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TRAVELERS MARKETLIFE(SM)
VARIABLE UNIVERSAL LIFE INSURANCE
INDIVIDUAL VARIABLE UNIVERSAL LIFE INSURANCE POLICIES
issued by
The Travelers Life and Annuity Company
<TABLE>
<S> <C>
FUND UL II
CAPITAL APPRECIATION FUND
MANAGED ASSETS TRUST PROSPECTUSES
MONEY MARKET PORTFOLIO
TRAVELERS SERIES TRUST MAY 1, 2000
</TABLE>
Travelers Life and Annuity [LOGO]
A member of citigroup
The Travelers Life and Annuity Company, One Tower Square, Hartford, Connecticut
06183 - Telephone: (800) 334-4298
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PROSPECTUS
This Prospectus describes The Travelers MarketLife(sm), an individual variable
universal (flexible premium) life insurance Policy (the "Policy") offered by The
Travelers Life and Annuity Company (the "Company"). A Policy Owner may choose
the amount of life insurance coverage desired with a minimum Stated Amount of
$50,000. The premium payment may be allocated by the Policy Owner to one or more
of the variable funding options (the "Investment Options").
During the Policy's Right to Cancel Period, the Applicant may return the Policy
to the Company for a refund. The Right to Cancel Period expires on the latest of
ten days after you receive the Policy, ten days after we mail or deliver to you
a written Notice of Right to Cancel, or 45 days after the Applicant signs the
application for insurance (or later if state laws requires).
There is no guaranteed minimum Cash Value for a Policy. The Cash Value of the
Policy will vary to reflect the investment performance of the Investment Options
to which you have directed your premium payments you bear the investment risk
under this policy. The Cash Value is reduced by the various fees and charges
assessed under the Policy, as described in this Prospectus. The Policy will
remain in effect for as long as the Cash Surrender Value can pay the monthly
Policy charges (subject to the Late Period provision) or for a longer period as
may be provided under the Lapse Protection Guarantee Rider.
We offer two death benefits under the Policy -- the "Level Option" and the
"Variable Option." Under either option, the death benefit will never be less
than the Amount Insured (less any outstanding Policy loans or Monthly Deduction
Amounts due and unpaid or any Accelerated Benefit Payment Lien). You choose one
at the time you apply for the Policy, however you may change the death benefit
option, subject to certain conditions.
This Policy may be or become a modified endowment Policy under federal tax law.
If so, any partial withdrawal, Policy surrender or loan may result in adverse
tax consequences or penalties.
REPLACING EXISTING INSURANCE WITH THIS POLICY MAY NOT BE TO YOUR ADVANTAGE.
EACH OF THE INVESTMENT OPTION PROSPECTUSES ARE INCLUDED WITH THE PACKAGE
CONTAINING THIS PROSPECTUS. ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS COMPLETE OR TRUTHFUL. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
VARIABLE LIFE INSURANCE POLICIES ARE NOT DEPOSITS OF ANY BANK AND ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER
GOVERNMENT AGENCY.
THE DATE OF THIS PROSPECTUS IS MAY 1, 2000.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Glossary of Special Terms.............. 3
Prospectus Summary..................... 5
General Description.................... 10
How the Policy Works................... 10
Beneficiary.......................... 10
Applying Premium Payments............ 10
The Investment Options................. 11
Policy Benefits and Rights............. 14
Transfers of Cash Value.............. 14
Telephone Transfers.................. 15
Automated Transfers.................. 15
Dollar-Cost Averaging............. 15
Portfolio Rebalancing............. 15
Lapse and Reinstatement.............. 15
Lapse Protection Guarantee Rider..... 16
Exchange Rights...................... 16
Right to Cancel...................... 16
Access to Cash Values.................. 16
Policy Loans......................... 16
Cash Value and Cash Surrender
Value............................. 17
Death Benefit.......................... 18
Payment of Proceeds............... 19
Payment Options................... 20
Maturity Benefits...................... 20
Maturity Extension Rider.......... 20
Charges and Deductions................. 21
Charges Against Premium.............. 21
Front-End Sales Charge............ 21
State Premium Tax Charge.......... 21
Monthly Deduction Amount............. 22
Cost of Insurance Charge.......... 22
Policy Administrative Expense
Charge.......................... 22
Charges for Supplemental Benefit
Provisions...................... 22
Charges Against the Separate
Account........................... 22
Mortality and Expense Risk
Charge.......................... 22
Administrative Expense Charge..... 22
Underlying Fund Fees................. 23
Surrender Charges.................... 23
Percent of Premium Charge......... 23
Per Thousand of Stated Amount
Charge.......................... 23
Transfer Charge...................... 24
Reduction or Elimination of
Charges........................... 24
The Separate Account and Valuation..... 24
The Travelers Fund UL II for Variable
Life Insurance (Fund UL II)....... 24
How the Cash Value Varies............ 25
Accumulation Unit Value.............. 25
Net Investment Factor................ 25
Changes to the Policy.................. 25
General.............................. 25
Changes in Stated Amount............. 26
Changes in Death Benefit Option...... 26
Additional Policy Provisions........... 26
Assignment........................... 26
Limit on Right to Contest and Suicide
Exclusion......................... 26
Misstatement as to Sex and Age....... 27
Voting Rights........................ 27
Disregard of Voting Instructions..... 27
For Policies Sold Prior to May 1,
1998.............................. 27
Policies Sold Prior to July 12,
1995.............................. 28
Other Matters.......................... 28
Statements to Policy Owners.......... 28
Suspension of Valuation.............. 29
Dividends............................ 29
Mixed and Shared Funding............. 29
Distribution......................... 29
Legal Proceedings and Opinion........ 30
Experts.............................. 30
Federal Tax Considerations............. 30
General.............................. 30
Tax Status of the Policy............. 30
Definition of Life Insurance...... 30
Diversification................... 31
Investor Control.................. 31
Tax Treatment of Policy Benefits..... 32
In General........................ 32
Modified Endowment Contracts...... 33
Exchanges......................... 33
Aggregation of Modified Endowment
Contracts....................... 33
Policies which are not Modified
Endowment Contracts............. 33
Treatment of Loan Interest........ 33
The Company's Income Taxes........ 34
The Company............................ 34
IMSA................................. 34
Management............................. 35
Directors of The Travelers Life and
Annuity Company................... 35
Senior Officers of The Travelers Life
and Annuity Company............... 35
Example of Policy Charges.............. 36
Performance Information................ 36
Illustrations.......................... 39
Appendix
A -- Annual Minimum Premiums........... 52
B -- Surrender Charges................. 53
C -- Current Monthly Administrative
Charge............................... 54
C(1) -- Guaranteed Monthly
Administrative Charge................ 56
Financial Statements -- Fund UL II
Financial Statements -- The Travelers
Life and Annuity Company
</TABLE>
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GLOSSARY OF SPECIAL TERMS
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The following terms are used throughout the Prospectus, and have the indicated
meanings:
ACCUMULATION UNIT -- a standard of measurement used to calculate the values
allocated to the Investment Options.
ANNUAL MINIMUM PREMIUM -- the Policy Owner must pay a first premium greater than
or equal to one-quarter of this amount for the Policy to be issued. (Please
refer to Appendix A.)
BENEFICIARY(IES) -- the person(s) named to receive the benefits of this Policy
at the Insured's death.
CASH SURRENDER VALUE -- the Cash Value less any outstanding Policy loan,
Accelerated Benefit Lien and surrender charges.
CASH VALUE -- the current value of Accumulation Units credited to each of the
Investment Options available under the Policy, plus the value of the Loan
Account.
COMPANY'S HOME OFFICE -- the principal executive offices of The Travelers Life
and Annuity Company located at One Tower Square, Hartford, Connecticut 06183.
DEDUCTION DATE -- the day in each Policy Month on which the Monthly Deduction
Amount is deducted from the Policy's Cash Value.
INSURED -- the person on whose life the Policy is issued.
INVESTMENT OPTIONS -- the segments of the Separate Account or Portfolio to which
you may allocate premiums or Cash Value under Fund UL II.
ISSUE DATE -- the date on which the Policy is issued by the Company for delivery
to the Policy Owner. Policies which replace existing company contracts will
maintain the issue date of the original policy.
LAPSE PROTECTION GUARANTEE RIDER -- a rider which provides that the Policy will
not lapse during the first three Policy Years if a required amount of premium is
paid. (Not available in all states.)
LOAN ACCOUNT -- an account in the Company's general account to which we transfer
the amount of any Policy loan, and to which we credit and charge a fixed rate of
interest.
MATURITY DATE -- The anniversary of the Policy Date on which the Insured is age
95.
MINIMUM AMOUNT INSURED -- the amount of Death Benefit required to qualify this
Policy as life insurance under federal tax law.
MONTHLY DEDUCTION AMOUNT -- the amount of charges deducted from the Policy's
Cash Value which includes cost of insurance charges, administrative charges, and
any charges for supplemental benefits.
MONTHLY PREMIUM THRESHOLD -- an amount shown on the Policy Summary page, the
cumulative amount of which must be paid during the first three Policy Years in
order for the Lapse Protection Guarantee to be in effect.
NET AMOUNT AT RISK -- an amount equal to the Death Benefit minus the Cash Value.
NET PREMIUM -- the amount of each premium payment applied to purchase
Accumulation Units under the Policy, less the deduction of front-end sales
charges and premium tax charges.
PLANNED PREMIUM -- the amount of premium which the Policy Owner chooses to pay
to the Company on a scheduled basis, and for which the Company will bill the
Policy Owner, either annually, semiannually or through automatic monthly
checking account deductions.
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POLICY DATE -- the date on which the Policy, benefits and provisions of the
Policy become effective.
POLICY MONTH -- monthly periods computed from the Policy Date.
POLICY OWNER (YOU, YOUR OR OWNER) -- the person having rights to benefits under
the Policy during the lifetime of the Insured; the Policy Owner may or may not
be the Insured.
POLICY YEARS -- annual periods computed from the Policy Date.
SEPARATE ACCOUNT -- assets set aside by The Travelers Life and Annuity Company,
for this class of policies and certain policies, the investment experience of
which is kept separate from that of other assets of The Travelers Life and
Annuity Company; for example, The Travelers Fund UL II for Variable Life
Insurance.
STATED AMOUNT -- the amount originally selected by the Policy Owner used to
determine the Death Benefit, or as may be increased or decreased as described in
this Prospectus.
UNDERLYING FUND -- the underlying mutual fund(s) that correspond to each
Investment Option. Each Investment Option invests directly in an underlying
fund.
VALUATION DATE -- a day on which the Separate Account is valued. A Valuation
Date is any day on which the New York Stock Exchange is open for trading. The
value of Accumulation Units will be determined as of 4:00 on the Valuation Date.
VALUATION PERIOD -- the period between the close of business on successive
Valuation Dates.
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PROSPECTUS SUMMARY
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WHAT IS VARIABLE UNIVERSAL LIFE INSURANCE?
The Flexible Premium Variable Universal Life Insurance Policy is designed to
provide insurance protection on the life of the Insured and to build Cash Value.
Like other life insurance, it provides an income-tax free death benefit that is
payable to the Beneficiary upon the Insured's death. Unlike traditional,
fixed-premium life insurance, the Policy allows you, as the owner, to allocate
your premium, or transfer Cash Value to various Investment Options. These
Investment Options include equity, bond, money market and other types of
portfolios. Your Cash Value may increase or decrease daily, depending on
investment return. There is no minimum amount guaranteed as it would be in a
traditional life insurance policy.
INVESTMENT OPTIONS: You have the ability to choose from a wide variety of
well-known Investment Options. These professionally managed stock, bond and
money market funding options cover a broad spectrum of investment objectives and
risk tolerance. Currently, the following Investment Options (subject to state
availability) are available under Fund UL II:
<TABLE>
<S> <C>
Capital Appreciation Fund TRAVELERS SERIES FUND INC.:
Dreyfus Stock Index Fund AIM Capital Appreciation Portfolio
Managed Assets Trust Alliance Growth Portfolio
Money Market Portfolio MFS Total Return Portfolio
Putnam Diversified Income Portfolio
DEUTSCHE ASSET MANAGEMENT VIT FUNDS: Smith Barney High Income Portfolio
EAFE Equity Index Fund Smith Barney Large Cap Value Portfolio
Small Cap Index Fund Smith Barney Large Capitalization Growth
Portfolio
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST: TRAVELERS SERIES TRUST:
Templeton Asset Strategy Fund (Class I) U.S. Government Securities Portfolio
Templeton Global Income Securities Fund Utilities Portfolio
(Class I) Zero Coupon Bond Portfolio 2000
Templeton Growth Securities Fund (Class I) Zero Coupon Bond Portfolio 2005
GREENWICH STREET SERIES FUND: VARIABLE INSURANCE PRODUCTS FUND (FIDELITY):
Equity Index Portfolio Equity Income Portfolio -- Initial Class
Total Return Portfolio Growth Portfolio -- Initial Class
High Income Portfolio -- Initial Class
JANUS ASPEN SERIES:
Aggressive Growth Portfolio -- Service VARIABLE INSURANCE PRODUCTS FUND II
Shares (FIDELITY):
Global Technology Portfolio -- Service Asset Manager Portfolio -- Initial Class
Shares
Worldwide Growth Portfolio -- Service
Shares
</TABLE>
Additional Portfolios may be added from time to time. For more information see
"The Investment Options." Refer to each Fund's prospectus for a complete
description of the investment objectives, restrictions and other material
information.
PREMIUMS: When applying for your Policy, you state how much you intend to pay,
and whether you will pay annually, semiannually or monthly via checking account
deductions. You may also make unscheduled premium payments in any amount. No
premium payments will be accepted if receipt of such premiums would disqualify
the Policy as life insurance under applicable federal tax laws.
You indicate on your application what percentage of each Net Premium you would
like allocated to the Investment Options. You may change your allocations by
writing to the Company or, if you have an authorization form on file, by calling
1-800-334-4298.
During the underwriting period, any premium paid will be held in a non-interest
bearing account. After the Policy Date and until the applicants' right to cancel
has expired, your Net Premium will be invested in the Money Market Portfolio.
After that, the cash value will be distributed to each Investment Option in the
percentages indicated on your application.
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RIGHT TO EXAMINE POLICY: You may return your Policy for any reason and receive
a full refund of your premium by mailing us the Policy and a written request for
cancellation within a specified period.
DEATH BENEFITS: At time of application, you select a death benefit option.
Under certain conditions you may be able to change the death benefit option at a
later date. The options available are:
- LEVEL OPTION (OPTION 1): the death benefit will be equal to the greater
of the Stated Amount or the Minimum Amount Insured.
- VARIABLE OPTION (OPTION 2): the death benefit will be equal to the
greater of the Stated Amount plus the Cash Value or the Minimum Amount
Insured.
POLICY VALUES: As with other types of insurance policies, MarketLife will
accumulate a Cash Value. The Cash Value of the Policy will increase or decrease
to reflect the investment experience of the Investment Options. Monthly charges
and any partial surrenders taken will also decrease the Cash Value. There is no
minimum guaranteed Cash Value.
- ACCESS TO POLICY VALUES: You may borrow against your Policy's Cash
Surrender Value. The maximum loan amount allowable is 100% of the Cash
Surrender Value, subject to state approval. After year 13, the Company
offers zero net cost loans. (For Policies issued after July 12, 1995 and
before May 1, 1998, the maximum loan allowed is 90% of the Cash Surrender
Value. For Policies issued prior to July 12, 1995, the maximum loan
allowed is 80% of the Cash Surrender Value.) (See "Policy Loans" for loan
impact on coverage and policy values.)
You may cancel all or a portion of your Policy while the Insured is living and
receive all or a portion of the Cash Surrender Value. Depending on the amount of
time the Policy has been in force, there may be a charge for the partial or full
surrender.
TRANSFERS OF POLICY VALUES: You may transfer all or a portion of your Cash
Value among the Investment Options. You may do this by writing to the Company
or, with the proper authorization, by calling 1-800-334-4298.
You can use automated transfers to take advantage of dollar cost
averaging -- investing a fixed amount at regular intervals. For example, you
might have a set amount transferred from a relatively conservative Investment
Option to a more aggressive one, or to several others.
LAPSE PROTECTION GUARANTEE RIDER: This Rider allows for your Policy to remain
in effect for the first three Policy Years. You are required to pay at least the
cumulative applicable Monthly Premium Threshold displayed on your Policy's
Contract Summary page. If there have been changes in Stated Amounts and/or
riders, there will be an adjustment to Monthly Threshold and this new Threshold
must now be met from the effective date of the coverage change. Any loans or
partial surrenders are deducted from premium paid to determine if the Lapse
Protection Guarantee is in effect.
LATE PERIOD: If the Cash Surrender Value of your Policy becomes less than the
amount needed to pay the Monthly Deduction Amount, and the Lapse Protection
Guarantee Rider is not in effect, you will have 61 days to pay a premium that is
sufficient to cover the Monthly Deduction Amount. If the premium is not paid,
your Policy will lapse.
EXCHANGE RIGHTS: During the first two Policy Years, you can exchange this
Policy for one that provides benefits that do not vary with the investment
return of the Investment Options.
TAX CONSEQUENCES: Currently, the federal tax law excludes all Death Benefit
payments from the gross income of the Beneficiary. At any point in time, the
Policy may become a modified endowment contract ("MEC"). A MEC has an
income-first taxation of all loans, pledges, collateral assignments or partial
surrenders. A 10% penalty tax may be imposed on such income distributed
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before the Policy Owner attains age 59 1/2. The Company has established
safeguards for monitoring whether a Policy may become a MEC.
CHARGES AND DEDUCTIONS: Your Policy is subject to the following charges, which
compensate the Company for administering and distributing the Policy, as well as
paying Policy benefits and assuming related risks. These charges are summarized
below, and explained in detail under "Charges and Deductions."
POLICY CHARGES:
- SALES AND PREMIUM EXPENSE CHARGES -- A sales charge and a premium tax
charge are applied to each premium based on the size of your Policy.
<TABLE>
<CAPTION>
PREMIUM TOTAL
STATED SALES TAX PREMIUM
AMOUNT CHARGE CHARGE EXPENSE
------ ------ ------- -------
<S> <C> <C> <C>
less than $500,000 2.5% 2.5% 5.0%
$500,000 to $999,999 2.0% 2.5% 4.5%
$1,000,000 and over 0% 2.5% 2.5%
</TABLE>
This charge pays some distribution expenses and state and local premium
taxes.
- MONTHLY DEDUCTION -- deductions taken from the value of your Policy each
month to cover cost of insurance charges, the monthly administrative
expense charges and charges for optional benefits.
- FULL SURRENDER CHARGE -- applies if you surrender your Policy for its
full Cash Value or the Policy lapses, during the first 10 years and for
10 years after requesting an increase in coverage. The surrender charge
consists of a percent of premium charge and a per thousand of face amount
charge.
- PARTIAL SURRENDER CHARGE -- applies if you surrender part of the value of
your Policy.
ASSET-BASED CHARGES:
- MORTALITY AND EXPENSE RISK CHARGE -- applies to the assets of the
Investment Options on a daily basis which equals an annual rate of .80%
for the first fifteen years and subject to state availability, for
policies issued after May 1, 1998 .25% thereafter. (For Policies issued
prior to July 12, 1995, the charge is 0.60% for all Policy Years.) (For
Policies issued after July 12, 1995, and prior to May 1, 1998, the charge
for the first fifteen years is .80% and .45% thereafter).
- ADMINISTRATIVE EXPENSE CHARGE -- applies to the assets of the Investment
Options on a daily basis which equals an annual rate of .10% for the
first fifteen years and 0% thereafter. (For Policies issued prior to July
12, 1995, there is no administrative charge.)
- UNDERLYING FUND FEES -- the separate account purchases shares of the
Underlying Funds on a net asset value basis. The shares purchased already
reflect the deduction of investment advisory fees and other expenses. The
fees are shown below as a percentage of average daily net assets of each
Investment Option as of December 31, 1999, unless noted otherwise.
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UNDERLYING FUND FEES
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<CAPTION>
<S> <C> <C> <C> <C>
MANAGEMENT OTHER TOTAL
FEE EXPENSES EXPENSES
(AFTER EXPENSE (AFTER EXPENSE (AFTER EXPENSE
FUND NAME REIMBURSEMENT) 12B-1 FEES REIMBURSEMENT) REIMBURSEMENT)
Capital Appreciation Fund (Janus) 0.75% 0.08% 0.83%
Dreyfus Stock Index Fund 0.25% 0.01% 0.26%
Managed Assets Trust 0.50% 0.10% 0.60%
Money Market(1) 0.32% 0.08% 0.40%
DEUTCHE ASSET MANAGEMENT VIT FUNDS:
EAFE Equity Index Fund(2) 0.26% 0.39% 0.65%
Small Cap Index Fund(2) 0.13% 0.32% 0.45%
GREENWICH STREET SERIES FUND:
Equity Index Portfolio(9) 0.21% 0.07% 0.28%
Total Return Portfolio(10) 0.75% 0.04% 0.79%
JANUS ASPEN SERIES:
Aggressive Growth -- Service Shares(3) 0.65% 0.25% 0.02% 0.92%
Global Technology -- Service Shares(3) 0.65% 0.25% 0.13% 1.03%
Worldwide Growth -- Service Shares(3) 0.65% 0.25% 0.05% 0.95%
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS SERIES TRUST:
Templeton Asset Strategy Fund(5) 0.60% 0.18% 0.78%
Templeton Global Income Securities(6) 0.60% 0.05% 0.65%
Templeton Growth Securities Fund(7) 0.83% 0.05% 0.88%
TRAVELERS SERIES FUND, INC.:
AIM Capital Appreciation Portfolio(8) 0.80% 0.04% 0.84%
Alliance Growth Portfolio(8) 0.80% 0.02% 0.82%
MFS Total Return Portfolio(8) 0.80% 0.04% 0.84%
Putnam Diversified Income Portfolio(8) 0.75% 0.08% 0.83%
Smith Barney High Income Portfolio(8) 0.60% 0.06% 0.66%
Smith Barney Large Cap Value(8) 0.65% 0.02% 0.67%
Smith Barney Large Cap Growth(8) 0.75% 0.11% 0.86%
TRAVELERS SERIES TRUST:
U.S. Government Securities 0.32% 0.16% 0.48%
Utilities Portfolio (SB) 0.65% 0.23% 0.88%
Zero Coupon Bond Portfolio 2000 0.10% 0.05% 0.15%
Zero Coupon Bond Portfolio 2005 0.10% 0.05% 0.15%
VARIABLE INSURANCE PRODUCTS FUND:
Equity Income Portfolio -- Initial
Class(4) 0.48% 0.08% 0.56%
Growth Portfolio -- Initial Class(4) 0.58% 0.07% 0.65%
High Income Portfolio -- Initial Class 0.58% 0.11% 0.69%
VARIABLE INSURANCE PRODUCTS FUND II:
Asset Manager Portfolio -- Initial
Class(4) 0.53% 0.09% 0.62%
</TABLE>
( 1) Other Expenses have been restated to reflect the current expense
reimbursement arrangement with Travelers Insurance Company. Travelers has
agreed to reimburse the Portfolio for the amount by which its aggregate
expenses (including the management fee, but excluding brokerage
commissions, interest charges and taxes) exceeds 0.40%. Without such
arrangement, Total Expenses would have been 0.50% for the Money Market
Portfolio.
( 2) These fees reflect a voluntary expense reimbursement arrangement whereby
the Adviser has agreed to reimburse the funds. Without such arrangement,
the Management Fee and Other Expenses for the Deutsche VIT EAFE Equity
Index Fund and Small Cap Index Fund would have been 0.45% and 0.69%, and
0.35% and 0.83%, respectively. Effective April 2000, the Trust's name was
changed from BT Insurance Funds Trust to Deutsche Asset Management VIT
Funds.
( 3) Expenses are based on the estimated expenses that the new Service Shares
Class of each Portfolio expects to incur in its initial fiscal year. All
expenses are shown without the effect of offset arrangements.
( 4) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain funds,
or FMR on behalf of certain funds, custodian, credits realized as a result
of uninvested cash balances were used to reduce a portion of each
applicable fund's expenses. Without these reductions, the total operating
expenses presented in the table would have been 0.57% for Equity-Income
Portfolio, 0.66% for Growth Portfolio, and 0.63% for Asset Manager
Portfolio.
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( 5) On 2/8/00, fund shareholders approved a merger and reorganization to merge
the assets of Templeton Global Asset Allocation Fund into Templeton Asset
Allocation Fund (which then changed its name to Templeton Asset Strategy
Fund), effective 5/1/00. The table shows restated total expenses based upon
the new fees and assets of Templeton Asset Allocation Fund as of 12/31/99,
and not the assets of the combined fund on 5/1/00. However if the table
reflected both the new fees and the combined assets, the funds expenses
after 5/1/00 would be estimated as: Management Fees 0.60%, Other expenses
0.14% and Total Fund Operating Expenses 0.74%.
( 6) On 2/8/00, a merger and reorganization was approved to merge the assets of
Templeton Bond Fund into Templeton Global Income Securities Fund, effective
5/1/00. The above table shows restated total expenses based upon the fees
and assets of Templeton Global Income Securities Fund as of 12/31/99, and
not the assets of the combined fund on 5/1/00. However if the table
reflected the combined assets, the funds expenses after 5/1/00 would be
estimated as: Management Fees 0.60%, Other expenses 0.04% and Total Fund
Operating Expenses 0.64%. The Funds administration fee is paid indirectly
through the management fee.
( 7) On 2/8/00, a merger and reorganization was approved to merge the assets of
Templeton Stock Fund into Templeton Global Growth Fund (which then changed
its name to Templeton Growth Securities Fund), effective 5/1/00. The above
table shows restated total expenses based upon the fees and assets of
Templeton Global Growth Fund as of 12/31/99, and not the assets of the
combined fund on 5/1/00. However if the table reflected the combined
assets, the funds expenses after 5/1/00 would be estimated as: Management
Fees 0.80%, Other expenses 0.05% and Total Fund Operating Expenses 0.85%.
The Funds administration fee is paid indirectly through the management fee.
( 8) Expenses are as of October 31, 1999 (the Funds fiscal year end). There were
no fees waived or expenses reimbursed for these funds in 1999.
( 9) The Portfolio Management Fee for Equity Index Portfolio includes 0.06% for
fund administration.
(10) The Portfolio Management Fee for the Total Return Portfolio includes 0.20%
for fund administration.
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GENERAL DESCRIPTION
--------------------------------------------------------------------------------
This prospectus describes an individual flexible premium variable universal life
insurance Policy offered by The Travelers Life and Annuity Company ("Company").
The policy offers:
- Flexible premium payments (you select the timing and amount of the
premium)
- A selection of investment options
- A choice of two death benefit options
- Loans and partial withdrawal privileges
- The ability to increase or decrease the Policy's face amount of insurance
- Additional benefits through the use of optional riders
This Policy is both an insurance product and a security. The Policy is first and
foremost a life insurance Policy with death benefits, Cash Values and other
features traditionally associated with life insurance. The Policy is a security
because the Cash Value and, under certain circumstances, the Amount Insured, and
Death Benefit may increase or decrease depending on the investment experience of
the Investment Options chosen.
THE APPLICATION. In order to become a policy owner, you must submit an
application to the Company. You must provide evidence of insurability. On the
application, you will also indicate:
- the amount of insurance desired (the "stated amount"); minimum of $50,000
- your choice of the two death benefit options
- the beneficiary(ies), and whether or not the beneficiary is irrevocable
- your choice of investment options.
Our underwriting staff will review the application, and, if approved, we will
issue the Policy.
HOW THE POLICY WORKS
--------------------------------------------------------------------------------
You make premium payments and direct them to one or more of the available
investment options. The Policy's Cash Value will increase or decrease depending
on the performance of the investment options you select. In the case of death
benefit option 2, the death benefit will also vary based on the investment
options' performance.
BENEFICIARY
The Applicant names the Beneficiary in the application for the Policy. The
Policy Owner may change the Beneficiary (unless irrevocably named) during the
Insured's lifetime by sending a written request to the Company. If no
Beneficiary is living when the Insured dies, the Death Benefit will be paid to
the Policy Owner, if living; otherwise, the Death Benefit will be paid to the
Policy Owner's estate.
Your Policy becomes effective once our underwriting staff has approved the
application and once the first premium payment has been made. The Policy Date is
the date we use to determine all future transactions on the policy, for example,
the deduction dates, policy months, policy years. The Policy Date may be before
or the same date as the Issue Date (the date the policy was issued). During the
underwriting period, any premium paid will be held in a non-interest bearing
account. Your policy will stay in effect as long as the policy's cash surrender
value can pay the policy's monthly charges.
APPLYING PREMIUM PAYMENTS
We apply the first premium on the later of the Policy Date or the date we
receive it at our Home Office. During the Right to Cancel Period, we allocate
net premiums to the Money Market
10
<PAGE> 12
Portfolio. At the end of the Right to Cancel Period, we direct the net premiums
to the investment option(s) selected on the application, unless you give us
other directions.
The investment options are segments of the separate account. They correspond to
underlying funds with the same names. The available investment options are
listed below.
We credit your policy with accumulation units of the investment option(s) you
have selected. We calculate the number of accumulation units by dividing your
net premium payment by each investment option's accumulation unit value computed
after we receive your payment.
THE INVESTMENT OPTIONS
--------------------------------------------------------------------------------
You may allocate Premium Payments to one or more of the available Investment
Options. The Investment Options currently available under the Policy may be
added, withdrawn or substituted as permitted by applicable state or federal law.
We would notify you before making such a change. Please read carefully the
complete risk disclosure in each Portfolio's prospectus before investing. For
more detailed information on the investment advisers and their services and
fees, please refer to the prospectuses for the Investment Options. In addition,
Travelers has entered into agreements with either the investment adviser or
distributor of certain of the underlying funds in which the adviser or
distributor pays us a fee for providing administrative services, which fee may
vary. The fee is ordinarily based upon an annual percentage of the average
aggregate net amount invested in the underlying funds on behalf of the Separate
Account.
The Investment Options currently available under Fund UL II are as follows:
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
Capital Appreciation Fund Seeks growth of capital through the Travelers Asset Management
use of common stocks. Income is not an International Company LLC
objective. The Fund invests ("TAMIC")
principally in common stocks of small Subadviser: Janus Capital
to large companies which are expected Corp.
to experience wide fluctuations in
price in both rising and declining
markets.
Dreyfus Stock Index Fund Seeks to provide investment results Mellon Equity
that correspond to the price and yield
performance of publicly traded common
stocks in the aggregate, as
represented by the Standard & Poor's
500 Composite Stock Price Index.
Managed Assets Trust Seeks high total investment return TAMIC
through a fully managed investment Subadviser: Travelers
policy in a portfolio of equity, debt Investment Management Company
and convertible securities. ("TIMCO")
Money Market Portfolio Seeks high current income from short- TAMIC
term money market instruments while
preserving capital and maintaining a
high degree of liquidity.
DEUTSCHE ASSET MANAGEMENT
VIT FUNDS
EAFE Equity Index Fund Seeks to replicate, before deduction Bankers Trust Global
of expenses, the total return Investment Management
performance of the EAFE index.
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
Small Cap Index Fund Seeks to replicate, before deduction Bankers Trust Global
of expenses, the total return Investment Management
performance of the Russell 2000 index.
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
Templeton Asset Strategy Seeks a high level of total return Templeton Investment Counsel,
Fund (Class 1) with reduced risk over the long term Inc.
through a flexible policy of investing
in stocks of companies in any nation
and debt obligations of companies and
governments of any nation.
Templeton Global Income Seeks high current income by investing Franklin Advisers, Inc.
Securities Fund (Class 1) primarily in debt securities of compa- Subadviser: Templeton
nies, governments and government Investment Counsel, Inc.
agencies of various nations throughout
the world.
Templeton Growth Seeks capital growth by investing Templeton Global Advisers
Securities Fund (Class 1) primarily in common stocks issued by Limited
companies, large and small, in various
nations throughout the world.
GREENWICH STREET
SERIES FUND
Equity Index Portfolio Seeks to replicate, before deduction Travelers Investment
of expenses, the total return Management Company
performance of the S&P 500 index.
Total Return Portfolio An equity portfolio that seeks to pro- SSB Citi Fund Management LLC
vide total return, consisting of ("SSB Citi")
long-term capital appreciation and
income. The Portfolio will invest
primarily in a diversified portfolio
of dividend-paying common stocks.
JANUS ASPEN SERIES
Aggressive Growth Seeks long-term capital growth by Janus Capital
Portfolio -- Service investing primarily in common stocks
Shares selected for their growth potential,
normally investing at least 50% in the
equity assets of medium-sized
companies.
Global Technology Seeks long-term capital growth by Janus Capital
Portfolio -- Service investing primarily in equity
Shares securities of U.S. and foreign
companies, normally investing at least
65% of its total assets in companies
likely to benefit significantly from
advances in technology.
Worldwide Growth Seeks growth of capital in a manner Janus Capital
Portfolio -- Service consistent with preservation of
Shares capital by investing primarily in
common stocks of companies of any size
throughout the world.
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Seeks capital appreciation by Travelers Investment Adviser
Portfolio investing principally in common stock, ("TIA")
with emphasis on medium-sized and Subadviser: AIM Capital
smaller emerging growth companies. Management Inc.
Alliance Growth Portfolio Seeks long-term growth of capital by TIA
investing predominantly in equity Subadviser: Alliance Capital
securities of companies with a Management L.P.
favorable outlook for earnings and
whose rate of growth is expected to
exceed that of the U.S. economy over
time. Current income is only an
incidental consideration.
MFS Total Return Seeks to obtain above-average income TIA
Portfolio (compared to a portfolio entirely Subadviser: MFS
invested in equity securities)
consistent with the prudent employment
of capital. Generally, at least 40% of
the Portfolio's assets will be
invested in equity securities.
Putnam Diversified Income Seeks high current income consistent TIA
Portfolio with preservation of capital. The Subadviser: Putnam Investment
Portfolio will allocate its Management, Inc.
investments among the U.S. Government
Sector, the High Yield Sector, and the
International Sector of the
fixed-income securities markets.
Smith Barney High Income Seeks high current income. Capital SSB Citi
Portfolio appreciation is a secondary objective.
The Portfolio will invest at least 65%
of its assets in high-yielding
corporate debt obligations and
preferred stock.
Smith Barney Large Cap Seeks current income and long-term SSB Citi
Value Portfolio growth of income and capital by
investing primarily, but not
exclusively, in common stocks.
Smith Barney Large Seeks long-term growth of capital by SSB Citi
Capitalization Growth investing in equity securities of
Portfolio companies with large market
capitalizations.
TRAVELERS SERIES TRUST
U.S. Government Seeks to select investments from the TAMIC
Securities Portfolio point of view of an investor concerned
primarily with highest credit quality,
current income and total return. The
assets of the U.S. Government Securi-
ties Portfolio will be invested in
direct obligations of the United
States, its agencies and
instrumentalities.
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
Utilities Portfolio Seeks to provide current income by SSB Citi
investing in equity and debt
securities of companies in the utility
industries.
Zero Coupon Bond Fund Seeks to provide as high an investment TAMIC
Portfolio (Series 2000 return as consistent with the
and Series 2005) preservation of capital investing in
primarily zero coupon securities that
pay cash income but are acquired by
the Portfolio at substantial discounts
from their values at maturity. The
Zero Coupon Bond Fund Portfolios may
not be appropriate for Policy Owners
who do not plan to have their premiums
invested in shares of the Portfolios
for the long term or until maturity.
VARIABLE INSURANCE
PRODUCTS FUND
Equity-Income Seeks reasonable income by investing Fidelity Management &
Portfolio -- Initial primarily in income-producing equity Research Company ("FMR")
Class securities; in choosing these
securities, the portfolio manager will
also consider the potential for
capital appreciation.
Growth Seeks capital appreciation by purchas- FMR
Portfolio -- Initial ing common stocks of well-known,
Class established companies, and small
emerging growth companies, although
its investments are not restricted to
any one type of security. Capital
appreciation may also be found in
other types of securities, including
bonds and preferred stocks.
High Income Portfolio -- Seeks to obtain a high level of FMR
Initial Class current income by investing primarily
in high yielding, lower-rated,
fixed-income securities, while also
considering growth of capital.
VARIABLE INSURANCE
PRODUCTS FUND II
Asset Manager Seeks high total return with reduced FMR
Portfolio -- Initial risk over the long-term by allocating
Class its assets among stocks, bonds and
short-term fixed-income instruments.
</TABLE>
POLICY BENEFITS AND RIGHTS
--------------------------------------------------------------------------------
TRANSFERS OF CASH VALUE
As long as the Policy remains in effect, you may transfer the Cash Value between
Investment Options. We reserve the right to restrict the number of free
transfers to four times in any Policy Year and to charge $10 for each additional
transfer; however, there is currently no charge for transfers. We also reserve
the right to restrict transfers by any market timing firm or any other third
14
<PAGE> 16
party authorized to initiate transfers on behalf of multiple contract owners. We
may, among other things, not accept: 1) the transfer instructions of any agent
acting under a power of attorney on behalf of more than one owner or (2) the
transfer or exchange instructions of individual owners who have executed
pre-authorized transfer forms which are submitted by marketing timing firms or
other third parties on behalf of more than one owner. We further reserve the
right to limit transfers that we determine will disadvantage other contract
owners.
We calculate the number of Accumulation Units involved using the Accumulation
Unit Values we determine at the end of the business day on which we receive the
request.
TELEPHONE TRANSFERS
The Policy Owner may make the request in writing by mailing such request to the
Company at its Home Office, or by telephone (if an authorization form is on
file) by calling 1-800-334-4298. The Company will take reasonable steps to
ensure that telephone transfer requests are genuine. These steps may include
seeking proper authorization and identification prior to processing telephone
requests. Additionally, the Company will confirm telephone transfers. Any
failure to take such measures may result in the Company's liability for any
losses due to fraudulent telephone transfer requests.
AUTOMATED TRANSFERS
DOLLAR-COST AVERAGING
You may establish automated transfers of Policy Values on a monthly or quarterly
basis from any Investment Option(s) to any other Investment Option(s) through
written request or other method acceptable to the Company. You must have a
minimum total Policy Value of $1,000 to enroll in the Dollar-Cost Averaging
program. The minimum total automated transfer amount is $100.
You may start or stop participation in the Dollar-Cost Averaging program at any
time, but you must give the Company at least 30 days' notice to change any
automated transfer instructions that are currently in place. Automated transfers
are subject to all of the other provisions and terms of the Policy. The Company
reserves the right to suspend or modify transfer privileges at any time and to
assess a processing fee for this service.
Before transferring any part of the Policy Value, Policy Owners should consider
the risks involved in switching between investments available under this Policy.
Dollar cost averaging requires regular investments regardless of fluctuating
price levels, and does not guarantee profits or prevent losses in a declining
market. Potential investors should consider their financial ability to continue
purchases through periods of low price levels.
PORTFOLIO REBALANCING
You may elect to have the Company periodically reallocate values in your policy
to match your original (or your latest) funding option allocation request.
LAPSE AND REINSTATEMENT
Except as provided below under "Lapse Protection Guarantee," the Policy will
remain in effect until the Cash Surrender Value of the Policy on any Deduction
Date can no longer cover the Monthly Deduction Amount or loan interest due but
not paid in cash. If this happens, we will notify you in writing that if the
amount shown in the notice is not paid within 61 days (the "Late Period"), the
Policy may lapse. The amount shown will be enough to pay the deduction amount
due. The Policy will continue through the Late Period, but if no payment is
received by us, it will terminate at the end of the Late Period. If the person
Insured under the Policy dies during the Late Period, the Death Benefit payable
will be reduced by the Monthly Deduction Amount due plus the amount of any
outstanding loan. (See "Death Benefit," below.)
If the Policy lapses, you may reinstate the Policy by paying the reinstatement
premium (and any applicable charges) shown in the Policy. You may request
reinstatement within three years of lapse (unless a different period is required
under applicable state law). Upon reinstatement, the
15
<PAGE> 17
Policy's Cash Value will equal the Net Premium. In addition, the Company
reserves the right to require satisfactory evidence of insurability.
LAPSE PROTECTION GUARANTEE RIDER
You may add a Lapse Protection Guarantee Rider to the Policy (as long as the
Insured is not a substandard risk). The Lapse Protection Guarantee Rider benefit
provides that if during the first three Policy Years (the "Guarantee Period")
the total premiums paid under the Policy, less any Loan Account Value or partial
surrenders, equal or exceed the cumulative applicable Monthly Premium Threshold
shown on the Policy Summary Page of the Policy, a Lapse Protection Guarantee
will be in effect. (This rider is not available in all jurisdictions.) This
rider provides that the Policy will not lapse during the next Policy Month even
if the Cash Surrender Value is insufficient to pay the Monthly Deduction Amount
due, provided the next Policy Month is within the Guarantee Period. The Premium
Threshold will change if the Policy Owner makes a change in the Stated Amount or
adds or eliminates supplemental benefit riders under the Policy. In such event,
the Company will send the Policy Owner notice of the new applicable Premium
Threshold which must be met until the expiration of the Guarantee Period in
order for the guarantee to remain in effect.
EXCHANGE RIGHTS
Once the Policy is in effect, it may be exchanged during the first 24 months for
a non-variable permanent individual life insurance policy issued by the Company
(or an affiliated company) on the life of the Insured. Benefits under the new
life insurance policy will be as described in that policy. No evidence of
insurability will be required. You have the right to select the same Death
Benefit or Net Amount At Risk as the former Policy at the time of exchange. Cost
of insurance rates will be based on the same risk classification as those of the
former Policy. Any outstanding Policy loan must be repaid before we will make an
exchange. In addition, there may be an adjustment for the difference in Cash
Value between the two Policies.
RIGHT TO CANCEL
An Applicant may cancel the Policy by returning it via mail or personal delivery
to the Company or to the agent who sold the Policy. The Policy must be returned
by the latest of:
(1) 10 days after delivery of the Policy to you
(2) 45 days of completion of the Policy application
(3) 10 days after the Notice of Right to Cancel has been mailed or
delivered to the Applicant whichever is latest, or
(4) later if required by state law.
We will refund the greater of all premium payments or the sum of:
(1) the difference between the premium paid, including any fees or charges,
and the amounts allocated to the Investment Option(s),
(2) the value of the amounts allocated to the Investment Option(s) on the
date on which the Company receives the returned Policy, and
(3) any fees and other charges imposed on amounts allocated to the
Investment Option(s).
We will make the refund within seven days after we receive your returned policy.
ACCESS TO CASH VALUES
--------------------------------------------------------------------------------
POLICY LOANS
A Policy Owner may obtain a cash loan from the Company secured by the Policy not
to exceed 90% of the Policy's Cash Value (determined on the day on which the
Company receives the written loan request), less any surrender penalties (which
include a percent of premium charge
16
<PAGE> 18
and per thousand of Stated Amount charge). The amount of any Accelerated Benefit
Payment Lien is added to the outstanding loan to determine if there is cash
available for a loan. For Policy loans taken after January 1, 2001, subject to
state availability, it is anticipated the maximum loan amount will be increased
to 100% from 90%. Subject to state law, no loan requests may be made for amounts
of less than $100.
If there is a loan outstanding at the time a subsequent loan request is made,
the amount of the outstanding loan will be added to the new loan request. The
Company will charge interest on the outstanding amounts of the loan, which
interest must be paid in advance by the Policy Owner. For Policies issued after
July 12, 1995, during the first thirteen Policy Years, the full Loan Account
Value will be charged an annual interest rate of 7.4%; thereafter 3.85% will be
charged. For Policies issued prior to July 12, 1995 (or where state approval has
not been received), refer to "Policies Sold Prior to July 12, 1995," if
applicable.
The amount of the loan will be transferred as of the date the loan is made on a
pro rata basis from each of the Investment Options attributable to the Policy
(unless the Policy Owner states otherwise) to another account (the "Loan
Account"). Amounts in the Loan Account will be credited by the Company with a
fixed annual rate of return of 4% (6% in Massachusetts) and will not be affected
by the investment performance of the Investment Options. When loan repayments
are made, the amount of the repayment will be deducted from the Loan Account and
will be reallocated based upon premium allocation percentages among the
Investment Options applicable to the Policy (unless the Policy Owner states
otherwise). The Company will make the loan to the Policy Owner within seven days
after receipt of the written loan request.
An outstanding loan amount decreases the Cash Surrender Value. If a maximum loan
is taken or a loan is not repaid, it permanently decreases the Cash Surrender
Value, which could cause the Policy to lapse (see "Lapse and Reinstatement").
For example, if a Policy has a Cash Surrender Value of $10,000, the Policy Owner
may take a loan of 90% or $9,000, leaving a new Cash Surrender Value of $1,000.
In addition, the Death Benefit actually payable would be decreased because of
the outstanding loan. Furthermore, even if the loan is repaid, the Death Benefit
and Cash Surrender Value may be permanently affected since the Policy Owner was
not credited with the investment experience of an Investment Option on the
amount in the Loan Account while the loan was outstanding. All or any part of a
loan secured by a Policy may be repaid while the Policy is still in effect.
CASH VALUE AND CASH SURRENDER VALUE
The Cash Value of a Policy changes on a daily basis and will be computed on each
Valuation Date. The Cash Value will vary to reflect the investment experience of
the Investment Options, as well as any partial Cash Surrenders, Monthly
Deduction Amount, daily Separate Account charges, and any additional premium
payments. There is no minimum guaranteed Cash Value.
The Cash Value of a particular Policy is related to the net asset value of the
Investment Options to which premium payments on the Policy have been allocated.
The Cash Value on any Valuation Date is calculated by multiplying the number of
Accumulation Units credited to the Policy in each Investment Options as of the
Valuation Date by the current Accumulation Unit Value of that Investment Option,
then adding the collective result for each of the Investment Options credited to
the Policy, and finally adding the value (if any) of the Loan Account. A Policy
Owner may withdraw Cash Value from the Policy, or transfer Cash Value among the
Investment Options, on any day that the Company is open for business.
As long as the Policy is in effect, a Policy Owner may elect, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), to surrender the Policy and receive its "Cash Surrender Value";
i.e., the Cash Value of the Policy determined as of the day the Company receives
the Policy Owner's written request, less any outstanding Policy loan, less any
Accelerated Benefit Payment Lien, and less any applicable Surrender Charges. For
full surrenders, the Company
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<PAGE> 19
will pay the Cash Surrender Value of the Policy within seven days following its
receipt of the written request, or on the date requested by the Policy Owner,
whichever is later. The Policy will terminate on the Deduction Date next
following the Company's receipt of the written request, or on the Deduction Date
next following the date on which the Policy Owner requests the surrender to
become effective, whichever is later.
In the case of partial surrenders, the Cash Surrender Value will be equal to the
net amount requested to be surrendered minus any applicable Surrender Charges.
The deduction from Cash Value for a partial surrender will be made on a pro rata
basis against the Cash Value of each of the Investment Options attributable to
the Policy (unless the Policy Owner states otherwise in writing).
In addition to reducing the Cash Value of the Policy, partial cash surrenders
will reduce the Death Benefit payable under the Policy. Under Option 1, the
Stated Amount of the Policy will be reduced by the amount of the partial cash
surrender. Under Option 2, the Cash Value, which is part of the Death Benefit,
will be reduced by the amount of the partial cash surrender. The Company may
require return of the Policy to record such reduction.
DEATH BENEFIT
--------------------------------------------------------------------------------
The Death Benefit under the Policy is the amount paid to the Beneficiary upon
the Insured's death. The Death Benefit will be reduced by any outstanding
charges, any Accelerated Benefit Payment Lien, fees and Policy loans. All or
part of the Death Benefit may be paid in cash or applied to one or more of the
payment options described in the following pages.
You may elect one of two Death Benefit options. As long as the Policy remains in
effect, the Company guarantees that the Death Benefit under either option will
be at least the current Stated Amount of the Policy less any outstanding Policy
loan, any Accelerated Benefit Payment Lien, and any unpaid Deduction Amount due.
The Death Benefit under either option may vary with the Cash Value of the
Policy. Under Option 1 (the "Level Option"), the Death Benefit will be equal to
the Stated Amount of the Policy or, if greater, a specified multiple of Cash
Value (the "Minimum Amount Insured"). Under Option 2 (the "Variable Option"),
the Death Benefit will be equal to the Stated Amount of the Policy plus the Cash
Value (determined as of the date of the Insured's death) or, if greater, the
Minimum Amount Insured.
The Minimum Amount Insured is the amount required to qualify the Policy as a
life insurance Policy under the current federal tax law. Under that law, the
Minimum Amount Insured equals a stated percentage of the Policy's Cash Value
determined as of the first day of each Policy Month. The percentages differ
according to the attained age of the Insured. The Minimum Amount Insured is set
forth in the Policy and may change as federal income tax laws or regulations
change. The following is a schedule of the applicable percentages. For attained
ages not shown, the applicable percentages will decrease evenly:
<TABLE>
<CAPTION>
ATTAINED AGE PERCENTAGE
------------ ----------
<S> <C>
0-40 250
45 215
50 185
55 150
60 130
65 120
70 115
75 105
95+ 100
</TABLE>
Federal tax law imposes another cash funding limitation on cash value life
insurance Policies that may increase the Minimum Amount Insured shown above.
This limitation known as the "guideline
18
<PAGE> 20
premium limitation," generally applies during the early years of variable
universal life insurance Policies.
The following examples demonstrate the relationship between the Death Benefit,
the Cash Surrender Value and the Minimum Amount Insured under Options 1 and 2 of
the Policy. The examples assume an Insured of age 40, a Minimum Amount Insured
of 250% of Cash Value (assuming the preceding table is controlling as to Minimum
Amount Insured), and no outstanding Policy loan.
OPTION 1 -- "LEVEL" DEATH BENEFIT
STATED AMOUNT: $50,000
In the following examples of an Option 1 "Level" Death Benefit, the Death
Benefit under the Policy is generally equal to the Stated Amount of $50,000.
Since the Policy is designed to qualify as a life insurance Policy, the Death
Benefit cannot be less than the Minimum Amount Insured (or, in this example,
250% of the Cash Value).
EXAMPLE ONE. If the Cash Value of the Policy equals $10,000, the Minimum Amount
Insured would be $25,000 ($10,000 x 250%). Since the Death Benefit in the Policy
is the greater of the Stated Amount ($50,000) or the Minimum Amount Insured
($25,000), the Death Benefit would be $50,000.
EXAMPLE TWO. If the Cash Value of the Policy equals $40,000, the Minimum Amount
Insured would be $100,000 ($40,000 x 250%). The resulting Death Benefit would be
$100,000 since the Death Benefit is the greater of the Stated Amount ($50,000)
or the Minimum Amount Insured ($100,000).
OPTION 2 -- "VARIABLE" DEATH BENEFIT
STATED AMOUNT: $50,000
In the following examples of an Option 2 "Variable" Death Benefit, the Death
Benefit varies with the investment experience of the applicable Investment
Options and will generally be equal to the Stated Amount plus the Cash Value of
the Policy (determined on the date of the Insured's death). The Death Benefit
cannot, however, be less than the Minimum Amount Insured (or, in this example,
250% of the Cash Value).
EXAMPLE ONE. If the Cash Value of the Policy equals $10,000, the Minimum Amount
Insured would be $25,000 ($10,000 x 250%). The Death Benefit ($60,000) would be
equal to the Stated Amount ($50,000) plus the Cash Value ($10,000), unless the
Minimum Amount Insured ($25,000) was greater.
EXAMPLE TWO. If the Cash Value of the Policy equals $60,000, then the Minimum
Amount Insured would be $150,000 ($60,000 x 250%). The resulting Death Benefit
would be $150,000 because the Minimum Amount Insured ($150,000) is greater than
the Stated Amount plus the Cash Value ($50,000 + $60,000 = $110,000).
PAYMENT OF PROCEEDS
Death Benefits are payable within seven days after we receive satisfactory proof
of the Insured's death. The amount of Death Benefit paid may be adjusted to
reflect any Policy loan, any Accelerated Benefit Payment Lien, any material
misstatements in the Policy application as to age or sex of the Insured, and any
amounts payable to an assignee under a collateral assignment of the Policy. (See
"Assignment.")
Subject to state law, if the Insured commits suicide within two years following
the Issue Date, limits on the amount of Death Benefit paid will apply. (See
"Limit on Right to Contest and Suicide Exclusion.") In addition, if the Insured
dies during the 61-day period after the Company gives notice to the Policy Owner
that the Cash Surrender Value of the Policy is insufficient to meet the
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<PAGE> 21
Monthly Deduction Amount due against the Cash Value of the Policy, then the
Death Benefit actually paid to the Policy Owner's Beneficiary will be reduced by
the amount of the Deduction Amount that is due and unpaid. (See "Cash Value and
Cash Surrender Value," for effects of partial surrenders on Death Benefits.)
PAYMENT OPTIONS
We will pay policy proceeds in a lump sum, unless you or the Beneficiary select
one of the Company's payment options. We may defer payment of proceeds which
exceed the Death Benefit for up to six months from the date of the request for
the payment. A combination of options may be used. The minimum amount that may
be placed under a payment option is $5,000 unless we consent to a lesser amount.
Proceeds applied under an option will no longer be affected by the investment
experience of the Investment Options.
The following payment options are available under the Policy:
OPTION 1 -- Payments of a Fixed Amount
OPTION 2 -- Payments for a Fixed Period
OPTION 3 -- Amounts Held at Interest
OPTION 4 -- Monthly Life Income
OPTION 5 -- Joint and Survivor Level Amount Monthly Life Income
OPTION 6 -- Joint and Survivor Monthly Life Income-Two-thirds to Survivor
OPTION 7 -- Joint and Last Survivor Monthly Life Income-Monthly Payment
Reduces on Death of First Person Named
OPTION 8 -- Other Options
We will make any other arrangements for periodic payments as may be agreed upon.
If any periodic payment due any payee is less than $100, we may make payments
less often. If we have declared a higher rate under an option on the date the
first payment under an option is due, we will base the payments on the higher
rate.
MATURITY BENEFITS
--------------------------------------------------------------------------------
The Maturity Date is the anniversary of the Policy Date on which the Insured is
age 95. If the Insured is living on the Maturity Date, the Company will pay you
the Policy's Cash Value less any outstanding Policy loan or unpaid Deduction
Amount. You must surrender the Policy to us before we make a payment, at which
point the Policy will terminate and we will have no further obligations under
the Policy.
MATURITY EXTENSION RIDER
When the Insured reaches age 94, and at any time during the twelve months
thereafter, you may request that coverage be extended beyond the Maturity Date
(the "Maturity Extension Benefit"). This Maturity Extension Benefit may not be
available in all jurisdictions. If we receive such request before the Maturity
Date, the Policy will continue until the earlier of the death of the Insured or
the date on which the Policy Owner requests that the Policy terminate. When the
Maturity Extension Benefit ends, a Death Benefit consisting of the Cash Value
less any Policy Loan or Accelerated Benefit Payment Lien will be paid. The Death
Benefit is based on the experience of the Investment Options selected and is not
guaranteed. After the Maturity Date, periodic Deduction Amounts will no longer
be charged against the Cash Value and additional premiums will not be accepted.
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We intend that the Policy and the Maturity Extension Rider will be considered
life insurance for tax purposes. The Death Benefit is designed to comply with
Section 7702 of the Internal Revenue Code of 1986, as amended, or other
equivalent section of the Code. However, we do not give tax advice, and cannot
guarantee that the Death Benefit and Cash Value will be exempt from any future
tax liability. The tax results of any benefits under the Maturity Extension
provision depend upon interpretation of the Internal Revenue Code. You should
consult your own personal tax adviser prior to the exercise of the Maturity
Extension Rider to assess any potential tax liability.
CHARGES AND DEDUCTIONS
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GENERAL
We deduct the charges described below. The charges are for services and benefits
we provide, costs and expenses we incur, and risks we assume under the Policies.
Services and benefits we provide include:
- the ability for you to make withdrawals and surrenders under the Policies;
- the ability for you to obtain a loan under the Policies;
- the death benefit paid on the death of the Insured;
- the available funding options and related programs (including dollar-cost
averaging and portfolio rebalancing);
- administration of the various elective options available under the Policies;
and
- the distribution of various reports to policy owners.
Costs and expenses we incur include:
- expenses associated with underwriting applications, increases in the stated
amount, and riders;
- losses associated with various overhead and other expenses associated with
providing the services and benefits provided by the Policies;
- sales and marketing expenses including commission payments to your sales
agent; and
- other costs of doing business.
Risks we assume include:
- that insureds may live for a shorter period of time than estimated resulting
in the payment of greater death benefits than expected; and
- that the costs of providing the services and benefits under the Policies will
exceed the charges deducted.
CHARGES AGAINST PREMIUM
FRONT-END SALES CHARGE
When we receive a Premium Payment, and before allocation of the payment among
the Investment Options, we deduct a front-end sales charge. For Stated Amounts
less than $500,000, the charge is 2.5%. The charge is 2% for Stated Amounts from
$500,000 to $999,999, and for Stated Amounts of $1,000,000 or greater, there is
no front-end sales charge. Additional charges may be assessed upon any full or
partial surrender. (See "Surrender Charges".)
STATE PREMIUM TAX CHARGE
A charge of 2.5% of each premium payment will be deducted for state premium
taxes (for reimbursement for the payment of the taxes by the Company). These
taxes owed by the Company
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vary from state to state and currently range from 0.75% to 3.5%; 2.5% is an
average. Because there is a range of premium taxes, a Policy Owner may pay a
premium tax charge that is higher or lower than the premium tax actually
assessed or not assessed in your jurisdiction.
The Company also reserves the right to charge the assets of each Investment
Option for a reserve for any income taxes payable by the Company on the assets
attributable to that Investment Option. (See "Federal Tax Considerations.")
MONTHLY DEDUCTION AMOUNT
We will deduct a Monthly Deduction Amount to cover certain charges and expenses
incurred in connection with the Policy. The Monthly Deduction Amount is deducted
pro rata from each of the Investment Options' values attributable to the Policy.
The amount is deducted on the first day of each Policy Month (the "Deduction
Date"), beginning on the Policy Date. The dollar amount of the Deduction Amount
will vary from month to month. The Monthly Deduction Amount consists of the Cost
of Insurance Charge, Policy Administrative Expense Charge and Charges for any
Supplemental Benefit Provision. These are described below:
COST OF INSURANCE CHARGE
The amount of the Cost of Insurance deduction depends on the amount of insurance
coverage on the date of the deduction and the current cost per dollar for
insurance coverage. The cost per dollar of insurance coverage varies annually
and is based on age, sex and risk class of the Insured.
POLICY ADMINISTRATIVE EXPENSE CHARGE
For the first three Policy Years, an administrative charge is deducted monthly
from the Policy's Cash Value. This charge also applies to increases in the
Stated Amount (excluding Cost of Living Adjustments and increases in Stated
Amounts due to Death Benefit Option changes.) This charge is used to cover
expenses associated with issuing the Policy.
The charge currently varies by issue age, Stated Amount and smoker/non-smoker
classification (see Appendix C for chart of current charges). The current Policy
administrative charges are lower than the guaranteed maximum charges. (See
Appendix C(1) for the guaranteed maximum charges.)
CHARGES FOR SUPPLEMENTAL BENEFIT PROVISIONS
The Company will include a supplemental benefits charge in the Monthly Deduction
Amount if you have elected any supplemental benefit provision for which there is
a charge. The amount of this charge will vary depending upon the actual
supplemental benefits selected.
CHARGES AGAINST THE SEPARATE ACCOUNT
MORTALITY AND EXPENSE RISK CHARGE
We deduct a daily charge for mortality and expense risks. This charge is at an
annual rate of 0.80% for the first fifteen (15) Policy Years, and 0.25%
thereafter. For policies issued after July 12, 1995 and prior to May 1, 1998,
this charge is at an annual rate of .80% for the first fifteen (15) Policy
Years, and .45% thereafter. For policies issued prior to July 12, 1995, the
charge is at an annual rate of .60% all years. Refer to "Policies Sold Prior to
May 1, 1998" if applicable. This charge compensates us for various risks
assumed, benefits provided and expenses incurred.
ADMINISTRATIVE EXPENSE CHARGE
We deduct a daily charge for administrative expenses incurred by us. For
Policies issued after July 12, 1995, the charge equals an annual rate of 0.10%
of the assets in the Investment Options for the first fifteen (15) Policy Years
and 0% thereafter. Refer to "Policies Sold Prior to May 1, 1998," if applicable.
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UNDERLYING FUND FEES
When you allocate money to the Investment Options, the Separate Account
purchases shares of the corresponding Underlying Funds at net asset value. The
net asset value reflects investment advisory fees and other expenses already
deducted. The investment advisory fees and other expenses paid to each of the
Underlying Funds are described in the individual Fund prospectuses for the
Investment Options and in the Policy prospectus summary. These are not direct
charges under the Policy; they are indirect because they affect each Investment
Option's accumulation unit value.
SURRENDER CHARGES
There are two types of surrender charges that can apply under the Policy: a
Percent of Premium Charge and a Per Thousand of Stated Amount Charge equal to a
specified amount for each $1,000 of Stated Amount. These surrender charges apply
during the first ten Policy Years (or the first ten years following an increase
in Stated Amount other than an increase for a Cost of Living Adjustment or a
change in Death Benefit option). Both charges apply upon a full surrender of the
Policy. Only the Percent of Premium Charge applies upon a partial surrender.
PERCENT OF PREMIUM CHARGE
A Percent of Premium surrender charge will be assessed upon a full or partial
surrender of the Policy during the first ten Policy Years (and during the first
ten years following an increase in Stated Amount). The charge will be the
smallest of:
(a) 6% of the amount of Cash Value being surrendered; or
(b) 6% of the amount of premiums actually paid within the five years
preceding the surrender; or
(c) 9% of the total Annual Minimum Premiums for each full or partial Policy
Year during the five years preceding the surrender, whether paid or
not. (See Appendix A, "Annual Minimum Premiums.")
For example, for a 45-year old male with a Stated Amount of $150,000 who pays a
premium of $1,969 per year for five years (a total of $9,845), and then fully
surrenders the Policy for its Cash Value of $7,485 (assuming a 6% rate of
return), the Percent of Premium surrender charge would be $449, because (a) is
$449 (6% of $7,485); (b) is $591 (6% of the $9,845 in premiums paid); and (c) is
approximately $682 (9% of the annual minimum premium for five years). The
smallest, $449, is the applicable charge.
PER THOUSAND OF STATED AMOUNT CHARGE
A Per Thousand of Stated Amount surrender charge is imposed on full surrenders,
but not on partial surrenders, and applies only during the first ten Policy
Years or the ten years following an increase in Stated Amount (other than an
increase for a Cost of Living Adjustment or a change in Death Benefit Option).
The charge is equal to a specified dollar amount for each $1,000 of Stated
Amount to which it applies, and will apply only to that portion of the Stated
Amount (except for increases excluded above) which has been in effect for less
than ten years.
The Per Thousand of Stated Amount Charge varies by original issue age, and
increases with the issue age of the Insured. For Stated Amounts of $499,999 or
less, this charge varies in the first year from $2.04 per $1,000 of Stated
Amount for issue ages of 4 years or less, to $25.40 per $1,000 of Stated Amount
for issue ages of 65 years or higher. The charge is lower for Stated Amounts
over $499,999, and even lower for Stated Amounts over $999,999.
Additionally, the charge decreases by 10% each year over the ten-year period.
For example, for a 45-year old with a Stated Amount of $150,000, the charge in
the first year is $7.18 for each $1,000 of Stated Amount, or $1,077. The charge
decreases 10%, or approximately $0.72, each year, so in
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<PAGE> 25
the fifth year, it is $4.31 for each $1,000 of Stated Amount, or $646.50; in the
tenth year, it is $0.72 for each $1,000, or $108.
This charge is designed to compensate the Company for administrative expenses
not covered by other administrative charges. This charge may be reduced or
eliminated when sales are made under certain arrangements. (See "Reduction or
Elimination of Sales Charges and Administrative Charges" below.) The Per
Thousand of Stated Amount surrender charges are set forth in Appendix B.
TRANSFER CHARGE
There is currently no charge for transfers. The Company reserves the right to
limit free transfers of Cash Value from one Investment Option to another by the
Policy Owner to four times in any Policy Year, and to charge $10 for any
additional transfers.
REDUCTION OR ELIMINATION OF CHARGES
We may offer the Policy in arrangements where an employer or trustee will own a
group of policies on the lives of certain employees, or in other situations
where groups of policies will be purchased at one time. We may reduce or
eliminate the mortality and expense risk charge, sales or surrender charges and
administrative charges in such arrangements to reflect the reduced sales
expenses, administrative costs and/or mortality and expense risks expected as a
result of sales to a particular group.
We will not reduce or eliminate the withdrawal charge, mortality and expense
risk charge or the administrative charge if the reduction or elimination will be
unfairly discriminatory to any person.
THE SEPARATE ACCOUNT AND VALUATION
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THE TRAVELERS FUND UL II FOR VARIABLE LIFE INSURANCE (FUND UL II)
The Travelers Fund UL II for Variable Life Insurance was established on October
17, 1995 under the insurance laws of the state of Connecticut. It is registered
with the Securities and Exchange Commission ("SEC") as a unit investment trust
under the Investment Company Act of 1940. A Registration Statement has been
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended. This Prospectus does not contain all information set forth in
the Registration Statement, its amendments and exhibits. You may access the
SEC's website (http://www.sec.gov) to view the entire Registration Statement.
This registration does not mean that the SEC supervises the management or the
investment practices or policies of the Separate Account.
The assets of Fund UL II are invested exclusively in shares of the Investment
Options. The operations of Fund UL II are also subject to the provisions of
Section 38a-433 of the Connecticut General Statutes which authorizes the
Connecticut Insurance Commissioner to adopt regulations under it. Under
Connecticut law, the assets of Fund UL II will be held for the exclusive benefit
of Policy Owners and the persons entitled to payments under the Policy. The
assets held in Fund UL II are not chargeable with liabilities arising out of any
other business which the Company may conduct. Any obligations arising under the
Policy are general corporate obligations of the Company.
All investment income of and other distributions to each Investment Option are
reinvested in shares of corresponding underlying fund at net asset value. The
income and realized gains or losses on the assets of each Investment Option are
separate and are credited to or charged against the Investment Option without
regard to income, gains or losses from any other Investment Option or from any
other business of the Company. The Company purchases shares of the Fund in
connection with premium payments allocated according to the Policy Owners'
directions, and redeems Fund shares to meet Policy obligations. We will also
make adjustments in reserves, if
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<PAGE> 26
required. The Investment Options are required to redeem Fund shares at net asset
value and to make payment within seven days.
HOW THE CASH VALUE VARIES. We calculate the Policy's Cash Value each day the
New York Stock Exchange is open for trading (a "valuation date"). A Policy's
Cash Value reflects a number of factors, including Premium Payments, partial
withdrawals, loans, Policy charges, and the investment experience of the
Investment Option(s) chosen. The Policy's Cash Value on a valuation date equals
the sum of all accumulation units for each Investment Option chosen, plus the
Loan Account Value.
The Separate Account purchases shares of the underlying funds at net asset value
(i.e., without a sales charge). The Separate Account receives all dividends and
capital gains distributions from each underlying fund, and reinvests in
additional shares of that fund. The Accumulation Unit Value reflects the
reinvestment of any dividends or capital gains distributions declared by the
underlying fund. The Separate Account will redeem underlying fund shares at
their net asset value, to the extent necessary to make payments under the
Policy.
In order to determine Cash Value, Cash Surrender Value, policy loans and the
number of Accumulation Units to be credited, we use the values calculated as of
4:00 p.m. Eastern time on each valuation date we receive the written request, or
payment in good order, at our Home Office.
ACCUMULATION UNIT VALUE. Accumulation Units measure the value of the Investment
Options. The value for each Investment Option's Accumulation Unit is calculated
on each valuation date. The value equals the Accumulation Unit value for the
preceding valuation period multiplied by the underlying fund's Net Investment
Factor during the next Valuation Period. (For example, to calculate Monday's
valuation date price, we would multiply Friday's Accumulation Unit Value by
Monday's net investment factor.)
The Accumulation Unit Value may increase or decrease. The number of Accumulation
Units credited to your Policy will not change as a result of the Investment
Option's investment experience.
NET INVESTMENT FACTOR. For each Investment Option, the value of its
Accumulation Unit depends of the net rate of return for the corresponding
underlying fund. We determine the net rate of return at the end of each
Valuation Period (that is, the period of time beginning at 4:00 p.m. Eastern
time and ending at 4:00 p.m. Eastern time on the next Valuation Date). The net
rate of return reflects the investment performance of the investment option,
includes any dividends or capital gains distributed, and is net of the Separate
Account charges.
CHANGES TO THE POLICY
--------------------------------------------------------------------------------
GENERAL
Once the policy is issued, you may make certain changes. Some of these changes
will not require additional underwriting approval; some changes will. Certain
requests must be made in writing, as indicated below:
WRITTEN CHANGES REQUIRING UNDERWRITING APPROVAL:
- increases in the stated amount of insurance;
- changing the death benefit from Option 1 to Option 2
WRITTEN CHANGES NOT REQUIRING UNDERWRITING APPROVAL:
- decreases in the stated amount of insurance
- changing the death benefit from Option 2 to Option 1
- changes to the way your premiums are allocated (Note: with the proper
authorization, you can also make these changes by telephone)
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- changing the beneficiary (unless irrevocably named)
Written requests for changes should be sent to the Company's Home Office at One
Tower Square, Hartford, Connecticut, 06183. The Company's telephone number is
(860) 277-0111.
CHANGES IN STATED AMOUNT
You may request in writing an increase or decrease in the Policy's Stated
Amount, provided that the Stated Amount after any decrease may not be less than
the minimum amount of $50,000. For purposes of determining the cost of insurance
charge, a decrease in the Stated Amount will reduce the Stated Amount in the
following order:
1) against the most recent increase in the Stated Amount;
2) to other increases in the reverse order in which they occurred;
3) to the initial Stated Amount.
A decrease in Stated Amount in a substantially funded Policy may cause a cash
distribution that is includable in the gross income of the Policy Owner.
For increases in the Stated Amount, we may require a new application and
evidence of insurability as well as an additional premium payment. The effective
date of any increase will be shown on the new Policy Summary which we will send.
The effective date of any increase in the Stated Amount will generally be the
Deduction Date next following either the date of a new application or, if
different, the date requested by the Applicant. There is an additional Policy
Administrative Charge and a Per Thousand of Stated Amount Surrender Charge
associated with a requested increase in Stated Amount. There is no additional
charge for a decrease in Stated Amount.
CHANGES IN DEATH BENEFIT OPTION
You may change the Death Benefit option by sending a written request to the
Company. There is no direct tax consequence of changing a Death Benefit option,
except as described under "Tax Treatment of Policy Benefits." However, the
change could affect future values of Net Amount At Risk, and with some Option 2
to Option 1 changes involving substantially funded Policies, there may be a cash
distribution which is included in your gross income. The cost of insurance
charge which is based on the Net Amount At Risk may be different in the future.
A change from Option 1 to Option 2 will not be permitted if the change results
in a Stated Amount of less than $50,000. A change from Option 1 to Option 2 also
subject to underwriting. Contact your registered representative for more
information.
ADDITIONAL POLICY PROVISIONS
--------------------------------------------------------------------------------
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation. The
Company is not responsible for any payment made or action taken before receipt
of written notice of such assignment. Proof of interest must be filed with any
claim under a collateral assignment.
LIMIT ON RIGHT TO CONTEST AND SUICIDE EXCLUSION
We may not contest the validity of the Policy after it has been in effect during
the Insured's lifetime for two years from the Issue Date. Subject to state law,
if the Policy is reinstated, the two-year period will be measured from the date
of reinstatement. Each requested increase in Stated Amount is contestable for
two years from its effective date (subject to state law). In addition, if the
Insured commits suicide during the two-year period following issue, subject to
state law, the Death Benefit will be limited to the premiums paid less (i) the
amount of any partial surrender, (ii) the amount of any outstanding Policy loan,
and (iii) the amount of any unpaid Deduction
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Amount due. During the two-year period following an increase, the Death Benefit
in the case of suicide will be limited to an amount equal to the Deduction
Amount paid for such increase.
MISSTATEMENT AS TO SEX AND AGE
If there has been a misstatement with regard to sex or age, benefits payable
will be adjusted to what the Policy would have provided with the correct
information. A misstatement with regard to sex or age in a substantially funded
Policy may cause a cash distribution that is includable in whole or in part in
the gross income of the Policy Owner.
VOTING RIGHTS
The Company is the legal owner of the underlying fund shares. However, we
believe that when an underlying fund solicits proxies, we are required to obtain
from policy owners who have chosen those investment options instructions on how
to vote those shares. When we receive those instructions, we will vote all of
the shares we own in proportion to those instructions. This will also include
any shares we own on our own behalf. If we determine that we no longer need to
comply with this voting method, we will vote on the shares in our own right.
DISREGARD OF VOTING INSTRUCTIONS
When permitted by state insurance regulatory authorities, we may disregard
voting instructions if the instructions would cause a change in the investment
objective or policies of the Separate Account or an Investment Option, or if it
would cause the approval or disapproval of an investment advisory Policy of an
Investment Option. In addition, we may disregard voting instructions in favor of
changes in the investment policies or the investment adviser of any Investment
Options which are initiated by a Policy Owner if we reasonably disapprove of
such changes. A change would be disapproved only if the proposed change is
contrary to state law or prohibited by state regulatory authorities, or if we
determine that the change would have an adverse effect on our general account
(i.e., if the proposed investment policy for an Investment Option may result in
overly speculative or unsound investments.) If we do disregard voting
instructions, a summary of that action and the reasons for such action would be
included in the next annual report to Policy Owners.
FOR POLICIES SOLD PRIOR TO MAY 1, 1998
The following pertains to policies sold between July 12, 1995 and May 1, 1998
(or sold after May 1, 1998 in the states where the new policy has not yet been
approved).
MORTALITY AND EXPENSE RISK CHARGE. The current charge is at an annual rate of
0.80% for years one through fifteen and 0.45% thereafter.
ADMINISTRATIVE EXPENSE CHARGE. The charge is 0.10% for years one through
fifteen and 0.00% thereafter.
ILLUSTRATIONS
The values shown in these illustrations vary according to assumptions used for
charges, and gross rates of returns. For the first fifteen Policy Years, the
current and guaranteed charges consist of 0.80% for mortality and expense risks,
0.10% for administrative expenses and an average of the Investment Option
expenses and thereafter, 0.45% for mortality and expense risks, 0.00% for
administrative expenses and an average of the Investment Option expenses.
The charge for Investment Option expenses reflected in the illustration assumes
that Cash Value is allocated equally among all investment Options and that no
Policy Loans are outstanding, and is the average of the investment advisory fees
and other expenses charged by each of the Investment Options during the last
audited calendar year.
After deduction of these amounts, the illustrated gross annual rates of 0%, 6%
and 12% correspond to approximate net annual rates of -1.56%, 4.44% and 10.44%,
respectively on a current and
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<PAGE> 29
guaranteed basis for the first fifteen Policy Years and to approximate net
annual rates of -1.11%, 4.89% and 10.89%, respectively on a current and
guaranteed basis thereafter.
POLICIES SOLD PRIOR TO JULY 12, 1995
The following pertains to Policies sold prior to July 12, 1995 (or sold
subsequent to July 12, 1995 in states where the new Policy had not yet been
approved).
MORTALITY AND EXPENSE RISK CHARGE. The current charge is at an annual rate of
0.60% of the assets in the Separate Account, however the policy provides that
the maximum charge for mortality and expense risks will not exceed .80%
ADMINISTRATION EXPENSE CHARGE. The maximum charge is equivalent, on an annual
basis, to 0.10% of the assets in the Separate Account, however, the Company does
not currently assess this charge.
CONTRACT LOANS. During the first 10 policy years, the full Loan Account Value
will be charged an annual interest rate of 7.4% (6% in the Virgin Islands).
During Contract Years 11, 12 and 13, 25%, 50% and 75% of the Loan Account Value,
respectively, will be charged a reduced rate of 3.85% (5.66% in Massachusetts).
Thereafter, 100% of the Loan Account Value will be charged the reduced rate.
ILLUSTRATIONS
The values shown in these illustrations vary according to assumptions used for
charges, and gross rates of returns. The current charges use 0.60% for mortality
and expense risks and an average of the Investment Option expenses. The
guaranteed charges use 0.80% for mortality and expense risks, 0.10% for
administrative expenses and an average of the Investment Option expenses.
The charge for Investment Option expenses reflected in the illustration assumes
that Cash Value is allocated equally among all investment Options and that no
Policy Loans are outstanding, and is the average of the investment advisory fees
and other expenses charged by each of the Investment Options during the last
audited calendar year.
After deduction of these amounts, the illustrated gross annual rates of 0%, 6%
and 12% correspond to approximate net annual rates of -1.26%, 4.74% and 10.74%,
respectively on a current basis and to approximate net annual rates of -1.56%,
4.44% and 10.44%, respectively on a guaranteed basis.
OTHER MATTERS
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STATEMENTS TO POLICY OWNERS
We will maintain all records relating to the Separate Account and the Investment
Options. At least once each Policy Year, we will send you a statement containing
the following information:
- the Stated Amount and the Cash Value of the Policy (indicating the number
of Accumulation Units credited to the Policy in each Investment Option
and the corresponding Accumulation Unit Value);
- the date and amount of each premium payment;
- the date and amount of each Monthly Deduction;
- the amount of any outstanding Policy loan as of the date of the
statement, and the amount of any loan interest charged on the Loan
Account;
- the date and amount of any partial cash surrenders and the amount of any
partial surrender charges;
- the annualized cost of any supplemental benefits purchased under the
Policy; and
- a reconciliation since the last report of any change in Cash Value and
Cash Surrender Value.
We will also send any other reports required by any applicable state or federal
laws or regulations.
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SUSPENSION OF VALUATION
We reserve the right to suspend or postpone the date of any payment of any
benefit or values for any Valuation Period (1) when the New York Stock Exchange
("Exchange") is closed; (2) when trading on the Exchange is restricted; (3) when
the SEC determines so that disposal of the securities held in the Underlying
Funds is not reasonably practicable or the value of the Investment Option's net
assets cannot be determined; or (4) during any other period when the SEC, by
order, so permits for the protection of security holders.
DIVIDENDS
No dividends will be paid under the Policy.
MIXED AND SHARED FUNDING
It is conceivable that in the future it may not be advantageous for variable
life insurance and variable annuity Separate Accounts to invest in the
Investment Options simultaneously. This is called mixed funding. Certain funds
may be available to variable products of other companies not affiliated with
Travelers. This is called "shared funding." Although we -- and the funds -- do
not anticipate any disadvantages either to variable life insurance or to
variable annuity Policy Owners, the Investment Options' Boards of Directors
intend to monitor events to identify any material conflicts that may arise and
to determine what action, if any, should be taken. If any of the Investment
Options' Boards of Directors conclude that separate mutual funds should be
established for variable life insurance and variable annuity Separate Accounts,
the Company will bear the attendant expenses, but variable life insurance and
variable annuity Policy Owners would no longer have the economies of scale
resulting from a larger combined fund. Please consult the prospectuses of the
Investment Options for additional information.
DISTRIBUTION
The Company intends to sell the Contracts in all jurisdictions where it is
licensed to do business and where the Contract is approved. Any sales
representative or employee associated with a broker-dealer who sells the
Contracts will be qualified to sell variable life insurance under applicable
federal and state laws. Each broker-dealer is registered with the SEC under the
Securities Exchange Act of 1934, and all are members of the NASD. The Contract
is offered through both affiliated and non-affiliated broker-dealers.
The principal underwriter of the Contracts is CFBDS, Inc, 21 Milk Street,
Boston, MA. CFBDS is not affiliated with the Company or the Separate Account.
However, it is currently anticipated that Travelers Distribution LLC, an
affiliated broker-dealer, may become the principal underwriter for the Contracts
sometime in 2000.
The maximum commission payable by the Company for distribution to the
broker-dealer will not exceed 110% of the target premium and 6.5% of the excess
premium paid in the first contract year. The maximum commission payable will not
exceed 4% of the annual renewal premium paid in contract years 2-10, and will
not exceed 4% of the annual renewal premium paid after contract year 10. In
addition, Tower Square Securities, Inc., an affiliate of the Company, receives
additional incentive payments from the Company relating to its sale of the
Contracts. From time to time, the Company may pay or permit other promotional
incentives, in cash, credit or other compensation.
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LEGAL PROCEEDINGS AND OPINION
There are no pending legal proceedings affecting the Separate Account. There is
one material pending legal proceeding, other than ordinary routine litigation
incidental to business, to which the Company is a party.
Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the Contract described in this prospectus, as well as the
organization of the Company, its authority to issue variable life contracts
under Connecticut law and the validity of the forms of the variable life
contracts under Connecticut law, have been reviewed by the General Counsel of
the Company.
EXPERTS
The financial statements of Fund UL II as of December 31, 1999 and for the year
ended December 31, 1999 have been included herein and in the registration
statement in reliance upon the report of KPMG LLP, independent certified public
accountants and upon the authority of said firm as experts in accounting and
auditing.
The financial statements of The Travelers Life and Annuity Company as of
December 31, 1999 and 1998, and for each of the years in the three-year period
ended December 31, 1999, have been included herein and in the registration
statement in reliance upon the report of KPMG LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.
FEDERAL TAX CONSIDERATIONS
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GENERAL
The following is a general discussion of the federal income tax considerations
relating to the Policies. This discussion is based upon the Company's
understanding of the federal income tax laws as they are currently interpreted
by the Internal Revenue Service ("IRS"). These laws are complex, and tax results
may vary among individuals. A person contemplating the purchase of or the
exercise of elections under a Policy should seek competent tax advice.
IT SHOULD BE UNDERSTOOD THAT THIS IS NOT AN EXHAUSTIVE DISCUSSION OF ALL TAX
QUESTIONS THAT MIGHT ARISE UNDER THE POLICIES. NO ATTEMPT HAS BEEN MADE TO
ADDRESS ANY FEDERAL ESTATE TAX OR STATE AND LOCAL TAX CONSIDERATIONS WHICH MAY
ARISE IN CONNECTION WITH A POLICY. FOR COMPLETE INFORMATION, A QUALIFIED TAX
ADVISOR SHOULD BE CONSULTED.
THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF ANY POLICY AND THE FOLLOWING
TAX DISCUSSION IS BASED ON THE COMPANY'S UNDERSTANDING OF FEDERAL INCOME TAX
LAWS AS THEY ARE CURRENTLY INTERPRETED. THE COMPANY CANNOT GUARANTEE THAT THOSE
LAWS OR INTERPRETATIONS WILL REMAIN UNCHANGED.
TAX STATUS OF THE POLICY
DEFINITION OF LIFE INSURANCE
Section 7702 of the Code sets forth a definition of a life insurance contract
for federal tax purposes. Guidance as to how Section 7702 is to be applied,
however, is limited. Although the Secretary of the Treasury (the "Treasury") is
authorized to prescribe regulations implementing Section 7702, and while
proposed regulations and other limited, interim guidance has been issued, final
regulations have not been adopted. If a Policy were determined not to be a life
insurance contract for purposes of Section 7702, such Policy would not provide
the tax advantages normally provided by a life insurance policy.
30
<PAGE> 32
With respect to a Policy issued on the basis of a standard rate class, the
Company believes (largely in reliance on IRS Notice 88-128 and the proposed
regulations under Section 7702) that such a Policy should meet the Section 7702
definition of a life insurance contract. There is less guidance on the
application of the rules with respect to a Policy that is issued on a
substandard basis (i.e., a premium class involving higher than standard
mortality risk). Thus, it is not clear whether such a Policy would satisfy
Section 7702, particularly if the Policy Owner pays the full amount of premiums
permitted under the Policy.
The Company reserves the right to make changes in the Policy if such changes are
deemed necessary to attempt to assure its qualification as a life insurance
contract for tax purposes.
DIVERSIFICATION
Section 817(h) of the Code provides that separate account investments (or the
investments of a mutual fund, the shares of which are owned by separate accounts
of insurance companies) underlying the Policy must be "adequately diversified"
in accordance with Treasury regulations in order for the Policy to qualify as
life insurance. The Treasury Department has issued regulations prescribing the
diversification requirements in connection with variable contracts. The Separate
Account, through the Investment Options, intends to comply with these
requirements. Although the Company does not control the Investment Options, it
intends to monitor the investments of the Investment Options to ensure
compliance with the diversification requirements prescribed by the Treasury
Department.
INVESTOR CONTROL
In certain circumstances, owners of variable life insurance contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their contract. In those circumstances, income
and gains from the separate account assets would be includable in the variable
contract owner's gross income each year. The IRS has stated in published rulings
that a variable contract owner will be considered the owner of separate account
assets if the contract owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. The Treasury
has also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor (i.e., the Policy Owner), rather than the
insurance company, to be treated as the owner of the assets in the account."
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular Investment Options without being treated as owners of
the underlying assets." As of the date of this prospectus, no such guidance has
been issued.
The ownership rights under the Policy are similar to, but different in certain
respects from, those described by the IRS in rulings in which it determined that
the policy owners received the desired tax benefits because they were not owners
of separate account assets. For example, a Policy Owner of this Policy has
additional flexibility in allocating payments and cash values. These differences
could result in the Policy Owner being treated as the owner of the assets of the
Separate Account. In addition, the Company does not know what standard will be
set forth in the regulations or rulings which the Treasury is expected to issue,
nor does the Company know if such guidance will be issued. The Company therefore
reserves the right to modify the Policy as necessary to attempt to prevent the
Policy Owner from being considered the owner of a pro rata share of the assets
of the Separate Account.
The remaining tax discussion assumes that the Policy qualifies as a life
insurance contract for federal income tax purposes.
31
<PAGE> 33
TAX TREATMENT OF POLICY BENEFITS
IN GENERAL
The Company believes that the proceeds and cash value increases of a Policy
should be treated in a manner consistent with a fixed-benefit life insurance
policy for federal income tax purposes. Thus, the Death Benefit under the Policy
should be excludable from the gross income of the Beneficiary.
In addition, the Policy Owner will generally not be deemed to be in constructive
receipt of the Cash Value, including increments thereof, until there is a
distribution. The tax consequences of distribution from, and loans taken from or
secured by, a Policy depend on whether the Policy is classified as a "Modified
Endowment Contract." However, whether a Policy is or is not a Modified Endowment
Contract, upon a complete surrender or lapse of a Policy or when benefits are
paid at a Policy's maturity date, if the amount received plus the amount of
indebtedness exceeds the total investment in the Policy, the excess will
generally be treated as ordinary income subject to tax.
Depending on the circumstances, the exchange of a Policy, a change in the
Policy's Death Benefit Option, a Policy loan, a partial withdrawal, a surrender,
a change in ownership, or an assignment of the Policy may have federal income
tax consequences. In addition, federal, state and local transfer, and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Owner or beneficiary. Therefore, it is important to check
with a tax adviser prior to the purchase of a policy.
MODIFIED ENDOWMENT CONTRACTS
A modified endowment contract is defined under tax law as any policy that
satisfies the present legal definition of a life insurance contract but which
fails to satisfy a 7-pay test. This failure could occur with contracts entered
into after June 21, 1988, or with certain older contracts materially changed
after that date. A Section 1035 exchange of an older contract into a contract
after that date will not by itself cause the new contract to be a modified
endowment contract if the older contract had not become one prior to the
exchange. However, the new contract must be re-tested under the 7-pay test
rules.
A contract fails to satisfy the 7-pay test if the cumulative amount of premiums
paid under the contract at any time during the first seven contract years
exceeds the sum of the net level premiums that would have been paid on or before
such time had the contract provided for paid-up future benefits after the
payment of seven level annual premiums. If a material change in the contract
occurs either during the first seven contract years, or later, a new seven-year
testing period is begun. A decrease to Stated Amount made in the first seven
years will cause a retest of the cumulative amount of premiums. Decreases made
after the first seven contract years are not considered a material change,
provided no other material changes have occurred prior. Tax regulations or other
guidance will be needed to fully define those transactions which are material
changes. The Company has established safeguards for monitoring whether a
contract may become a modified endowment contract.
Loans and partial withdrawals from, as well as collateral assignments of,
Policies that are modified endowment contracts will be treated as distributions
to the Policy Owner for tax purposes. All pre-death distributions (including
loans, partial withdrawals and collateral assignments) from these Policies will
be included in gross income on an income-first basis to the extent of any income
in the Policy (the cash value less the Policy Owner's investment in the Policy)
immediately before the distribution.
The law also imposes a 10% penalty tax on pre-death distributions (including
loans, collateral assignments, partial withdrawals and complete surrenders) from
modified endowment contracts to the extent they are included in income, unless a
specific exception to the penalty applies. The penalty does not apply to amounts
which are distributed on or after the date on which the taxpayer attains age
59 1/2, because the taxpayer is disabled, or as substantially equal periodic
payments over the taxpayer's life (or life expectancy) or over the joint lives
(or joint life expectancies) of the taxpayer and his or her beneficiary.
Furthermore, if the loan interest is
32
<PAGE> 34
capitalized by adding the amount due to the balance of the loan, the amount of
the capitalized interest will be treated as an additional distribution subject
to income tax as well as the 10% penalty tax, if applicable, to the extent of
income in the Policy.
The Death Benefit of a modified endowment contract remains excludable from the
gross income of the Beneficiary to the extent described above in "Tax Treatment
of Policy Benefits." Furthermore, no part of the investment growth of the Cash
Value of a modified endowment contract is includable in the gross income of the
Contract Owner unless the contract matures, is distributed or partially
surrendered, is pledged, collaterally assigned, or borrowed against, or
otherwise terminates with income in the contract prior to death. A full
surrender of the contract after age 59 1/2 will have the same tax consequences
as noted above in "Tax Treatment of Policy Benefits."
EXCHANGES
Any Policy issued in exchange for a modified endowment contract will be subject
to the tax treatment accorded to modified endowment contracts. However, the
Company believes that any Policy received in exchange for a life insurance
contract that is not a modified endowment contract will generally not be treated
as a modified endowment contract if the face amount of the Policy is greater
than or equal to the death benefit of the policy being exchanged. The payment of
any premiums at the time of or after the exchange may, however, cause the Policy
to become a modified endowment contract. A prospective purchaser should consult
a qualified tax advisor before authorizing the exchange of his or her current
life insurance contract for a Policy.
AGGREGATION OF MODIFIED ENDOWMENT CONTRACTS
In the case of a pre-death distribution (including a loan, partial withdrawal,
collateral assignment or complete surrender) from a Policy that is treated as a
modified endowment contract, a special aggregation requirement may apply for
purposes of determining the amount of the income on the Policy. Specifically, if
the Company or any of its affiliates issues to the same Policy Owner more than
one modified endowment contract within a calendar year, then for purposes of
measuring the income on the Policy with respect to a distribution from any of
those Policies, the income on the Policy for all those Policies will be
aggregated and attributed to that distribution.
POLICIES WHICH ARE NOT MODIFIED ENDOWMENT CONTRACTS
Unlike loans from modified endowment contracts, a loan from a Policy that is not
a modified endowment contract will be considered indebtedness of the Owner and
no part of a loan will constitute income to the Owner. However, the treatment of
loans taken after the 13th Policy Year, is unclear; such loans might be
considered a withdrawal instead of indebtedness for federal tax purposes.
Pre-death distributions from a Policy that is not a modified endowment contract
will generally not be included in gross income to the extent that the amount
received does not exceed the Policy Owner's investment in the Policy. (An
exception to this general rule may occur in the case of a decrease or change
that reduces the benefits provided under a Policy in the first 15 years after
the Policy is issued and that results in a cash distribution to the Policy
Owner. Such a cash distribution may be taxed in whole or in part as ordinary
income to the extent of any gain in the Policy.) Further, the 10% penalty tax on
pre-death distributions does not apply to Policies that are not modified
endowment contracts.
Certain changes to Policies that are not modified endowment contracts may cause
such Policies to be treated as modified endowment contracts. A Policy Owner
should therefore consult a tax advisor before effecting any change to a Policy
that is not a modified endowment contract.
TREATMENT OF LOAN INTEREST
If there is any borrowing against the Policy, the interest paid on loans may not
be tax deductible.
33
<PAGE> 35
THE COMPANY'S INCOME TAXES
The Company is taxed as a life insurance company under federal income tax law.
Presently, the Company does not expect to incur any income tax on the earnings
or the realized capital gains attributable to Fund UL II. However, the Company
may assess a charge against the Investment Options for federal income taxes
attributable to those accounts in the event that the Company incurs income or
capital gains or other tax liability attributable to Fund UL II under future tax
law.
THE COMPANY
--------------------------------------------------------------------------------
The Travelers Life and Annuity Company (the "Company") is a stock insurance
company chartered in 1973 in Connecticut and has been engaged in the insurance
business since that time. The Company writes individual life insurance and
individual and group annuity contracts on a non-participating basis, and acts as
depositor for the Separate Account assets. The Company is licensed to conduct
life insurance business in a majority of the states of the United States, and
intends to seek licensure in the remaining states, except New York. The
Company's obligations as depositor for Fund UL II may not be transferred without
notice to and consent of Policy Owners.
The Company is an indirect wholly owned subsidiary of Citigroup Inc., a
financial services holding company. The Company's principal executive offices
are located at One Tower Square, Hartford, Connecticut 06183, telephone number
(860) 277-0111.
The Company is subject to Connecticut law governing insurance companies and is
regulated and supervised by the Connecticut Commissioner of Insurance. An annual
statement in a prescribed form must be filed with the Commissioner on or before
March 1 in each year covering the operations of the Company for the preceding
year and its financial condition on December 31 of such year. The Company's
books and assets are subject to review or examination by the Commissioner, and a
full examination of its operations is conducted at least once every four years.
In addition, the Company is subject to the insurance laws and regulations of any
jurisdiction in which it sells its insurance Policies, as well as to various
federal and state securities laws and regulations.
IMSA
The Company is a member of the Insurance Marketplace Standards Association
("IMSA"), and as such may use the IMSA logo and IMSA membership in its
advertisements. Companies that belong to IMSA subscribe to a set of ethical
standards covering the various aspects of sales and service for individually
sold life insurance and annuities. IMSA members have adopted policies and
procedures that demonstrate a commitment to honesty, fairness and integrity in
all customer contacts involving the sale and service of individual life
insurance and annuity products.
34
<PAGE> 36
MANAGEMENT
--------------------------------------------------------------------------------
DIRECTORS OF THE TRAVELERS LIFE AND ANNUITY COMPANY
The following are the Directors and Executive Officers of The Travelers Life and
Annuity Company. Unless otherwise indicated, the principal business address for
all individuals is the Company's Home Office at One Tower Square, Hartford,
Connecticut 06183. References to Citigroup include, prior to December 31, 1993,
Primerica Corporation or its predecessors, and prior to October 8, 1998,
Travelers Group Inc.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND POSITION SINCE PRINCIPAL BUSINESS
----------------- -------- ------------------
<S> <C> <C>
George C. Kokulis.......... 1996 President and Chief Executive Officer since April
2000,
Director Executive Vice President (7/1999 to 3/2000), Senior
Vice President (1995-1999), Vice President (1993-1995)
of The Travelers Life and Annuity Company.
Katherine M. Sullivan...... 1996 Senior Vice President since May 1996 and General
Director Counsel from May 1996 to August 1999 of The Travelers
Life and Annuity Company; Senior Vice President and
General Counsel (1994-1996) Connecticut Mutual;
Special Counsel & Chief of Staff (1988-1994) Aetna
Life & Casualty.
Marc P. Weill*............. 1994 Senior Vice President-Investments since 1993 and Chief
Director Investment Officer since 1995 of The Travelers
Insurance Life and Annuity Company; Senior Vice
President and Chief Investment Officer of Citigroup
Inc. since 1992; Vice President (1990-1992), Primerica
Corporation; Vice President (1989-1990), Smith Barney
Inc.
</TABLE>
---------------
* Principal business address: Citigroup Inc., 153 East 53rd St., New York, New
York 10043
SENIOR OFFICERS OF THE TRAVELERS LIFE AND ANNUITY COMPANY
The following are the Senior Officers of The Travelers Life and Annuity Company,
other than the Directors listed above, as of the date of this Prospectus. Unless
otherwise indicated, the principal business address for all individuals listed
is One Tower Square, Hartford, Connecticut 06183.
<TABLE>
<CAPTION>
NAME POSITION WITH INSURANCE COMPANY
---- -------------------------------
<S> <C>
Stuart Baritz........................ Senior Vice President
Barry Jacobson....................... Senior Vice President
Russell H. Johnson................... Senior Vice President
Glenn D. Lammey...................... Executive Vice President, Chief
Financial Officer, Chief Accounting
Officer and Controller
Marla Berman Lewitus................. Senior Vice President and General
Counsel
Brendan Lynch........................ Senior Vice President
Warren H. May........................ Senior Vice President
Kathleen A. Preston.................. Senior Vice President
Mary Jean Thornton................... Executive Vice President and
Chief Information Officer
David A. Tyson....................... Senior Vice President
F. Denney Voss....................... Senior Vice President
</TABLE>
Information relating to the management of the underlying funds is contained in
the applicable prospectuses.
35
<PAGE> 37
EXAMPLE OF POLICY CHARGES
--------------------------------------------------------------------------------
The following chart illustrates the surrender charges and Monthly Deduction
Amounts that would apply under a Policy based on the assumptions listed below.
Surrender charges and Monthly Deductions Amounts generally will be higher for an
Insured who is older than the assumed Insured, and lower for an Insured who is
younger (assuming the Insureds have the same risk classification). Cost of
Insurance rates go up each year as the Insured becomes a year older.
Male, Age 45
Preferred Non-smoker
Annual Premium: $1,968.75
Hypothetical Gross Annual Investment
Rate of Return: 8%
Face Amount: $150,000
Level Death Benefit Option
Current Charges
<TABLE>
<CAPTION>
TOTAL MONTHLY DEDUCTION
FOR THE POLICY YEAR
---------------------------
COST OF ADMINISTRATIVE
POLICY CUMULATIVE INSURANCE CHARGES AND
YEAR PREMIUMS SURRENDER CHARGES CHARGES MONTHLY
------ ---------- ----------------- --------- POLICY CHARGES
<S> <C> <C> <C> <C>
1 $ 1,968.75 $1,186.92 $431.37 $144.00
2 $ 3,937.50 $1,184.60 $457.06 $144.00
3 $ 5,906.25 $1,182.27 $480.38 $144.00
5 $ 9,843.75 $1,177.57 $539.95 $ 0.00
10 $19,687.50 $1,165.61 $684.10 $ 0.00
</TABLE>
Hypothetical results shown above are illustrative only and are based on the
Hypothetical Gross Annual Investment Rate of Return shown above. This
Hypothetical Gross Annual Investment Rate of Return should not be deemed to be a
representation of past or future investment results. Actual Investment results
may be more or less than shown. No representations can be made that the
hypothetical rates assumed can be achieved for any one year or sustained over a
period of time.
PERFORMANCE INFORMATION
--------------------------------------------------------------------------------
From time to time, Fund UL II's Investment Options may show the percentage
change in the value of an Accumulation Unit based on the performance of the
Investment Option over a period of time, usually for the past one-, two-,
three-, five-, and ten-year periods determined by dividing the increase
(decrease) in value for that unit by the Accumulation Unit Value at the
beginning of the period.
For Investment Options of Fund UL II that invest in underlying funds that were
in existence prior to the date on which the Investment Option became available
under the Policy, average annual rates of return may include periods prior to
the inception of the Investment Option. Performance calculations for Investment
Options with pre-existing Investment Options will be calculated by adjusting the
actual returns of the Investment Options to reflect the charges that would have
been assessed under the Investment Options had the Investment Option been
available under Fund UL II during the period shown.
The following performance information represents the percentage change in the
value of an Accumulation Unit of the Investment Options for the periods
indicated, and reflects all expenses of the Investment Options. The chart
reflects the guaranteed maximum .80% mortality and expense risk charge and .10%
administrative expense risk charge. The rates of return do not reflect the 2.5%
front-end sales charge or the 2.5% state premium tax charge (both of which are
deducted from premium payments) nor do they reflect surrender charges or Monthly
Deduction Amounts. The surrender charges and Monthly Deduction Amounts for a
hypothetical Insured are depicted in the Example following the Rates of Returns.
For information about the Charges and Deductions assessed under the Policy, see
page 19. For illustrations of how these charges affect Cash Values and Death
Benefits, see the Illustrations beginning on page 38. The performance
36
<PAGE> 38
information described in this prospectus, may be used from time to time in
advertisement for the Policy, subject to National Association of Securities
Dealers, Inc. ("NASD") and applicable state approval and guidelines.
The table below shows the net annual rates of return for accumulation units of
investment options available through MarketLife.
AVERAGE ANNUAL RETURNS THROUGH 12/31/99
<TABLE>
<CAPTION>
FUND
INCEPTION
UNDERLYING INVESTMENT OPTIONS ONE YEAR THREE YEARS FIVE YEARS TEN YEARS DATE
----------------------------- -------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
STOCK FUNDS:
AIM Capital Appreciation Portfolio 41.58% 22.24% -- -- 10/10/95
Alliance Growth Portfolio 30.97% 28.85% 29.60% -- 06/16/94
Capital Appreciation Fund (Janus) 51.97% 44.82% 39.07% 23.30% 03/18/82
Deutsche VIT EAFE Equity Index Fund 26.33% -- -- -- 08/22/97
Deutsche VIT Small Cap Index Fund 19.00% -- -- -- 08/25/97
Dreyfus Stock Index Fund 19.46% 25.93% 26.82% 16.58% 09/29/89
Fidelity VIP Equity Income Portfolio 5.36% 13.92% 17.48% 13.41% 10/09/86
Fidelity VIP Growth Portfolio 36.09% 31.98% 28.46% 18.79% 10/09/86
Janus Aspen Ser. Aggressive Growth n/a n/a n/a n/a n/a
Janus Aspen Ser. Global Technology n/a n/a n/a n/a n/a
Janus Aspen Series Worldwide Growth n/a n/a n/a n/a n/a
Smith Barney Equity Index Portfolio 19.59% 26.22% 27.39% -- 10/16/91
Smith Barney Large Cap Growth 30.05% -- -- -- 05/06/98
Smith Barney Large Cap Value -0.83% 10.61% 16.16% -- 06/16/94
Smith Barney Total Return Portfolio 20.89% 13.33% 17.46% -- 10/16/91
Templeton Growth Securities Fund 27.85% 12.45% 16.41% 12.50% 08/31/88
Utilities Portfolio (SB) -0.97% 12.90% 14.42% -- 02/04/94
BOND FUNDS:
Fidelity VIP High Income Portfolio 7.16% 5.81% 9.83% 11.41% 09/19/85
Putnam Diversified Income Portfolio 0.20% 2.18% 5.87% -- 06/16/94
Smith Barney High Income Portfolio 1.67% 4.51% 8.37% -- 06/16/94
Templeton Global Income Securities -6.69% 0.22% 4.44% 5.04% 08/31/88
Travelers US Govt Securities -4.99% 5.00% 7.48% -- 01/24/92
Travelers Zero Coupon Bond 2000 2.39% 5.06% -- -- 10/11/95
Travelers Zero Coupon Bond 2005 -6.27% 4.88% -- -- 10/11/95
BALANCED FUNDS:
Fidelity VIP II Asset Mgr Portfolio 10.06% 14.45% 14.54% 12.08% 09/06/89
MFS Total Return Portfolio 1.71% 10.54% 13.77% -- 06/16/94
Templeton Asset Strategy Fund 21.69% 13.66% 15.97% 12.01% 08/31/88
Travelers Managed Assets Trust 13.16% 17.82% 18.32% 12.00% 08/06/82
MONEY MARKET FUND:
Travelers Money Market(1) 4.04% 4.08% 3.76% 3.69% 10/01/81
</TABLE>
The information presented in the above chart represents the percentage change in
the value of an accumulation unit of the underlying investment options for the
periods indicated, and reflects all expenses of the underlying funds, 0.80%
mortality and expense risk charge and 0.10% administrative expense charge
against amounts allocated to the underlying funds. The rates of return do not
reflect the 2.5% front-end sales charge or the 2.5% state premium tax charge
(both of which are deducted from premium payments) nor do they reflect surrender
charges or monthly deduction amounts. These charges would reduce the average
annual return reflected.
(1) An investment in Money Market Portfolio is neither insured nor guaranteed by
the United States Government. There is no assurance that a stable $1.00
value will be maintained.
37
<PAGE> 39
MARKETLIFE HYPOTHETICAL EXAMPLE *
Male nonsmoker age 45 with a level death benefit
of $150,000 and annual premium payments of $1,968.75
<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS
------------------------------------ ------------------------------------
TOTAL ACCUMULATED SURRENDER TOTAL ACCUMULATED SURRENDER
UNDERLYING INVESTMENT OPTION INVESTMENT VALUE VALUE INVESTMENT VALUE VALUE
---------------------------- ---------- ----------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
STOCK FUNDS
AIM Capital Appreciation Portfolio 1,969 1,926 733 N/A N/A N/A
Alliance Growth Portfolio 1,969 1,757 575 9,844 15,155 13,918
Capital Appreciation Fund (Janus) 1,969 2,092 896 9,844 19,751 18,514
Deutsche VIT EAFE Equity Index Fund 1,969 1,684 506 N/A N/A N/A
Deutsche VIT Small Cap Index Fund 1,969 1,568 397 N/A N/A N/A
Dreyfus Stock Index Fund 1,969 1,576 404 9,844 13,994 12,757
Fidelity VIP Equity Income Portfolio 1,969 1,354 196 9,844 10,633 9,396
Fidelity VIP Growth Portfolio 1,969 1,839 651 9,844 14,671 13,433
Janus Aspen Ser. Aggressive Growth N/A N/A N/A N/A N/A N/A
Janus Aspen Ser. Global Technology N/A N/A N/A N/A N/A N/A
Janus Aspen Series Worldwide Growth N/A N/A N/A N/A N/A N/A
Smith Barney Equity Index Portfolio 1,969 1,578 406 9,844 14,226 12,989
Smith Barney Large Cap Growth 1,969 1,743 561 N/A N/A N/A
Smith Barney Large Cap Value 1,969 1,258 105 9,844 10,221 8,984
Smith Barney Total Return Portfolio 1,969 1,598 425 9,844 10,628 9,391
Templeton Growth Securities Fund 1,969 1,708 529 9,844 10,298 9,061
Utilities Portfolio (SB) 1,969 1,255 103 9,844 9,697 8,469
BOND FUNDS:
Fidelity VIP High Income Portfolio 1,969 1,382 222 9,844 8,426 7,274
Putnam Diversified Income Portfolio 1,969 1,274 120 9,844 7,447 6,354
Smith Barney High Income Portfolio 1,969 1,297 142 9,844 8,053 6,923
Templeton Global Income Securities 1,969 1,166 19 9,844 7,119 6,045
Travelers US Govt Securities 1,969 1,193 44 9,844 7,833 6,717
Travelers Zero Coupon Bond 2000 1,969 1,308 152 N/A N/A N/A
Travelers Zero Coupon Bond 2005 1,969 1,173 26 N/A N/A N/A
BALANCED FUNDS:
Fidelity VIP II Asset Mgr Portfolio 1,969 1,428 265 9,844 9,731 8,501
MFS Total Return Portfolio 1,969 1,297 142 9,844 9,507 8,290
Templeton Asset Strategy Fund 1,969 1,611 437 9,844 10,162 8,925
Travelers Managed Assets Trust 1,969 1,476 311 9,844 10,907 9,669
MONEY MARKET FUND:
Travelers Money Market 1,969 1,344 177 9,844 6,968 5,903
</TABLE>
The charges used in the above example consist of a front-end sales charge of
2.5%, a state premium tax charge of 2.5%, the 0.80% mortality and expense risk
charge and 0.10% administrative expense charge, all expenses of the underlying
funds, and monthly deduction charges including cost of insurance.
The benefits illustrated above may differ from other policies as a results of
differences in investment allocation, premium timing and amount, death benefit
type, as well as age and underwriting classification of the insured ( which
could result in higher cost of insurance ). Because Marketlife is a variable
universal life insurance policy, actual performance should always be considered
in conjunction with the level of death benefit and cash values.
* These hypothetical examples show the effect of the performance quoted on cash
values. Performance, loans and withdrawals will affect the cash value and
death benefit of your policy. Since the values of the portfolios will
fluctuate, the cash value at any time may be more or less than the total
principal investment made, including at the time of surrender of the policy,
when surrender charges may apply.
38
<PAGE> 40
ILLUSTRATIONS
--------------------------------------------------------------------------------
The following pages are intended to illustrate how the Account Value, Cash
Surrender Value and Death Benefit can change over time for Policies issued to a
45 year old male and a 45 year old female. The difference between the Account
Value and the Cash Surrender Value in these illustrations represents the
Surrender Charge that would be incurred upon a full surrender of the Policy.
The illustrations assume that premiums are paid as indicated, no Policy loans
are made, no increases or decreases to the Stated Amount are requested, no
partial surrenders are made, and no charges for transfers between funds are
incurred.
For both male and female age 45, there are two pages of values. One page
illustrates the assumption that the maximum Guaranteed Cost of Insurance Rates,
the monthly administrative charge, mortality and expense risk charge, and
administrative expense charge allowable under the Policy are charged in all
years. The other page illustrates the assumption that the current scale of Cost
of Insurance Rates and other charges are charged in all years. The Cost of
Insurance Rates charged vary by age, sex and underwriting classification, and
the monthly administrative charge varies by age, amount of insurance and
smoker/non-smoker classification for current charges. The illustrations reflect
a deduction of 5% from each annual premium for premium tax (2.5%) and front end
sales charge (2.5%).
The values shown in these illustrations vary according to assumptions used for
charges, and gross rates of investment returns. For the first fifteen Policy
Years, the current and guaranteed charges consist of 0.80% for mortality and
expense risks, 0.10% for administrative expenses, and .66% for Investment Option
expenses and thereafter 0.25% for mortality and expense risks, 0.00% for
administrative expenses, and .66% for Investment Option expenses.
The charge for Investment Option expenses reflected in the illustrations assumes
that Cash Value is allocated equally among all Investment Options and that no
Policy Loans are outstanding, and is an average of the investment advisory fees
and other expenses charged by each of the Investment Options during the most
recent audited calendar year.
The Investment Option expenses for some of the Investment Options reflect an
expense reimbursement agreement currently in effect, as shown in the Policy
prospectus summary. Although these reimbursement arrangements are expected to
continue in subsequent years, the effect of discontinuance could be higher
expenses charged to Policy Owners.
After deduction of these amounts, the illustrated gross annual investment rates
of return of 0%, 6%, and 12% correspond to approximate net annual rates of
-1.56%, 4.44%, and 10.44%, respectively on a current and guaranteed basis during
the first fifteen Policy Years, and to approximate net annual rates of -.91%,
5.09%, and 11.09%, respectively on a current and guaranteed basis thereafter.
For illustrations shown for policies issued prior to May 1, 1998, see "Policies
Issued Prior to May 1, 1998" for the applicable charges and fees.
The illustrations do not reflect any charges for federal income taxes against
the Separate Account, since the Company is not currently deducting such charges
from the Separate Account. However, such charges may be made in the future, and
in that event, the gross annual investment rates of return would have to exceed
0%, 6% and 12% by an amount sufficient to cover the tax charges in order to
produce the Death Benefits, Account Values and Cash Surrender Values
illustrated.
Upon request, the Company will provide a comparable illustration based upon the
proposed Insured's age, sex, underwriting classification, the specified
insurance benefits, and the premium requested. The illustration will show
average fund expenses or, if requested, actual fund expenses. The hypothetical
gross annual investment return assumed in such an illustration will not exceed
12%.
39
<PAGE> 41
MARKETLIFE
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH CURRENT CHARGES**
<TABLE>
<S> <C>
Female, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,595.63
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,675 150,000 150,000 150,000 1,004 1,079 1,155 0 0 8
2 3,435 150,000 150,000 150,000 1,978 2,192 2,415 891 1,091 1,301
3 5,282 150,000 150,000 150,000 2,916 3,332 3,785 1,880 2,271 2,697
4 7,221 150,000 150,000 150,000 3,957 4,646 5,426 2,965 3,613 4,346
5 9,258 150,000 150,000 150,000 4,957 5,994 7,215 4,013 4,988 6,135
6 11,396 150,000 150,000 150,000 5,917 7,377 9,166 5,023 6,396 8,149
7 13,641 150,000 150,000 150,000 6,837 8,798 11,300 5,996 7,889 10,391
8 15,999 150,000 150,000 150,000 7,720 10,261 13,638 6,934 9,460 12,837
9 18,474 150,000 150,000 150,000 8,564 11,766 16,201 7,869 11,071 15,506
10 21,073 150,000 150,000 150,000 9,365 13,311 19,010 8,778 12,724 18,423
15 36,153 150,000 150,000 150,000 12,568 21,531 37,642 12,568 21,531 37,642
20 55,399 150,000 150,000 150,000 14,735 31,547 69,724 14,735 31,547 69,724
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Current cost of insurance charges, mortality and expense risk charge, monthly
administrative charge and administrative expense charge.
40
<PAGE> 42
MARKETLIFE
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH GUARANTEED CHARGES**
<TABLE>
<S> <C>
Female, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,595.63
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,675 150,000 150,000 150,000 521 581 641 0 0 0
2 3,435 150,000 150,000 150,000 1,000 1,152 1,313 0 114 265
3 5,282 150,000 150,000 150,000 1,435 1,711 2,016 488 748 1,034
4 7,221 150,000 150,000 150,000 2,251 2,698 3,209 1,362 1,781 2,262
5 9,258 150,000 150,000 150,000 3,013 3,685 4,483 2,185 2,817 3,568
6 11,396 150,000 150,000 150,000 3,716 4,670 5,845 2,955 3,851 4,956
7 13,641 150,000 150,000 150,000 4,359 5,650 7,302 3,667 4,880 6,433
8 15,999 150,000 150,000 150,000 4,935 6,617 8,856 4,316 5,897 8,055
9 18,474 150,000 150,000 150,000 5,440 7,566 10,516 4,898 6,896 9,821
10 21,073 150,000 150,000 150,000 5,873 8,495 12,292 5,413 7,909 11,705
15 36,153 150,000 150,000 150,000 6,992 12,841 23,502 6,992 12,841 23,502
20 55,399 150,000 150,000 150,000 5,897 16,420 41,351 5,897 16,420 41,351
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Guaranteed cost of insurance charges, mortality and expense risk charge,
monthly administrative charge and administrative expense charge.
41
<PAGE> 43
MARKETLIFE
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH CURRENT CHARGES**
<TABLE>
<S> <C>
Male, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,968.75
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,067 150,000 150,000 150,000 1,270 1,364 1,458 117 205 294
2 4,238 150,000 150,000 150,000 2,495 2,763 3,042 1,376 1,628 1,890
3 6,517 150,000 150,000 150,000 3,676 4,199 4,767 2,595 3,086 3,620
4 8,910 150,000 150,000 150,000 4,956 5,821 6,799 3,905 4,717 5,637
5 11,423 150,000 150,000 150,000 6,179 7,478 9,008 5,162 6,383 7,821
6 14,061 150,000 150,000 150,000 7,353 9,181 11,421 6,374 8,091 10,291
7 16,831 150,000 150,000 150,000 8,477 10,928 14,058 7,538 9,907 13,037
8 19,740 150,000 150,000 150,000 9,554 12,728 16,950 8,659 11,815 16,037
9 22,794 150,000 150,000 150,000 10,583 14,579 20,122 9,777 13,773 19,315
10 26,001 150,000 150,000 150,000 11,548 16,469 23,590 10,850 15,771 22,891
15 44,607 150,000 150,000 150,000 15,474 26,658 46,823 15,474 26,658 46,823
20 68,354 150,000 150,000 150,000 17,325 38,419 86,671 17,325 38,419 86,671
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Current cost of insurance charges, mortality and expense risk charge, monthly
administrative charge and administrative expense charge.
42
<PAGE> 44
MARKETLIFE
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH GUARANTEED CHARGES**
<TABLE>
<S> <C>
Male, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,968.75
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,067 150,000 150,000 150,000 716 791 868 0 0 0
2 4,238 150,000 150,000 150,000 1,367 1,564 1,771 316 501 695
3 6,517 150,000 150,000 150,000 1,951 2,312 2,709 973 1,312 1,685
4 8,910 150,000 150,000 150,000 2,894 3,475 4,140 1,966 2,512 3,137
5 11,423 150,000 150,000 150,000 3,758 4,624 5,655 2,886 3,700 4,669
6 14,061 150,000 150,000 150,000 4,535 5,752 7,257 3,724 4,868 6,283
7 16,831 150,000 150,000 150,000 5,215 6,846 8,946 4,471 6,005 7,978
8 19,740 150,000 150,000 150,000 5,788 7,894 10,720 5,119 7,098 9,807
9 22,794 150,000 150,000 150,000 6,243 8,882 12,579 5,653 8,133 11,773
10 26,001 150,000 150,000 150,000 6,570 9,796 14,524 6,067 9,101 13,825
15 44,607 150,000 150,000 150,000 5,970 12,812 25,724 5,970 12,812 25,724
20 68,354 150,000 150,000 150,000 227 11,593 41,095 227 11,593 41,095
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Guaranteed cost of insurance charges, mortality and expense risk charge,
monthly administrative charge and administrative expense charge.
43
<PAGE> 45
MARKETLIFE POLICIES ISSUED BETWEEN JULY 12, 1995 AND MAY 1, 1998
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH CURRENT CHARGES**
<TABLE>
<S> <C>
Female, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,595.63
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,675 150,000 150,000 150,000 1,004 1,079 1,155 0 0 8
2 3,435 150,000 150,000 150,000 1,978 2,192 2,415 891 1,091 1,301
3 5,282 150,000 150,000 150,000 2,916 3,332 3,785 1,880 2,271 2,697
4 7,221 150,000 150,000 150,000 3,957 4,646 5,426 2,965 3,613 4,346
5 9,258 150,000 150,000 150,000 4,957 5,994 7,215 4,013 4,988 6,135
6 11,396 150,000 150,000 150,000 5,917 7,377 9,166 5,023 6,396 8,149
7 13,641 150,000 150,000 150,000 6,837 8,798 11,300 5,996 7,889 10,391
8 15,999 150,000 150,000 150,000 7,720 10,261 13,638 6,934 9,460 12,837
9 18,474 150,000 150,000 150,000 8,564 11,766 16,201 7,869 11,071 15,506
10 21,073 150,000 150,000 150,000 9,365 13,311 19,010 8,778 12,724 18,423
15 36,153 150,000 150,000 150,000 12,568 21,531 37,642 12,568 21,531 37,642
20 55,399 150,000 150,000 150,000 14,590 31,252 69,104 14,590 31,252 69,104
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Current cost of insurance charges, mortality and expense risk charge, monthly
administrative charge and administrative expense charge.
44
<PAGE> 46
MARKETLIFE POLICIES ISSUED BETWEEN JULY 12, 1995 AND MAY 1, 1998
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH GUARANTEED CHARGES**
<TABLE>
<S> <C>
Female, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,595.63
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,675 150,000 150,000 150,000 521 581 641 0 0 0
2 3,435 150,000 150,000 150,000 1,000 1,152 1,313 0 114 265
3 5,282 150,000 150,000 150,000 1,435 1,711 2,016 488 748 1,034
4 7,221 150,000 150,000 150,000 2,251 2,698 3,209 1,362 1,781 2,262
5 9,258 150,000 150,000 150,000 3,013 3,685 4,483 2,185 2,817 3,568
6 11,396 150,000 150,000 150,000 3,716 4,670 5,845 2,955 3,851 4,956
7 13,641 150,000 150,000 150,000 4,359 5,650 7,302 3,667 4,880 6,433
8 15,999 150,000 150,000 150,000 4,935 6,617 8,856 4,316 5,897 8,055
9 18,474 150,000 150,000 150,000 5,440 7,566 10,516 4,898 6,896 9,821
10 21,073 150,000 150,000 150,000 5,873 8,495 12,292 5,413 7,909 11,705
15 36,153 150,000 150,000 150,000 6,992 12,841 23,502 6,992 12,841 23,502
20 55,399 150,000 150,000 150,000 5,821 16,248 40,964 5,821 16,248 40,964
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Guaranteed cost of insurance charges, mortality and expense risk charge,
monthly administrative charge and administrative expense charge.
45
<PAGE> 47
MARKETLIFE POLICIES ISSUED BETWEEN JULY 12, 1995 AND MAY 1, 1998
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH CURRENT CHARGES**
<TABLE>
<S> <C>
Male, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,968.75
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,067 150,000 150,000 150,000 1,270 1,364 1,458 117 205 294
2 4,238 150,000 150,000 150,000 2,495 2,763 3,042 1,376 1,628 1,890
3 6,517 150,000 150,000 150,000 3,676 4,199 4,767 2,595 3,086 3,620
4 8,910 150,000 150,000 150,000 4,956 5,821 6,799 3,905 4,717 5,637
5 11,423 150,000 150,000 150,000 6,179 7,478 9,008 5,162 6,383 7,821
6 14,061 150,000 150,000 150,000 7,353 9,181 11,421 6,374 8,091 10,291
7 16,831 150,000 150,000 150,000 8,477 10,928 14,058 7,538 9,907 13,037
8 19,740 150,000 150,000 150,000 9,554 12,728 16,950 8,659 11,815 16,037
9 22,794 150,000 150,000 150,000 10,583 14,579 20,122 9,777 13,773 19,315
10 26,001 150,000 150,000 150,000 11,548 16,469 23,590 10,850 15,771 22,891
15 44,607 150,000 150,000 150,000 15,474 26,658 46,823 15,474 26,658 46,823
20 68,354 150,000 150,000 150,000 17,147 38,053 85,892 17,147 38,053 85,892
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Current cost of insurance charges, mortality and expense risk charge, monthly
administrative charge and administrative expense charge.
46
<PAGE> 48
MARKETLIFE POLICIES ISSUED BETWEEN JULY 12, 1995 AND MAY 1, 1998
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH GUARANTEED CHARGES**
<TABLE>
<S> <C>
Male, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,968.75
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,067 150,000 150,000 150,000 716 791 868 0 0 0
2 4,238 150,000 150,000 150,000 1,367 1,564 1,771 316 501 695
3 6,517 150,000 150,000 150,000 1,951 2,312 2,709 973 1,312 1,685
4 8,910 150,000 150,000 150,000 2,894 3,475 4,140 1,966 2,512 3,137
5 11,423 150,000 150,000 150,000 3,758 4,624 5,655 2,886 3,700 4,669
6 14,061 150,000 150,000 150,000 4,535 5,752 7,257 3,724 4,868 6,283
7 16,831 150,000 150,000 150,000 5,215 6,846 8,946 4,471 6,005 7,978
8 19,740 150,000 150,000 150,000 5,788 7,894 10,720 5,119 7,098 9,807
9 22,794 150,000 150,000 150,000 6,243 8,882 12,579 5,653 8,133 11,773
10 26,001 150,000 150,000 150,000 6,570 9,796 14,524 6,067 9,101 13,825
15 44,607 150,000 150,000 150,000 5,970 12,812 25,724 5,970 12,812 25,724
20 68,354 150,000 150,000 150,000 180 11,438 40,681 180 11,438 40,681
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Guaranteed cost of insurance charges, mortality and expense risk charge,
monthly administrative charge and administrative expense charge.
47
<PAGE> 49
MARKETLIFE POLICIES ISSUED PRIOR TO JULY 12, 1995
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH CURRENT CHARGES**
<TABLE>
<S> <C>
Female, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,595.63
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,675 150,000 150,000 150,000 1,008 1,083 1,158 0 0 12
2 3,435 150,000 150,000 150,000 1,989 2,203 2,427 900 1,102 1,312
3 5,282 150,000 150,000 150,000 2,936 3,354 3,809 1,899 2,292 2,720
4 7,221 150,000 150,000 150,000 3,989 4,683 5,468 2,995 3,647 4,385
5 9,258 150,000 150,000 150,000 5,005 6,050 7,281 4,058 5,041 6,198
6 11,396 150,000 150,000 150,000 5,983 7,458 9,265 5,085 6,472 8,248
7 13,641 150,000 150,000 150,000 6,924 8,910 11,442 6,078 8,000 10,533
8 15,999 150,000 150,000 150,000 7,830 10,408 13,833 7,038 9,607 13,032
9 18,474 150,000 150,000 150,000 8,700 11,955 16,463 8,005 11,260 15,768
10 21,073 150,000 150,000 150,000 9,530 13,549 19,353 8,943 12,962 18,766
15 36,153 150,000 150,000 150,000 12,903 22,132 38,723 12,903 22,132 38,723
20 55,399 150,000 150,000 150,000 14,808 31,816 70,506 14,808 31,816 70,506
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Current cost of insurance charges, mortality and expense risk charge, monthly
administrative charge and administrative expense charge.
48
<PAGE> 50
MARKETLIFE POLICIES ISSUED PRIOR TO JULY 12, 1995
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH GUARANTEED CHARGES**
<TABLE>
<S> <C>
Female, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,595.63
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,675 150,000 150,000 150,000 521 581 641 0 0 0
2 3,435 150,000 150,000 150,000 1,000 1,152 1,313 0 114 265
3 5,282 150,000 150,000 150,000 1,435 1,711 2,016 488 748 1,034
4 7,221 150,000 150,000 150,000 2,251 2,698 3,209 1,362 1,781 2,262
5 9,258 150,000 150,000 150,000 3,013 3,685 4,483 2,185 2,817 3,568
6 11,396 150,000 150,000 150,000 3,716 4,670 5,845 2,955 3,851 4,956
7 13,641 150,000 150,000 150,000 4,359 5,650 7,302 3,667 4,880 6,433
8 15,999 150,000 150,000 150,000 4,935 6,617 8,856 4,316 5,897 8,055
9 18,474 150,000 150,000 150,000 5,440 7,566 10,516 4,898 6,896 9,821
10 21,073 150,000 150,000 150,000 5,873 8,495 12,292 5,413 7,909 11,705
15 36,153 150,000 150,000 150,000 6,992 12,841 23,502 6,992 12,841 23,502
20 55,399 150,000 150,000 150,000 5,654 15,867 40,104 5,654 15,867 40,104
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Guaranteed cost of insurance charges, mortality and expense risk charge,
monthly administrative charge and administrative expense charge.
49
<PAGE> 51
MARKETLIFE POLICIES ISSUED PRIOR TO JULY 12, 1995
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH CURRENT CHARGES**
<TABLE>
<S> <C>
Male, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,968.75
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,067 150,000 150,000 150,000 1,275 1,369 1,463 122 210 298
2 4,238 150,000 150,000 150,000 2,508 2,776 3,056 1,389 1,641 1,904
3 6,517 150,000 150,000 150,000 3,702 4,226 4,797 2,618 3,112 3,648
4 8,910 150,000 150,000 150,000 4,997 5,867 6,851 3,943 4,760 5,686
5 11,423 150,000 150,000 150,000 6,239 7,549 9,091 5,218 6,450 7,899
6 14,061 150,000 150,000 150,000 7,436 9,282 11,545 6,451 8,187 10,416
7 16,831 150,000 150,000 150,000 8,586 11,067 14,235 7,640 10,046 13,214
8 19,740 150,000 150,000 150,000 9,692 12,912 17,194 8,788 11,999 16,281
9 22,794 150,000 150,000 150,000 10,753 14,815 20,449 9,947 14,009 19,642
10 26,001 150,000 150,000 150,000 11,754 16,767 24,019 11,055 16,068 23,321
15 44,607 150,000 150,000 150,000 15,891 27,409 48,178 15,891 27,409 48,178
20 68,354 150,000 150,000 150,000 17,427 38,776 87,685 17,427 38,776 87,685
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Current cost of insurance charges, mortality and expense risk charge, monthly
administrative charge and administrative expense charge.
50
<PAGE> 52
MARKETLIFE POLICIES ISSUED PRIOR TO JULY 12, 1995
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
LEVEL DEATH BENEFIT OPTION
ILLUSTRATED WITH GUARANTEED CHARGES**
<TABLE>
<S> <C>
Male, Issue Age 45 Face Amount $150,000
Preferred, Non-Smoker Annual Premium $1,968.75
</TABLE>
<TABLE>
<CAPTION>
TOTAL
PREMIUMS DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
WITH 5% ------------------------------ ------------------------------ ------------------------------
YEAR INTEREST 0% 6% 12% 0% 6% 12% 0% 6% 12%
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,067 150,000 150,000 150,000 716 791 868 0 0 0
2 4,238 150,000 150,000 150,000 1,367 1,564 1,771 316 501 695
3 6,517 150,000 150,000 150,000 1,951 2,312 2,709 973 1,312 1,685
4 8,910 150,000 150,000 150,000 2,894 3,475 4,140 1,966 2,512 3,137
5 11,423 150,000 150,000 150,000 3,758 4,624 5,655 2,886 3,700 4,669
6 14,061 150,000 150,000 150,000 4,535 5,752 7,257 3,724 4,868 6,283
7 16,831 150,000 150,000 150,000 5,215 6,846 8,946 4,471 6,005 7,978
8 19,740 150,000 150,000 150,000 5,788 7,894 10,720 5,119 7,098 9,807
9 22,794 150,000 150,000 150,000 6,243 8,882 12,579 5,653 8,133 11,773
10 26,001 150,000 150,000 150,000 6,570 9,796 14,524 6,067 9,101 13,825
15 44,607 150,000 150,000 150,000 5,970 12,812 25,724 5,970 12,812 25,724
20 68,354 150,000 150,000 150,000 76 11,094 39,759 76 11,094 39,759
</TABLE>
These hypothetical rates of returns are illustrative only and should not be
considered a representation of past or future investment results. Actual
investment results may be more or less than those shown and will depend on a
number of factors. The Account Values and Cash Surrender Values will be
different from those shown if the actual rates of return averaged 0%, 6%, or 12%
over a period of years but fluctuated above or below the average for individual
contract years. No representation can be made that these rates of return can be
achieved for any one year or sustained over a period of time.
** Guaranteed cost of insurance charges, mortality and expense risk charge,
monthly administrative charge and administrative expense charge.
51
<PAGE> 53
APPENDIX A
ANNUAL MINIMUM PREMIUMS
(Per Thousand of Stated Amount)
<TABLE>
<CAPTION>
AGE MALE FEMALE
--- ---- ------
<S> <C> <C>
0 2.80 2.42
1 2.69 2.47
2 2.59 2.48
3 2.58 2.47
4 2.58 2.47
5 2.58 2.47
6 2.58 2.47
7 2.60 2.49
8 2.62 2.52
9 2.66 2.56
10 2.72 2.62
11 2.80 2.68
12 2.89 2.76
13 3.01 2.84
14 3.13 2.94
15 3.25 3.04
16 3.38 3.16
17 3.51 3.28
18 3.62 3.40
19 3.72 3.47
20 3.81 3.53
21 3.90 3.60
22 3.98 3.67
23 4.05 3.73
24 4.08 3.71
25 4.13 3.76
26 4.30 3.93
27 4.45 4.09
28 4.61 4.26
29 4.76 4.41
30 4.92 4.60
31 5.12 4.80
32 5.32 5.02
33 5.52 5.22
34 5.74 5.46
35 5.98 5.71
36 6.33 6.01
37 6.66 6.31
38 7.01 6.64
39 7.34 6.97
40 7.69 7.34
41 8.17 7.75
42 8.66 8.18
43 9.14 8.62
44 9.63 9.11
45 10.11 9.59
46 10.79 10.13
47 11.47 10.70
</TABLE>
<TABLE>
<CAPTION>
AGE MALE FEMALE
--- ---- ------
<S> <C> <C>
48 12.15 11.29
49 12.83 11.89
50 13.51 12.51
51 14.42 13.18
52 15.34 13.86
53 16.24 14.53
54 17.16 15.29
55 18.07 16.10
56 19.43 17.11
57 20.79 18.20
58 22.16 19.35
59 23.52 20.51
60 24.88 21.68
61 27.11 22.98
62 29.34 24.27
63 31.57 25.59
64 33.80 27.01
65 36.03 28.57
66 38.86 30.12
67 41.70 31.63
68 44.52 33.29
69 47.36 35.39
70 49.76 37.75
71 54.39 40.67
72 59.04 44.16
73 63.71 48.15
74 68.41 52.54
75 72.60 57.27
76 80.21 62.20
77 87.34 67.37
78 94.52 73.00
79 101.76 79.30
80 109.06 86.49
81 120.34 94.56
82 131.76 103.39
83 143.32 112.96
84 155.03 123.28
85 166.88 138.49
86 170.39 149.27
87 177.17 159.84
88 191.28 171.55
89 208.18 185.73
90 241.15 203.75
91 254.21 225.63
92 282.60 250.53
93 314.35 278.47
94 349.51 309.50
</TABLE>
APPENDIX A -- ANNUAL MINIMUM PREMIUMS
52
<PAGE> 54
APPENDIX B
PER THOUSAND OF STATED AMOUNT SURRENDER CHARGE
(First Year)
<TABLE>
<CAPTION>
STATED AMOUNT
---------------------------------------
ISSUE $50,000 $500,000 $1,000,000
AGE TO $499,999 TO $999,999 AND ABOVE
----- ----------- ----------- ----------
<S> <C> <C> <C>
0 2.04 1.84 1.63
1 2.04 1.84 1.63
2 2.04 1.84 1.63
3 2.04 1.84 1.63
4 2.04 1.84 1.63
5 2.19 1.97 1.75
6 2.19 1.97 1.75
7 2.21 1.99 1.77
8 2.23 2.01 1.78
9 2.26 2.03 1.81
10 2.39 2.15 1.91
11 2.46 2.21 1.97
12 2.54 2.29 2.03
13 2.65 2.39 2.12
14 2.75 2.48 2.20
15 2.76 2.48 2.21
16 2.77 2.49 2.22
17 2.79 2.51 2.23
18 2.82 2.54 2.26
19 2.90 2.61 2.32
20 2.86 2.57 2.29
21 2.93 2.64 2.34
22 2.99 2.69 2.39
23 3.04 2.74 2.43
24 3.06 2.75 2.45
25 3.08 2.77 2.46
26 3.14 2.83 2.51
27 3.25 2.93 2.60
28 3.37 3.03 2.70
29 3.47 3.12 2.78
30 3.49 3.14 2.79
31 3.64 3.28 2.91
32 3.78 3.40 3.02
</TABLE>
<TABLE>
<CAPTION>
STATED AMOUNT
---------------------------------------
ISSUE $50,000 $500,000 $1,000,000
AGE TO $499,999 TO $999,999 AND ABOVE
----- ----------- ----------- ----------
<S> <C> <C> <C>
33 3.92 3.53 3.14
34 4.08 3.67 3.26
35 4.19 3.77 3.35
36 4.43 3.99 3.54
37 4.66 4.19 3.73
38 4.91 4.42 3.93
39 5.14 4.63 4.11
40 5.69 5.12 4.55
41 6.05 5.45 4.84
42 6.41 5.77 5.13
43 6.76 6.08 5.41
44 7.13 6.42 5.70
45 7.18 6.46 5.74
46 7.66 6.89 6.13
47 8.14 7.33 6.51
48 8.63 7.77 6.90
49 9.11 8.20 7.29
50 10.00 9.00 8.00
51 10.67 9.60 8.54
52 11.35 10.22 9.06
53 12.02 10.82 9.62
54 12.70 11.43 10.16
55 13.01 11.71 10.41
56 13.99 12.69 11.19
57 14.97 13.47 11.98
58 15.96 14.36 12.77
59 16.93 15.24 13.54
60 17.91 16.12 14.33
61 19.52 17.57 15.82
62 21.12 19.01 16.90
63 22.73 20.46 18.18
64 24.34 21.91 19.47
65+ 25.40 22.85 20.32
</TABLE>
APPENDIX B -- PER THOUSAND OF STATED AMOUNT SURRENDER CHARGE
53
<PAGE> 55
APPENDIX C
CURRENT MONTHLY ADMINISTRATIVE CHARGE
(Per Thousand of Stated Amount)
Applicable for Three Years Following Issue or Increase
NON-SMOKERS
<TABLE>
<CAPTION>
STATED AMOUNT
--------------------------------------
ISSUE $50,000 $250,000 $1,000,000
AGE TO $249,999 TO $999,999 AND ABOVE
----- ----------- ----------- ----------
<S> <C> <C> <C>
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20 0.08 0.00 0.00
21 0.08 0.00 0.00
22 0.08 0.00 0.00
23 0.08 0.00 0.00
24 0.08 0.00 0.00
25 0.08 0.00 0.00
26 0.08 0.00 0.00
27 0.08 0.00 0.00
28 0.08 0.00 0.00
29 0.08 0.00 0.00
30 0.08 0.00 0.00
31 0.08 0.00 0.00
32 0.08 0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
STATED AMOUNT
--------------------------------------
ISSUE $50,000 $250,000 $1,000,000
AGE TO $249,999 TO $999,999 AND ABOVE
----- ----------- ----------- ----------
<S> <C> <C> <C>
33 0.08 0.00 0.00
34 0.08 0.00 0.00
35 0.08 0.00 0.00
36 0.08 0.00 0.00
37 0.08 0.00 0.00
38 0.08 0.00 0.00
39 0.08 0.00 0.00
40 0.08 0.00 0.00
41 0.08 0.00 0.00
42 0.08 0.00 0.00
43 0.08 0.00 0.00
44 0.08 0.00 0.00
45 0.08 0.00 0.00
46 0.08 0.00 0.00
47 0.09 0.00 0.00
48 0.09 0.00 0.00
49 0.10 0.00 0.00
50 0.10 0.00 0.00
51 0.11 0.00 0.00
52 0.11 0.00 0.00
53 0.12 0.00 0.00
54 0.12 0.00 0.00
55 0.12 0.00 0.00
56 0.13 0.00 0.00
57 0.13 0.00 0.00
58 0.14 0.00 0.00
59 0.14 0.00 0.00
60 0.15 0.00 0.00
61 0.15 0.00 0.00
62 0.15 0.00 0.00
63 0.15 0.00 0.00
64 0.15 0.00 0.00
65+ 0.15 0.00 0.00
</TABLE>
APPENDIX C -- CURRENT MONTHLY ADMINISTRATIVE CHARGE
54
<PAGE> 56
APPENDIX C (CONT'D)
CURRENT MONTHLY ADMINISTRATIVE CHARGE
(Per Thousand of Stated Amount)
Applicable for Three Years Following Issue or Increase
SMOKERS
<TABLE>
<CAPTION>
STATED AMOUNT
--------------------------------------
ISSUE $50,000 $500,000 $1,000,000
AGE TO $499,999 TO $999,999 AND ABOVE
----- ----------- ----------- ----------
<S> <C> <C> <C>
0 0.12 0.08 0.00
1 0.12 0.08 0.00
2 0.12 0.08 0.00
3 0.12 0.08 0.00
4 0.12 0.08 0.00
5 0.12 0.08 0.00
6 0.13 0.08 0.00
7 0.14 0.08 0.00
8 0.15 0.08 0.00
9 0.16 0.08 0.00
10 0.16 0.08 0.00
11 0.16 0.08 0.00
12 0.16 0.08 0.00
13 0.16 0.08 0.00
14 0.16 0.08 0.00
15 0.16 0.08 0.00
16 0.16 0.08 0.00
17 0.16 0.08 0.00
18 0.16 0.08 0.00
19 0.16 0.08 0.00
20 0.16 0.08 0.00
21 0.16 0.08 0.00
22 0.16 0.08 0.00
23 0.16 0.08 0.00
24 0.16 0.08 0.00
25 0.16 0.08 0.00
26 0.16 0.09 0.00
27 0.17 0.09 0.00
28 0.17 0.09 0.00
29 0.18 0.09 0.00
30 0.18 0.09 0.00
31 0.18 0.09 0.00
32 0.18 0.09 0.00
</TABLE>
<TABLE>
<CAPTION>
STATED AMOUNT
--------------------------------------
ISSUE $50,000 $500,000 $1,000,000
AGE TO $499,999 TO $999,999 AND ABOVE
----- ----------- ----------- ----------
<S> <C> <C> <C>
33 0.19 0.09 0.00
34 0.19 0.09 0.00
35 0.19 0.09 0.00
36 0.20 0.09 0.00
37 0.21 0.10 0.00
38 0.22 0.10 0.00
39 0.23 0.10 0.00
40 0.23 0.10 0.00
41 0.24 0.10 0.00
42 0.24 0.10 0.00
43 0.24 0.10 0.00
44 0.24 0.10 0.00
45 0.24 0.10 0.00
46 0.25 0.11 0.00
47 0.26 0.11 0.00
48 0.27 0.11 0.00
49 0.28 0.11 0.00
50 0.29 0.15 0.00
51 0.30 0.15 0.00
52 0.32 0.15 0.00
53 0.33 0.15 0.00
54 0.34 0.15 0.00
55 0.35 0.15 0.00
56 0.35 0.15 0.00
57 0.35 0.15 0.00
58 0.36 0.15 0.00
59 0.36 0.15 0.00
60 0.36 0.15 0.00
61 0.38 0.15 0.00
62 0.38 0.15 0.00
63 0.38 0.15 0.00
64 0.39 0.15 0.00
65+ 0.39 0.15 0.00
</TABLE>
55
<PAGE> 57
APPENDIX C(1)
GUARANTEED MONTHLY ADMINISTRATIVE CHARGE
(Per Thousand of Stated Amount)
Applicable for Three Years Following Issue or Increase
SMOKERS AND NON-SMOKERS
<TABLE>
<CAPTION>
STATED AMOUNT
--------------------------------------
ISSUE $50,000 $500,000 $1,000,000
AGE TO $499,999 TO $999,999 AND ABOVE
----- ----------- ----------- ----------
<S> <C> <C> <C>
0 0.16 0.08 0.00
1 0.16 0.08 0.00
2 0.16 0.08 0.00
3 0.16 0.08 0.00
4 0.16 0.08 0.00
5 0.16 0.08 0.00
6 0.16 0.08 0.00
7 0.16 0.08 0.00
8 0.16 0.08 0.00
9 0.16 0.08 0.00
10 0.16 0.08 0.00
11 0.16 0.08 0.00
12 0.16 0.08 0.00
13 0.16 0.08 0.00
14 0.16 0.08 0.00
15 0.16 0.08 0.00
16 0.16 0.08 0.00
17 0.16 0.08 0.00
18 0.16 0.08 0.00
19 0.16 0.08 0.00
20 0.16 0.08 0.00
21 0.16 0.08 0.00
22 0.16 0.08 0.00
23 0.16 0.08 0.00
24 0.16 0.08 0.00
25 0.16 0.08 0.00
26 0.16 0.09 0.00
27 0.17 0.09 0.00
28 0.17 0.09 0.00
29 0.18 0.09 0.00
30 0.18 0.09 0.00
31 0.18 0.09 0.00
32 0.18 0.09 0.00
</TABLE>
<TABLE>
<CAPTION>
STATED AMOUNT
--------------------------------------
ISSUE $50,000 $500,000 $1,000,000
AGE TO $499,999 TO $999,999 AND ABOVE
----- ----------- ----------- ----------
<S> <C> <C> <C>
33 0.19 0.09 0.00
34 0.19 0.09 0.00
35 0.19 0.09 0.00
36 0.20 0.09 0.00
37 0.21 0.10 0.00
38 0.22 0.10 0.00
39 0.23 0.10 0.00
40 0.23 0.10 0.00
41 0.24 0.10 0.00
42 0.24 0.10 0.00
43 0.24 0.10 0.00
44 0.24 0.10 0.00
45 0.24 0.10 0.00
46 0.25 0.11 0.00
47 0.26 0.11 0.00
48 0.27 0.11 0.00
49 0.28 0.11 0.00
50 0.29 0.15 0.00
51 0.30 0.15 0.00
52 0.32 0.15 0.00
53 0.33 0.15 0.00
54 0.34 0.15 0.00
55 0.35 0.15 0.00
56 0.35 0.15 0.00
57 0.35 0.15 0.00
58 0.36 0.15 0.00
59 0.36 0.15 0.00
60 0.36 0.15 0.00
61 0.38 0.15 0.00
62 0.38 0.15 0.00
63 0.38 0.15 0.00
64 0.39 0.15 0.00
65+ 0.39 0.15 0.00
</TABLE>
APPENDIX C(1) -- GUARANTEED MONTHLY ADMINISTRATIVE CHARGE
56
<PAGE> 58
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 59
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 60
MARKETLIFE
INDIVIDUAL VARIABLE UNIVERSAL LIFE INSURANCE CONTRACTS
ISSUED BY
THE TRAVELERS LIFE AND ANNUITY COMPANY
HARTFORD, CONNECTICUT
Travelers Life and Annuity [LOGO]
A member of citigroup
L-12539 May, 2000
