

7.1 Terminology A detailed explanation of the terms used in this section is provided below.

Index Margin –The Index Margin is a percentage rate subtracted from the Index Increase after recognition of the Index Cap Rate. The Index Margin is declared at issue and is shown on the Policy Data page. The Index Margin will not change for the duration of the policy.

Index Value – The Index Value on any specified date is the closing value on the previous trading day associated with the Index shown on the Policy Data page. If the Index Value is not available for any Index Value date, We will use the Index Value on the immediately preceding day for which the Index Value is available. If publication of an Index is discontinued or the calculation is substantially changed, We will substitute a suitable Index and notify You. If required, any change in an Index will be filed with the proper regulatory authority for prior approval.

ET-BIA-2000(01-04)

Participation Rate – The Participation Rate is the recognized percentage of the Index Interest, after recognition of the Index Cap Rate and Index Margin, that is used in the calculation of Index interest. The Participation Rate is declared at issue and will not change for the duration of the policy.

9

7.2 Index Interest Averaging Methodology The Index Interest Averaging Methodology is: a. the Index Average for the current Policy Year, minus the Index Value on the last Policy Anniversary date; divided by b. the Index Value on the last Policy Anniversary date; adjusted c. to not be greater than the Index Cap Rate; less d. the Index Margin; multiplied by e. the Participation Rate; multiplied by f. the Index Account Value allocated to the Averaging Methodology on the last Policy Anniversary date (including any transfers on that date), less any partial withdrawals (before any Market Value Adjustment or reduction for Surrender Charges) during the Policy Year.

Section 8 -- Death Benefits 8.1 Amount of Death Benefit The death benefit is equal to the Accumulated Value on the date of Your death. Interest will be applied from the date of death to the date of a lump sum payment or the first payment made under a payment option. The interest rate will be set by Us, but will not be less than the Guaranteed Minimum Interest Rate. If any law applicable to this policy requires the death benefit to be calculated in a manner that results in a larger death benefit, We will pay the larger benefit amount. 8.2 Death of Owner Prior to Income Date If an Owner dies prior to the Income Date, the death benefit will be paid to the Beneficiary. If the Owner is not a living person and the Annuitant has died, the policy will be treated as if the Owner had died, and the death benefit will be paid to the Beneficiary in a lump sum.

7.3 Index Interest Point-to-Point Methodology The Index Interest Point-to-Point Methodology is equal to: a. the Index Value for the current Policy Anniversary Date, minus the Index Value on the last Policy Anniversary date; divided by b. the Index Value on the last Policy Anniversary date; adjusted c. to not be greater than the Index Cap Rate; less d. the Index Margin; multiplied by e. the Participation Rate; multiplied by f. the Index Account Value allocated to the Point-to-Point Methodology on the last Policy Anniversary date (including any transfers on that date), less any partial withdrawals (before any Market Value Adjustment or reduction for Surrender Charges) during the Policy Year.

ET-BIA-2000(01-04)

8.3 Payment to Beneficiary Upon the death of an Owner while this policy is in force, the death benefit will be paid to the Beneficiary after receipt by Us of due proof of the death. Due proof of death means proof of death satisfactory to Us. The Beneficiary may choose how the death benefit will be paid, either as a lump sum or from the options described in Section 10 – Payment Options. If the Owner has previously designated how the death benefit was to be paid, the Beneficiary cannot change the Owner’s designation. 10

If there is only one Beneficiary, the Beneficiary may elect to defer payment of the death benefit for up to five years after the date of death of the Owner. An Annuitant is necessary to continue the policy between the date of death and the final distribution. If there is no Annuitant at that time, the Beneficiary will be the new Annuitant.

If all Owners do not choose a new Annuitant within 90 days of the Annuitant’s death, the oldest of all Owners becomes the Annuitant.

The Beneficiary may elect a payment option provided: a. the Owner did not previously designate how the death benefit was to be paid; b. this election is made within 60 days of the date We receive due proof of death; c. payments under the annuity payment option begin not later than 1 year after an Owner’s death; and d. payments will be payable for the life of the Beneficiary, or over a period not greater than the Beneficiary's life expectancy.

8.6 Death of Owner on or After Income Date If You die on or after the Income Date, but before all proceeds payable under this policy have been distributed, We will continue payments to the Payee under the payment method in effect at the time of the Your death.

For purposes of this Section 8, if any Owner of this contract is not a natural person, the death of the Annuitant shall be treated as the death of an Owner.

Section 9 – Policy Values All policy values are equal to or greater than the minimums set by the laws of the state where the policy is delivered. 9.1 Accumulated Value The Accumulated Value of this policy will be equal to the Fixed Account Value plus the Index Account Value.

8.4 Continuation by Spouse after the Owner’s Death If an Owner dies prior to the Income Date, the Owner’s spouse can continue the policy as Owner in lieu of receiving a death benefit if the surviving spouse was: a. named as an Owner; or b. named as sole Beneficiary.

9.2 Cash Surrender Value Before the Income Date, You may surrender this policy for its Cash Surrender Value. To do this We must receive a written request from You on a form acceptable to Us at Our Home Office.

The surviving spouse must send Us a written request to do so.

The Cash Surrender Value is determined as of the date Your written request is received by Us and is equal to: a. the Accumulated Value; less b. any Surrender Charge; multiplied by c. the Market Value Adjustment (if any).

8.5 Death of Annuitant Prior to Income Date If the Owner is not the Annuitant, and the Annuitant (or the last surviving Joint Annuitant) dies while this policy is in force, all Owners must: a. notify Us within 90 days; and b. choose a new Annuitant.

ET-BIA-2000(01-04)

11

In no event will the Cash Surrender Value be less than the Guaranteed Minimum Cash Surrender Value.

The index rates are based on the Treasury Constant Maturity Series published by the Federal Reserve. The starting index rate is the rate at the Policy Date for a maturity of [14] years. The current index rate is the rate at the time of MVA calculation for a maturity equal to the period remaining until the end of the [14]th Policy Year. Rates will be interpolated between those for nearest maturities, when necessary. For remaining periods of less than one year, the one-year maturity rate will be used.

We have the right to defer payment of the Cash Surrender Value for up to 6 months. 9.3 Guaranteed Minimum Cash Surrender Value The Guaranteed Minimum Cash Surrender Value on any day will be : a. b.

c.

d.

Premium paid (excluding any Premium Bonus); less any partial withdrawals (before any applicable MVA or Surrender Charges); plus interest earned at the at the Guaranteed Minimum Cash Surrender Value Interest Rate shown on the Policy Data page; minus any applicable Surrender Charge.

If the index rate is no longer published, We will use a substantially similar index. If required, any change in the index will be filed with the proper regulatory authority for prior approval. The MVA can be positive or negative. In no case will the MVA cause the Cash Surrender Value to be greater than the Accumulated Value or less than the Guaranteed Minimum Cash Surrender Value.

9.4 Market Value Adjustment We may make a Market Value Adjustment (MVA) on amounts withdrawn or surrendered from this policy. An MVA will be made only when a Surrender Charge is deducted. The MVA is calculated by multiplying the MVA Factor by the amount withdrawn or surrendered (after reduction for any Surrender Charges).

9.5 Surrender Charge We calculate the Surrender Charge as the amount withdrawn or surrendered (including any Free Partial Withdrawal Privilege amount taken in the same Policy Year as a surrender) multiplied by the Surrender Charge percentage shown on the Policy Data page.

c=

the current index rate determined at the time We receive a request for partial withdrawal or surrender

9.6 Free Partial Withdrawal Privilege Each Policy Year after the first Policy Year, You may withdraw up to the Free Partial Withdrawal Privilege (FPWP) amount without being subject to the Surrender Charge or MVA. The FPWP amount will be equal to 10% of the Accumulated Value on the most recent policy anniversary.

n=

the number of complete months remaining to the end of the [14]th Policy Year, divided by twelve.

Under the Free Partial Withdrawal Privilege, You may withdraw up to the FPWP amount through a single withdrawal or multiple withdrawals in a

The MVA Factor is equal to: (1 + s)n / (1 + c + .005)n Where: s = the starting index rate

ET-BIA-2000(01-04)

12

An additional report will be sent to You upon request. A fee, not to exceed $25, may be charged for this report.

Policy Year. The unused portion of the FPWP amount in a Policy Year will not carry over to any subsequent Policy Year. If the policy is subsequently surrendered during the Policy Year, the Surrender Charge and MVA will be applied to any Free Partial Withdrawal Privilege amounts taken in the same Policy Year.

Section 10 -- Payment Options 10.1 Choosing an Option You may choose to have the proceeds of this policy paid under a payment option. If no option is selected, Option C with a guaranteed period of 10 years becomes effective.

9.7 Partial Withdrawal Prior to the Income Date, You may withdraw a portion of the Accumulated Value, subject to the following rules:

We may also fulfill Our obligation under this policy by paying the proceeds in one sum if: a. the proceeds are less than $2,000; b. periodic payments become less than $20; or c. the Payee is an assignee, estate, trustee, partnership, corporation, or association.

a. the amount of any partial withdrawal must be at least $250; b. if the Cash Surrender Value after a partial withdrawal is less than $2,000, We have the right to pay the remaining Cash Surrender Value to You as a full surrender; c. We have the right to defer payment of the partial withdrawal for up to 6 months; and d. the amount of the withdrawal above the FPWP amount will be reduced by any applicable Surrender Charge and subject to an MVA as described in Section 9.4.

10.2 Payment Option Choices The payment option choices are: Option A -- Proceeds Left at Interest The proceeds will be left with Us to earn interest. You may leave the interest with Us to accumulate or receive payments of interest only. Interest payments will be paid every 1, 3, 6 or 12 months as selected by You. The rate of interest will be determined by Us.

A Partial Withdrawal will be deducted in the same proportion that the value of each account bears to the Accumulated Value. 9.8 Periodic Report At least once each year We will send You a report, without charge, showing any premium paid and partial withdrawals since the previous report, Accumulated Value, Cash Surrender Value, Death Benefit, and any other information required by law. The values shown in the report will be as of a date not more than two months prior to the date of its mailing.

ET-BIA-2000(01-04)

Option B -- Payment for a Designated Number of Years The proceeds will be paid out in equal installments for a designated number of years.

13

If a payment option has been chosen by You, it is effective on the date the proceeds of this policy are due. If a Beneficiary chooses a payment option, it is effective on the date the election is received by Us. The first payment under Option B, C or D is due on the effective date. The first payment under Option A is due at the end of the payment period chosen.

Option C -- Payment of Life Income Payments will continue for the lifetime of the Payee, but for not less than the guaranteed period. You or the Payee may choose one of the guaranteed periods shown in the Option C Payment of Life Income table in this policy. Option D -- Payment of a Designated Amount The proceeds will be paid out in equal installments of a specified amount. The payments will continue until all proceeds plus interest have been paid out.

10.5 Death of Payee If a Payee dies, any remaining payments will be paid to a contingent Payee. If no Payee survives, We will pay the commuted value of any remaining payments to the estate of the last Payee to die.

Other Options The proceeds may be paid in any other manner requested and agreed to by Us, or under any other payment options made available by Us.

10.6 Withdrawal of Proceeds The Payee may not withdraw the funds under a payment option unless agreed to in the payment option agreement. We have the right to defer a withdrawal for up to 6 months. We may also refuse to allow partial withdrawals of less than $250.

10.3 Interest and Mortality The minimum interest rate used in computing any payment option is [1.5%] per year. We may at any time declare additional interest on these funds. The amount of additional interest and how it is determined will be set by Us.

10.7 Claims of Creditors Payments under any payment option will be exempt from the claims of creditors to the maximum extent allowed by law.

The mortality table that is used for Option C is the "Annuity 2000" individual annuity mortality table. 10.4 Payment Option Agreement; Effective Date We will send a payment option agreement if any payment option is chosen. If all of the value of this policy is applied to a payment option agreement, it will replace this policy. All sums to be paid by Us under this policy are considered paid when tendered by Us at Our Home Office.

ET-BIA-2000(01-04)

14

Payment Option Tables (per $1,000 of proceeds) Option B -- Payment for a Designated Number of Years Payments per $1,000 of Proceeds Number of Years 5 10 15 20 25 30

Annual 206.00 106.83 73.84 57.38 47.55 41.02

Monthly 17.28 8.96 6.20 4.81 3.99 3.44

Option C - Payment of Life Income Monthly Payments per $1,000 of Proceeds Male Female Unisex 10 Years 15 Years 20 Years 10 Years 15 Years 20 Years 10 Years 15 Years 20 Years Guaranteed Guaranteed Guaranteed Guaranteed Guaranteed Guaranteed Guaranteed Guaranteed Guaranteed 55 3.64 3.58 3.48 3.35 3.32 3.27 3.49 3.45 3.37 56 3.73 3.66 3.55 3.43 3.40 3.34 3.58 3.52 3.44 57 3.82 3.74 3.62 3.51 3.47 3.40 3.66 3.60 3.51 58 3.92 3.83 3.69 3.60 3.55 3.47 3.75 3.69 3.58 59 4.02 3.92 3.76 3.69 3.63 3.54 3.85 3.77 3.65 60 4.13 4.01 3.83 3.78 3.72 3.62 3.95 3.86 3.72 61 4.24 4.11 3.90 3.89 3.81 3.69 4.06 3.95 3.79 62 4.36 4.20 3.97 3.99 3.91 3.77 4.17 4.05 3.86 63 4.49 4.30 4.04 4.10 4.01 3.84 4.29 4.15 3.94 64 4.62 4.41 4.10 4.22 4.11 3.92 4.41 4.25 4.01 65 4.76 4.51 4.17 4.35 4.21 4.00 4.54 4.36 4.08 66 4.90 4.62 4.24 4.48 4.32 4.07 4.68 4.46 4.15 67 5.05 4.73 4.30 4.62 4.43 4.15 4.82 4.57 4.22 68 5.20 4.83 4.36 4.76 4.55 4.22 4.97 4.68 4.29 69 5.36 4.94 4.41 4.92 4.66 4.29 5.13 4.80 4.35 70 5.53 5.04 4.47 5.08 4.78 4.36 5.29 4.91 4.41 71 5.70 5.15 4.51 5.25 4.90 4.42 5.46 5.02 4.47 72 5.87 5.25 4.56 5.43 5.02 4.48 5.64 5.13 4.52 73 6.05 5.35 4.60 5.62 5.14 4.53 5.82 5.24 4.56 74 6.23 5.44 4.63 5.81 5.25 4.58 6.01 5.34 4.60 75 6.41 5.53 4.67 6.01 5.36 4.62 6.19 5.44 4.64 80 7.31 5.88 4.77 7.03 5.81 4.75 7.16 5.84 4.76 85 8.06 6.08 4.81 7.93 6.06 4.80 7.99 6.07 4.81 90 8.57 6.17 4.81 8.52 6.17 4.81 8.54 6.17 4.81 95 8.86 6.19 4.81 8.83 6.19 4.81 8.84 6.19 4.81 100 8.95 6.20 4.81 8.95 6.20 4.81 8.95 6.20 4.81

Age

ET-BIA-2000(01-04)

15

Flexible Premium Fixed and Equity Indexed Deferred Annuity Policy If You have any questions concerning this policy or if anyone suggests that You change or replace this policy, please contact Your EquiTrust Life agent or our Home Office.

EquiTrust Life Insurance Company [5400 University Avenue] [West Des Moines, Iowa 50266-5997] [1-888-349-4656]