<PAGE> 1
As filed with the Securities and Exchange Commission on April 11, 1997.
Registration No. 333- _____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
___________
GLENBROOK LIFE A I M VARIABLE LIFE SEPARATE ACCOUNT A
(Exact Name of Trust)
GLENBROOK LIFE AND ANNUITY COMPANY
(Name of Depositor)
3100 SANDERS ROAD
NORTHBROOK, IL 60062
(Complete Address of Depositor's Principal Executive Offices)
MICHAEL J. VELOTTA, ESQ.
GLENBROOK LIFE AND ANNUITY COMPANY
3100 SANDERS ROAD
NORTHBROOK, IL 60062
(Name and Complete Address of Agent for Service)
Copy to:
STEPHEN E. ROTH, ESQ.
SUTHERLAND, ASBILL & BRENNAN, L.L.P.
1275 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20004-2404
Securities being offered -- modified single premium variable life insurance
contracts.
___________
The registrant hereby declares that it is registering an indefinite amount of
securities pursuant to Rule 24f-2 under the Investment Company Act of 1940.
Approximate date of proposed public offering: As soon as practical after the
effective date of this registration statement.
The Registrant hereby amends this registration statement on such dates as may
be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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RECONCILIATION AND TIE BETWEEN FORM N-8B-2 and PROSPECTUS
<TABLE>
<CAPTION>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
<S> <C>
1. Cover Page
2. Cover Page; Additional Information about the Company
3. Not applicable
4. The Company; Distribution of the Contracts
5. The Variable Account - General
6. The Variable Account - General
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; The Variable Account - Fund; The Contract - Application for a Contract; Contract Benefits and Rights;
Other Matters - Voting Rights, Dividends
11. Summary; The Variable Account - Fund
12. Summary; The Variable Account - Fund
13. Summary; Deductions and Charges; Distribution of the Contracts; Federal Tax Considerations
14. The Contract - Application for a Contract, Premiums, Allocation of Premiums
15. Summary; The Contract - Premiums, Allocation of Premiums
16. The Variable Account - Fund; The Contract - Allocation of Premiums
17. Summary; Contract Benefits and Rights - Amount Payable on Surrender of the Contract, Partial Withdrawals,
Cancellation and Exchange Rights
18. The Variable Account; The Contract - Allocation of Premiums; Deductions and Charges; Federal Tax Considerations
19. Other Matters - Statements to Contract Owners
20. Not applicable
21. Contract Benefits and Rights - Contract Loans; Contract Benefits and Rights - Suspension of Valuation, Payments
and Transfers
22. Not applicable
23. Safekeeping of Variable Account's Assets; Additional Information about the Company
24. Contract Benefits and Rights - Transfer of Account Value; Other Matters
25. The Company
26. Not applicable
27. The Company; Additional Information about the Company
28. Executive Officers and Directors of the Company
29. The Company
30. Not applicable
31. Not applicable
32. Not applicable
33. Not applicable
34. Not applicable
35. The Company; Distribution of the Contracts
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Contracts
39. The Company; Distribution of the Contracts
40. Not applicable
41. The Company; Distribution of the Contracts
</TABLE>
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<TABLE>
<S> <C>
42. Not applicable
43. Not applicable
44. The Contract - Allocation of Premiums, Accumulation Unit Value; Contract Benefits and Rights - Account Value;
Deductions and Charges
45. Not applicable
46. Contract Benefits and Rights - Account Value, Amount Payable on Surrender of the Contract, Partial Withdrawals;
Deductions and Charges
47. Not applicable
48. Cover Page; The Company
49. Not applicable
50. The Variable Account - General
51. Summary; The Company; The Contract; Contract Benefits and Rights; Other Matters; Federal Tax Considerations
52. The Variable Account - Fund, Investment Adviser
53. Summary; Federal Tax Considerations
54. Not applicable
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
</TABLE>
<PAGE> 4
GLENBROOK LIFE AND ANNUITY COMPANY
MODIFIED SINGLE PREMIUM
VARIABLE LIFE INSURANCE CONTRACTS
3100 SANDERS ROAD
NORTHBROOK, IL 60062
TELEPHONE (800) XXX-XXXX
------------------------------
This prospectus describes the "AIM Lifetime Plus(SM) Variable Life," a
modified single premium variable life insurance contract (the "Contract")
offered by Glenbrook Life and Annuity Company (the "Company") for prospective
insured persons age 0-85. The Contract lets the Contract Owner pay a significant
single premium and subject to restrictions, additional premiums.
The Contracts are modified endowment contracts for federal income tax
purposes, except in certain cases described under "Federal Tax Considerations,"
page 20. A LOAN, DISTRIBUTION OR OTHER AMOUNT RECEIVED FROM A MODIFIED ENDOWMENT
CONTRACT DURING THE LIFE OF THE INSURED WILL BE TAXED TO THE EXTENT OF ANY
ACCUMULATED INCOME IN THE CONTRACT. ANY AMOUNTS THAT ARE TAXABLE WITHDRAWALS
WILL BE SUBJECT TO A 10% ADDITIONAL PENALTY TAX, WITH CERTAIN EXCEPTIONS.
The minimum initial premium the Company will accept is $10,000. Premiums
are allocated to Glenbrook Life A I M Variable Life Separate Account A (the
"Variable Account"). The Variable Account invests in shares of AIM Variable
Insurance Funds, Inc. (the "Fund Series"). Nine Funds are currently available
for investment within the Variable Account: (1) AIM V.I. Capital Appreciation
Fund; (2) AIM V.I. Diversified Income Fund; (3) AIM V.I. Global Utilities Fund;
(4) AIM V.I. Government Securities Fund; (5) AIM V.I. Growth Fund; (6) AIM V.I.
Growth and Income Fund; (7) AIM V.I. International Equity Fund; (8) AIM V.I.
Money Market Fund; and (9) AIM V.I. Value Fund.
There is no guaranteed minimum Account Value for a Contract. The Account
Value of a Contract will vary up or down to reflect the investment experience of
the Funds to which the Contract Owner has allocated premiums. The Contract Owner
bears the entire investment risk for all amounts so allocated. The Contract
continues in effect while the Cash Surrender Value is sufficient to pay the
monthly charges under the Contract ("Monthly Deduction Amount").
The Contract provides for an Initial Death Benefit shown on the Contract
Data page. The death benefit ("Death Benefit") payable under a Contract may be
greater than the Initial Death Benefit but so long as the Contract continues in
effect, if no withdrawals are made, will never be less than the Initial Death
Benefit. The Account Value will, and under certain circumstances the Death
Benefit of the Contract may, increase or decrease based on the investment
experience of the Funds to which premiums have been allocated. At the death of
the Insured, the Company will pay a Death Benefit to the beneficiary.
IT MAY NOT BE ADVANTAGEOUS TO PURCHASE VARIABLE LIFE INSURANCE AS A
REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY OWN A VARIABLE
LIFE INSURANCE CONTRACT.
THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUS OF
THE FUND SERIES WHICH CONTAINS A FULL DESCRIPTION OF THE FUNDS. BOTH
PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE CONTRACTS DESCRIBED HEREIN ARE NOT DEPOSITS OF, OR GUARANTEED BY, ANY
BANK, NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
The Contracts may not be available in all states.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SUMMARY.................................. 3
SPECIAL TERMS............................ 6
THE COMPANY.............................. 6
THE VARIABLE ACCOUNT..................... 7
General................................ 7
THE FUND SERIES.......................... 7
AIM Variable Insurance Funds, Inc. .... 7
Investment Advisor for the Funds....... 8
THE CONTRACT............................. 8
Application for a Contract............. 8
Premiums............................... 9
Allocation of Premiums................. 9
Accumulation Unit Values............... 9
DEDUCTIONS AND CHARGES................... 10
Monthly Deductions..................... 10
Cost of Insurance Charge............ 10
Tax Expense Charge.................. 11
Administrative Expense Charge....... 11
Other Deductions....................... 11
Mortality and Expense Risk Charge... 11
Annual Maintenance Fee.............. 11
Taxes Charged Against the Variable
Account........................... 11
Charges Against the Funds........... 11
Withdrawal Charge................... 12
Due and Unpaid Premium Tax Charge... 12
CONTRACT BENEFITS AND RIGHTS............. 12
Death Benefit.......................... 12
Accelerated Death Benefit.............. 13
Account Value.......................... 13
Transfer of Account Value.............. 13
Dollar Cost Averaging.................. 14
Automatic Fund Rebalancing............. 14
Contract Loans......................... 14
Amount Payable on Surrender of the
Contract............................ 15
Partial Withdrawals.................... 15
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Maturity............................... 15
Lapse and Reinstatement................ 15
Cancellation and Exchange Rights....... 15
Confinement Waiver Benefit............. 16
Suspension of Valuation, Payments and
Transfers........................... 16
Last Survivor Contracts................ 16
OTHER MATTERS............................ 16
Voting Rights.......................... 16
Statements to Contract Owners.......... 17
Limit on Right to Contest.............. 17
Misstatement as to Age and Sex......... 17
Payment Options........................ 17
Beneficiary............................ 18
Assignment............................. 18
Dividends.............................. 18
EXECUTIVE OFFICERS AND DIRECTORS OF THE
COMPANY................................. 18
DISTRIBUTION OF THE CONTRACTS............ 19
SAFEKEEPING OF THE VARIABLE ACCOUNT'S
ASSETS................................. 19
FEDERAL TAX CONSIDERATIONS............... 20
Introduction........................... 20
Taxation of the Company and the
Variable Account.................... 20
Taxation of Contract Benefits.......... 20
Modified Endowment Contracts........... 20
Diversification Requirements........... 21
Ownership Treatment.................... 21
Policy Loan Interest................... 21
ADDITIONAL INFORMATION ABOUT THE
COMPANY................................ 21
LEGAL PROCEEDINGS........................ 22
LEGAL MATTERS............................ 22
REGISTRATION STATEMENT................... 22
EXPERTS.................................. 22
FINANCIAL INFORMATION.................... 22
FINANCIAL STATEMENTS..................... F-1
APPENDIX A............................... A-1
</TABLE>
2
<PAGE> 6
SUMMARY
NOTE: A glossary of Special Terms used in this Prospectus appears at page
6, immediately following this Summary.
THE CONTRACT
The Contracts are life insurance contracts with death benefits, cash
values, and other traditional life insurance features. The Contracts are
"variable." Unlike the fixed benefits of ordinary whole life insurance, the
Account Value of a Contract will increase or decrease based on the investment
experience of the Funds to which the Contract Owner has allocated premiums. The
Death Benefit also may increase or decrease under some circumstances, but so
long as the Contract remains in effect, the Death Benefit will not decrease
below the Initial Death Benefit if no withdrawals are made. The Contracts are
credited with units ("Accumulation Units") to calculate cash values. The
Contract Owner may transfer the Account Value among the Variable Account's
underlying Funds.
The Contracts can be issued on a single life or "last survivor" basis. For
a discussion of how last survivor Contracts operate differently from single life
Contracts, see "Last Survivor Contracts," page 16.
In some states, the Contracts may be issued in the form of a group
Contract. In those states, certificates will be issued evidencing a purchaser's
rights under the group Contract. In certain states, certificates are issued
under group Contracts issued to the Financial Services Group Insurance Trust, an
Illinois Trust. The terms "Contract" and "Contract Owner," as used in this
prospectus, refer to and include such a certificate and certificate owner,
respectively.
THE VARIABLE ACCOUNT AND THE FUNDS
The Glenbrook Life A I M Variable Life Separate Account A ("Variable
Account") funds the variable life insurance Contracts offered by this
prospectus. The Variable Account is a unit investment trust registered as such
under the Investment Company Act of 1940. It consists of multiple sub-accounts
("Variable Sub-Accounts"), each investing in a corresponding Fund Series.
Applicants should read the prospectus for the Fund Series in connection
with the purchase of a Contract. The investment objectives of each of the Funds
are briefly summarized below under "the Fund Series," page 7. The Variable
Account invests in shares of AIM Variable Insurance Funds, Inc. The Fund Series
has a total of nine Funds available under the Contract. The Funds include: (1)
AIM V.I. Capital Appreciation Fund; (2) AIM V.I. Diversified Income Fund; (3)
AIM V.I. Global Utilities Fund; (4) AIM V.I. Government Securities Fund; (5) AIM
V.I. Growth Fund; (6) AIM V.I. Growth and Income Fund; (7) AIM V.I.
International Equity Fund; (8) AIM V.I. Money Market Fund; and (9) AIM V.I.
Value Fund. The assets of each Fund are held separately from the other Funds and
each has distinct investment objectives and policies which are described in the
accompanying prospectus for the Fund Series.
PREMIUMS
The Contract requires the Contract Owner to pay an initial premium of at
least $10,000. Additional premium payments may be made subject to the following
conditions:
- only one payment is allowed in any Contract Year;
- the minimum payment is $500;
- the attained age of the insured must be less than age 86; and
- absent submission of new evidence of insurability of the insured, the
maximum additional payment permitted in a Contract Year is the
"Guaranteed Additional Payment." The Guaranteed Additional Payment is
the lesser of $5,000 or a percentage of the initial payment (5% for
attained ages 40-70, and 0% for attained ages 20-39 and 71-85).
Additional premium payments may require an increase in the Specified Amount
in order for the Contract to meet the definition of a life insurance contract
under the Internal Revenue Code. Other than for the "Guaranteed Additional
Payment," the Company reserves the right to obtain satisfactory evidence of
insurability before accepting any additional premium payments requiring an
increase in the Specified Amount. The Company reserves the right to reject an
additional premium payment for any reason. Additional premiums may also be paid
at any time and in any amount necessary to avoid termination of the Contract.
DEDUCTIONS AND CHARGES
On each Monthly Activity Date, the Company will deduct a Monthly Deduction
Amount from the Account Value. The Monthly Deduction Amount will be made pro
rata from each Variable Sub-Account to which Account Value is allocated. The
Monthly Deduction Amount includes a cost of insurance charge, a tax expense
charge and an administrative expense charge. The monthly cost of insurance
charge is to cover the Company's anticipated mortality costs. The Company will
deduct monthly from the Account Value a tax expense charge equal to an annual
rate of 0.40% for the first ten Contract Years. This charge compensates the
Company for premium taxes imposed by various states and local jurisdictions and
for federal taxes resulting from the application of Section 848 of the Code. The
charge includes a premium tax deduction of 0.25% and a federal tax deduction of
0.15%. The premium tax deduction represents an average premium tax of 2.5% of
premiums over ten years. The Company will deduct from the Account Value a
monthly administrative charge equal to an annual rate of 0.25%. This charge
compensates the Company for administrative expenses incurred in the
3
<PAGE> 7
administration of the Variable Account and the Contracts. The Company will also
deduct from the Variable Account a daily charge equal to an annual rate of 0.90%
for the mortality risks and expense risks the Company assumes in relation to the
Contracts. If the Cash Surrender Value is not sufficient to cover a Monthly
Deduction Amount due on any Monthly Activity Date, the Contract may lapse. See
"Deductions and Charges -- Monthly Deductions," page 10, and "Contract Benefits
and Rights -- Lapse and Reinstatement," page 15.
An Annual Maintenance Fee of $35 will be deducted on each Contract
Anniversary from all Variable Sub-Accounts to which Account Value is allocated,
in proportion to the amounts so allocated. This fee will be waived if total
premiums paid are $50,000 or more. This fee will help reimburse the Company for
administrative and maintenance costs of the Contracts. See "Deductions and
Charges -- Other Deductions -- Annual Maintenance Fee," page 11.
Applicants should review the prospectus for the Fund Series which
accompanies this prospectus for a description of the charges and expenses borne
by the Funds in connection with their operations.
Withdrawals in excess of the Free Withdrawal Amount will be subject to a
withdrawal charge as set forth below:
<TABLE>
<CAPTION>
PERCENTAGE OF
CONTRACT YEAR INITIAL PREMIUM WITHDRAWN
------------- -------------------------
<S> <C>
1..................................................... 7.75%
2..................................................... 7.75%
3..................................................... 7.75%
4..................................................... 7.25%
5..................................................... 6.25%
6..................................................... 5.25%
7..................................................... 4.25%
8..................................................... 3.25%
9..................................................... 2.25%
10+.................................................... 0.00%
</TABLE>
The Withdrawal Charge is imposed to cover a portion of the sales expense
incurred by the Company in distributing the Contracts. This expense includes
agents' commissions, advertising and the printing of prospectuses. See
"Deductions and Charges -- Other Deductions -- Withdrawal Charge," page 12.
During the first nine Contract Years, an additional premium tax charge will
be imposed on full or partial withdrawals. This charge ranges from a maximum of
2.25% in the first Contract Year, decreasing .25% in each of the next nine
Contract Years, with no charge thereafter. See "Deductions and Charges -- Other
Deductions -- Due and Unpaid Premium Tax Charge," page 12.
For a discussion of the tax consequences of a full or a partial withdrawal,
see "Federal Tax Considerations," page 20.
DEATH BENEFIT
At the death of the Insured while the Contract is in force, we will pay the
Death Benefit (less any Indebtedness and certain due and unpaid Monthly
Deduction Amounts) to the beneficiary. The Death Benefit determined on the date
of the Insured's death is the greater of: (1) the Specified Amount; or (2) the
Account Value multiplied by the death benefit ratio as found in the Contract.
See "Contract Benefits and Rights -- Death Benefit," page 12.
ACCOUNT VALUE
The Account Value of the Contract will increase or decrease to reflect: (1)
the investment experience of the Funds to which Account Value is allocated; and
(2) deductions for the mortality and expense risk charge, the Monthly Deduction
Amount, and the Annual Maintenance Fee. There is no minimum guaranteed Account
Value and the Contract Owner bears the risk of the investment in the Funds. See
"Contract Benefits and Rights -- Account Value," page 13.
CONTRACT LOANS
A Contract Owner may obtain one or both of two types of cash loans from the
Company. Both types of loans are secured by the Contract. The maximum amount
available for such loans is 90% of the Contract's Cash Value, less the amount of
all loans existing on the date of the loan request (including loan interest to
the next Contract Anniversary), less any Annual Maintenance Fee due on or before
the next Contract Anniversary, and less any due and unpaid Monthly Deduction
Amounts. See "Contract Benefits and Rights -- Contract Loans," page 14.
LAPSE
Under certain circumstances a Contract may terminate if the Cash Surrender
Value on any Monthly Activity Date is less than the required Monthly Deduction
Amount. The Company will give written notice to the Contract Owner and a 61 day
grace period during which additional amounts may be paid to continue the
Contract. See "Contract Benefits and Rights -- Contract Loans," page 14 and
"Lapse and Reinstatement," page 15.
4
<PAGE> 8
CANCELLATION AND EXCHANGE RIGHTS
A Contract Owner has a limited right to return his or her Contract for
cancellation. The Contract Owner may return the Contract for cancellation, by
mail or hand delivery, to the agent who sold the Contract, within 10 days after
delivery of the Contract to the Contract Owner (in some states, this free-look
period is longer). If the Contract is returned within the free-look period, the
Company will return to the Contract Owner within 7 days thereafter the premiums
paid for the Contract adjusted to reflect any investment gain or loss resulting
from allocation to the Variable Account prior to the date of cancellation.
Certain states may require a return of premium without such adjustments. In
those states where the Company is required to return the premiums paid upon a
free-look of the Contract and where it has been approved by the state, the
Company reserves the right to allocate all premium payments made prior to the
expiration of the free-look period to the money market sub-account of the
Variable Account.
Once the Contract is in effect, it may be exchanged during the first 24
months after its issuance for a permanent life insurance contract on the life of
the Insured without submitting proof of insurability. See "Contract Benefits and
Rights -- Cancellation and Exchange Rights," page 15.
TAX CONSEQUENCES
The current Federal tax law generally excludes all death benefit payments
from the gross income of the Contract beneficiary. The Contracts generally will
be treated as modified endowment contracts. This status does not affect the
Contracts' classification as life insurance, nor does it affect the exclusion of
death benefit payments from gross income. However, loans, distributions or other
amounts received under a modified endowment contract are taxed to the extent of
accumulated income in the Contract (generally, the excess of Account Value over
premiums paid) and may be subject to a 10% penalty tax. See "Federal Tax
Considerations," page 20.
5
<PAGE> 9
SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated
meanings:
Account Value: The aggregate value under a Contract of the Variable
Sub-Accounts and the Loan Account.
Accumulation Unit: An accounting unit of measure used to calculate the
value of a Variable Sub-Account.
Age: The Insured's age at the Insured's last birthday.
Cash Value: The Account Value less any applicable withdrawal charges and
due and unpaid Premium Tax Charges.
Cash Surrender Value: The Cash Value less all Indebtedness and the Annual
Maintenance Fee, if applicable.
Code: The Internal Revenue Code of 1986, as amended.
Contract Anniversary: The same day and month as the Contract Date for each
subsequent year the Contract remains in force.
Contract Date: The date on or as of which coverage under a Contract becomes
effective and the date from which Contract Anniversaries, Contract Years and
Contract months are determined.
Contract Owner: The person having rights to benefits under the Contract
during the lifetime of the Insured; the Contract Owner may or may not be the
Insured.
Contract Years: Annual periods computed from the Contract Date.
Death Benefit: The greater of (1) the Specified Amount or (2) the Account
Value on the date of death multiplied by the death benefit ratio as specified in
the Contract.
Free Withdrawal Amount: The amount of a surrender or partial withdrawal
that is not subject to a Withdrawal Charge. This amount in any Contract Year is
10% of total premiums paid.
Initial Death Benefit: The Initial Death Benefit under a Contract is shown
on the Contract Data page.
Indebtedness: All Contract loans, if any, and accrued loan interest.
Insured: The person whose life is insured under a Contract.
Loan Account: An account in the Company's General Account, established for
any amounts transferred from the Variable Sub-Accounts for requested loans. The
Loan Account credits a fixed rate of interest that is not based on and is
different from the investment experience of the Variable Account.
Monthly Activity Date: The day of each month on which the Monthly Deduction
Amount is deducted from the Account Value of the Contract. Monthly Activity
Dates occur on the same day of the month as the Contract Date. If there is no
date equal to the Monthly Activity Date in a particular month, the Monthly
Activity Date will be the last day of that month.
Monthly Deduction Amount: A deduction on each Monthly Activity Date for the
cost of insurance charge, the tax expense charge and the administrative expense
charge.
Specified Amount: The minimum death benefit under a Contract, equal to the
Initial Death Benefit on the Contract Date. Thereafter it may change in
accordance with the terms of the partial withdrawal and the subsequent premium
provisions of the Contract.
Valuation Day: Every day the New York Stock Exchange is open for trading.
The value of the Variable Account is determined at the close of regular trading
on the New York Stock Exchange (currently 4:00 p.m. Eastern Time) on each
valuation day.
Valuation Period: The period between the close of regular trading on the
New York Stock Exchange on successive Valuation Days.
Variable Account: Glenbrook Life AIM Variable Life Separate Account A, an
account established by the Company to separate the assets funding the Contracts
from other assets of the Company.
Variable Sub-Account: The subdivisions of the Variable Account used to
allocate a Contract Owner's Account Value, less Indebtedness, among the Funds.
THE COMPANY
The Company is the issuer of the Contract. The Company is a stock life
insurance company organized under the laws of Illinois in 1992. The Company was
originally organized under the laws of Indiana in 1965. From 1965 to 1983, the
Company was known as "United Standard Life Assurance Company" and from 1983 to
1992, the Company was known as "William Penn Life Assurance Company of America."
The Company is licensed to operate in the District of Columbia and all states
except New York. The Company intends to market the Contract in those
jurisdictions in which it is licensed to operate. The Company's home office is
located at 3100 Sanders Road, Northbrook, Illinois 60062.
6
<PAGE> 10
The Company is a wholly owned subsidiary of Allstate Life Insurance Company
("Allstate Life"), a stock life insurance company incorporated under the laws of
Illinois. Allstate Life is a wholly owned subsidiary of Allstate Insurance
Company ("Allstate"), a stock property-liability insurance company incorporated
under the laws of Illinois. All of the outstanding capital stock of Allstate is
owned by The Allstate Corporation (the "Corporation").
THE VARIABLE ACCOUNT
GENERAL
Glenbrook Life A I M Variable Life Separate Account A ("Variable Account")
is a separate account of the Company established on January 15, 1996 pursuant to
the insurance laws of Illinois. The Variable Account is organized as a unit
investment trust and registered as such with the Securities and Exchange
Commission (the "Commission") under the Investment Company Act of 1940 (the
"1940 Act"). The Variable Account meets the definition of a "separate account"
under the federal securities laws. Under Illinois law, the assets of the
Variable Account are held exclusively for the benefit of Contract Owners and
persons entitled to payments under the Contracts. The assets of the Variable
Account are not chargeable with liabilities arising out of any other business
which the Company may conduct.
THE FUND SERIES
The Variable Account will invest in shares of the AIM Variable Insurance
Funds, Inc. (the "Fund Series"). The Fund Series is registered with the
Commission as an open-end, series, management investment company. Registration
of the Fund Series does not involve supervision of its management, investment
practices or policies by the Commission. The Funds are designed to provide
investment vehicles for variable insurance contracts of various insurance
companies, in addition to the Variable Account.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in a Fund simultaneously. Although neither the Company nor the Fund
Series currently foresees any such disadvantages either to variable life
insurance or variable annuity contract owners, the Fund Series Board of
Directors intends to monitor events in order to identify any material conflicts
between variable life and variable annuity contract owners and to determine what
action, if any, should be taken in response thereto. If the Board of Directors
were to conclude that separate funds should be established for variable life and
variable annuity separate accounts, the Company will bear the attendant
expenses.
All investment income of and other distributions to each Variable
Sub-Account arising from the corresponding Fund are reinvested in shares of that
Fund at net asset value. The income and both realized and unrealized gains or
losses on the assets of each Variable Sub-Account are therefore separate and are
credited to or charged against the Variable Sub-Account without regard to
income, gains or losses from any other Variable Sub-Account or from any other
business of the Company. The Company will purchase shares in the Funds in
connection with premiums allocated to the corresponding Variable Sub-Account in
accordance with Contract Owners' directions and will redeem shares in the Funds
to meet Contract obligations or make adjustments in reserves, if any. The Fund
Series is required to redeem Fund shares at net asset value and to make payment
within seven days.
The Company reserves the right, subject to compliance with the law as then
in effect, to make additions to, deletions from, or substitutions for the Fund
shares underlying the Variable Sub-Accounts. If shares of any of the Funds
should no longer be available for investment, or if, in the judgment of the
Company's management, further investment in shares of any Fund should become
inappropriate in view of the purposes of the Contracts, the Company may
substitute shares of another Fund for shares already purchased, or to be
purchased in the future, under the Contracts. No substitution of securities will
take place without notice to Contract Owners and without prior approval of the
Commission to the extent required by the 1940 Act. The Company reserves the
right to establish additional Variable Sub-accounts of the Variable Account,
each of which would invest in shares of another Fund. Subject to Contract Owner
approval, the Company also reserves the right to end the registration under the
1940 Act of the Variable Account or any other separate accounts of which it is
the depositor or to operate the Variable Account as a management investment
company under the 1940 Act.
Each Fund is subject to certain investment restrictions and policies which
may not be changed without the approval of a majority of the shareholders of
that Fund. See the accompanying prospectus for the Fund Series for further
information.
AIM VARIABLE INSURANCE FUNDS, INC.
AIM Variable Insurance Funds, Inc. offers nine Funds for use with this
Contract: (1) AIM V.I. Capital Appreciation Fund; (2) AIM V.I. Diversified
Income Fund; (3) AIM V.I. Global Utilities Fund; (4) AIM V.I. Government
Securities Fund; (5) AIM V.I. Growth Fund; (6) AIM V.I. Growth and Income Fund;
(7) AIM V.I. International Equity Fund; (8) AIM V.I. Money Market Fund; and (9)
AIM V.I. Value Fund. Each Fund has different investment objectives and policies
and operates as a separate investment fund. The following is a brief description
of the investment objectives and programs of the Funds. For a more complete
description, please see the prospectus of the Fund Series accompanying this
prospectus.
AIM V.I. CAPITAL APPRECIATION FUND ("CAPITAL APPRECIATION FUND") is a
diversified fund which seeks capital appreciation through investments in common
stocks, with emphasis on medium-sized and smaller emerging growth companies.
7
<PAGE> 11
AIM V.I. DIVERSIFIED INCOME FUND ("DIVERSIFIED INCOME FUND") is a
diversified fund which seeks a high level of current income primarily by
investing in a diversified portfolio of foreign and U.S. government and
corporate debt securities, including lower rated high yield debt securities
(commonly known as "junk bonds"). The risks of investing in junk bonds are
described in the accompanying prospectus for the Fund Series, which should be
read carefully before investing.
AIM V.I. GLOBAL UTILITIES FUND ("GLOBAL UTILITIES FUND") is a
nondiversified fund which seeks a high level of current income, and as a
secondary objective, capital appreciation, by investing primarily in common and
preferred stocks of public utility companies (either domestic or foreign).
AIM V.I. GOVERNMENT SECURITIES FUND ("GOVERNMENT FUND") is a diversified
fund which seeks a high level of current income consistent with reasonable
concern for safety of principal by investing in debt securities issued,
guaranteed or otherwise backed by the U.S. Government.
AIM V.I. GROWTH FUND ("GROWTH FUND") is a diversified fund which seeks
growth of capital through investments primarily in common stocks of leading U.S.
companies considered by the investment advisor to have strong earnings momentum.
AIM V.I. GROWTH AND INCOME FUND ("GROWTH & INCOME FUND") is a diversified
fund which seeks growth of capital, with current income as a secondary
objective, by investing primarily in dividend paying common stocks which have
prospects for both growth of capital and dividend income.
AIM V.I. INTERNATIONAL EQUITY FUND ("INTERNATIONAL FUND") is a diversified
fund which seeks long-term growth of capital by investing in international
equity securities, the issuers of which are considered by the investment advisor
to have strong earnings momentum.
AIM V.I. MONEY MARKET FUND ("MONEY MARKET FUND") is a diversified fund
which seeks as high a level of current income as is consistent with the
preservation of capital and liquidity by investing in a diversified portfolio of
money market instruments.
AIM V.I. VALUE FUND ("VALUE FUND") is a diversified fund which seeks
long-term growth of capital by investing primarily in equity securities judged
by the investment advisor to be undervalued relative to the current or projected
earnings of the companies issuing the securities, or relative to current market
values of assets owned by the companies issuing the securities or relative to
the equity markets generally. Income is a secondary objective.
An investment in the AIM VI Money Market Fund is neither insured nor
guaranteed by the U.S. Government. There can be no assurance that the AIM VI
Money Market Fund will be able to maintain a stable net asset value of $1.00 per
share.
All dividends and capital gains distributions from the Funds are
automatically reinvested in shares of the distributing Fund at their net asset
value.
There is no assurance that the Funds will attain their respective stated
objectives. Additional information concerning the investment objectives and
policies of the Funds can be found in the current prospectus for the Fund Series
accompanying this prospectus.
You will find more complete information about the Funds, including the
risks associated with each Fund, in the accompanying prospectus. You should read
the prospectus for the Fund Series in conjunction with this prospectus.
THE FUND SERIES PROSPECTUS SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE CONCERNING THE ALLOCATION OF PURCHASE PAYMENTS TO A PARTICULAR VARIABLE
SUB-ACCOUNT.
INVESTMENT ADVISOR FOR THE FUNDS
AIM Advisors, Inc., ("AIM") serves as the investment advisor to each Fund.
AIM was organized in 1976, and, together with its affiliates, manages or advises
43 investment company portfolios (including the Funds). AIM is a wholly owned
subsidiary of AIM Management Group Inc., a holding company. AIM manages the
Funds pursuant to a master investment advisory agreement dated October 18, 1993,
as amended April 28, 1994. As of December 31, 1996, total assets advised or
managed by AIM and its affiliates approximated $62.3 billion.
THE CONTRACT
APPLICATION FOR A CONTRACT
Individuals wishing to purchase a Contract must submit an application to
the Company. A Contract will be issued only on the lives of Insureds age 0-85
who supply evidence of insurability satisfactory to the Company. Acceptance is
subject to the Company's underwriting rules and the Company reserves the right
to reject an application for any lawful reason. If a Contract is not issued, the
premium will be returned to you. No change in the terms or conditions of a
Contract will be made without the consent of the Contract Owner.
Once the Company has received the initial premium and underwriting has been
approved, the Contract will be issued on the date the Company has received the
final requirement for issue. In the case of simplified underwriting, the
Contract will be issued or coverage denied within 3 business days of receipt of
premium. The Insured will be covered under the Contract, however, as of the
Contract Date.
8
<PAGE> 12
Since the Contract Date will generally be the date the Company receives the
initial premium, coverage under a Contract may begin before it is actually
issued. In addition to determining when coverage begins, the Contract Date
determines Monthly Activity Dates, Contract months, and Contract Years.
If the initial premium is over the limits established from time to time by
the Company (currently $1,000,000), the initial payment will not be accepted
with the application. In other cases where we receive the initial payment with
the application, we will provide fixed conditional insurance during underwriting
according to the terms of a conditional receipt. The fixed conditional insurance
will be the insurance applied for, up to a maximum that varies by age.
PREMIUMS
The Contract is designed to permit an initial premium payment and, subject
to certain conditions, additional premium payments. The initial premium payment
purchases a Death Benefit initially equal to the Contract's Specified Amount.
The minimum initial payment is $10,000.
Under current underwriting rules, which are subject to change, proposed
Insureds are eligible for simplified underwriting without a medical examination
if their application responses and initial premium payment meet simplified
underwriting standards. Customary underwriting standards will apply to all other
proposed Insureds. The maximum initial premium currently permitted on a
simplified underwriting basis varies with the issue age of the insured according
to the following table:
<TABLE>
<CAPTION>
SIMPLIFIED UNDERWRITING
ISSUE AGE MAXIMUM INITIAL PREMIUM
--------- -----------------------
<S> <C>
0-34........................................................ Not available
35-44....................................................... $ 15,000
45-54....................................................... $ 30,000
55-64....................................................... $ 50,000
65-80....................................................... $100,000
Over age 80................................................. Not available
</TABLE>
Additional premium payments may be made at any time, subject to the
following conditions:
- only one additional premium payment may be made in any Contract Year;
- each additional premium payment must be at least $500;
- attained age of the Insured must be less than age 86; and
- absent submission of new evidence of insurability of the insured, the
maximum additional payment permitted in a Contract Year is the "Guaranteed
Additional Payment." The Guaranteed Additional Payment is the lesser of
$5,000 or a percentage of the initial payment (5% for attained ages 40-70,
and 0% for attained ages 20-39 and 71-85).
Additional premium payments may require an increase in the Specified Amount
in order for the Contract to remain within the definition of a life insurance
contract under Section 7702 of the Code. Other than for the "Guaranteed
Additional Payment," the Company reserves the right to obtain satisfactory
evidence of insurability upon any additional premium payments requiring an
increase in the Specified Amount. However, we reserve the right to reject any
additional premium payment for any reason.
Unless you request otherwise in writing, any additional premium payment
received while a Contract loan exists will be applied first, as a repayment of
Indebtedness, and second, as an additional premium payment, subject to the
conditions described above.
Additional premiums may be paid at any time and in any amount necessary to
avoid termination of the Contract without evidence of insurability.
ALLOCATION OF PREMIUMS
Upon completion of underwriting, the Company will either issue a Contract,
or deny coverage and return all premiums. If a Contract is issued, the initial
premium payment, plus an amount equal to the interest that would have been
earned had the initial premium been invested in the AIM V.I. Money Market
Sub-Account since the date of receipt of the premium, will be allocated on the
date the Contract is issued according to the initial premium allocation
instructions specified on the application. In the future, the Company may
allocate the initial premium (and the interest that would have been earned had
the initial premium been invested in the AIM V.I. Money Market Sub-Account since
its receipt) to the AIM VI Money Market Sub-Account during the free look period
in those states where state law requires premiums to be returned upon exercise
of the free-look right.
ACCUMULATION UNIT VALUES
The Accumulation Unit Value for each Variable Sub-Account will vary to
reflect the investment experience of the corresponding Fund and will be
determined on each Valuation Day by multiplying the Accumulation Unit Value of
the particular Variable Sub-Account on the preceding Valuation Day by a "Net
Investment Factor" for that Sub-Account for the Valuation Period then ended. The
Net Investment
9
<PAGE> 13
Factor for each Variable Sub-Account is determined by first dividing (A) the net
asset value per share of the corresponding Fund at the end of the current
Valuation Period (plus the per share dividends or capital gains by that Fund if
the ex-dividend date occurs in the Valuation Period then ended), by (B) the net
asset value per share of the corresponding Fund at the end of the immediately
preceding Valuation Period; and then subtracting from the result an amount equal
to the daily deductions for mortality and expense risk charges imposed during
the Valuation Period. Applicants should refer to the prospectus for the Fund
Series which accompanies this prospectus for a description of how the assets of
the Fund Series are valued since such determination has a direct bearing on the
Accumulation Unit Value of the corresponding Sub-Account and therefore the
Account Value. See "Contract Benefits and Rights -- Account Value," page 13.
All valuations in connection with a Contract, e.g., with respect to
determining Account Value and Cash Surrender Value and in connection with
Contract loans, or calculation of Death Benefits, or with respect to determining
the number of Accumulation Units to be credited to a Contract with each premium,
other than the initial premium and additional premiums requiring underwriting,
will be made on the date the request or payment is received in good order by the
Company at its Home Office if such date is a Valuation Day; otherwise such
determination will be made on the next succeeding date which is a Valuation Day.
Specialized Uses of the Contract: Because the Contract provides for an
accumulation of Cash Value as well as a death benefit, the Contract can be used
for various individual and business financial planning purposes. Purchasing the
Contract in part for such purposes entails certain risks. For example, if the
investment performance of Sub-Accounts to which Account Value is allocated is
less than expected or if sufficient premiums are not paid, the Contract may
lapse or may not accumulate sufficient Account Value to fund the purpose for
which the Contract was purchased. Withdrawals and Contract loans may
significantly affect current and future Account Value, Cash Surrender Value, or
Death Benefit proceeds. Depending upon Sub-Account investment performance and
the amount of a Contract loan, the loan may cause a Contract to lapse. The
Contract is designed to provide benefits on a long-term basis. Before purchasing
a Contract for a specialized purpose, a purchaser should consider whether the
long-term nature of the Contract is consistent with the purpose for which it is
being considered. Using a Contract for a specialized purpose may have tax
consequences. (See "Federal Tax Considerations," page 20.)
DEDUCTIONS AND CHARGES
MONTHLY DEDUCTIONS
On each Monthly Activity Date including the Contract Date, the Company will
deduct from the Account Value attributable to the Variable Account an amount
("Monthly Deduction Amount") to cover charges and expenses incurred in
connection with a Contract. Each Monthly Deduction Amount will be deducted pro
rata from each Variable Sub-Account attributable to the Contract such that the
proportion of Account Value of the Contract attributable to each Sub-Account
remains the same before and after the deduction. The Monthly Deduction Amount
will vary from month to month. If the Cash Surrender Value is not sufficient to
cover a Monthly Deduction Amount due on any Monthly Activity Date, the Contract
may lapse. See "Contract Benefits and Rights -- Lapse and Reinstatement," page
15. The following is a summary of the monthly deductions and charges which
constitute the Monthly Deduction Amount.
Cost of Insurance Charge: The cost of insurance charge covers the Company's
anticipated mortality costs for standard and substandard risks. Current cost of
insurance rates are lower after the 10th Contract Year. The current cost of
insurance charge will not exceed the guaranteed cost of insurance charge. This
charge is the maximum annual cost of insurance per $1,000 as indicated in the
Contract; multiplied by the difference between the Death Benefit and the Account
Value (both as determined on the Monthly Activity Date); divided by $1,000; and
divided by 12. For standard risks, the guaranteed cost of insurance rate is
based on the 1980 Commissioner's Standard Ordinary Mortality Table, age last
birthday. (Unisex rates may be required in some states). A table of guaranteed
cost of insurance charges per $1,000 will be included in each Contract; however,
the Company reserves the right to use rates less than those shown in the table.
Substandard risks will be charged at a higher cost of insurance rate that will
not exceed rates based on a multiple of the 1980 Commissioner's Standard
Ordinary Mortality Table, age last birthday. The multiple will be based on the
Insured's substandard rating.
The cost of insurance charge rates are applied to the difference between
the Death Benefit determined on the Monthly Activity Date and the Account Value
on that same date prior to assessing the Monthly Deduction Amount, because the
difference is the amount for which the Company is at risk should the Death
Benefit be then payable. The Death Benefit as computed on a given date is the
greater of: (1) the Specified Amount on that date; and (2) the Account Value on
that date multiplied by the applicable Death Benefit ratio. (For an explanation
of the Death Benefit, see "Contract Benefits and Rights" on page 12.)
EXAMPLE:
<TABLE>
<S> <C> <C>
Specified Amount............................................ = $100,000
Account Value on the Monthly Activity Date.................. = $ 30,000
Insured's attained age...................................... = 45
Death Benefit ratio for age 45.............................. = 2.15
</TABLE>
On the Monthly Activity Date in this example, the Death Benefit as then
computed would be $100,000, because the Specified Amount ($100,000) is greater
than the Account Value multiplied by the applicable Death Benefit ratio ($30,000
X 2.15 = $64,500).
10
<PAGE> 14
Since the Account Value on that date is $30,000, the cost of insurance charges
per $1,000 are applied to the difference ($100,000 - $30,000 = $70,000).
Assume that the Account Value in the above example was $50,000. The Death
Benefit would then be $107,500 (2.15 X $50,000), since this is greater than the
Specified Amount ($100,000). The cost of insurance rates in that case would be
applied to ($107,500 - $50,000) = $57,500.
Because the Account Value and, as a result, the amount for which the
Company is at risk under a Contract may vary monthly, the cost of insurance
charge may also vary on each Monthly Activity Date. However, once a risk rating
class has been assigned to an Insured when the Contract is issued, that rating
class will not change if additional premium payments or partial withdrawals
increase or decrease the Specified Amount.
Tax Expense Charge: The Company will deduct monthly from the Account Value
a tax expense charge equal to an annual rate of 0.40% for the first ten Contract
Years. This charge compensates the Company for premium taxes imposed by various
states and local jurisdictions and for federal taxes related to the receipt of
premiums under the Contracts and that results from the application of Section
848 of the Code. The charge includes a premium tax deduction of 0.25% and a
federal tax deduction of 0.15%. The 0.25% premium tax deduction over ten
Contract Years approximates the Company's average expenses for state and local
premium taxes (2.5%). Premium taxes vary, ranging from zero to 3.5%. The premium
tax deduction will be imposed regardless of a contract owner's state of
residence and, therefore, is made whether or not any premium tax applies. The
deduction may be higher or lower than the premium tax imposed. The 0.15% federal
tax deduction helps reimburse the Company for approximate expenses incurred for
federal taxes resulting from the application of Section 848 of the Code.
Administrative Expense Charge: The Company will deduct monthly from the
Account Value an administrative expense charge equal to an annual rate of 0.25%.
This charge compensates the Company for administrative expenses incurred in the
administration of the Variable Account and the Contracts.
All monthly deductions are taken by canceling Accumulation Units of the
Variable Account under the Contract.
OTHER DEDUCTIONS
Mortality and Expense Risk Charge: The Company will deduct from the
Variable Account a daily charge equivalent to an annual rate of 0.90% for the
mortality risks and expense risks the Company assumes in relation to the
Contracts. The mortality risk assumed includes the risk that the cost of
insurance charges specified in the Contract will be insufficient to meet claims.
The Company also assumes a risk that the Death Benefit will exceed the amount on
which the cost of insurance charges were based on the Monthly Activity Date
preceding the death of an Insured. The expense risk assumed is that expenses
incurred in issuing and administering the Contracts will exceed the
administrative charges set in the Contract.
Annual Maintenance Fee: If the aggregate premiums paid on a Contract are
less than $50,000, the Company will deduct from the Account Value an Annual
Maintenance Fee of $35 on each Contract Anniversary. This fee will help
reimburse the Company for administrative and maintenance costs of the Contracts.
Taxes Charged Against the Variable Account: Currently, no charge is made to
the Variable Account for federal income taxes that may be attributable to the
operations of the Variable Account (as opposed to the federal tax related to the
receipt of premiums under the Contract). The Company may, however, make such a
charge in the future. Charges for other taxes, if any, attributable to the
Variable Account or this class of Contracts may also be made.
Charges Against the Funds: The Variable Account purchases shares of the
Funds at net asset value. The net asset value of the Fund shares reflects
investment advisory fees and administrative expenses already deducted from the
assets of the Funds. Fund investment management fees are a percentage of the
average daily value of the net assets of the Funds:
FUND EXPENSES
(AS A PERCENTAGE OF FUND ASSETS)
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER ANNUAL
FUND FEES EXPENSES EXPENSES
---- ---------- -------- ----------
<S> <C> <C> <C>
AIM V.I. Capital Appreciation Fund.......................... 0.65% 0.10% 0.75%
AIM V.I. Growth and Income Fund............................. 0.65% 0.52% 1.17%
AIM V.I. Global Utilities Fund*............................. 0.65% 1.03% 1.68%
AIM V.I. Diversified Income Fund............................ 0.60% 0.28% 0.88%
AIM V.I. Government Securities Fund......................... 0.50% 0.69% 1.19%
AIM V.I. Growth Fund........................................ 0.65% 0.19% 0.84%
AIM V.I. International Equity Fund.......................... 0.75% 0.40% 1.15%
AIM V.I. Value Fund......................................... 0.65% 0.10% 0.75%
AIM V.I. Money Market Fund.................................. 0.40% 0.13% 0.53%
</TABLE>
- - - ---------------
* To be added by pre-effective amendment.
11
<PAGE> 15
Withdrawal Charge: Upon surrender of the Contract and partial withdrawals
in excess of the Free Withdrawal Amount, a Withdrawal Charge may be assessed.
The Free Withdrawal Amount in any Contract Year is 10% of total premiums paid.
Any Free Withdrawal Amount not taken in a Contract Year may not be carried
forward to increase the Free Withdrawal Amount in any subsequent year.
Withdrawals in excess of the Free Withdrawal Amount will be subject to a
withdrawal charge as set forth in the table below:
<TABLE>
<CAPTION>
PERCENTAGE OF
INITIAL PREMIUM
CONTRACT YEAR WITHDRAWN
- - - ------------- ---------------
<S> <C>
1.......................................................... 7.75%
2.......................................................... 7.75%
3.......................................................... 7.75%
4.......................................................... 7.25%
5.......................................................... 6.25%
6.......................................................... 5.25%
7.......................................................... 4.25%
8.......................................................... 3.25%
9.......................................................... 2.25%
10+......................................................... 0.00%
</TABLE>
After the ninth Contract Year, no Withdrawal Charges will be imposed. In
addition, no Withdrawal Charge will be imposed on any withdrawal to the extent
that aggregate Withdrawal Charges and the federal tax portion of the tax expense
charge imposed would otherwise exceed 9% of total premiums paid prior to the
withdrawal. The Withdrawal Charge may be waived under certain circumstances if
the Insured is confined to a qualified long-term care facility or hospital. See
"Contract Benefits and Rights -- Confinement Waiver Benefit," page 16.
Due and Unpaid Premium Tax Charge: During the first nine Contract Years, a
charge for due and unpaid premium tax will be imposed on full or partial
withdrawals in excess of the Free Withdrawal Amount. This charge is shown below,
as a percent of the Account Value withdrawn:
<TABLE>
<CAPTION>
PERCENTAGE OF
INITIAL PREMIUM
YEAR WITHDRAWN
- - - ---- ---------------
<S> <C>
1.......................................................... 2.25%
2.......................................................... 2.00%
3.......................................................... 1.75%
4.......................................................... 1.50%
5.......................................................... 1.25%
6.......................................................... 1.00%
7.......................................................... 0.75%
8.......................................................... 0.50%
9.......................................................... 0.25%
10+......................................................... 0.00%
</TABLE>
After the ninth Contract Year, no due and unpaid premium tax charge will be
imposed. The percentages indicated above are guaranteed not to increase.
CONTRACT BENEFITS AND RIGHTS
DEATH BENEFIT
The Contracts provide for the payment of Death Benefit proceeds to the
named beneficiary when the Insured under the Contract dies. The Proceeds payable
to the beneficiary equal the Death Benefit less any Indebtedness and less any
due and unpaid Monthly Deduction Amounts occurring during a Grace Period (if
applicable). The Death Benefit equals the greater of: (1) the Specified Amount;
or (2) the Account Value multiplied by the Death Benefit Ratio. The ratios vary
according to the attained age of the Insured and are specified in the Contract.
An increase in Account Value due to favorable investment experience may increase
the Death Benefit above the
12
<PAGE> 16
Specified Amount; and a decrease in Account Value due to unfavorable investment
experience may decrease the Death Benefit (but not below the Specified Amount).
EXAMPLES:
<TABLE>
<CAPTION>
A B
- -
<S> <C> <C>
Specified Amount: .......................................... $100,000 $100,000
Insured's Age: ............................................. 45 45
Account Value on Date of Death: ............................ $ 48,000 $ 34,000
Death Benefit Ratio......................................... 2.15 2.15
</TABLE>
In Example A, the Death Benefit equals $103,200, i.e., the greater of
$100,000 (the Specified Amount) and $103,200 (the Account Value at the Date of
Death of $48,000, multiplied by the Death Benefit Ratio of 2.15). This amount,
less any Indebtedness and due and unpaid Monthly Deduction Amounts, constitutes
the Proceeds which we would pay to the beneficiary.
In Example B, the Death Benefit is $100,000, i.e., the greater of $100,000
(the Specified Amount) or $73,100 (the Account Value of $34,000 multiplied by
the Death Benefit Ratio of 2.15).
All or part of the Proceeds may be paid in cash or applied under an Income
Plan. See "Other Matters -- Payment Options," page 17.
ACCELERATED DEATH BENEFIT
If the Insured becomes terminally ill, the Contract Owner may request an
accelerated Death Benefit in an amount up to the lesser of: (1) 50% of the
Specified Amount on the day we receive the request; or (2) $250,000 for all
policies issued by the Company which cover the Insured. "Terminally ill" means
an illness or physical condition of the Insured that, notwithstanding
appropriate medical care, will result in a life expectancy of 12 months or less.
If the Insured is terminally ill as the result of an illness, the accelerated
Death Benefit is not available unless the illness occurred at least 30 days
after the Issue Date. If the Insured is terminally ill as the result of an
accident, the accelerated Death Benefit is available if the accident occurred
after the Issue Date.
The Company will pay benefits due under the accelerated Death Benefit
provision upon receipt of a written request from the Contract Owner and due
proof that the Insured has been diagnosed as terminally ill. The Company
reserves the right to require supporting documentation of the diagnosis and to
require, at the Company's expense, an examination of the Insured by a physician
of the Company's choice to confirm the diagnosis. The amount of the payment will
be the amount requested by the Contract Owner, reduced by the sum of: (1) a 12
month interest discount to reflect the early payment; (2) an administrative fee
not to exceed $250; and (3) a pro rata amount of any outstanding Contract loan
and accrued loan interest. After the payment has been made, the Specified
Amount, the Account Value and any outstanding Contract loan will be reduced on a
prorata basis.
Only one request for an accelerated Death Benefit per Insured is allowed.
The accelerated Death Benefit may not be available in all states.
ACCOUNT VALUE
The Account Value of a Contract will be computed on each Valuation Day. On
the Contract Date, the Account Value is equal to the initial premium less the
Monthly Deduction Amount for the first month. Thereafter, the Account Value will
vary to reflect the investment experience of the Funds, the value of the Loan
Account and the Monthly Deduction Amounts. There is no minimum guaranteed
Account Value.
The Account Value of a particular Contract is related to the net asset
value of the Funds to which premiums paid on the Contract have been allocated.
The Account Value on any Valuation Day is calculated by multiplying the number
of Accumulation Units credited to the Contract in each Variable Sub-Account as
of the Valuation Day by the then Accumulation Unit Value of that Sub-Account and
then summing the result for all the Sub-Accounts credited to the Contract and
the value of the Loan Account. See "The Contract -- Accumulation Unit Values,"
page 9.
TRANSFER OF ACCOUNT VALUE
While the Contract remains in force and subject to the Company's transfer
rules then in effect, the Contract Owner may request that part or all of the
Account Value of a particular Variable Sub-Account be transferred to other
Variable Sub-Accounts. The Company reserves the right to impose a $10 charge on
each such transfer in excess of 12 per Contract Year. There are no charges on
transfers at the present time. The minimum amount that can be transferred is
shown on the Contract Data page (currently, there is no minimum).
Telephone transfer requests will be accepted by the Company if received at
1(800) by 4:00 p.m., Eastern Time. Telephone transfer requests received
at any other telephone number or after 4:00 p.m., Eastern Time will not be
accepted by the Company. Telephone transfer requests received before 4:00 p.m.,
Eastern Time are effected at the next computed value. Transfers by telephone may
be made by the Contract Owner's agent of record or attorney-in-fact pursuant to
a power of attorney. Telephone transfers may not be permitted in some states.
The policy of the Company and its agents and affiliates is that they will not be
responsible for losses resulting
13
<PAGE> 17
from acting upon telephone requests reasonably believed to be genuine. The
Company will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine; otherwise, the Company may be liable for
any losses due to unauthorized or fraudulent instructions. The procedures the
Company follows for transactions initiated by telephone include requirements
that callers on behalf of a Contract Owner identify themselves and the Contract
Owner by name and social security number or other identifying information. All
transfer instructions by telephone are tape recorded.
As a result of a transfer, the number of Accumulation Units credited to the
Variable Sub-Account from which the transfer is made will be reduced by the
number obtained by dividing the amount transferred by the Accumulation Unit
Value of the Sub-Account from which the transfer is made on the Valuation Date
the Company receives the transfer request. The number of Accumulation Units
credited to the Sub-Account to which the transfer is made will be increased by
the number obtained by dividing the amount transferred by the Accumulation Unit
Value of that Sub-Account on the Valuation Day the Company receives the transfer
request.
DOLLAR COST AVERAGING
Transfers may be made automatically through Dollar Cost Averaging while the
Contract is in force. Dollar Cost Averaging permits the Owner to transfer a
specified amount every month (or some other frequency as may be determined by
the Company) from the Money Market Sub-Account to any other Variable
Sub-Account. The theory of Dollar Cost Averaging is that, if purchases of equal
dollar amounts are made at fluctuating prices, the aggregate average cost per
unit will be less than the average of the unit prices on the same purchase
dates. Participation in the Dollar Cost Averaging program does not assure you of
a greater profit from your purchases under the program, nor will it prevent or
alleviate losses in a declining market.
AUTOMATIC FUND REBALANCING
Transfers may be made automatically through Automatic Fund Rebalancing
while the Contract is in force. By electing Automatic Fund Rebalancing, the
Account Value in the Variable Sub-Accounts will be rebalanced to the desired
allocation on a quarterly basis, determined from the first date that you decide
to rebalance. Each quarter, Account Value will be transferred among Variable
Sub-Accounts to achieve the desired allocation.
The desired allocation will be the allocation initially selected, unless
subsequently changed. You may change the allocation at any time by giving us
written notice. The new allocation will be effective with the first rebalancing
that occurs after we receive the written request.
CONTRACT LOANS
While the Contract is in force, a Contract Owner may obtain, without the
consent of the beneficiary (provided the designation of beneficiary is not
irrevocable), one or both of two types of cash loans from the Company. These
types are Preferred Loans (described below) and non-Preferred Loans. Both types
of loans are secured by the Contract. The maximum amount available for a loan is
90% of the Contract's Cash Value, less the amount of all Contract loans existing
on the date of the loan (including loan interest to the next Contract
Anniversary), less any due and unpaid Monthly Deduction Amounts, and less any
Annual Maintenance Fee due on or before the next Contract Anniversary.
The loan amount will be transferred pro rata from each Variable Sub-Account
attributable to the Contract (unless the Contract Owner specifies otherwise) to
the Loan Account. The amounts allocated to the Loan Account will be credited
with interest at the loan credited rate set forth in the Contract. Loans will
bear interest at rates determined by the Company from time to time. Rates will
not exceed the maximum rate indicated in the Contract (currently 8% per year).
The amount of the Loan Account that equals the difference between the Account
Value and the total of all premiums paid under the Contract net of any premiums
returned due to partial withdrawals, as determined on each Contract Anniversary,
is considered a "Preferred Loan." Preferred Loans bear interest at a rate not to
exceed the Preferred Loan rate set forth in the Contract. The difference between
the value of the Loan Account and the Indebtedness will be transferred on a
pro-rata basis from the Variable Sub-Accounts to the Loan Account on each
Contract Anniversary. If the aggregate outstanding loan(s) and loan interest
secured by the Contract exceeds the Cash Value of the Contract, the Company will
give written notice to the Contract Owner that unless the Company receives an
additional payment within 61 days (the "Grace Period") to reduce the aggregate
outstanding loan(s) secured by the Contract, the Contract may lapse.
All or any part of any loan secured by a Contract may be repaid while the
Contract is still in force. When loan repayments or interest payments are made,
the repayment will be allocated among the Variable Sub-Accounts in the same
percentage as subsequent payments are allocated (unless the Contract Owner
requests a different allocation), and an amount equal to the payment will be
deducted from the Loan Account. Any outstanding loan at the end of a Grace
Period must be repaid before the Contract will be reinstated. See "Contract
Benefits and Rights -- Lapse and Reinstatement," page 15.
A loan, whether or not repaid, will have a permanent effect on the Account
Value because the investment results of each Variable Sub-Account will apply
only to the amount remaining in that Sub-Account. The longer a loan is
outstanding, the greater the effect is likely to be. The effect could be
favorable or unfavorable. If the Variable Sub-Accounts earn more than the annual
interest rate for amounts held in the Loan Account, a Contract Owner's Account
Value will not increase as rapidly as it would have had no loan been made. If
the Variable Sub-Accounts earn less than that rate, the Contract Owner's Account
Value will be greater than it would have been had no loan
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been made. Also, if not repaid, the aggregate outstanding loan(s) will reduce
the Death Benefit Proceeds and Cash Surrender Value otherwise payable.
AMOUNT PAYABLE ON SURRENDER OF THE CONTRACT
While the Contract is in force, a Contract Owner may elect, without the
consent of the beneficiary (provided the designation of beneficiary is not
irrevocable), to surrender the Contract. Upon surrender, the Contract Owner will
receive the Cash Surrender Value determined as of the day the Company receives
the Contract Owner's written request or the date requested by the Contract
Owner, whichever is later. The Cash Surrender Value equals the Cash Value less
the Annual Maintenance Fee and any Indebtedness. The Company will pay the Cash
Surrender Value of the Contract within seven days of receipt by the Company of
the written request or on the effective surrender date requested by the Contract
Owner, whichever is later.
The Contract will terminate on the date of receipt of the written request,
or the date the Contract Owner requests the surrender to be effective, whichever
is later. For a discussion of the tax consequences of surrendering the Contract,
see "Federal Tax Considerations," page 20.
The Contract Owner may elect to apply the surrender proceeds to an Income
Plan (see "Other Matters -- Payment Options," page 17).
PARTIAL WITHDRAWALS
While the Contract is in force, a Contract Owner may elect, by written
request, to make partial withdrawals of at least $50 from the Cash Surrender
Value. The Cash Surrender Value, after the partial withdrawal, must at least
equal $2,000; otherwise, the request will be treated as a request for surrender.
The partial withdrawal will be deducted pro rata from each Variable Sub-Account,
unless the Contract Owner instructs otherwise. The Specified Amount after the
partial withdrawal will be the greater of:
- the Specified Amount prior to the partial withdrawal reduced
proportionately to the reduction in Account Value; or
- the minimum Specified Amount necessary in order to meet the definition of
a life insurance contract under Section 7702 of the Code.
Partial withdrawals in excess of the Free Withdrawal Amount may be subject
to a Withdrawal Charge and any due and unpaid premium tax charges. See
"Deductions and Charges -- Other Deductions -- Withdrawal Charge" and "Premium
Tax Charge." For a discussion of the tax consequences of partial withdrawals,
see "Federal Tax Considerations," page 20.
MATURITY
The Contracts have no maturity date.
LAPSE AND REINSTATEMENT
The Contract will remain in force until the Cash Surrender Value is
insufficient to cover a Monthly Deduction Amount due on a Monthly Activity Date.
The Company will give written notice to the Contract Owner that if an amount
shown in the notice (which will be sufficient to cover the Monthly Deduction
Amount(s) due) is not paid within the 61 day Grace Period, there is a danger of
lapse.
The Contract will continue through the Grace Period, but if no payment is
forthcoming, it will terminate at the end of the Grace Period. If the Insured
dies during the Grace Period, the Proceeds payable under the Contract will be
reduced by the Monthly Deduction Amount(s) due and unpaid. See "Contract
Benefits and Rights -- Death Benefit," page 12.
If the Contract lapses, the Contract Owner may apply for reinstatement of
the Contract by payment of the reinstatement premium (and any applicable
charges) required under the Contract. A request for reinstatement must be made
within five years of the date the Contract entered a Grace Period. If a loan was
outstanding at the time of lapse, the Company will require repayment of the loan
before permitting reinstatement. In addition, the Company reserves the right to
require evidence of insurability satisfactory to the Company. The reinstatement
premium is equal to an amount sufficient to (1) cover all Monthly Deduction
Amounts and Annual Maintenance Fees due and unpaid during the Grace Period, and
(2) keep the Contract in force for three months after the date of reinstatement.
The Specified Amount upon reinstatement cannot exceed the Specified Amount of
the Contract at its lapse. The Account Value on the reinstatement date will
reflect the Account Value at the time of termination of the Contract plus the
premiums paid at the time of reinstatement. Withdrawal charges and due and
unpaid premium tax charges, Cost of Insurance, and Tax Expense Charges will
continue to be based on the original Contract Date.
CANCELLATION AND EXCHANGE RIGHTS
A Contract Owner has a limited right to return a Contract for cancellation.
If the Contract is returned for cancellation by mail or personal delivery to the
Company or to the agent who sold the Contract within 10 days after delivery of
the Contract to the Contract Owner (a longer free-look period is provided in
certain states), the Company will return to the Contract Owner within 7 days the
sum of (1) the Account Value on the date the returned Contract is received by
the Company or its agent; and (2) any deductions under the Contract or by the
Funds for taxes, charges or fees. Some states may require the Company to return
the premiums paid for the returned Contract.
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Once the Contract is in effect, it may be exchanged during the first 24
months after its issuance for a non-variable permanent life insurance contract
offered by the Company on the life of the Insured. The Company reserves the
right to make available a permanent life insurance contract offered by the
Company's account or any affiliated company without evidence of insurability.
The amount at risk to the Company (i.e., the difference between the Death
Benefit and the Account Value) under the new contract will be equal to or less
than the amount at risk to the Company under the exchanged Contract on the date
of exchange. Premiums under the new Contract will be based on the same risk
classification as the exchanged Contract. The exchange is subject to adjustments
in premiums and Account Value to reflect any variance between the exchanged
Contract and the new contract. The Company reserves the right to make such a
contract available that is offered by the Company's parent or by any affiliate
of the Company.
CONFINEMENT WAIVER BENEFIT
Under the terms of an amendatory endorsement to the Contract, the Company
will waive any Withdrawal Charges on Partial Withdrawals and surrenders of the
Contract requested while the Insured is confined to a qualified long-term care
facility or hospital for a period of more than 90 consecutive days beginning 30
days or more after the Issue Date, or within 90 days after the Insured is
discharged from such confinement. The confinement must have been prescribed by a
licensed medical doctor or a licensed doctor of osteopathy, operating within the
scope of his or her license, and must be medically necessary. The prescribing
doctor may not be the Insured, the Contract Owner, or any spouse, child, parent,
grandchild, grandparent, sibling or in-law of the Contract Owner. "Medically
necessary" means appropriate and consistent with the diagnosis and which could
not have been omitted without adversely affecting the Insured's condition. The
confinement waiver benefit may not be available in all states.
SUSPENSION OF VALUATION, PAYMENTS AND TRANSFERS
The Company will suspend all procedures requiring valuation of the Variable
Account (including transfers, surrenders and loans) on any day the New York
Stock Exchange is closed or trading is restricted due to an existing emergency
as defined by the Commission, or on any day the Commission has ordered that the
right of surrender of the Contracts be suspended for the protection of Contract
Owners, until such emergency has ended.
LAST SURVIVOR CONTRACTS
The Contracts are offered on a single life and "last survivor" basis.
Contracts sold on a last survivor basis operate in a manner almost identical to
the single life version. The most important difference is that the last survivor
version involves two Insureds and the Proceeds are paid only on the death of the
last surviving Insured. The other significant differences between the last
survivor and single life versions are listed below:
1. Last survivor Contracts are offered for prospective insured persons age
18-85.
2. The cost of insurance charges under the last survivor Contracts are
determined in a manner that reflects the anticipated mortality of the
two Insureds and the fact that the Death Benefit is not payable until
the death of the second Insured. See the last survivor illustrations in
"Appendix A," page A-1.
3. To qualify for simplified underwriting under a last survivor Contract,
both Insureds must meet the simplified underwriting standards.
4. For a last survivor Contract to be reinstated, both Insureds must be
alive on the date of reinstatement.
5. For a last survivor Contract, provisions regarding misstatement of age
or sex, suicide and incontestability apply to either Insured.
6. The Accelerated Death Benefit provision is only available upon terminal
illness of the last survivor.
7. The Confinement Waiver Benefit is available upon confinement of either
insured.
OTHER MATTERS
VOTING RIGHTS
In accordance with its view of presently applicable law, the Company will
vote the shares of the Funds at regular and special meetings of the shareholders
of the Funds in accordance with instructions from Contract Owners (or the
assignee of the Contract, as the case may be) having a voting interest in the
Variable Account. The number of shares of a Fund held in a Variable Account
which are attributable to each Contract Owner is determined by dividing the
Contract Owner's interest in that Variable Sub-Account by the per share net
asset value of the corresponding Fund. The Company will vote shares for which no
instructions have been given and shares which are not attributable to Contract
Owners (i.e., shares owned by the Company) in the same proportion as it votes
shares for which it has received instructions. If the 1940 Act or any rule
promulgated thereunder should be amended, however, or if the Company's present
interpretation should change and, as a result, the Company determines it is
permitted to vote the shares of the Funds in its own right, it may elect to do
so.
The voting interests of the Contract Owner (or the assignee) in the Funds
will be determined as follows: Contract Owners are entitled to give voting
instructions to the Company with respect to Fund shares attributable to them as
described above, determined on the
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record date for the shareholder meeting for that Fund. Therefore, if a Contract
Owner has taken a loan secured by the Contract, amounts transferred from the
Sub-Account(s) to the Loan Account in connection with the loan (see "Contract
Benefits and Rights -- Contract Loans," page 14) will not be considered in
determining the voting interests of the Contract Owner. Contract Owners should
review the prospectus for the Fund Series which accompanies this prospectus to
determine matters on which Fund shareholders may vote.
The Company may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to cause a change in the sub-classification or investment objective
of one or more of the Funds or to approve or disapprove an investment advisory
contract for the Funds.
The Company may disregard voting instructions in favor of changes initiated
by Contract Owners in the investment objectives or the investment advisor of the
Funds if the Company reasonably disapproves of such changes. A change would be
disapproved only if the proposed change is contrary to state law or prohibited
by state regulatory authorities. If the Company does disregard voting
instructions, a summary of that action and the reasons for such action will be
included in the next periodic report to Contract Owners.
STATEMENTS TO CONTRACT OWNERS
The Company will maintain all records relating to the Variable Account and
the Variable Sub-Accounts. At least once each Contract Year, the Company will
send to each Contract Owner a statement showing the Coverage Amount and the
Account Value of the Contract (indicating the number of Accumulation Units
credited to the Contract in each Variable Sub-Account and the corresponding
Accumulation Unit Value), and any outstanding loan secured by the Contract as of
the date of the statement. The statement will also show premiums paid, and
Monthly Deduction Amounts under the Contract since the last statement, and any
other information required by applicable law or regulation.
LIMIT ON RIGHT TO CONTEST
The Company may not contest the validity of the Contract after it has been
in effect during the Insured's lifetime for two years from the Contract Date. If
the Contract is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Specified Amount for which evidence of
insurability was obtained is contestable for 2 years from its effective date. In
addition, if the Insured dies by suicide while sane or self destruction while
insane in the two-year period after the Contract Date, or such period as
specified under applicable state law, the benefit payable will be limited to the
premiums paid less any Indebtedness and partial withdrawals. If the Insured dies
by suicide while sane or self-destruction while insane in the two-year period
following an increase in the Specified Amount, the benefit payable with respect
to the increase will be limited to the additional premium paid for such
increase, less any Indebtedness and partial withdrawals.
MISSTATEMENT AS TO AGE AND SEX
If the age or sex of the Insured is incorrectly stated, the Death Benefit
will be appropriately adjusted as specified in the Contract.
PAYMENT OPTIONS
The surrender proceeds or Death Benefit Proceeds under the Contracts may be
paid in a lump sum or may be applied to one of the Company's Income Plans. If
the amount to be applied to an Income Plan is less than $3,000 or if it would
result in an initial income payment of less than $20, the Company may require
that the frequency of income payments be decreased such that the income payments
are greater than $20 each, or it may elect to pay the amount in a lump sum. No
surrender or partial withdrawals are permitted after payments under an Income
Plan commence.
We will pay interest on the proceeds from the date of the Insured's death
to the date payment is made or a payment option is elected. At such times, the
proceeds are not subject to the investment experience of the Variable Account.
The Income Plans are fixed annuities payable from the Company's general
account. They do not reflect the investment experience of the Variable Account.
Fixed annuity payments are determined by multiplying the amount applied to the
annuity by a rate to be determined by the Company which is no less than the rate
specified in the fixed payment annuity tables in the Contract. The annuity
payment will remain level for the duration of the annuity. The Company may
require proof of age and gender of the payee (and joint payee, if applicable)
before payments begin. The Company may also require proof that such person(s)
are living before it makes each payment.
The following options are available under the Contracts (the Company may
offer other payment options):
INCOME PLAN 1 -- LIFE INCOME WITH GUARANTEED PAYMENTS
The Company will make payments for as long as the payee lives. If the payee
dies before the selected number of guaranteed payments have been made, the
Company will continue to pay the remainder of the guaranteed payments.
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INCOME PLAN 2 -- JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS
The Company will make payments for as long as either the payee or Joint
payee, named at the time of Income Plan selection, is living. If both the payee
and the Joint payee die before the selected number of guaranteed payments have
been made, the Company will continue to pay the remainder of the guaranteed
payments.
The Company will make any other arrangements for income payments as may be
agreed on.
BENEFICIARY
The applicant names the beneficiary in the application for the Contract.
The Contract Owner may change the beneficiary (unless irrevocably named) during
the Insured's lifetime by written request to the Company. If no beneficiary is
living when the Insured dies, the Proceeds will be paid to the Contract Owner if
living; otherwise to the Contract Owner's estate.
ASSIGNMENT
Unless required by state law, the Contract may not be assigned as
collateral for a loan or other obligation.
DIVIDENDS
No dividends will be paid under the Contracts.
GLENBROOK LIFE AND ANNUITY COMPANY
EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY
The directors and executive officers are listed below, together with
information as to their ages, dates of election and principal business
occupations during the last five years (if other than their present business
occupations).
LOUIS G. LOWER, II, 51, Chief Executive Officer and Chairman of the Board
(1995)*
Also Director (1986-Present) and Senior Vice President (1995-Present) of
Allstate Insurance Company; Director (1991-Present) of Allstate Life Financial
Services, Inc.; Director (1986-Present) and President (1990-Present) Allstate
Life Insurance Company; Director (1983-Present) and Chairman of the Board
(1990-Present) of Allstate Life Insurance Company of New York; Director
(1990-Present), Chairman of the Board of Directors and Chief Executive Officer
(1995-Present), Chairman of the Board of Directors and President (1990-1995) of
Glenbrook Life Insurance Company; Director and Chairman of the Board
(1995-Present) of Laughlin Group Holdings, Inc.; Director and Chairman of the
Board of Directors and Chief Executive Officer (1989-Present) Lincoln Benefit
Life Company; Director (1986-Present), Chairman of the Board of Directors and
Chief Executive Officer (1995-Present) of Northbrook Life Insurance Company; and
Chairman of the Board of Directors and Chief Executive Officer (1995-Present)
Surety Life Insurance Company.
PETER H. HECKMAN, 51, President, Chief Operating Officer and Director (1996)*
Also Director and Vice President (1988-Present) of Allstate Life Insurance
Company; Director (1990-1996), Vice President (1989-Present), Allstate Life
Insurance Company of New York; Director (1991-1993) of Allstate Life Financial
Services, Inc.; Director (1990-Present), President and Chief Operating Officer
(1996-Present), and Vice President (1990-1996), Glenbrook Life Insurance
Company; Director (1995-Present) and Vice Chairman of the Board (1996-Present)
Laughlin Group Holdings, Inc.; Director (1990-Present) and Vice Chairman of the
Board (1996-Present) Lincoln Benefit Life Company; Director (1988-Present)
President and Chief Operating Officer (1996-Present), and was Vice President
(1989-1996), Northbrook Life Insurance Company; and Director (1995-Present) and
Vice Chairman of the Board (1996-Present) Surety Life Insurance Company.
MICHAEL J. VELOTTA, 50, Vice President, Secretary, General Counsel, and Director
(1992)*
Also Director and Secretary (1993-Present) of Allstate Life Financial
Services, Inc.; Director (1992-Present) Vice President, Secretary and General
Counsel (1993-Present) Allstate Life Insurance Company; Director (1992-Present)
Vice President, Secretary and General Counsel (1993-Present) Allstate Life
Insurance Company of New York; Director (1992-Present) Vice President, Secretary
and General Counsel (1993-Present) Glenbrook Life Insurance Company; Director
and Secretary (1995-Present) Laughlin Group Holdings, Inc.; Director
(1992-Present) and Assistant Secretary (1995-Present) Lincoln Benefit Life
Company; Director (1992-Present) Vice President, Secretary and General Counsel
(1993-Present) Northbrook Life Insurance Company; and Director and Assistant
Secretary (1995-Present) Surety Life Insurance Company.
JOHN R. HUNTER, 41, Director (1996)*
Also Assistant Vice President (1990-Present) Allstate Life Insurance
Company; Assistant Vice President (1996-Present) Allstate Life Insurance Company
of New York; Director (1996-Present) Glenbrook Life Insurance Company; and
Director (1994-Present) and Assistant Vice President (1990-Present) Northbrook
Life Insurance Company.
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<PAGE> 22
G. CRAIG WHITEHEAD, 50, Senior Vice President and Director (1995)*
Also Assistant Vice President (1991-Present) Allstate Life Insurance
Company; Director (1994-Present) Assistant Vice President (1991-Present)
Glenbrook Life Insurance Company; Assistant Vice President (1992-Present)
Secretary (1995) Glenbrook Life and Annuity Company; Director (1995-Present)
Laughlin Group Holdings, Inc.
MARLA G. FRIEDMAN, 43, Vice President (1996)*
Also Director (1991-Present) and Vice President (1988-Present) Allstate
Life Insurance Company; Director (1993-1996) Allstate Life Financial Services,
Inc.; Assistant Vice President (1996-Present) Allstate Life Insurance Company of
New York; Director (1991-1996), President and Chief Operating Officer
(1995-1996) and Vice President (1990-1995) and (1996-Present) Glenbrook Life
Insurance Company; Director and Vice Chairman of the Board (1995-1996) Laughlin
Group Holdings, Inc.; and Director (1989-1996), President and Chief Operating
Officer (1995-1996) and Vice President (1996-Present) Northbrook Life Insurance
Company.
KEVIN R. SLAWIN, 39, Vice President (1996)*
Also Assistant Vice President and Assistant Treasurer (1995-1996) Allstate
Insurance Company; Director (1996-Present) and Assistant Treasurer (1995-1996)
Allstate Financial Services, Inc.; Director and Vice President (1996-Present)
and Assistant Treasurer (1995-1996) Allstate Life Insurance Company; Director
and Vice President (1996-Present) and Assistant Treasurer (1995-1996) Allstate
Life Insurance Company of New York; Director and Vice President (1996-Present)
and Assistant Treasurer (1995-1996) Glenbrook Life Insurance Company; Director
(1996-Present) and Assistant Treasurer (1995-1996) Laughlin Group Holdings,
Inc.; Director (1996-Present) Lincoln Benefit Life Company; Director and Vice
President (1996-Present) and Assistant Treasurer (1995-1996) Northbrook Life
Insurance Company; Director (1996-Present) Surety Life Insurance Company; and
Assistant Treasurer and Director (1994-1995) Sears Roebuck and Co.; and
Treasurer and First Vice President (1986-1994) Sears Mortgage Corporation.
CASEY J. SYLLA, 53, Chief Investment Officer (1995)*
Also Director (1995-Present) Senior Vice President and Chief Investment
Officer (1995-Present) Allstate Insurance Company; Director (1995-Present) Chief
Investment Officer (1995-Present) Allstate Life Insurance Company; Chief
Investment Officer (1995-Present) Allstate Life Insurance Company of New York;
Chief Investment Officer (1995-Present) Glenbrook Life Insurance Company; and
Director and Chief Investment Officer (1995-Present) Northbrook Life Insurance
Company. Prior to 1995 he was Senior Vice President and Executive Officer --
Investments (1992-1995) of Northwestern Mutual Life Insurance Company.
JAMES P. ZILS, 46, Treasurer (1995)*
Also Vice President and Treasurer (1995-Present) Allstate Insurance
Company; Treasurer (1995-Present) Allstate Life Financial Services, Inc.;
Treasurer (1995-Present) Allstate Life Insurance Company; Treasurer
(1995-Present) Allstate Life Insurance Company of New York; Treasurer
(1995-Present) Glenbrook Life Insurance Company; Treasurer (1995-Present)
Laughlin Group Holdings, Inc.; and Treasurer (1995-Present) Northbrook Life
Insurance Company. Prior to 1995 he was Vice President of Allstate Life
Insurance Company. Prior to 1993 he held various management positions.
* Date elected/appointed to current office.
DISTRIBUTION OF THE CONTRACTS
Allstate Life Financial Services, Inc. ("ALFS"), 3100 Sanders Road,
Northbrook Illinois, a wholly owned subsidiary of Allstate Life Insurance
Company, acts as the principal underwriter of the Contracts. ALFS is registered
as a broker-dealer under the Securities Exchange Act of 1934 and became a member
of the National Association of Securities Dealers, Inc. on June 30, 1993.
Contracts are sold by registered representatives of unaffiliated broker-dealers
or bank employees who are licensed insurance agents appointed by the Company,
either individually or through an incorporated insurance agency and who have
entered into a selling agreement with ALFS to sell the Contracts. In some
states, Contracts may be sold by representatives or employees of banks which may
be acting as broker-dealers without separate registration under the Securities
Exchange Act of 1934, pursuant to legal and regulatory exceptions.
The maximum sales commission payable to Company agents, independent
registered insurance brokers, and other registered broker-dealers is 7.25% of
initial and subsequent premiums. From time to time, the Company may pay or
permit other promotional incentives, in cash or credit or other compensation.
The underwriting agreement with ALFS provides for indemnification of ALFS
by the Company for liability to Owners arising out of services rendered or
Contracts issued.
SAFEKEEPING OF THE VARIABLE
ACCOUNT'S ASSETS
The assets of the Variable Account are held by the Company. The assets of
the Variable Account are kept physically segregated and held separate and apart
from the General Account of the Company. The Company maintains records of all
purchases and redemptions of shares of the Funds.
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FEDERAL TAX CONSIDERATIONS
INTRODUCTION
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. THE
COMPANY MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR
TRANSACTION INVOLVING A CONTRACT. Federal, state, local and other tax
consequences of ownership or purchase of a life insurance contract depend upon
the individual circumstances of each person. If you are concerned about any tax
consequences with regard to your individual circumstances, you should consult a
qualified tax advisor.
TAXATION OF THE COMPANY AND THE VARIABLE ACCOUNT
The Company is taxed as a life insurance company under Part I of Subchapter
L of the Internal Revenue Code. Since the Variable Account is not an entity
separate from the Company and its operations form a part of the Company, it will
not be taxed separately as a "Regulated Investment Company" under Subchapter M
of the Code. Investment income and realized capital gains are automatically
applied to increase reserves under the Contracts. Under existing federal income
tax law, the Company believes that the Variable Account investment income and
realized net capital gains will not be taxed to the extent that such income and
gains are applied to increase the reserves under the Contracts.
Accordingly, the Company does not anticipate that it will incur any federal
income tax liability attributable to the Variable Account, and therefore the
Company does not intend to make provisions for any such taxes. However, if
changes in the federal tax laws or interpretations thereof result in the Company
being taxed on income or gains attributable to the Variable Account, then the
Company may impose a charge against the Variable Account (with respect to some
or all Contracts) in order to set aside provisions to pay such taxes.
TAXATION OF CONTRACT BENEFITS
In order to qualify as a life insurance contract for federal income tax
purposes, the Contract must meet the definition of a life insurance contract set
forth in Section 7702 of the Code. Section 7702 limits the amount of premiums
that may be invested in a contract that is treated as life insurance. The manner
in which Section 7702 should be applied to certain features of the Contract
offered in this prospectus is not directly addressed in Section 7702.
Nevertheless, the Company believes that the Contact will meet the Section 7702
definition of a life insurance contract. This means that:
- the death benefit should be fully excludable from the gross income of the
beneficiary under Section 101(a)(1) of the Code; and
- the Contract Owner should not be considered in constructive receipt of
the Cash Value of the Contract, including any increases, until actual
cancellation of the Contract
In addition, in the absence of final regulations or other pertinent
interpretations of Section 7702, there is necessarily some uncertainty as to
whether a substandard risk Contract will meet the statutory life insurance
contract definition. If a Contract were determined not to be a life insurance
contract for purposes of Section 7702, such Contract would not provide most of
the tax advantages normally provided by a life insurance contract. The Company
reserves the right to amend the Contracts to comply with any future changes in
the Code, any regulations or rulings under the Code and any other requirements
imposed by the Internal Revenue Service.
If you own and are the Insured under the Contract, the Death Benefit will
be included in your gross estate for federal estate tax purposes if the proceeds
are payable to your estate. If the beneficiary is other than your estate but you
retained incidents of ownership in the Contract, the Death Benefit will also be
included in your gross estate. Examples of incidents of ownership include, but
are not limited to, the right to change beneficiaries, to assign the Contract or
revoke an assignment, to pledge the Contract or to obtain a policy loan. If you
own and are the Insured under the Contract and you transfer all incidents of
ownership in the Contract, the Death Benefit will be included in your gross
estate if you die within three years from the date of the ownership transfer.
State and local estate and inheritance tax consequences may also apply. In
addition, certain transfers of the Contract or Death Benefit, either during life
or at death, to individuals (or trusts for the benefit of such individuals) two
or more generations below that of the transferor may be subject to the federal
generation skipping transfer tax.
In addition, the Contract may be used in various arrangements, including
nonqualified deferred compensation or salary continuance plans, split dollar
insurance plans, executive bonus plans, retiree medical benefit plans, and
others. The tax consequences of such plans may vary depending on the particular
facts and circumstances of each individual arrangement. Therefore, if you are
contemplating the use of a Contract in any arrangement the value of which
depends in part on its tax consequences, you should be sure to consult a
qualified tax advisor regarding the tax attributes of the particular
arrangement.
MODIFIED ENDOWMENT CONTRACTS
A life insurance contract is treated as a "modified endowment contract"
under Section 7702A of the Code if it meets the definition of life insurance in
Section 7702 but fails the "seven-pay" test of Section 7702A. The seven-pay test
provides that premiums cannot be paid at a rate more rapidly than that allowed
by the payment of seven annual premiums using specified computational rules
provided in Section 7702A(c). The large single premium permitted under the
Contract (which is equal to 100% of the "Guideline Single Premium" as defined in
Section 7702 of the Code) does not meet the specified computational rules for
the "seven-pay test" under Section 7702A(c).
20
<PAGE> 24
Therefore, the Contract will generally be treated as a modified endowment
contract for federal income tax purposes. However, an exchange of a life
insurance contract that is not a modified endowment contract will not cause the
new contract to be a modified endowment contract if no additional premiums are
paid. An exchange under Section 1035 of the Code of a life insurance contract
that is a modified endowment contract for a new life insurance contract will
always cause the new contract to be a modified endowment contract. A contract
that is classified as a modified endowment contract is generally eligible for
the beneficial tax treatment accorded to life insurance. Accordingly, the death
benefit is excluded from income and increments in value are not subject to
current taxation. If a person receives any amount as a policy loan from a
modified endowment contract, or assigns or pledges any part of the value of the
contract, such amount is treated as a distribution. Unlike other life insurance
contracts, distributions received before the insured's death are treated first
as income (to the extent of gain) and then as recovery of investment in the
contract. Any amounts that are taxable withdrawals will be subject to a 10%
additional tax, with certain exceptions: (1) distributions made on or after the
date on which the taxpayer attains age 59 1/2; (2) distributions attributable to
the taxpayer's becoming disabled (within the meaning of Section 72(m)(7) of the
Code); or (3) any distribution that is part of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life expectancies) of
such taxpayer and his or her beneficiary.
All modified endowment contracts that are issued within any calendar year
to the same Contract Owner by one company or its affiliates shall be treated as
one modified endowment contract in determining the taxable portion of any loan
or distributions.
DIVERSIFICATION REQUIREMENTS
For a Contract to be treated as a variable life insurance contract for
federal tax purposes, the investments in the Variable Account must be
"adequately diversified" in accordance with the standards provided in the
Treasury regulations. If the investments in the Variable Account are not
adequately diversified, then the Contract will not be treated as a variable life
insurance contract for federal income tax purposes and the Owner will be taxed
on the excess of the Contract Value over the investment in the Contract.
Although the Company does not have control over the Fund Series or their
investments, the Company expects the Fund Series to meet the diversification
requirements.
OWNERSHIP TREATMENT
In connection with the issuance of the regulations on the adequate
diversification standards, the Department of the Treasury announced that the
regulations do not provide guidance concerning the extent to which contract
owners may direct their investments among sub-accounts of a Variable Account.
The Internal Revenue Service has previously stated in published rulings that a
variable contract owner will be considered the owner of separate account assets
if the owner possesses incidents of ownership in those assets such as the
ability to exercise investment control over the assets. At the time the
diversification regulations were issued, the Treasury Department announced that
guidance would be issued in the future regarding the extent that owners could
direct their investments among sub-accounts without being treated as owners of
the underlying assets of the Variable Account. As of the date of this
prospectus, no such guidance has been issued.
The ownership rights under this contract are similar to, but different in
certain respects from, those described by the service in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the Owner of this Contract has the choice of more investment options to
which to allocate premiums and contract values, and may be able to transfer
among investment options more frequently than in such rulings. These differences
could result in the Contract Owner being treated as the owner of the Variable
Account. In those circumstances, income and gain from the Variable Account
assets would be includible in the Contract Owner's gross income. In addition,
the Company does not know what standards will be set forth in the regulations or
rulings which the Treasury Department has stated it expects to issue. It is
possible that Treasury Department's position, when announced, may adversely
affect the tax treatment of existing contracts. The Company, therefore, reserves
the right to modify the contract as necessary to attempt to prevent the contract
owner from being considered the federal tax owner of the assets of the Variable
Account. However, the Company makes no guarantee that such modification to the
contract will be successful.
POLICY LOAN INTEREST
Interest paid on loans against a Contract is generally not deductible.
ADDITIONAL INFORMATION ABOUT THE COMPANY
The Company also acts as the sponsor for four of its separate accounts that
are registered investment companies: Glenbrook Life and Annuity Company Variable
Annuity Account, Glenbrook Life and Annuity Company Separate Account A,
Glenbrook Life Variable Life Separate Account A, and Glenbrook Life
Multi-Manager Variable Account. The officers and employees of the Company are
covered by a fidelity bond in the amount of $5,000,000. No person beneficially
owns more than 5% of the outstanding voting stock of The Allstate Corporation,
of which the Company is an indirect wholly owned subsidiary.
21
<PAGE> 25
LEGAL PROCEEDINGS
From time to time the Company is involved in pending and threatened
litigation in the normal course of its business in which claims for monetary
damages are asserted. Management, after consultation with legal counsel, does
not anticipate the ultimate liability arising from such pending or threatened
litigation to have a material effect on the financial condition of the Company
or the Variable Account.
LEGAL MATTERS
Sutherland, Asbill & Brennan, L.L.P., of Washington, D.C., has provided
advice on certain legal matters relating to the federal securities laws
applicable to the issue and sale of the Contracts. All matters of Illinois law
pertaining to the Contracts, including the validity of the Contracts and the
Company's right to issue such Contracts under Illinois insurance law, have been
passed upon by Michael J. Velotta, General Counsel of the Company.
REGISTRATION STATEMENT
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, to all of which reference is made for further information
concerning the Variable Account, the Funds, the Company, and the Contracts.
EXPERTS
The financial statements of the Company as of December 31, 1996 and 1995
and for each of the three years in the period ended December 31, 1996 and the
related financial statement schedule included in this Prospectus have been
audited by Deloitte & Touche LLP, Two Prudential Plaza, 180 North Stetson
Avenue, Chicago, IL 60601-6779, independent auditors, as stated in their report
appearing herein, and are included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
The hypothetical Contract illustrations included in this Prospectus have
been approved by Diana Montigney, FSA, and are included in reliance upon her
opinion as to their reasonableness. (Illustrations to be filed by pre-effective
amendment).
FINANCIAL INFORMATION
Financial statements for the Variable Account are not included herein
because, as of the date of this Prospectus, sales of the Contracts had not
commenced and the Variable Account therefore had no assets. The financial
statements for the Company appearing immediately below should be considered as
bearing only on the ability of the Company to fulfill its obligations under the
Contracts. They do not relate to the investment performance of the Variable
Account.
(Company financials to be filed by pre-effective amendment).
22
<PAGE> 26
APPENDIX A
ILLUSTRATIONS OF ACCOUNT VALUES, CASH SURRENDER VALUES,
DEATH BENEFITS, AND ACCUMULATED PREMIUMS
The tables in Appendix A illustrate the way the Contracts operate. They
show how the Death Benefit, Account Value and Cash Surrender Value could vary
over an extended period of time assuming hypothetical gross rates of return
(I.E., investment income and capital gains and losses, realized or unrealized)
for the Variable Account equal to annual rates of 0%, 6%, and 12%. The tables
are based on an initial premium of $10,000 and also show the initial Death
Benefit based on that premium. The insureds are assumed to be in the standard
underwriting class. Values are first given based on current Contract charges and
then based on guaranteed Contract charges. (See "Deductions and Charges.") These
tables may assist in the comparison of Death Benefits, Account Values and Cash
Surrender Values for the Contracts with those under other variable life
insurance contracts that may be issued by other companies.
Death Benefits, Account Values and Cash Surrender Values for a Contract
would be different from the amounts shown if the actual gross rates of return
averaged 0%, 6% or 12%, but varied above and below that average for the period,
if the initial premium were paid in another amount, or additional payments were
made. They would also be different depending on the allocation of Account Value
among the Variable Account's Variable Sub-Accounts, or if the actual gross rate
of return for all Variable Sub-Accounts averaged 0%, 6% or 12%, but varied above
or below that average for individual Variable Sub-Accounts. They would also
differ if any Contract loan or partial withdrawal were made during the period of
time illustrated, or if the insured were in another risk class.
The Death Benefits, Account Values and Cash Surrender Values shown in the
tables reflect the fact that: a Monthly Deduction Amount (consisting of a cost
of insurance charge, tax expense charge, and an administrative expense charge)
is deducted from Account Value each Monthly Activity Date and that an Annual
Maintenance Fee of $35 is deducted on each Contract Anniversary from all
Variable Sub-Accounts to which Account Value is allocated. The values in the
tables also reflect a deduction from the Variable Account of a daily charge
equal to an annual rate of 0.90% for the mortality and expense risk charge. The
Cash Surrender Value shown in the tables reflect the fact that a Withdrawal
Charge is imposed on withdrawals in excess of the Free Withdrawal Amount. (See
"Deductions and Charges.") The amounts shown in the table are based on an
average of the investment advisory fees and operating expenses incurred by the
Funds, at an annual rate of .65% of the average daily net assets of the Funds.
(See "Charges and Expenses.")
Taking account of the average investment advisory fee and operating
expenses of the Funds, the gross annual rates of return of 0%, 6% and 12%
correspond to net investment experience at constant annual rates of: (-.65%,
5.35%, and 11.35%,) respectively.
The hypothetical rates of return shown in the tables do not reflect any tax
charges attributable to the Variable Account since no such charges are currently
made. If any such charges are imposed in the future, the gross annual rate of
return would have to exceed the rates shown by an amount sufficient to cover the
tax charges, in order to produce the Account Values, Cash Surrender Values, and
Death Benefits illustrated.
The second column of each table shows the amount that would accumulate if
the initial premium of $10,000 were invested to earn interest, after taxes, of
5% per year, compounded annually.
Glenbrook Life will furnish upon request a personalized illustration
reflecting the proposed insured's age, sex, and underwriting classification.
Where applicable, Glenbrook Life will also furnish upon request an illustration
for a Contract that is not affected by the sex of the insured.
A-1
<PAGE> 27
PART II - OTHER INFORMATION
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
REPRESENTATION AS TO FEES AND CHARGES
Glenbrook Life and Annuity Company represents that the fees and charges
deducted under the Modified Single Premium Variable Life Insurance Contract
hereby registered by this Registration Statement, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed by Glenbrook Life.
REPRESENTATION PURSUANT TO RULE 6e-3(T)
This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the
Investment Company Act of 1940 ("Investment Company Act").
RULE 484 UNDERTAKING
The By-Laws of Glenbrook Life and Annuity Company ("Depositor") which are
incorporated herein by reference as Exhibit 1.(6)(b), provide that it will
indemnify its officers and directors for certain damages and expenses that may
be incurred in the performance of their duty to Depositor. No indemnification
is provided, however, when such person is adjudged to be liable for negligence
or misconduct in the performance of his or her duty, unless indemnification is
deemed appropriate by the court upon application. Insofar as indemnification
for liability arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE> 28
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The Facing Sheet.
The Prospectus consisting of ___ pages.
The Undertaking to File Reports.
Rule 484 Undertaking.
Representation As To Fees and Charges.
Representation Pursuant to Rule 6e-3(T).
The Signatures.
Written Consents of the following persons:
(a) Messrs. Sutherland, Asbill & Brennan, L.L.P.**
(b) Deloitte & Touche LLP**
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2:
(1) Form of Resolution of the Board of Directors of Glenbrook
Life and Annuity Company authorizing establishment of the AIM
Variable Life Separate Account A.*
(2) Not Applicable.
(3) (a) Form of Principal Underwriting Agreement.**
(b) Form of Selling Agreement.**
(c) See Exhibit 1(3)(b).
(4) Not Applicable.
(5) Specimen Contract.*
(6) (a) Certificate of Incorporation of Glenbrook Life and Annuity
Company.***
(b) By-laws of Glenbrook Life and Annuity Company.***
(7) Not Applicable.
(8) Form of Participation Agreements.**
(9) Not Applicable.
(10) Form of Application for Contract.*
2. Opinion of Counsel.**
3. Financial Statements omitted from the prospectus pursuant to instruction
1(b) or 1(c)
(1) Not Applicable.
(2) Financial Statements pursuant to 1(c).**
4. Not Applicable.
5. Financial Data Schedule. ****
6. Not Applicable.
7. Powers of Attorney.*
8. Consents.**
(1) Messrs. Sutherland, Asbill & Brennan, L.L.P.
(2) Deloitte & Touche, LLP
9. Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii)**
10. Actuarial Opinion and Consent*
* Filed herewith.
** Exhibits to be filed by Pre-effective Amendment.
*** Previously filed in Form S-1 Registration Statement No. 333-07275 dated
June 28, 1996, and incorporated herein by reference.
**** Previously filed in Depositor's Form 10-K filed March 31, 1997.
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, Glenbrook Life A I M Variable Life Separate Account A, has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the Township of Northfield, State of Illinois, on the 9th day
of April 1997.
GLENBROOK LIFE A I M VARIABLE LIFE SEPARATE ACCOUNT A
(Registrant)
GLENBROOK LIFE AND ANNUITY COMPANY
(Depositor)
(SEAL)
Attest: /s/BRENDA D. SNEED By: /s/MICHAEL J. VELOTTA
---------------------------- -----------------------------
Brenda D. Sneed Michael J. Velotta
Assistant Secretary Vice President, Secretary and
and Assistant General Counsel General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following Directors and
Officers of Glenbrook Life and Annuity Company on the 9th day of April 1997.
*/LOUIS G. LOWER, II Chairman of the Board of Directors and
- - - ---------------------------- Chief Executive Officer
Louis G. Lower, II (Principal Executive Officer)
/s/MICHAEL J. VELOTTA Vice President, Secretary, General
- - - ---------------------------- Counsel and Director
Michael J. Velotta
*/PETER H. HECKMAN President, Chief Operating Officer
- - - ---------------------------- and Director
Peter H. Heckman
*/JOHN R. HUNTER Director
- - - ----------------------------
John R. Hunter
*/MARLA G. FRIEDMAN Vice President
- - - ----------------------------
Marla G. Friedman
*/KEVIN R. SLAWIN Vice President
- - - ---------------------------- (Principal Financial Officer)
Kevin R. Slawin
*/G. CRAIG WHITEHEAD Senior Vice President and Director
- - - ----------------------------
G. Craig Whitehead
*/CASEY J. SYLLA Chief Investment Officer
- - - ----------------------------
Casey J. Sylla
*/JAMES P. ZILS Treasurer
- - - ----------------------------
James P. Zils
*/KEITH A. HAUSCHILDT Assistant Vice President and Controller
- - - ---------------------------- (Principal Accounting Officer)
Keith A. Hauschildt
*/ By Michael J. Velotta, pursuant to Power of Attorney filed herewith.
<PAGE> 1
Exhibit 1.(1)
Form of Resolution of Board of Directors
FORM OF RESOLUTION OF THE BOARD OF DIRECTORS OF GLENBROOK LIFE
AND ANNUITY COMPANY AUTHORIZING ESTABLISHMENT OF THE A I M
VARIABLE LIFE SEPARATE ACCOUNT A.
Pursuant to Section 10 of the Illinois Insurance Code and Article I,
Section 9 of the By-Laws of Glenbrook Life and Annuity Company, the undersigned
Directors of this Illinois Corporation hereby consent to the following action
being taken by and on behalf of Glenbrook Life and Annuity Company herein,
("the Corporation"):
AIM VARIABLE LIFE SEPARATE ACCOUNT A
RESOLVED, That the Corporation, pursuant to the provisions of Section
245.21 of the Illinois Insurance Code, hereby establishes a separate account
designated Glenbrook Life and Annuity Company A I M Variable Life Separate
Account A, (hereafter "Separate Account A") for the following use and purposes,
and subject to such conditions as hereinafter set forth.
FURTHER RESOLVED, That Separate Account A shall be established for the
purpose of providing for the issuance by the Corporation of such variable life
or such other contracts ("Contracts") as the Chief Executive Officer or his
designated representative may designate for such purpose and shall constitute a
separate account into which are allocated amounts paid to or held by the
Corporation under such Contracts.
FURTHER RESOLVED, That the income, gains and losses, whether or not
realized, from assets allocated to Separate Account A shall, in accordance with
Contracts, be credited to or charged against such account without regard to
other income, gains, or losses of the Corporation.
FURTHER RESOLVED, That the fundamental investment policy of Separate
Account A shall be to invest or reinvest the assets of Separate Account A in
securities issued by investment companies registered under the Investment
Company Act of 1940, as amended, as the Investment Committee may designate
pursuant to the provisions of the Contracts.
FURTHER RESOLVED, That multiple investment divisions be, and hereby are,
established within Separate Account A to which net payments under the Contracts
will be allocated in accordance with instructions received from
contractholders, and that the Chief Executive Officer be, and hereby is,
authorized to increase or decrease the number of investment divisions in
Separate Account A as deemed necessary or appropriate.
FURTHER RESOLVED, That each such investment division shall invest only in
the shares of a single mutual fund or a single mutual fund portfolio of an
investment corporation organized as a series fund pursuant to the Investment
Company Act of 1940.
<PAGE> 2
FURTHER RESOLVED, That the Chief Executive Officer, President and
Treasurer be, and they hereby are, authorized to deposit such amount in
Separate Account A or in each investment division thereof as may be necessary
or appropriate to facilitate the commencement of the Separate Account A's
operations.
FURTHER RESOLVED, That the Chief Executive Officer of the Corporation or
his designated representative be, and hereby is, authorized to change the
designation of Separate Account A to such other designation as the Chief
Executive Officer may deem necessary or appropriate.
FURTHER RESOLVED, That the appropriate officers of the Corporation, with
such assistance from the Corporation's auditors, legal counsel and independent
consultants or others as they may require, be, and they hereby are, authorized
and directed to take all action necessary to: (a) register Separate Account A
as a unit investment trust under the Investment Company Act of 1940, as
amended; (b) register the Contracts in such amounts, which may be an indefinite
amount, as the officers of the Corporation shall from time to time deem
appropriate under the Securities Act of 1933; and (c) take all other actions
which are necessary in connection with the offering of said Contracts for sale
and the operation of Separate Account A in order to comply with the Investment
Company Act of 1940, the Securities Exchange Act of 1934, the Securities Act of
1933, and other applicable federal laws, including the filing of any amendments
to registration statements, any undertakings, and any applications for
exemptions from the Investment Company Act of 1940 or other applicable federal
laws as the officers of the Corporation shall deem necessary or appropriate.
FURTHER RESOLVED, That the appropriate officers of the Corporation be, and
they hereby are, authorized on behalf of Separate Account A and on behalf of
the Corporation to take any and all action that they may deem necessary or
advisable in order to sell the Contracts, including any registrations, filings
and qualifications of the Corporation, its officers, agents and employees, and
the Contracts under the insurance and securities laws of any of the states of
the United States of America or other jurisdictions, and in connection
therewith, to prepare, execute, deliver and file all such applications,
reports, covenants, resolutions, applications for exemptions, consents to
service of process and other papers and instruments as may be required under
such laws, and to take any and all further action which said officers or
counsel of the Corporation may deem necessary or desirable (including entering
into whatever agreements and contracts may be necessary) in order to maintain
such registrations or qualifications for as long as said officers or counsel
deem them to be in the best interests of Separate Account A and the
Corporation.
FURTHER RESOLVED, That the General Counsel for the Corporation be, and
hereby is, authorized in the names and on behalf of Separate Account A and the
Corporation to execute and file irrevocable written consents on the part of
Separate Account A and of the Corporation to be used in such states wherein
such consents to service of process may be requisite under the insurance or
securities laws therein in connection with said registration or qualification
of Contracts and to appoint the appropriate state official, or such other
person as may be allowed by said insurance or securities laws, agent of
Separate Account A and of the Corporation for the purpose of receiving and
accepting process.
FURTHER RESOLVED, That the Chief Executive Officer of the Corporation or
his designated representative be, and hereby is, authorized to establish
<PAGE> 3
criteria by which the Corporation shall institute procedures to provide
for a pass-through of voting rights to the owners of such Contracts as required
by the applicable laws with respect to securities owned by Separate Account A.
FURTHER RESOLVED, That the Chief Executive Officer of the Corporation or
his designated representative is hereby authorized to execute such agreement or
agreements on such terms and subject to such modifications as deemed necessary
or appropriate (i) with a qualified entity that will be appointed principal
underwriter and distributor for the Contracts and (ii) with one or more
qualified banks or other qualified entities to provide administrative and/or
custodial services in connection with the establishment and maintenance of
Separate Account A and the design, issuance, and administration of the
Contracts.
FURTHER RESOLVED, That since it is expected that Separate Account A will
invest in the securities issued by one or more investment companies, the
appropriate officers of the Corporation are hereby authorized to execute
whatever agreement or agreements as may be necessary or appropriate to enable
such investments to be made.
FURTHER RESOLVED, That the appropriate officers of the Corporation, and
each of them, are hereby authorized to execute and deliver all such documents
and papers and to do or cause to be done all such acts and things as they may
deem necessary or desirable to carry out the foregoing resolutions and the
intent and purposes thereof.
<PAGE> 1
Exhibit 1.(5)
Specimen Contract
<PAGE> 2
MODIFIED SINGLE PREMIUM VARIABLE
LIFE INSURANCE CONTRACT
GLENBROOK LIFE AND ANNUITY COMPANY, A Stock Company,
Home Office: Allstate Plaza, Northbrook, Illinois 60062
(800) xxx-xxxx
This Contract is issued in consideration of your application and the receipt of
your initial premium. Glenbrook Life and Annuity Company will pay the benefits
of this Contract, subject to its terms and conditions.
Throughout this Contract, "you" and "your" refer to the Contract's owner(s),
who may be someone other than the Insured. "We," "us" and "our" refer to
Glenbrook Life and Annuity Company.
This modified single premium variable life insurance contract provides a death
benefit payable to the beneficiary if the Insured dies while this Contract is
In Force.
The death benefit and cash value provided by this Contract are based on the
investment experience of the Variable Account, and vary to reflect the
performance of the Variable Account and other flexible factors.
This Contract does not pay dividends.
PLEASE READ YOUR CONTRACT CAREFULLY.
This is a Legal Contract between the Contract owner(s) and Glenbrook Life and
Annuity Company.
RETURN PRIVILEGE
If you are not satisfied with this Contract for any reason, you may return it
to us or our agent within 30 days after you receive it. We will refund any
premiums allocated to the Variable Account, adjusted to reflect investment gain
or loss from the date of allocation to the date of cancellation.
/s/Michael J. Velotta /s/ Louis G. Lower, II
Michael J. Velotta Louis G. Lower, II
Secretary Chief Executive Officer
Modified Single Premium Variable Life Insurance Contract
Proceeds Payable at Death
Non-Participating
<PAGE> 3
- - - -----------------------------------------------------------------------
TABLE OF CONTENTS
- - - -----------------------------------------------------------------------
CONTRACT DATA.........................................................3
DEFINITIONS...........................................................5
TABLE OF GUARANTEED VALUES............................................6
GENERAL PROVISIONS....................................................9
CONTRACT VALUES......................................................12
LOAN VALUES..........................................................16
WITHDRAWAL BENEFITS..................................................17
PAYMENT OF PROCEEDS..................................................18
INCOME PAYMENT TABLES................................................19
<PAGE> 4
- - - ------------------------------------------------------------------------------
CONTRACT DATA
- - - ------------------------------------------------------------------------------
OWNER:................................................................John Doe
......................................................................Jane Doe
INSURED:..............................................................John Doe
AGE:.....................................................................45
SEX:...................................................................Male
RATING CLASSIFICATION:.............................................Standard
CONTRACT NUMBER:....................................................0123456789
CONTRACT DATE:..................................................August 1, 1996
INITIAL DEATH BENEFIT:................................................$120,438
INITIAL PREMIUM:....................................................$30,000.00
LOAN CREDITED RATE:......................................................6.00%
PREFERRED LOAN INTEREST RATE:............................................6.00%
MAXIMUM LOAN INTEREST RATE:..............................................8.00%
FREE WITHDRAWAL PERCENTAGE:................................................10%
MINIMUM WITHDRAWAL AMOUNT:..............................................$50.00
MINIMUM TRANSFER AMOUNT:.................................................$0.00
VARIABLE ACCOUNT:........Glenbrook Life A I M Variable Life Separate Account A
ALLOCATION OF INITIAL PREMIUM:
ALLOCATED
VARIABLE SUB-ACCOUNTS AMOUNT (%)
Capital Appreciation Fund 10%
Diversified Income Fund 10%
Global Utilities Fund 10%
Government Securities Fund 10%
Growth Fund 10%
Growth and Income Fund 10%
International Equity Fund 10%
Value Fund 10%
Money Market Fund 10%
Equity 20%
Page 3
<PAGE> 5
ANNUAL MAINTENANCE FEE (*):.............................................$35.00
FEDERAL TAX ANNUAL RATE (YEARS 1-10):....................................0.15%
PREMIUM TAX ANNUAL RATE (YEARS 1-10):....................................0.25%
ADMINISTRATIVE EXPENSE ANNUAL RATE:......................................0.25%
MORTALITY AND EXPENSE RISK ANNUAL RATE:..................................0.90%
(*) Waived if total premiums paid are in excess of $50,000.
WITHDRAWAL CHARGE AS A PERCENTAGE OF INITIAL PREMIUM
CONTRACT PERCENTAGE OF INITIAL
YEAR PREMIUM WITHDRAWN
1 7.75%
2 7.75%
3 7.75%
4 7.25%
5 6.25%
6 5.25%
7 4.25%
8 3.25%
9 2.25%
10+ 0.00%
DUE AND UNPAID PREMIUM TAX CHARGE UPON WITHDRAWAL
AS A PERCENTAGE OF INITIAL PREMIUM
CONTRACT PERCENTAGE OF INITIAL
YEAR PREMIUM WITHDRAWN
1 2.25%
2 2.00%
3 1.75%
4 1.50%
5 1.25%
6 1.00%
7 0.75%
8 0.50%
9 0.25%
10+ 0.00%
RELATIONSHIP
BENEFICIARY TO INSURED PERCENTAGE
- - - ----------- ------------- ----------
Jane Doe Spouse 100%
RELATIONSHIP
CONTINGENT BENEFICIARY TO INSURED PERCENTAGE
- - - ---------------------- ------------
John Doe, Jr. Son 100%
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- - - --------------------------------------------------------------------------------
DEFINITIONS
- - - --------------------------------------------------------------------------------
When we use the following words, this is what we mean:
ACCOUNT VALUE The sum of the Accumulated Values of the Variable Sub-accounts
and the Loan Account.
AGE The Insured's age at the Insured's last birthday.
CASH SURRENDER VALUE The Cash Value less all Indebtedness, less the Annual
Maintenance Fee, if applicable.
CASH VALUE The Account Value less any applicable Withdrawal Charges and due
and unpaid Premium Tax Charges.
CONTRACT ANNIVERSARY The same day and month as your Contract Date for each
subsequent year your Contract remains In Force.
CONTRACT DATE The date from which contract anniversaries, contract years, and
contract months are determined.
Coverage shall become effective on the date the full Initial Premium has been
paid when:
- - - - the application has been approved by us;
- - - - the Contract has been accepted by you; and
- - - - the full Initial Premium has been paid while the Insured is alive.
IN FORCE The Insured's life is insured under the terms of this Contract.
INDEBTEDNESS All contract loans, if any, and accrued loan interest.
INSURED The person whose life is insured under this Contract as shown on page
3.
LOAN ACCOUNT An Account established for any amounts transferred from the
Variable Sub-accounts as a result of loans. The Loan Account is credited with
interest and is not based on the experience of any Separate Account.
MONTHLY ACTIVITY DATE The same day of each month as the Contract Date. If
there is no Monthly Activity Date in a calendar month, the Monthly Activity
Date will be the last day of the current calendar month.
PROCEEDS The amount we are obligated to pay under the terms of this Contract
when your Contract is surrendered or when the Insured dies.
SPECIFIED AMOUNT The Specified Amount equals the Initial Death Benefit on the
Contract Date. Thereafter, it may change in accordance with the terms of the
Partial Withdrawal provision and the Subsequent Premium provision.
TERMINATE The Insured's life is no longer insured under any of the terms of
this Contract.
VARIABLE ACCOUNT The "Variable Account" for this Contract is that shown on
page 3. This account is a separate investment account to which we allocate
assets contributed under this and certain other contracts.
VARIABLE SUB-ACCOUNTS The Variable Account is divided into Variable
Sub-accounts. Each Variable Sub-account invests solely in the shares of the
mutual fund underlying that Variable Sub-account.
WRITTEN REQUEST A request in writing signed by you on a form agreeable to us.
WE, US, OUR Glenbrook Life and Annuity Company.
YOU, YOUR The owner(s) of this Contract as shown in the application, unless
subsequently changed. The owner is the Insured unless otherwise stated.
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- - - --------------------------------------------------------------------------------
TABLE OF GUARANTEED VALUES
- - - --------------------------------------------------------------------------------
Maximum Annual Cost of Insurance per $1,000
Death Benefit Standard Class Special Class
Attained
Age Ratio Male Female Male Female
- - - -------- ----------- ----------- ----------- ----------- -----------
0 2.50 2.63 1.88 5.26 3.76
1 2.50 1.03 0.84 2.06 1.68
2 2.50 0.99 0.80 1.98 1.60
3 2.50 0.97 0.78 1.94 1.56
4 2.50 0.93 0.77 1.86 1.54
5 2.50 0.88 0.75 1.76 1.50
6 2.50 0.83 0.73 1.66 1.46
7 2.50 0.78 0.71 1.56 1.42
8 2.50 0.75 0.70 1.50 1.40
9 2.50 0.74 0.69 1.48 1.38
10 2.50 0.75 0.68 1.50 1.36
11 2.50 0.81 0.70 1.62 1.40
12 2.50 0.92 0.73 1.84 1.46
13 2.50 1.07 0.77 2.14 1.54
14 2.50 1.24 0.82 2.48 1.64
15 2.50 1.42 0.87 2.84 1.74
16 2.50 1.59 0.92 3.18 1.84
17 2.50 1.72 0.96 3.44 1.92
18 2.50 1.82 1.00 3.64 2.00
19 2.50 1.88 1.03 3.76 2.06
20 2.50 1.90 1.06 3.80 2.12
21 2.50 1.90 1.08 3.80 2.16
22 2.50 1.88 1.10 3.76 2.20
23 2.50 1.84 1.12 3.68 2.24
24 2.50 1.80 1.15 3.60 2.30
25 2.50 1.75 1.17 3.50 2.34
26 2.50 1.72 1.20 3.44 2.40
27 2.50 1.71 1.24 3.42 2.48
28 2.50 1.70 1.28 3.40 2.56
29 2.50 1.72 1.32 3.44 2.64
30 2.50 1.75 1.37 3.50 2.74
31 2.50 1.80 1.42 3.60 2.84
32 2.50 1.87 1.47 3.74 2.94
33 2.50 1.95 1.54 3.90 3.08
34 2.50 2.05 1.61 4.10 3.22
35 2.50 2.17 1.70 4.34 3.40
36 2.50 2.32 1.82 4.64 3.64
37 2.50 2.49 1.96 4.98 3.92
38 2.50 2.68 2.13 5.36 4.26
39 2.50 2.90 2.32 5.80 4.64
40 2.50 3.15 2.53 6.30 5.06
41 2.43 3.42 2.75 6.84 5.50
42 2.36 3.71 2.98 7.42 5.96
43 2.29 4.03 3.20 8.06 6.40
44 2.22 4.37 3.44 8.74 6.88
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<PAGE> 8
45 2.15 4.73 3.68 9.46 7.36
46 2.09 5.12 3.92 10.24 7.84
47 2.03 5.53 4.19 11.06 8.38
48 1.97 5.97 4.48 11.94 8.96
49 1.91 6.46 4.79 12.92 9.58
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<TABLE>
<CAPTION>
Maximum Annual Cost of Insurance per $1,000
Death Benefit Standard Class Special Class
Attained
Age Ratio Male Female Male Female
-------- ----- ---- ------ ------ ------
<S> <C> <C> <C> <C> <C>
50 1.85 7.00 5.13 14.00 10.26
51 1.78 7.63 5.50 15.26 11.00
52 1.71 8.33 5.92 16.66 11.84
53 1.64 9.13 6.38 18.26 12.76
54 1.57 10.01 6.85 20.02 13.70
55 1.50 10.96 7.33 21.92 14.66
56 1.46 11.97 7.80 23.94 15.60
57 1.42 13.04 8.25 26.08 16.50
58 1.38 14.18 8.70 28.36 17.40
59 1.34 15.42 9.20 30.84 18.40
60 1.30 16.80 9.80 33.60 19.60
61 1.28 18.36 10.54 36.72 21.08
62 1.26 20.12 11.49 40.24 22.98
63 1.24 22.09 12.63 44.18 25.26
64 1.22 24.27 13.92 48.54 27.84
65 1.20 26.62 15.29 53.24 30.58
66 1.19 29.13 16.71 58.26 33.42
67 1.18 31.79 18.13 63.58 36.26
68 1.17 34.65 19.59 69.30 39.18
69 1.16 37.81 21.23 75.62 42.46
70 1.15 41.37 23.16 82.74 46.32
71 1.13 45.43 25.53 90.86 51.06
72 1.11 50.08 28.47 100.16 56.94
73 1.09 55.34 31.99 110.68 63.98
74 1.07 61.10 36.05 122.20 72.10
75 1.05 67.25 40.56 134.50 81.12
76 1.05 73.70 45.45 147.40 90.90
77 1.05 80.37 50.68 160.74 101.36
78 1.05 87.32 56.32 174.64 112.64
79 1.05 94.76 62.57 189.52 125.14
80 1.05 102.94 69.67 205.88 139.34
81 1.05 112.09 77.83 224.18 155.66
82 1.05 122.41 87.25 244.82 174.50
83 1.05 133.84 97.90 267.68 195.80
84 1.05 146.12 109.62 292.24 219.24
85 1.05 158.98 122.29 317.96 244.58
86 1.05 172.21 135.82 344.42 271.64
87 1.05 185.73 150.18 371.46 300.36
88 1.05 199.53 165.38 399.06 330.76
89 1.05 213.69 181.54 427.38 363.08
90 1.05 228.43 198.85 456.86 397.70
91 1.04 244.11 217.68 488.22 435.36
92 1.03 261.43 238.69 522.86 477.38
93 1.02 282.13 263.41 564.26 526.82
94 1.01 309.97 295.23 619.94 590.46
95 1.01 351.86 341.02 703.72 682.04
96 1.01 420.99 413.88 841.98 827.76
97 1.01 541.00 537.24 894.65 885.17
98 1.01 745.15 743.96 947.33 942.59
99 & older 1.01 990.00 980.00 995.00 985.00
</TABLE>
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- - - --------------------------------------------------------------------------------
GENERAL PROVISIONS
- - - --------------------------------------------------------------------------------
THE CONTRACT Your Contract is issued in consideration of the application and
the payment of the Initial Premium.
Your Contract, any riders and endorsements, the application, and any
supplemental applications are the entire contract between you and us. A copy
of the application is included. Any supplemental applications will also be
attached to and made a part of the Contract. Any statements made in the
application and any supplemental applications either by you or by the Insured
will, in the absence of fraud, be considered representations and not
warranties. Also, any written statement made either by you or by the Insured
will not be used to void your Contract nor defend against a claim under your
Contract unless the statement is contained in the application or any
supplemental applications.
Only our officers may change the Contract or waive a right or requirement. No
agent or other person may do this.
SUICIDE EXCLUSION If the Insured dies by suicide while sane or
self-destruction while insane within two years from the Contract Date, our
liability will be limited to an amount equal to the premiums paid less any
Indebtedness and Partial Withdrawals. If the Insured dies by suicide while
sane or self-destruction while insane within two years of the effective date of
any increase in Specified Amount, our liability with respect to the increase
will be limited to the additional premiums paid for such increase, less
Indebtedness and Partial Withdrawals.
INCONTESTABILITY We cannot contest this Contract after it has been In Force
during the lifetime of the Insured for two years after the Contract Date. Any
increase in the Specified Amount for which evidence of insurability was
obtained will be incontestable only after the increase has been In Force,
during the lifetime of the Insured, for two years from the effective date of
the increase.
ASSIGNMENT You may not assign an interest in this Contract as collateral or
security for a loan.
REINSTATEMENT Prior to the death of the Insured and if this Contract has not
been surrendered for cash, this Contract may be reinstated provided:
- - - - you make your request within five years of the date the Contract entered a
Grace Period;
- - - - satisfactory evidence of insurability is submitted;
- - - - any Indebtedness is repaid; and
- - - - sufficient premium is paid to:
- cover all Monthly Deduction Amounts and Annual Maintenance Fee due and
unpaid during the Grace Period, and
- keep the Contract In Force for three months after the date of
reinstatement.
The Specified Amount of the reinstated Contract cannot exceed the Specified
Amount at the time of lapse. The Account Value on the reinstatement date will
reflect:
- - - - the Account Value at the time of Termination; and
- - - - premiums paid at the time of reinstatement.
Withdrawal Charges will continue to be based on the original Contract Date.
EXCHANGE OPTION If this Contract is In Force, you may exchange it during the
first two years after the Contract Date for a permanent life insurance contract
offered by us. We reserve the right to make available a permanent life
insurance contract offered by our parent Company or any affiliated Company on
the life of the Insured without evidence of insurability. The new Contract
will be issued:
- - - - with a net amount at risk equal to or less than the net amount at risk in
effect on the date of exchange;
- - - - with premiums based on the same risk classification as this Contract.
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The net amount at risk is equal to the Specified Amount less the Account Value
of the Contract on the date of exchange. This exchange is subject to
adjustments in premiums and Account Values to reflect any variances under this
Contract and the new contract.
MISSTATEMENT OF AGE OR SEX If the age or sex of the Insured has been
misstated, any Proceeds will be adjusted to the amount which the Initial
Premium and any Subsequent Premium Payments would have purchased at the correct
age and sex.
BENEFICIARY When we receive due proof of the Insured's death, we will pay the
Proceeds of this Contract to the beneficiary or beneficiaries who are named in
the application for this Contract unless you subsequently change the
beneficiary. In that event, we will pay the Proceeds to the beneficiary named
in your last change of beneficiary request as provided for in this Contract.
If a primary or contingent beneficiary dies before the Insured, that
beneficiary's interest in this Contract ends with that beneficiary's death.
Only those beneficiaries who survive the Insured will be eligible to share in
the Proceeds. If no beneficiary survives the Insured, we will pay the Proceeds
of this Contract to you, if living, otherwise to your estate.
CHANGE OF OWNER OR BENEFICIARY If you have reserved the right to change the
owner or beneficiary, you can file a written request with us to make such a
change. If you have not reserved the right to change the beneficiary, the
written consent of the irrevocable beneficiary(s) will be required.
Your written request will not be effective until it is recorded in our home
office records. After it has been recorded, it will take effect as of the date
you signed the request. However, if the Insured dies before the request has
been recorded, the request will not effect those Proceeds we may have paid
before your request was recorded in our home office records.
LIFE INSURANCE QUALIFICATION This Contract is intended to qualify for
treatment as a life insurance contract under the Internal Revenue Code as it
now exists or may later be amended. We reserve the right to amend this
Contract to comply with future changes in the Code and its Regulations. We
will promptly provide you with a copy of any amendment.
TAXATION Currently, no charge is made to the Variable Account for federal
income taxes that may be attributable to the operations of the Variable
Account. However, the Company may make such a charge in the future. Charges
for other taxes, if any, attributable to the Variable Account or this class of
Contracts may also be made.
VARIABLE ACCOUNT The "Variable Account" for this contract is that shown on
page 3. This account is a separate investment account to which we allocate
assets contributed under this and certain other life insurance contracts.
We will have exclusive and absolute ownership and control of the assets of our
separate accounts. The assets of the Variable Account will be available to
cover the liabilities of our general account only to the extent those assets
exceed the liabilities of that Variable Account arising under the variable life
insurance contracts supported by that Variable Account.
The assets of the Variable Account will be valued at least as often as any
contract benefits vary, but at least monthly. Our determination of the value
of an Accumulation Unit by the method described in this policy will be
conclusive.
VARIABLE ACCOUNT MODIFICATIONS We reserve the right, subject to applicable
law, to make additions to, deletions from, or substitutions for the mutual fund
shares underlying the Variable Sub-accounts of the Variable Account. We will
not substitute any shares attributable to your interest in a Variable
Sub-account of the Variable Account without notice to you and prior approval of
the Securities and Exchange Commission, to the extent required by the
Investment Company Act of 1940.
We reserve the right to establish additional Variable Sub-accounts of the
Variable Account, each of which would invest in shares of another mutual fund.
You may then instruct us to allocate premiums paid or transfers to such
Variable Sub-accounts, subject to any terms set by us or the mutual fund. In
the event of any such substitution or change, we may by endorsement, make such
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<PAGE> 12
changes as may be necessary or appropriate to reflect such substitution
or change.
If we deem it to be in the best interests of persons having voting rights under
these Contracts, the Variable Account may be operated as a management company
under the Investment Company Act of 1940 or it may be deregistered under such
Act in the event such registration is no longer required.
NONPARTICIPATING This Contract will not share in our surplus distributions.
TERMINATION This Contract will Terminate upon the earliest of the following
events:
- - - - full surrender of the Contract; or
- - - - the end of the Grace Period; or
- - - - the death of the Insured.
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- - - --------------------------------------------------------------------------------
CONTRACT VALUES
- - - --------------------------------------------------------------------------------
INITIAL PREMIUM PAYMENT The Initial Premium is due by the Contract Date and
must be paid in advance. This Contract will not be in effect and there will be
no Death Benefit before the Initial Premium is paid. Your Initial Premium is
shown on page 3.
SUBSEQUENT PREMIUM PAYMENTS Subsequent Premium Payments may be made at any
time subject to the following conditions:
- - - - only one Subsequent Premium Payment may be made in any Contract year;
- - - - each Subsequent Premium Payment must be at least $500; and
- - - - the attained age of the Insured must be less than age 86.
We reserve the right to obtain evidence of insurability upon all Subsequent
Premium Payments. Subsequent Premium Payments may require an increase in
Specified Amount to remain within the definition of a life insurance contract
under the Internal Revenue Code.
Unless you request otherwise in writing, any Subsequent Premium Payment
received while a Contract Loan exists will be applied:
- - - - first, as a repayment of Indebtedness; and
- - - - second, as a Subsequent Premium Payment, subject to the preceding
conditions.
Subsequent Premium Payments may be made at any time and in any amount necessary
to avoid termination of this Contract.
PREMIUM ALLOCATION The Initial Premium will be allocated to the Variable
Sub-accounts, in whole percentages according to the premium allocation
specified on the application, on the date we receive the final requirement to
put the Contract In Force.
All premium payments not requiring underwriting will be allocated to the
Variable Sub-accounts as of the date payments are received at our home office.
Premium payments requiring underwriting will be allocated to the Variable
Sub-accounts once underwriting approval is received. Upon underwriting
approval, an amount equal to the Accumulated Value which would have been earned
had the premium been invested in the Money Market Sub-account since the date of
receipt of the premium, will be allocated according to the Initial Premium
allocation specified on the application or your most recent written
instructions.
You may change your premium allocation upon written request.
GRACE PERIOD This contract will Terminate 61 days after a Monthly Activity
Date on which the Cash Surrender Value is less than zero. This 61 day period
is the Grace Period. The Company will notify the Owner of the premium amount
required to continue this Contract, at least 61 days before the end of the
Grace Period. The premium required will be no greater than an amount required
to pay three Monthly Deduction Amounts as of the day the Grace Period began.
If this premium is not paid by the end of the Grace Period, this Contract will
Terminate.
TRANSFERS Upon request and as long as this Contract is In Force, you may
transfer amounts among the Variable Sub-accounts. You may make 12 transfers
each Contract year without charge. Subsequent transfers in any Contract year
may be assessed a $10 transfer fee. The minimum amount that may be transferred
among Variable Sub-accounts is subject to the Minimum Transfer Amount shown on
page 3.
We reserve the right to waive the transfer fees and restrictions contained in
this contract.
ACCUMULATION UNIT AND ACCUMULATION UNIT VALUE Amounts which you allocate to a
Variable Sub-account of the Variable Account are used to purchase Accumulation
Units in that Variable Sub-account. The Accumulation Unit Value for each
Variable Sub-account at the end of any Valuation Period is calculated by
multiplying the Accumulation Unit Value at the end of the immediately preceding
Valuation Period by the Variable Sub-account's Net Investment Factor for the
Valuation Period. The Accumulation Unit Values may
Page 12
<PAGE> 14
go up or down. Additions or transfers to a Variable Sub-account of the
Variable Account will increase the number of Accumulation Units for that
Variable Sub-account. Withdrawals, Transfers, Contract Loans, Monthly
Deduction Amounts and Annual Maintenance Fees deducted from a Variable
Sub-account of the Variable Account will decrease the number of Accumulation
Units for that Variable Sub-account.
The number of Accumulation Units to be added to or deducted from a Variable
Sub-account equals the dollar amount of the transaction divided by the
Accumulation Unit Value for the Valuation Period.
VALUATION PERIOD AND VALUATION DATE A "Valuation Period" is the time interval
between the close of regular trading of the New York Stock Exchange on
consecutive Valuation Dates. A "Valuation Date" is any date the New York Stock
Exchange is open for trading.
NET INVESTMENT FACTOR For each Variable Sub-account of the Variable Account,
the "Net Investment Factor" for a Valuation Period is (A) divided by (B), minus
(C) where:
(A) is the sum of:
1. the net asset value per share of the mutual fund underlying the
Variable Sub-account determined as of the end of the current Valuation
Period; plus
2. the per share amount of any dividend or capital gain distributions made
by the mutual fund underlying the Variable Sub-account during the
current Valuation Period.
(B) is the net asset value per share of the mutual fund underlying the Variable
Sub-account determined as of the end of the immediately preceding Valuation
Period.
(C) is the Mortality and Expense Risk Annual Rate divided by 365 and multiplied
by the number of calendar days in the current Valuation Period.
The Mortality and Expense Risk Annual Rate is shown on page 4.
ACCOUNT VALUE Your Account Value on the Contract Date equals the Initial
Premium less the Monthly Deduction Amount for the first policy month. Your
Account Value on each subsequent Monthly Activity Date equals:
- - - - the sum of your Accumulated Values in each Variable Sub-account; plus
- - - - the value of your Loan Account, if any; minus
- - - - the Monthly Deduction Amount; minus
- - - - the Annual Maintenance Fee, if applicable.
On any day other than your Monthly Activity Date, your Account Value equals:
- - - - the sum of your Accumulated Values in each Variable Sub-account; plus
- - - - the value of your Loan Account, if any.
ACCUMULATED VALUE Your Accumulated Value in any Variable Sub-account equals:
- - - - the number of Accumulation Units in that Variable Sub-account on the
Valuation Day; multiplied by
- - - - that Variable Sub-account's Accumulation Unit Value on the Valuation Day.
MONTHLY DEDUCTION AMOUNT The Monthly Deduction Amount will be taken
proportionately from your Variable Sub-accounts on each Monthly Activity Date,
and is equal to:
- - - - the Cost of Insurance Charge; plus
- - - - the Administrative Expense Charge; plus
- - - - the Tax Expense Charge.
COST OF INSURANCE CHARGES The Maximum Cost of Insurance charge for any Monthly
Activity Date is equal to:
- - - - the Death Benefit; minus
- - - - the Account Value on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount; the result is divided by 1000 and multiplied by
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- - - - the Maximum Annual Cost of Insurance Rate divided by 12.
We can use Cost of Insurance Charges that are lower than the Maximum Annual
Cost of Insurance shown on page 6. Charges will be determined based on our
expectation as to future experience. Any change we make will be on a uniform
basis for all Insureds with the same age, sex, and rating classification whose
coverage has been In Force for the same length of time. No change in rating
classification or cost will occur on account of deterioration of the Insured's
health.
ADMINISTRATIVE EXPENSE CHARGE The Administrative Expense Charge for any
Monthly Activity Date is equal to:
- - - - the Administrative Expense Annual Rate divided by 12; multiplied by
- - - - the Account Value on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount.
The Administrative Expense Annual Rate is shown on page 4.
TAX EXPENSE CHARGE The Tax Expense Charge for any Monthly Activity Date
occurring during the first ten years of the Contract is an amount not greater
than:
- - - - the Tax Expense Rate divided by 12; multiplied by
- - - - the Account Value on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount.
The Tax Expense Rate is the sum of the Federal Tax Annual Rate and the Premium
Tax Annual Rate shown on page 4. If you surrender or withdraw from this
Contract within nine years of the Contract Date, any due and unpaid Premium Tax
shown on page 4 will be deducted from your Account Value.
ANNUAL MAINTENANCE FEE An Annual Maintenance Fee shown on page 4 will be
deducted proportionately from all Variable Sub-accounts if applicable on each
Contract Anniversary. A full Annual Maintenance Fee will be deducted if the
Contract is Terminated on any day other the Contract Anniversary. This fee
will be waived if total premiums paid are in excess of those shown on page 4.
ANNUAL REPORT We will send you, at least once a year, an Annual Report which
provides information on the current status of your Contract. This information
will include items such as;
- - - - the current Death Benefit;
- - - - the current Account Value and Cash Surrender Value;
- - - - any amount of Indebtedness;
- - - - any Monthly Deductions since the last report;
- - - - any Partial Withdrawals and Withdrawal Charges since the last report;
- - - - any Subsequent Premium Payments since the last report; and
- - - - any Annual Maintenance Fee, if applicable, since the last report.
If you ask us, we will send you an additional report, at any time during the
Contract year. We may charge you for this report. The charge will not be more
than $25. We will tell you what the current charge is before sending the
report. We will send you any shareholder reports of the Funds or any other
notices, reports or documents required by law.
SPECIFIED AMOUNT The Specified Amount equals the Initial Death Benefit on the
Contract Date. The Initial Death Benefit for your Contract is shown on page 3.
If a Partial Withdrawal is taken or a Subsequent Premium Payment is received,
the Specified Amount will change as described in the Partial Withdrawal
provision and the Subsequent Premium Payment provision. If your Specified
Amount changes, we will send you an endorsement showing the new Specified
Amount.
DEATH BENEFIT The Death Benefit determined on the date of the Insured's death
is the greater of the Specified Amount or the Account Value multiplied by the
Death Benefit Ratio on page 6. We will pay the Death Benefit, less any
Indebtedness and less any due and unpaid Monthly Deduction Amounts occurring
during a Grace Period, if the Insured dies while this Contract is In Force,
subject to the terms of this Contract. Written due proof that the Insured has
died must be received at our home office prior to paying a Death Benefit.
INTEREST FROM DATE OF DEATH If the Proceeds under this Contract are not paid
within thirty days after we
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receive due proof of the death to the Insured, we will also pay interest on
the Proceeds. Interest will accrue at the legal rate of interest and will
accrue from the date of death until the claim is paid.
Page 15
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- - - --------------------------------------------------------------------------------
LOAN VALUES
- - - --------------------------------------------------------------------------------
CONTRACT LOAN At any time while this Contract is In Force, you can borrow up
to the available Loan Value of your Contract. The maximum Loan Value is 90% of
your Cash Value, less 100% of any existing loans as of the date of the loan,
less any loan interest to the next Contract Anniversary, less any Monthly
Deduction Amounts due and any Annual Maintenance Fee due on or before the next
Contract Anniversary. Unless you specify otherwise, all loan amounts will be
transferred proportionately from the Variable Sub-accounts to the Loan Account.
Loans have priority over the claims of any other person. Your Contract is sole
security for all loans.
PREFERRED LOAN If the Account Value exceeds the total premiums paid, net of
any premiums returned due to Partial Withdrawals, a Preferred Loan is
available. The amount available for a Preferred Loan is the amount by which
the Cash Value exceeds the net premiums paid. The amount of loans qualifying
as Preferred Loans is determined on each Contract Anniversary.
CREDITED INTEREST The Loan Account will be credited with interest at a rate
equal to the Loan Credited Rate shown on page 3.
LOAN INTEREST For Preferred Loans, interest will accrue daily by a rate not to
exceed the Preferred Loan Interest Rate shown on page 3. For other than
Preferred Loans, interest will accrue daily by a rate not to exceed the Maximum
Loan Interest Rate shown on page 3. Interest payments are due on the Contract
Anniversary. If unpaid, interest is added to the amount of the loan and will
itself bear interest at the rate described in this provision. On each Contract
Anniversary, the difference between the total indebtedness and the balance in
the Loan Account will be transferred proportionately from the Variable
Sub-accounts to the Loan Account.
LOAN REPAYMENT You can repay all or part of a loan and loan interest at any
time while this Contract is In Force. The loan repayment will be allocated
among the Variable Sub-accounts in the same percentage as premiums are
allocated, unless you specify otherwise. If you do not repay your loans, we
will deduct all loans and loan interest from the amounts we pay you.
LOAN LIMIT Your Contract will become overloaned when loans and loan interest
exceed the Cash Value. We will Terminate this Contract when it becomes
overloaned. We will not Terminate a contract which becomes overloaned until 61
days after notice has been mailed to the last known address of the owner.
Page 16
<PAGE> 18
- - - --------------------------------------------------------------------------------
WITHDRAWAL BENEFITS
- - - --------------------------------------------------------------------------------
CASH SURRENDER VALUE You may surrender your Contract for its Cash Surrender
Value, which may be paid in cash or under an Income Plan.
Your Cash Surrender Value is equal to:
- - - - the Cash Value; less
- - - - any Indebtedness; less
- - - - the Annual Maintenance Fee, if applicable.
Your Cash Value is equal to:
- - - - the Account Value; less
- - - - any applicable Withdrawal Charge; less
- - - - any due and unpaid Premium Tax Charge.
Surrender will be effective on the date we receive written request. We may
require that your Contract be sent in with your written request before making a
surrender payment. When you surrender your Contract for its Cash Surrender
Value, your Contract will Terminate.
PARTIAL WITHDRAWALS You may withdraw a portion of the Cash Surrender Value.
The withdrawal amount must be at least the Minimum Withdrawal Amount shown on
page 3 and must not cause the Cash Surrender Value after the withdrawal to be
less than $2,000. If the remaining Cash Surrender Value is less than $2,000,
we will Terminate the Contract and pay the Cash Surrender Value.
Unless specified otherwise, the Partial Withdrawal amount will be deducted
proportionately from each Variable Sub-account. The new Specified Amount of
the Contract will be the greater of:
- - - - the Specified Amount prior to the Partial Withdrawal, reduced
proportionately to the reduction in Account Value; or
- - - - the minimum Specified Amount allowed by the Internal Revenue Code to still
be considered life insurance.
The Account Value after a Partial Withdrawal is equal to the Account Value
before the Partial Withdrawal less the Partial Withdrawal Amount, including the
Withdrawal Charge and any due and unpaid Premium Tax Charge.
FREE WITHDRAWAL AMOUNT The annual Free Withdrawal Amount is equal to:
- - - - the Free Withdrawal Percentage shown on page 3, multiplied by
- - - - the total premiums paid.
Any Free Withdrawal Amount not taken during a Contract year may not be carried
forward to increase the Free Withdrawal Amount in any subsequent year. You may
withdraw the Free Withdrawal Amount in any Contract year without incurring a
Withdrawal Charge or Premium Tax Charge.
WITHDRAWAL CHARGES Withdrawals in excess of the Free Withdrawal Amount will be
subject to a Withdrawal Charge and any due and unpaid Premium Tax Charge. The
Withdrawal Charge and any due and unpaid Premium Tax Charge are equal to:
- - - - the percentages shown on page 4 for the Contract year in which the
withdrawal or surrender occurs; multiplied by
- - - - the portion of the withdrawal amount in excess of the Free Withdrawal
Amount.
In any event, your Withdrawal Charges will never be more than 9% of your total
premiums paid.
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<PAGE> 19
- - - --------------------------------------------------------------------------------
PAYMENT OF PROCEEDS
- - - --------------------------------------------------------------------------------
DEFERMENT OF PAYMENTS We will pay any amounts due from the Variable Account
under this Contract within seven days of receiving a written request for a
Transfer, Contract Loan, Termination, Partial Withdrawal, or Death Benefit, as
well as, any other required documentation, unless:
- - - - the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on such Exchange is restricted;
- - - - an emergency exists as defined by the Securities and Exchange Commission;
or
- - - - the Securities and Exchange Commission permits delay for the protection of
contract holders.
PAYEE RIGHTS You will be the payee for the Cash Surrender Value unless you
name a different payee. The beneficiary will be the payee for the death
Proceeds. When we pay the Proceeds, we may ask that you give this Contract
back to us. If the Insured has died, you or the beneficiary must give us due
proof of death.
You may choose payment as a single payment or an Income Plan. Before the
Proceeds are due, you may choose or change an Income Plan selection by writing
to us. Once we accept the change, it takes effect as of the date you signed
the request. This change is subject to any action we take before we accept it.
After the Proceeds are due, the payee may choose an Income Plan if:
- - - - you have not made a prior choice which is still in effect; and
- - - - the Proceeds are due in a single sum and have not been paid.
No surrender or Partial Withdrawals are permitted after payments under an
Income Plan have started.
PAYOUT START DATE The Payout Start Date is the date the Cash Surrender Value
or Death Benefit is applied to an Income Plan.
INCOME PLANS An Income Plan is a series of payments on a scheduled basis to
the payee. The Proceeds will be applied to your Income Plan choice from the
following list:
1. LIFE INCOME WITH GUARANTEED PAYMENTS We will make payments for as long
as the payee lives. If the payee dies before the selected number of
guaranteed payments have been made, we will continue to pay the
remainder of the guaranteed payments.
2. JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS We will make
payments for as long as either the payee or joint payee, named at the
time of Income Plan selection, lives. If both the payee and the joint
payee die before the selected number of guaranteed payments have been
made, we will continue to pay the remainder of the guaranteed payments.
We reserve the right to make available other Income Plans.
PAYOUT TERMS AND CONDITIONS The income payments are subject to the following
terms and conditions:
- - - - If the Proceeds are less than $3,000, or not enough to provide an initial
payment of at least $20, we reserve the right to:
- change the payment frequency to make the payment at least $20; or
- Terminate the Contract and pay you the Proceeds in a lump sum.
- - - - If you choose an Income Plan which depends on any person's life, we may
require:
- proof of age and sex before income payments begin; and
- proof that the payee or joint payee is still alive before we make each
payment.
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<PAGE> 20
- - - --------------------------------------------------------------------------------
INCOME PAYMENT TABLES
- - - --------------------------------------------------------------------------------
The initial income payment will be at least the amount based on the adjusted
age of the annuitant(s) and the tables below, less any federal income taxes
which are withheld. The adjusted age is the actual age on the Payout Start
Date reduced by one year for each six full years between January 1, 1983 and
the Payout Start Date. Income payments for ages and guaranteed payment
periods not shown below will be determined on a basis consistent with that used
to determine those that are shown. The Income Payment Tables are based on 3.0%
interest and the 1983a Annuity Mortality Tables.
INCOME PLAN 1 - LIFE INCOME WITH GUARANTEED PAYMENTS FOR 120 MONTHS
<TABLE>
<CAPTION>
Monthly Income Payment for each $1,000 Applied to this Income Plan
- - - ------------------------------------------------------------------------------------------
Annuitant's Annuitant's Annuitant's
Age Male Female Age Male Female Age Male Female
- - - ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97
36 3.47 3.28 50 4.22 3.88 64 5.66 5.09
37 3.51 3.31 51 4.29 3.94 65 5.80 5.22
38 3.55 3.34 52 4.37 4.01 66 5.95 5.35
39 3.60 3.38 53 4.45 4.07 67 6.11 5.49
40 3.64 3.41 54 4.53 4.14 68 6.27 5.64
41 3.69 3.45 55 4.62 4.22 69 6.44 5.80
42 3.74 3.49 56 4.71 4.29 70 6.61 5.96
43 3.79 3.53 57 4.81 4.38 71 6.78 6.13
44 3.84 3.58 58 4.92 4.46 72 6.96 6.31
45 3.90 3.62 59 5.02 4.55 73 7.13 6.50
46 3.96 3.67 60 5.14 4.65 74 7.31 6.69
47 4.02 3.72 61 5.26 4.75 75 7.49 6.88
48 4.08 3.77 62 5.39 4.86
<CAPTION>
INCOME PLAN 2 - JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS FOR 120 MONTHS
Monthly Income Payment for each $1,000 Applied to this Income Plan
- - - -------------------------------------------------------------------------------------------------
Female Annuitant's Age
Male
Annuitant's
Age 35 40 45 50 55 60 65 70 75
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
</TABLE>
<PAGE> 21
LAST SURVIVOR
MODIFIED SINGLE PREMIUM VARIABLE
LIFE INSURANCE CONTRACT
GLENBROOK LIFE AND ANNUITY COMPANY, A Stock Company, Home Office:
Allstate Plaza, Northbrook, Illinois 60062
(800) 776 - 6978
This Contract is issued in consideration of your application and the receipt of
your initial premium. Glenbrook Life and Annuity Company will pay the benefits
of this Contract, subject to its terms and conditions.
Throughout this Contract, "you" and "your" refer to the Contract's owner(s),
who may be someone other than the Insured(s). "We", "us" and "our" refer to
Glenbrook Life and Annuity Company.
This last survivor modified single premium variable life insurance contract
provides a death benefit payable to the beneficiary upon the death of the last
surviving Insured while this Contract is In Force.
THE DEATH BENEFIT AND CASH VALUE PROVIDED BY THIS CONTRACT ARE BASED ON THE
INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT, AND VARY TO REFLECT THE
PERFORMANCE OF THE VARIABLE ACCOUNT AND OTHER FLEXIBLE FACTORS.
This Contract does not pay dividends.
PLEASE READ YOUR CONTRACT CAREFULLY.
THIS IS A LEGAL CONTRACT BETWEEN THE CONTRACT OWNER(S) AND GLENBROOK LIFE AND
ANNUITY COMPANY.
RETURN PRIVILEGE
If you are not satisfied with this Contract for any reason, you may return it
to us or our agent within 30 days after you receive it. We will refund any
premiums allocated to the Variable Account, adjusted to reflect investment gain
or loss from the date of allocation to the date of cancellation.
Michael J. Velotta Louis G. Lower, II
Michael J. Velotta Louis G. Lower, II
Secretary Chief Executive Officer
Last Survivor
Modified Single Premium Variable Life Insurance Contract
Proceeds Payable upon Death of the Last Surviving Insured
Non-Participating
<PAGE> 22
- - - ------------------------------------------------------------------------------
TABLE OF CONTENTS
- - - ------------------------------------------------------------------------------
CONTRACT DATA.................................. 3
TABLE OF GUARANTEED VALUES..................... 5
DEFINITIONS ................................... 6
GENERAL PROVISIONS ............................ 7
CONTRACT VALUES ............................... 10
LOAN VALUES ................................... 14
WITHDRAWAL BENEFITS ........................... 15
PAYMENT OF PROCEEDS ........................... 16
INCOME PAYMENT TABLES ......................... 17
<PAGE> 23
- - - -------------------------------------------------------------------------------
CONTRACT DATA
- - - -------------------------------------------------------------------------------
<TABLE>
<S> <C>
OWNER:............................................................... John Doe
..................................................................... Jane Doe
INSURED: ............................................................. John Doe
AGE: .............................................................. 45
SEX: .............................................................. Male
RATING CLASSIFICATION: ............................................ Standard
INSURED: ............................................................. Jane Doe
AGE: .............................................................. 45
SEX: .............................................................. Female
RATING CLASSIFICATION: ............................................ Standard
JOINT EQUAL AGE: ........................................................... 45
CONTRACT NUMBER: ................................................. 0123456789
CONTRACT DATE: ................................................. August 1, 1996
INITIAL DEATH BENEFIT: .............................................. $216,014
INITIAL PREMIUM: .................................................... $30,000.00
LOAN CREDITED RATE: ...................................................... 6.00%
PREFERRED LOAN INTEREST RATE: ........................................... 6.00%
MAXIMUM LOAN INTEREST RATE: .............................................. 8.00%
FREE WITHDRAWAL PERCENTAGE: .............................................. 10%
MINIMUM WITHDRAWAL AMOUNT: ............................................... $50.00
MINIMUM TRANSFER AMOUNT: ................................................. $0.00
VARIABLE ACCOUNT: ..........Glenbrook Life A I M Variable Life Separate Account A
</TABLE>
ALLOCATION OF INITIAL PREMIUM:
ALLOCATED
VARIABLE SUB-ACCOUNTS AMOUNT (%)
Capital Appreciation Fund 10%
Diversified Income Fund 10%
Global Utilities Fund 10%
Government Securities Fund 10%
Growth Fund 10%
Growth and Income Fund 10%
International Equity Fund 10%
Value Fund 10%
Money Market Fund 20%
<PAGE> 24
ANNUAL MAINTENANCE FEE (*): ........................................... $35.00
FEDERAL TAX ANNUAL RATE (YEARS 1-10): ................................. 0.15%
PREMIUM TAX ANNUAL RATE (YEARS 1-10): ................................. 0.25%
ADMINISTRATIVE EXPENSE ANNUAL RATE: ................................... 0.25%
MORTALITY AND EXPENSE RISK ANNUAL RATE: ............................... 0.90%
(*) Waived if total premiums paid are in excess of $50,000.
WITHDRAWAL CHARGE AS A PERCENTAGE OF INITIAL PREMIUM
CONTRACT PERCENTAGE OF INITIAL
YEAR PREMIUM WITHDRAWN
1 7.75%
2 7.75%
3 7.75%
4 7.25%
5 6.25%
6 5.25%
7 4.25%
8 3.25%
9 2.25%
10+ 0.00%
DUE AND UNPAID PREMIUM TAX CHARGE UPON WITHDRAWAL
AS A PERCENTAGE OF INITIAL PREMIUM
CONTRACT PERCENTAGE OF INITIAL
YEAR PREMIUM WITHDRAWN
1 2.25%
2 2.00%
3 1.75%
4 1.50%
5 1.25%
6 1.00%
7 0.75%
8 0.50%
9 0.25%
10+ 0.00%
RELATIONSHIP
BENEFICIARY TO INSURED PERCENTAGE
- - - ----------- ------------ ----------
Jack Doe Son 100%
RELATIONSHIP
CONTINGENT BENEFICIARY TO INSURED PERCENTAGE
- - - ---------------------- ---------- ----------
Nancy Doe Sister 100%
Page 4
<PAGE> 25
- - - --------------------------------------------------------------------------------
DEFINITIONS
- - - --------------------------------------------------------------------------------
When we use the following words, this is what we mean:
ACCOUNT VALUE The sum of the Accumulated Values of the Variable Sub-accounts
and the Loan Account.
AGE The individual ages of the Insureds at their last birthday.
CASH SURRENDER VALUE The Cash Value less all Indebtedness, less the Annual
Maintenance Fee, if applicable.
CASH VALUE The Account Value less any applicable Withdrawal Charges and due
and unpaid Premium Tax Charges.
CONTRACT ANNIVERSARY The same day and month as your Contract Date for each
subsequent year your Contract remains In Force.
CONTRACT DATE The date from which contract anniversaries, contract years, and
contract months are determined. Coverage shall become effective on the date
the full Initial Premium has been paid when:
- - - - the application has been approved by us;
- - - - the Contract has been accepted by you; and
- - - - the full Initial Premium has been paid while the Insured is alive.
IN FORCE Either Insureds' life is insured under the terms of this Contract.
INDEBTEDNESS All contract loans, if any, and accrued loan interest.
INSURED, INSUREDS The persons whose lives are insured under this Contract as
shown on page 3.
JOINT EQUAL AGE The adjusted, combined age for the Insureds determined from
each individual insured's issue age and sex. The Joint Equal Age is shown on
page 3.
LOAN ACCOUNT An Account established for any amounts transferred from the
Variable Sub-accounts as a result of loans. The Loan Account is credited with
interest and is not based on the experience of any Separate Account.
MONTHLY ACTIVITY DATE The same day of each month as the Contract Date. If
there is no Monthly Activity Date in a calendar month, the Monthly Activity
Date will be the last day of the current calendar month.
PROCEEDS The amount we are obligated to pay under the terms of this Contract
when your Contract is surrendered or when all Insureds have died.
SECOND DEATH The death of the last surviving Insured.
SPECIFIED AMOUNT The Specified Amount equals the Initial Death Benefit on the
Contract Date. Thereafter, it may change in accordance with the terms of the
Partial Withdrawal provision and the Subsequent Premium provision.
TERMINATE The Insureds' lives are no longer insured under any of the terms of
this Contract.
VARIABLE ACCOUNT The "Variable Account" for this contract is that shown on
page 3. This account is a separate investment account to which we allocate
assets contributed under this and certain other contracts.
VARIABLE SUB-ACCOUNTS The Variable Account is divided into Variable
Sub-accounts. Each Variable Sub-account invests solely in the shares of the
mutual fund underlying that Variable Sub-account.
WRITTEN REQUEST A request in writing signed by you on a form agreeable to us.
WE, US, OUR Refers to Glenbrook Life and Annuity Company.
Page 5
<PAGE> 26
YOU, YOUR The owners of this Contract as shown in the application, unless
subsequently changed. The owners are the Insureds unless otherwise stated.
Page 6
<PAGE> 27
GENERAL PROVISIONS
- - - ------------------
THE CONTRACT Your Contract is issued in consideration of the application and
the payment of the Initial Premium.
Your Contract, any riders and endorsements, the application, and any
supplemental applications are the entire contract between you and us. A copy
of the application is included. Any supplemental applications will also be
attached to and made a part of the Contract. Any statements made in the
application and any supplemental applications either by you or by the Insureds
will, in the absence of fraud, be considered representations and not
warranties. Also, any written statement made either by you or by the Insureds
will not be used to void your Contract nor defend against a claim under your
Contract unless the statement is contained in the application or any
supplemental applications.
Only our officers may change the Contract or waive a right or requirement. No
agent or other person may do this.
SUICIDE EXCLUSION If either Insured dies by suicide while sane or
self-destruction while insane within two years from the Contract Date, our
liability will be limited to an amount equal to the premiums paid less any
Indebtedness and Partial Withdrawals, and the Contract will Terminate. If
either Insured dies by suicide while sane or self-destruction while insane
within two years of the effective date of any increase in Specified Amount, our
liability with respect to the increase will be limited to the additional
premiums paid, less Indebtedness and Partial Withdrawals, and the Contract will
Terminate.
INCONTESTABILITY We cannot contest this Contract after it has been In Force
during the lifetime of either Insured for two years after the Contract Date.
Any increase in the Specified Amount for which evidence of insurability was
obtained will be incontestable only after the increase has been In Force,
during the lifetime of either Insured, for two years from the effective date of
the increase.
ASSIGNMENT You may not assign an interest in this Contract as collateral or
security for a loan.
REINSTATEMENT Prior to the death of either Insured and if this Contract has
not been surrendered for cash, this Contract may be reinstated provided:
- - - - you make your request within five years of the date the Contract entered a
Grace Period;
- - - - satisfactory evidence of insurability for both Insureds is submitted;
- - - - any Indebtedness is repaid; and
- - - - sufficient premium is paid to:
cover all Monthly Deduction Amounts and Annual Maintenance Fee due and
unpaid during the Grace Period, and
keep the Contract In Force for three months after the date of
reinstatement.
The Specified Amount of the reinstated Contract cannot exceed the Specified
Amount at the time of lapse. The Account Value on the reinstatement date will
reflect:
- - - - the Account Value at the time of Termination; and
- - - - premiums paid at the time of reinstatement.
Withdrawal Charges will continue to be based on the original Contract Date.
EXCHANGE OPTION If this Contract is In Force, you may exchange it during the
first two years after the Contract Date for a permanent last survivor life
insurance contract offered by us. We reserve the right to make available a
permanent last survivor life insurance contract offered by our parent Company
or any affiliated Company on the lives of the Insureds without evidence of
insurability. The new Contract will be issued:
- - - - with a net amount at risk equal to or less than the net amount at risk in
effect on the date of exchange;
- - - - with premiums based on the same risk classification as this Contract.
Page 7
<PAGE> 28
The net amount at risk is equal to the Specified Amount less the Account Value
of the Contract on the date of exchange. This exchange is subject to
adjustments in premiums and Account Values to reflect any variances under this
Contract and the new contract.
MISSTATEMENT OF AGE OR SEX If the age or sex of either Insured has been
misstated, any Proceeds will be adjusted to the amount which the Initial
Premium and any Subsequent Premium Payments would have purchased at the Joint
Equal Age calculated using the correct age and sex.
BENEFICIARY When we receive due proof of the Second Death, we will pay the
Proceeds of this Contract to the beneficiary or beneficiaries who are named in
the application for this Contract unless you subsequently change the
beneficiary. In that event, we will pay the Proceeds to the beneficiary named
in your last change of beneficiary request as provided for in this Contract.
If a primary or contingent beneficiary dies before the last surviving Insured,
that beneficiary's interest in this Contract ends with that beneficiary's
death. Only those beneficiaries who survive the last surviving Insured will be
eligible to share in the Proceeds. If no beneficiary survives the Insureds, we
will pay the Proceeds of this Contract to you, if living, otherwise to your
estate.
CHANGE OF OWNER OR BENEFICIARY If you have reserved the right to change the
owner or beneficiary, you can file a written request with us to make such a
change. If you have not reserved the right to change the beneficiary, the
written consent of the irrevocable beneficiary(s) will be required.
Your written request will not be effective until it is recorded in our home
office records. After it has been recorded, it will take effect as of the date
you signed the request. However, if both Insureds die before the request has
been recorded, the request will not effect those Proceeds we may have paid
before your request was recorded in our home office records.
LIFE INSURANCE QUALIFICATION This Contract is intended to qualify for
treatment as a life insurance contract under the Internal Revenue Code as it
now exists or may later be amended. We reserve the right to amend this
Contract to comply with future changes in the Code and its Regulations. We
will promptly provide you with a copy of any amendment.
TAXATION Currently, no charge is made to the Variable Account for federal
income taxes that may be attributable to the operations of the Variable
Account. However, the Company may make such a charge in the future. Charges
for other taxes, if any, attributable to the Variable Account or this class of
Contracts may also be made.
VARIABLE ACCOUNT The "Variable Account" for this contract is that shown on
page 3. This account is a separate investment account to which we allocate
assets contributed under this and certain other life insurance contracts.
We will have exclusive and absolute ownership and control of the assets of our
separate accounts. The assets of the Variable Account will be available to
cover the liabilities of our general account only to the extent those assets
exceed the liabilities of that Variable Account arising under the variable life
insurance contracts supported by that Variable Account.
The assets of the Variable Account will be valued at least as often as any
contract benefits vary, but at least monthly. Our determination of the value
of an Accumulation Unit by the method described in this policy will be
conclusive.
VARIABLE ACCOUNT MODIFICATIONS We reserve the right, subject to applicable
law, to make additions to, deletions from, or substitutions for the mutual fund
shares underlying the Variable Sub-accounts of the Variable Account. We will
not substitute any shares attributable to your interest in a Variable
Sub-account of the Variable Account without notice to you and prior approval of
the Securities and Exchange Commission, to the extent required by the
Investment Company Act of 1940.
We reserve the right to establish additional Variable Sub-accounts of the
Variable Account, each of which would invest in shares of another mutual fund.
You may then instruct us to allocate premiums paid or transfers to such
Variable Sub-accounts, subject to any terms set by us or the mutual fund. In
the event of any such substitution or change, we may by endorsement, make such
changes as may
Page 8
<PAGE> 29
be necessary or appropriate to reflect such substitution or change.
If we deem it to be in the best interests of persons having voting rights under
these Contracts, the Variable Account may be operated as a management company
under the Investment Company Act of 1940 or it may be deregistered under such
Act in the event such registration is no longer required.
NONPARTICIPATING This Contract will not share in our surplus distributions.
TERMINATION This Contract will Terminate upon the earliest of the following
events:
- - - - full surrender of the Contract; or
- - - - the end of the Grace Period; or
- - - - the Second Death.
Page 9
<PAGE> 30
- - - --------------------------------------------------------------------------------
CONTRACT VALUES
- - - --------------------------------------------------------------------------------
INITIAL PREMIUM PAYMENT The Initial Premium is due by the Contract Date and
must be paid in advance. This Contract will not be in effect and there will be
no Death Benefit before the Initial Premium is paid. Your Initial Premium is
shown on page 3.
SUBSEQUENT PREMIUM PAYMENTS Subsequent Premium Payments may be made at any
time subject to the following conditions:
- - - - only one Subsequent Premium Payment may be made in any Contract year;
- - - - each Subsequent Premium Payment must be at least $500; and
- - - - the attained Joint Equal Age of the Insureds must be less than age 86.
We reserve the right to obtain evidence of insurability upon all Subsequent
Premium Payments. Subsequent Premium Payments may require an increase in
Specified Amount to remain within the definition of a life insurance contract
under the Internal Revenue Code.
Unless you request otherwise in writing, any Subsequent Premium Payment
received while a Contract Loan exists will be applied:
- - - - first, as a repayment of Indebtedness; and
- - - - second, as a Subsequent Premium Payment, subject to the preceding
conditions.
Subsequent Premium Payments may be made at any time and in any amount necessary
to avoid termination of this Contract.
PREMIUM ALLOCATION The Initial Premium will be allocated to the Variable
Sub-accounts, in whole percentages according to the premium allocation
specified on the application, on the date we receive the final requirement to
put the Contract In Force.
All premium payments not requiring underwriting will be allocated to the
Variable Sub-accounts as of the date payments are received at our home office.
Premium payments requiring underwriting will be allocated to the Variable
Sub-accounts once underwriting approval is received. Upon underwriting
approval, an amount equal to the Accumulated Value which would have been earned
had the premium been invested in the Money Market Sub-account since the date of
receipt of the premium, will be allocated according to the Initial Premium
allocation specified on the application or your most recent written
instructions.
You may change your premium allocation upon written request.
GRACE PERIOD This contract will Terminate 61 days after a Monthly Activity
Date on which the Cash Surrender Value is less than zero. This 61 day period
is the Grace Period. The Company will notify the Owner of the premium amount
required to continue this Contract, at least 61 days before the end of the
Grace Period. The premium required will be no greater than an amount required
to pay three Monthly Deduction Amounts as of the day the Grace Period began.
If this premium is not paid by the end of the Grace Period, this Contract will
Terminate.
TRANSFERS Upon request and as long as this Contract is In Force, you may
transfer amounts among the Variable Sub-accounts. You may make 12 transfers
each Contract year without charge. Subsequent transfers in any Contract year
may be assessed a $10 transfer fee. The minimum amount that may be transferred
among Variable Sub-accounts is subject to the Minimum Transfer Amount shown on
page 3.
We reserve the right to waive the transfer fees and restrictions contained in
this contract.
ACCUMULATION UNIT AND ACCUMULATION UNIT VALUE Amounts which you allocate to a
Variable Sub-account of the Variable Account are used to purchase Accumulation
Units in that Variable Sub-account. The Accumulation Unit Value for each
Variable Sub-account at the end of any Valuation
Page 10
<PAGE> 31
Period is calculated by multiplying the Accumulation Unit Value at the end of
the immediately preceding Valuation Period by the Variable Sub-account's Net
Investment Factor for the Valuation Period. The Accumulation Unit Values may
go up or down. Additions or transfers to a Variable Sub-account of the
Variable Account will increase the number of Accumulation Units for that
Variable Sub-account. Withdrawals, Transfers, Contract Loans, Monthly
Deduction Amounts and Annual Maintenance Fees deducted from a Variable
Sub-account of the Variable Account will decrease the number of Accumulation
Units for that Variable Sub-account.
The number of Accumulation Units to be added to or deducted from a Variable
Sub-account equals the dollar amount of the transaction divided by the
Accumulation Unit Value for the Valuation Period.
VALUATION PERIOD AND VALUATION DATE A "Valuation Period" is the time interval
between the close of regular trading of the New York Stock Exchange on
consecutive Valuation Dates. A "Valuation Date" is any date the New York Stock
Exchange is open for trading.
NET INVESTMENT FACTOR For each Variable Sub-account of the Variable Account,
the "Net Investment Factor" for a Valuation Period is (A) divided by (B), minus
(C) where:
(A) is the sum of:
1. the net asset value per share of the mutual fund underlying the
Variable Sub-account determined as of the end of the current Valuation Period;
plus
2. the per share amount of any dividend or capital gain distributions made
by the mutual fund underlying the Variable Sub-account during the current
Valuation Period.
(B) is the net asset value per share of the mutual fund underlying the Variable
Sub-account determined as of the end of the immediately preceding Valuation
Period.
(C) is the Mortality and Expense Risk Annual Rate divided by 365 and multiplied
by the number of calendar days in the current Valuation Period.
The Mortality and Expense Risk Annual Rate is shown on page 4.
ACCOUNT VALUE Your Account Value on the Contract Date equals the Initial
Premium less the Monthly Deduction Amount for the first policy month. Your
Account Value on each subsequent Monthly Activity Date equals:
- - - - the sum of your Accumulated Values in each Variable Sub-account; plus
- - - - the value of your Loan Account, if any; minus
- - - - the Monthly Deduction Amount; minus
- - - - the Annual Maintenance Fee, if applicable.
On any day other than your Monthly Activity Date, your Account Value equals:
- - - - the sum of your Accumulated Values in each Variable Sub-account; plus
- - - - the value of your Loan Account, if any.
ACCUMULATED VALUE Your Accumulated Value in any Variable Sub-account equals:
- - - - the number of Accumulation Units in that Variable Sub-account on the
Valuation Day; multiplied by
- - - - that Variable Sub-account's Accumulation Unit Value on the Valuation Day.
MONTHLY DEDUCTION AMOUNT The Monthly Deduction Amount will be taken
proportionately from your Variable Sub-accounts on each Monthly Activity Date,
and is equal to:
- - - - the Cost of Insurance Charge; plus
- - - - the Administrative Expense Charge; plus
- - - - the Tax Expense Charge.
COST OF INSURANCE CHARGES The Maximum Cost of Insurance charge for any Monthly
Activity Date is
Page 11
<PAGE> 32
equal to:
- - - - the Death Benefit; minus
- - - - the Account Value on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount; the result is divided by 1000 and multiplied by
- - - - the Maximum Annual Cost of Insurance Rate divided by 12.
We can use Cost of Insurance Charges that are lower than the Maximum Annual
Cost of Insurance shown on page 5. Charges will be determined based on our
expectation as to future experience. Any change we make will be on a uniform
basis for all Insureds with the same age, sex, and rating classification whose
coverage has been In Force for the same length of time. No change in rating
classification or cost will occur on account of deterioration of the Insureds'
health.
ADMINISTRATIVE EXPENSE CHARGE The Administrative Expense Charge for any
Monthly Activity Date is equal to:
- - - - the Administrative Expense Annual Rate divided by 12; multiplied by
- - - - the Account Value on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount.
The Administrative Expense Annual Rate is shown on page 4.
TAX EXPENSE CHARGE The Tax Expense Charge for any Monthly Activity Date
occurring during the first ten years of the Contract is an amount not greater
than:
- - - - the Tax Expense Rate divided by 12; multiplied by
- - - - the Account Value on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount.
The Tax Expense Rate is the sum of the Federal Tax Annual Rate and the Premium
Tax Annual Rate shown on page 4. If you surrender or withdraw from this
Contract within nine years of the Contract Date, any due and unpaid Premium Tax
shown on page 4 will be deducted from your Account Value.
ANNUAL MAINTENANCE FEE An Annual Maintenance Fee shown on page 4 will be
deducted proportionately from all Variable Sub-accounts if applicable on each
Contract Anniversary. A full Annual Maintenance Fee will be deducted if the
Contract is Terminated on any day other the Contract Anniversary. This fee
will be waived if total premiums paid are in excess of those shown on page 4.
ANNUAL REPORT We will send you, at least once a year, an Annual Report which
provides information on the current status of your Contract. This information
will include items such as;
- - - - the current Death Benefit;
- - - - the current Account Value and Cash Surrender Value;
- - - - any amount of Indebtedness;
- - - - any Monthly Deductions since the last report;
- - - - any Partial Withdrawals and Withdrawal Charges since the last report;
- - - - any Subsequent Premium Payment since the last report; and
- - - - any Annual Maintenance Fee, if applicable, since the last report.
If you ask us, we will send you an additional report, at any time during the
Contract year. We may charge you for this report. The charge will not be more
than $25. We will tell you what the current charge is before sending the
report. We will send you any shareholder reports of the Funds or any other
notices, reports or documents required by law.
SPECIFIED AMOUNT The Specified Amount equals the Initial Death Benefit on the
Contract Date. The Initial Death Benefit for your Contract is shown on page 3.
If a Partial Withdrawal is taken or a Subsequent Premium Payment is received,
the Specified Amount will change as described in the Partial Withdrawal
provision and the Subsequent Premium Payment provision. If your Specified
Amount changes, we will send you an endorsement showing the new Specified
Amount.
Page 12
<PAGE> 33
DEATH BENEFIT The Death Benefit determined on the date of the Second Death is
the greater of the Specified Amount or the Account Value multiplied by the
Death Benefit Ratio on page 5. We will pay the Death Benefit, less any
Indebtedness and less any due and unpaid Monthly Deduction Amounts occurring
during a Grace Period, if the Second Death occurs while this Contract is In
Force, subject to the terms of this Contract. Written due proof that both
Insureds have died must be received at our home office prior to paying a Death
Benefit. Due proof of the first Insured's death should be furnished to us at
the time of such death.
INTEREST FROM DATE OF DEATH If the Proceeds under this Contract are not paid
within thirty days after we receive due proof of the Second Death, we will also
pay interest on the Proceeds. Interest will accrue at the legal rate of
interest and will accrue from the date of death until the claim is paid.
Page 13
<PAGE> 34
- - - --------------------------------------------------------------------------------
LOAN VALUES
- - - --------------------------------------------------------------------------------
CONTRACT LOAN At any time while this Contract is In Force, you can borrow up
to the available Loan Value of your Contract. The maximum Loan Value is 90% of
your Cash Value, less 100% of any existing loans as of the date of the loan,
less any loan interest to the next Contract Anniversary, less any Monthly
Deduction Amounts due and any Annual Maintenance Fee due on or before the next
Contract Anniversary. Unless you specify otherwise, all loan amounts will be
transferred proportionately from the Variable Sub-accounts to the Loan Account.
Loans have priority over the claims of any other person. Your Contract is the
sole security for all loans.
PREFERRED LOAN If the Account Value exceeds the total premiums paid, net of
any premiums returned due to Partial Withdrawals, a Preferred Loan is
available. The amount available for a Preferred Loan is the amount by which
the Cash Value exceeds the net premiums paid. The amount of loans qualifying
as Preferred Loans is determined on each Contract Anniversary.
CREDITED INTEREST The Loan Account will be credited with interest at a rate
equal to the Loan Credited Rate shown on page 3.
LOAN INTEREST For Preferred Loans, interest will accrue daily by a rate not to
exceed the Preferred Loan Interest Rate shown on page 3. For other than
Preferred Loans, interest will accrue daily by a rate not to exceed the Maximum
Loan Interest Rate shown on page 3. Interest payments are due on the Contract
Anniversary. If unpaid, interest is added to the amount of the loan and will
itself bear interest at the rate described in this provision. On each Contract
Anniversary, the difference between the total indebtedness and the balance in
the Loan Account will be transferred proportionately from the Variable
Sub-accounts to the Loan Account.
LOAN REPAYMENT You can repay all or part of a loan and loan interest at any
time while this Contract is In Force. The loan repayment will be allocated
among the Variable Sub-accounts in the same percentage as premiums are
allocated, unless you specify otherwise. If you do not repay your loans, we
will deduct all loans and loan interest from the amounts we pay you.
LOAN LIMIT Your Contract will become overloaned when loans and loan interest
exceed the Cash Value. We will Terminate this Contract when it becomes
overloaned. We will not Terminate a contract which becomes overloaned until 61
days after notice has been mailed to the last known address of the owner.
Page 14
<PAGE> 35
- - - --------------------------------------------------------------------------------
WITHDRAWAL BENEFITS
- - - --------------------------------------------------------------------------------
CASH SURRENDER VALUE You may surrender your Contract for its Cash Surrender
Value which may be paid in cash or under an Income Plan.
Your Cash Surrender Value is equal to:
- - - - the Cash Value; less
- - - - any Indebtedness; less
- - - - the Annual Maintenance Fee, if applicable.
Your Cash Value is equal to:
- - - - the Account Value; less
- - - - any applicable Withdrawal Charge; less
- - - - any due and unpaid Premium Tax Charge.
Surrender will be effective on the date we receive written request. We may
require that your Contract be sent in with your written request before making a
surrender payment. When you surrender your Contract for its Cash Surrender
Value, your Contract will Terminate.
PARTIAL WITHDRAWALS You may withdraw a portion of the Cash Surrender Value.
The withdrawal amount must be at least the Minimum Withdrawal Amount shown on
page 3 and must not cause the Cash Surrender Value after the withdrawal to be
less than $2,000. If the remaining Cash Surrender Value is less than $2,000,
we will Terminate the Contract and pay the Cash Surrender Value.
Unless specified otherwise, the Partial Withdrawal amount will be deducted
proportionately from each Variable Sub-account. The new Specified Amount of
the Contract will be the greater of:
- - - - the Specified Amount prior to the Partial Withdrawal, reduced
proportionately to the reduction in Account Value; or
- - - - the minimum Specified Amount allowed by the Internal Revenue Code to still
be considered life insurance.
The Account Value after a Partial Withdrawal is equal to the Account Value
before the Partial Withdrawal less the Partial Withdrawal Amount, including the
Withdrawal Charge and any due and unpaid Premium Tax Charge.
FREE WITHDRAWAL AMOUNT The annual Free Withdrawal Amount is equal to:
- - - - the Free Withdrawal Percentage shown on page 3, multiplied by
- - - - the total premiums paid.
Any Free Withdrawal Amount not taken during a Contract year may not be carried
forward to increase the Free Withdrawal Amount in any subsequent year. You may
withdraw the Free Withdrawal Amount in any Contract year without incurring a
Withdrawal Charge or Premium Tax Charge.
WITHDRAWAL CHARGES Withdrawals in excess of the Free Withdrawal Amount will be
subject to a Withdrawal Charge and any due and unpaid Premium Tax Charge. The
Withdrawal Charge and any due and unpaid Premium Tax Charge are equal to:
- - - - the percentages shown on page 4 for the Contract year in which the
withdrawal or surrender occurs; multiplied by
- - - - the portion of the withdrawal amount in excess of the Free Withdrawal
Amount.
In any event, your Withdrawal Charges will never be more than 9% of your total
premiums paid.
Page 15
<PAGE> 36
- - - --------------------------------------------------------------------------------
PAYMENT OF PROCEEDS
- - - --------------------------------------------------------------------------------
DEFERMENT OF PAYMENTS We will pay any amounts due from the Variable Account
under this Contract within seven days of receiving a written request for a
Transfer, Contract Loan, Termination, Partial Withdrawal, or Death Benefit, as
well as, any other required documentation, unless:
- - - - the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on such Exchange is restricted;
- - - - an emergency exists as defined by the Securities and Exchange Commission;
or
- - - - the Securities and Exchange Commission permits delay for the protection of
contract holders.
PAYEE RIGHTS You will be the payee for the Cash Surrender Value unless you
name a different payee. The beneficiary will be the payee for the death
Proceeds. When we pay the Proceeds, we may ask that you give this Contract
back to us. If the Insureds have died, you or the beneficiary must give us due
proof of death.
You may choose payment as a single payment or an Income Plan. Before the
Proceeds are due, you may choose or change an Income Plan selection by writing
to us. Once we accept the change, it takes effect as of the date you signed
the request. This change is subject to any action we take before we accept it.
After the Proceeds are due, the payee may choose an Income Plan if:
- - - - you have not made a prior choice which is still in effect; and
- - - - the Proceeds are due in a single sum and have not been paid.
No surrender or Partial Withdrawals are permitted after payments under an
Income Plan have started.
PAYOUT START DATE The Payout Start Date is the date the Cash Surrender Value
or Death Benefit is applied to an Income Plan.
INCOME PLANS An Income Plan is a series of payments on a scheduled basis to
the payee. The Proceeds will be applied to your Income Plan choice from the
following list:
1. LIFE INCOME WITH GUARANTEED PAYMENTS We will make payments for as long
as the payee lives. If the payee dies before the selected number of
guaranteed payments have been made, we will continue to pay the remainder
of the guaranteed payments.
2. JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS We will make
payments for as long as either the payee or joint payee, named at the time
of Income Plan selection, lives. If both the payee and the joint payee
die before the selected number of guaranteed payments have been made, we
will continue to pay the remainder of the guaranteed payments.
We reserve the right to make available other Income Plans.
PAYOUT TERMS AND CONDITIONS The income payments are subject to the following
terms and conditions:
- - - - If the Proceeds are less than $3,000, or not enough to provide an initial
payment of at least $20, we reserve the right to:
- change the payment frequency to make the payment at least $20; or
- Terminate the Contract and pay you the Proceeds in a lump sum.
- - - - If you choose an Income Plan which depends on any person's life, we may
require:
- proof of age and sex before income payments begin; and
- proof that the payee or joint payee is still alive before we make each
payment.
Page 16
<PAGE> 37
- - - --------------------------------------------------------------------------------
INCOME PAYMENT TABLES
- - - --------------------------------------------------------------------------------
The initial income payment will be at least the amount based on the adjusted
age of the annuitant(s) and the tables below, less any federal income taxes
which are withheld. The adjusted age is the actual age on the Payout Start
Date reduced by one year for each six full years between January 1, 1983 and
the Payout Start Date. Income payments for ages and guaranteed payment periods
not shown below will be determined on a basis consistent with that used to
determine those that are shown. The Income Payment Tables are based on 3.0%
interest and the 1983a Annuity Mortality Tables.
<TABLE>
<CAPTION>
INCOME PLAN 1 - LIFE INCOME WITH GUARANTEED PAYMENTS FOR 120 MONTHS
- - - ------------------------------------------------------------------------------------------------------------
Monthly Income Payment for each $1,000 Applied to this Income Plan
- - - ------------------------------------------------------------------------------------------------------------
Annuitant's Annuitant's Annuitant's
Age Male Female Age Male Female Age Male Female
- - - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.43 $3.25 49 $4.15 $3.82
36 3.47 3.28 50 4.22 3.88 63 $5.52 $4.97
37 3.51 3.31 51 4.29 3.94 64 5.66 5.09
38 3.55 3.34 52 4.37 4.01 65 5.80 5.22
39 3.60 3.38 53 4.45 4.07 66 5.95 5.35
40 3.64 3.41 54 4.53 4.14 67 6.11 5.49
41 3.69 3.45 55 4.62 4.22 68 6.27 5.64
42 3.74 3.49 56 4.71 4.29 69 6.44 5.80
43 3.79 3.53 57 4.81 4.38 70 6.61 5.96
44 3.84 3.58 58 4.92 4.46 71 6.78 6.13
45 3.90 3.62 59 5.02 4.55 72 6.96 6.31
46 3.96 3.67 60 5.14 4.65 73 7.13 6.50
47 4.02 3.72 61 5.26 4.75 74 7.31 6.69
48 4.08 3.77 62 5.39 4.86 75 7.49 6.88
</TABLE>
<TABLE>
<CAPTION>
INCOME PLAN 2 - JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS FOR 120 MONTHS
- - - --------------------------------------------------------------------------------------------
Monthly Income Payment for each $1,000 Applied to this Income Plan
- - - --------------------------------------------------------------------------------------------
Female Annuitant's Age
------------------------------------------------------------------------------
Male
Annuitant's
Age 35 40 45 50 55 60 65 70 75
- - - --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
</TABLE>
<PAGE> 1
Exhibit 1.(10)
Form of Application for Contract
<PAGE> 2
AIM LIFETIME PLUS (SM) SINGLE PREMIUM VARIABLE LIFE
This is a modified Single Premium Variable Life Policy issued by: Glenbrook
Life and Annuity Company
PO Box 94039, Palatine, IL 60094-4039 - Telephone #800-776-6978 FAX
847-402-9543
Mail check (payable to) and application to: Glenbrook Life and Annuity Company
- - - - PO Box 227317 - Dallas, TX 75222-7317
Send overnight mail to: Glenbrook Life and Annuity Company - 8711 North
Freeport Parkway - Irving, TX 75063
<TABLE>
<S><C>
1 INSURED(S) Name John Michael Doe [ X ] M [ ] F Birthdate 6/1 /50
Address 123 Main St. Anytowm XX XXXXX
Soc. Sec. No. 987-65-4321 Phone No. (111)111-1111
Name Jane Mary Doe [ ] M [ X ] F Birthdate 10/1 /50
Address 123 Main St. Anytown XX, XXXXX
Soc. Sec. No. 123-45-6789 Phone No. (111)111-1111
- - - ------------------------------------------------------------------------------------------------------------------------------------
2 OWNER Name [ ] M [ ] F Birthdate _____ / _____ / ____
Leave blank if Insured is same as ----------------------------------
Owner. If more than one owner, Address
attach a separate page -------------------------------------------------------------------------------------
Street City State Zip
Soc. Sec. No. Relationship to Insured(s)
---------------------------- ------------------------
- - - ------------------------------------------------------------------------------------------------------------------------------------
3 BENEFICIARY(IES) Name Jack Doe Relationship to Owner Son Percentage 50%
Leave blank if Spouse Name Nancy Doe Relationship to Owner Sister Percentage 50%
of sole Owner
- - - ------------------------------------------------------------------------------------------------------------------------------------
4 PURCHASE INITIAL PURCHASE PAYMENT $30,000 Initial Death Benefit $216,014
PAYMENT/ INVESTMENT ALLOCATION (WHOLE % ONLY, NO FRACTIONS)
PLAN OPTIONS AIM V.I. FUNDS
[ X ] Capital Appreciation Fund 40 % [ ] Growth and Income Fund.........%
[ ] Diversified Income Fund......% [ ] International Equity Fund......%
[ ] Global Utilities Fund........% [ X ] Money Market Fund............20%
[ X ] Government Securities Fund 40% [ ] Value Fund.....................%
[ ] Growth Fund..................% Total.............................100%
- - - ------------------------------------------------------------------------------------------------------------------------------------
MEDICAL HISTORY
(Questions below refer to anyone proposed for this insurance.) Yes No
5 Has anyone proposed for this insurance used any tobacco or nicotine products in
the past 24 months? .......................................................[ ] [ X ]
6 Has anyone proposed for this insurance been:
a. Hospitalized or surgically treated within the last 2 years for heart
attack, chest pain or disorder of the heart? [ ] [ X ]
b. Treated within the last 5 years or told they have cancer (other than
skin cancer, excluding melanoma)? [ ] [ X ]
c. Diagnosed or treated by a member of the medical profession for: stroke
or other cerebrovascular disorder, diabetes treated with insulin,
kidney disorder (not to include bladder or prostate), Alzheimer's
disease or other disorder of the brain or nervous system, liver
disorder, organ transplant, or sought or received
treatment or advice for alcohol or drug use? ...........................[ ] [ X ]
d. Has the proposed insured tested positive for exposure to the HIV
infection or been diagnosed as having ARC or AIDS caused by the
HIV infection? .........................................................[ ] [ X ]
7 Has anyone proposed for this insurance been:
a. Diagnosed with or treated within the last 10 years for: heart disorder
or irregular heart beat, blood pressure treated with medication,
vascular or circulatory disorder, fainting spells, emphysema or other
chronic lung or respiratory disorder, cancer (other than skin
cancer, excluding melanoma), diabetes, Crohn's disease,
regional enteritis, ulcerative colitis? ................................[ ] [ X ]
b. Unable to work or perform regular activities for more than 7
consecutive days within the past 6 months because of sickness or
injury? ................................................................[ ] [ X ]
8 Within the last 5 years, has anyone proposed for this insurance had
surgery or been advised to have any diagnostic test, hospitalization,
or surgery which was not
completed? ................................................................[ ] [ X ]
9 Provide full details here for Questions 6, 7, and 8 answered "Yes":
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
AIM LIFETIME PLUS (SM) SINGLE PREMIUM VARIABLE LIFE
This is a modified Single Premium Variable Life Policy issued by: Glenbrook
Life and Annuity Company
PO Box 94039, Palatine, IL 60094-4039 Telephone #800-776-6978 FAX
847-402-9543
Mail check (payable to) and application to: Glenbrook Life and Annuity Company
PO Box 227317 Dallas, TX 75222-7317
Send overnight mail to: Glenbrook Life and Annuity Company 8711 North
Freeport Parkway Irving, TX 75063
<TABLE>
<S> <C> <C> <C>
10 Will this policy replace or change any pending or existing life
insurance policy or annuity policy? [ ] Yes [ X ] No
-----------------------------------------
If yes, please list company name Policy Number
------------------------------- ------------------------------
</TABLE>
11 I HAVE READ THIS APPLICATION, AND I DECLARE THAT ALL ANSWERS WRITTEN
ON THIS APPLICATION ARE FULL AND CORRECT TO THE BEST OF MY KNOWLEDGE
AND BELIEF. I ALSO UNDERSTAND THAT:
a. FOR APPLICANTS IN FLORIDA: Any person who knowingly and with
intent to injure, defraud, or deceive any insurer files a
statement of claim or an application containing any false,
incomplete, or misleading information is guilty of a felony of
the third degree.
b. FOR APPLICANTS IN OHIO: Any person who knowingly and with
intent to defraud any insurance company or other person files an
application for insurance or statement of claim containing any
materially false information or conceals for the purpose of
misleading information concerning any fact material thereto
commits a fraudulent insurance act, which is a crime and
subjects such person to criminal and civil penalties.
c. This Application shall be a part of any insurance policy issued
by Glenbrook.
d. Glenbrook has the right to require a medical exam, test, or
other information on the person proposed for this insurance.
e. Any changes are agreed to if the policy issued is accepted, but
written agreement will be obtained from me for any changes, in
insurance amount, rating class or age at issue. (In Idaho,
Kentucky, and West Virginia, written agreement will be obtained
for any changes.)
f. Insurance will start only as provided in the Receipt and
Temporary Insurance Agreement issued in connection with this
Application. If no receipt is issued, or if insurance under it
has stopped and not started again, no insurance will start by
reason of this Application until the policy is delivered and the
payment is accepted by Glenbrook. In this case insurance will
start on the date shown in the policy, except that no insurance
will start on the start date of the policy if the health of the
person proposed for this insurance is not as described in this
Application.
g. Only an officer of Glenbrook may change this Application or
waive a right or requirement. No agent may do this.
h. By signing this Application, the named Owner
certifies under penalties of perjury that: 1) the Social
Security Number shown on Question 1 of this Application is
correct, and 2) that I am not subject to backup withholding
either because I have not been notified that I am subject to
backup withholding as a result of a failure to report all
interest or dividends, or the Internal Revenue Service has
notified me that I am no longer subject to backup withholding.
(If you are subject to backup withholding, cross out item 2
above.)
i. I understand the Death Benefit, Cash Surrender
Value and Account Value may increase or decrease in accordance
with the investment experience of the Separate Account. I have
received the current prospectus for this variable life product.
I believe that this variable product is consistent with my
insurance needs and financial objectives.
PLEASE REVIEW ALL INFORMATION BEFORE SIGNING.
John Doe
Date 1 13 97 ------------------------------
----- / ----- / ----- Signature of Proposed Insured
Jane Doe
---------------------------------------- -------------------------------
Signature of Owner if Other Than Insured Signature of Proposed Co-Insured
12 AGENT INFORMATION
AND SIGNATURE
BY SIGNING THIS APPLICATION, AS THE WRITING AGENT I CERTIFY THAT TO THE BEST
OF MY KNOWLEDGE,
REPLACEMENT OF EXISTING LIFE INSURANCE OR ANNUITY [ ] IS [ X ] IS NOT
INVOLVED IN THIS SALE.
<TABLE>
<S><C>
Agent Name (Please Print) Mike Smith Phone Number (111)111-1111
------------------- -------------
Agent Signature Mike Smith Soc. Sec. No. 123-45-6789
----------------------------- -------------
Agent GA No. (Joint Business) 123-45 License No. 123456
---------------- --------------
Client's B/D Acct. No. 123456789 B/D Name xxxx
---------------------- ----------------
</TABLE>
Designation: [ X ] A [ ] B
Note: Please be advised that a firm designation may override an individual
agent designation. If no designation is given, "A" will be the designation.
<PAGE> 4
AIM LIFETIME PLUS(SM) SINGLE PREMIUM VARIABLE LIFE
This is a modified Single Premium Variable Life Policy issued by: Glenbrook Life
and Annuity Company PO Box 94039, Palatine, IL 60094-4039 - Telephone
#800-776-6978 FAX 847-402-9543 Mail check (payable to) and application to:
Glenbrook Life and Annuity Company - PO Box 227317 - Dallas, TX 75222-7317 Send
overnight mail to: Glenbrook Life and Annuity Company - 8711 North Freeport
Parkway - Irving, TX 75063
<TABLE>
<S><C>
13 NOTICE REGARDING Information regarding your insurability will be treated
THE MEDICAL as confidential. Glenbrook or its reinsurer(s) may,
INFORMATION BUREAU however, make a brief report thereon to the Medical
(MIB), INC. Information Bureau, Inc. (MIB, Inc.), a non-profit
membership organization of life insurance companies,
which operates an information exchange on behalf of its
members. If you apply to another Bureau member company
for life or health insurance coverage, or a claim for
benefits is submitted to such a company, the Bureau,
upon request, will supply such company with the
information in its file. Upon receipt of a request from
you, the Bureau will arrange disclosure of any
information it may have in your file. If you question
the accuracy of information in the Bureau's file, you
may contact the Bureau and seek a correction in
accordance with the procedures set forth in the federal
Fair Credit Reporting Act. The address of the Bureau's
information office is Post Office Box 105, Essex
Station, Boston, Massachusetts 02112, telephone number
(617) 426-3660. Glenbrook or its reinsurer(s) may also
release information in its file to other life insurance
companies to whom you may apply for life or health
insurance.
14 NOTICE UNDER In compliance with the Fair Credit Reporting Act, you
THE FAIR CREDIT are hereby notified that an Investigative Consumer
REPORTING ACT Report may be made through personal interviews with
neighbors, friends, associates, or other persons
concerning the character, general reputation, personal
characteristics, and mode of living (except as may be
related directly or indirectly to sexual orientation)
of the person proposed for this insurance. You may
obtain additional information concerning the nature and
scope of this investigation by writing to Glenbrook
Life and Annuity Company, P.O. Box 94042, Palatine,
Illinois, 60094. In addition, upon your written request
you will be informed whether or not an Investigative
Consumer Report was requested in connection with your
application. If one was requested, you will receive
the name and address of the consumer reporting agency
to whom the request was made. You may inspect and
review a copy of the Investigative Consumer Report by
contacting the consumer reporting agency.
15 PERMIT TO OBTAIN A. Glenbrook, its reinsurers, and consumer reporting
AND DISCLOSE agencies may get data about my health, occupations,
CERTAIN DATA mode of living (except as may be related directly
or indirectly to sexual orientation), and
avocations. I understand that the information
obtained by use of this authorization will be used
to determine eligibility for insurance and/or
benefits.
B. Any doctor, practitioner, medical or medically
related facility, the Veterans Administration, the
Medical Information Bureau, Inc. (MIB, Inc.),
employer, consumer reporting agency, or insurance
company which has such data about me may give such
data to Glenbrook when this permit or a copy of it
is shown. All sources but the MIB, Inc., may give
such data to agencies Glenbrook has hired to
retrieve the information for them.
C. Data about mental illness, alcoholism, sexually
transmitted disease, and the use of drugs is to be
included.
D. Glenbrook or its reinsurers may make a brief
report about me to other companies to which I have
applied or may apply.
E. This permit is good for 30 months after it is
signed.
F. Glenbrook may obtain an investigative consumer
report on me. /X/ I want to be interviewed if such
report is obtained.
G. I have read this permit and have a copy. I also
have the NOTICE REGARDING MIB, INC., and the NOTICE
UNDER THE FAIR CREDIT REPORTING ACT.
John Doe
----------------------------------------
Signature of Proposed Insured Date 01/13/97
Jane Doe
----------------------------------------
Signature of Proposed Insured
Mike Smith
---------------------------------------- ----------------------
Signature of Owner if Other Than Insured Agent's Signature
</TABLE>
<PAGE> 5
AIM LIFETIME PLUS(SM) SINGLE PREMIUM VARIABLE LIFE
This is a modified Single Premium Variable Life Policy issued by: Glenbrook Life
and Annuity Company PO Box 94039, Palatine, IL 60094-4039 - Telephone
#800-776-6978 FAX 847-402-9543 Mail check (payable to) and application to:
Glenbrook Life and Annuity Company - PO Box 227317 - Dallas, TX 75222-7317 Send
overnight mail to: Glenbrook Life and Annuity Company - 8711 North Freeport
Parkway - Irving, TX 75063
RECEIPT AND TEMPORARY INSURANCE AGREEMENT
(Referred to as "Agreement")
<TABLE>
<S><C>
16 RECEIPT AND
TEMPORARY INSURANCE
AGREEMENT All checks must be made payable to Glenbrook Life and
Annuity Company. Do not make checks payable to the
agent or leave the payee blank.
$30,000 has been received from John Doe as payment for
life insurance on the proposed insured as applied for
this date, except as limited in the Amount of
Insurance section below.
WHEN TEMPORARY INSURANCE STARTS
17 NO INSURANCE WILL If payment has been accepted by us and if Part 1 of the
TAKE EFFECT EXCEPT Application has been completed on or before the date of
AS DESCRIBED HERE this Agreement, temporary insurance under this
Agreement will start on the date of this Agreement
except: if the applicant is told that a medical exam is
required, then the temporary insurance will start when
the medical exam is completed.
WHEN TEMPORARY INSURANCE WILL STOP
Temporary insurance under this Agreement will stop on
the first of the dates below:
1. The date we write to the Owner indicating that we
have stopped considering the Application. We have
the absolute right to stop.
2. The date we write to the Owner indicating that a
medical exam is required, in which event insurance
will stop. Insurance under this Agreement will
start again when the required medical exam is done.
We have the absolute right to require such medical
exam.
3. The date we agree to issue the coverage applied
for in the Application. The insurance will then be
provided by the policy as of its start date and not
by this Agreement.
4. The date we offer to issue insurance other than as
applied for in the Application.
5. Sixty days from the date of this Agreement, except
that in Connecticut written notice of termination
will first be sent.
We will refund all payments for which this Agreement
was given if we stop considering the Application.
AMOUNT OF INSURANCE
If temporary insurance under this Agreement is in
effect, it will have the same benefits, provisions, and
limitations and be for the same amount as the policy
applied for. However, we will provide no more than a
combined total of $500,000 of temporary life insurance
under this Agreement and all other Agreements issued
for pending Applications for the person to whom this
receipt was issued.
CONDITIONS UNDER WHICH THERE IS NO COVERAGE
1. If in the answers in the Application, there is
fraud or misrepresentation material to the
underwriter's acceptance of the risk, then no
insurance starts under this Agreement. We will pay
only a refund of all payments made.
2. If the person proposed for this insurance dies by
suicide while sane or self-destruction while insane,
we will pay only a refund of all payments made. We
may offer to issue insurance other than as applied
for in the Application on the person proposed for
this insurance.
3. No insurance starts under this Agreement if no
payment is received or if a check or draft given as
payment is not honored by the bank.
NO ONE MAY WAIVE OR CHANGE ANY OF THE TERMS OF THIS
AGREEMENT.
Mike Smith
-------------------------- Date 01/13/97
Agent's Signature
</TABLE>
<PAGE> 1
Exhibit 7
Powers of Attorney
<PAGE> 2
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that Louis G. Lower, II, whose signature appears
below, constitutes and appoints Michael J. Velotta, his attorney-in-fact, with
power of substitution, and his in any and all capacities, to sign any Form S-6
registration statements and amendments thereto under the Federal Securities
Laws for the Glenbrook Life A I M Variable Life Separate Account A and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming
all that each of said attorneys-in-fact, or his substitute or substitutes, may
do or cause to be done by virtue hereof.
March 6, 1997
- - - --------------------------------------
Date
/s/ LOUIS G. LOWER, II
- - - --------------------------------------
Louis G. Lower, II
Chairman of the Board of Directors &
Chief Executive Officer
<PAGE> 3
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that Michael J. Velotta, whose signature appears
below, constitutes and appoints Louis G. Lower, II, his attorney-in-fact, with
power of substitution, and his in any and all capacities, to sign any Form S-6
registration statements and amendments thereto under the Federal Securities
Laws for the Glenbrook Life A I M Variable Life Separate Account A and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming
all that each of said attorneys-in-fact, or his substitute or substitutes, may
do or cause to be done by virtue hereof.
March 5, 1997
- - - ---------------------------------------
Date
/s/ MICHAEL J. VELOTTA
- - - ---------------------------------------
Michael J. Velotta
Director, Vice President, Secretary & General Counsel
<PAGE> 4
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that Marla G. Friedman, whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, her attorneys-in-fact, with power of substitution, and her in any
and all capacities, to sign any Form S-6 registration statements and amendments
thereto under the Federal Securities Laws for the Glenbrook Life A I M Variable
Life Separate Account A and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
March 6, 1997
- - - --------------------------------------
Date
/s/ MARLA G. FRIEDMAN
- - - --------------------------------------
Marla G. Friedman
Vice President
<PAGE> 5
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that Peter H. Heckman, whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, his attorneys-in-fact, with power of substitution, and his in any
and all capacities, to sign any Form S-6 registration statements and amendments
thereto under the Federal Securities Laws for the Glenbrook Life A I M Variable
Life Separate Account A and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
March 6, 1997
- - - --------------------------------------------
Date
/s/ PETER H. HECKMAN
- - - --------------------------------------------
Peter H. Heckman
Director, President and Chief Operating Officer
<PAGE> 6
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that James P. Zils, whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, his attorneys-in-fact, with power of substitution, and his in any
and all capacities, to sign any Form S-6 registration statements and amendments
thereto under the Federal Securities Laws for the Glenbrook Life A I M Variable
Life Separate Account A and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
March 5, 1997
- - - --------------------------------------------
Date
/s/ JAMES P. ZILS
- - - --------------------------------------------
James P. Zils
Treasurer
<PAGE> 7
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that Casey J. Sylla, whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, his attorneys-in-fact, with power of substitution, and his in any
and all capacities, to sign any Form S-6 registration statements and amendments
thereto under the Federal Securities Laws for the Glenbrook Life A I M Variable
Life Separate Account A and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
March 5, 1997
- - - -----------------------------
Date
/s/ CASEY J. SYLLA
- - - -----------------------------
Casey J. Sylla
Chief Investment Officer
<PAGE> 8
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that G. Craig Whitehead, whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, his attorneys-in-fact, with power of substitution, and his in any
and all capacities, to sign any Form S-6 registration statements and amendments
thereto under the Federal Securities Laws for the Glenbrook Life A I M Variable
Life Separate Account A and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
March 6, 1997
- - - ------------------------------------------
Date
/s/ G. CRAIG WHITEHEAD
- - - ------------------------------------------
G. Craig Whitehead
Senior Vice President and Director
<PAGE> 9
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that John R. Hunter, whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, his attorneys-in-fact, with power of substitution, and his in any
and all capacities, to sign any Form S-6 registration statements and amendments
thereto under the Federal Securities Laws for the Glenbrook Life A I M Variable
Life Separate Account A and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
March 10, 1997
- - - -------------------------------------
Date
/s/ JOHN R. HUNTER
- - - -------------------------------------
John R. Hunter
Director
<PAGE> 10
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that Kevin R. Slawin, whose signature appears
below, constitutes and appoints Louis G. Lower, II, and Michael J. Velotta, and
each of them, his attorneys-in-fact, with power of substitution, and his in any
and all capacities, to sign any Form S-6 registration statements and amendments
thereto under the Federal Securities Laws for the Glenbrook Life A I M Variable
Life Separate Account A and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
March 6, 1997
- - - -------------------------------------
Date
/s/ KEVIN R. SLAWIN
- - - -------------------------------------
Kevin R. Slawin
Vice President
<PAGE> 11
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE
A I M VARIABLE LIFE SEPARATE ACCOUNT A
Know all men by these presents that Keith A. Hauschildt, whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorneys-in-fact, with power of substitution,
and his in any and all capacities, to sign any Form S-6 registration statements
and amendments thereto under the Federal Securities Laws for the Glenbrook Life
A I M Variable Life Separate Account A and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.
March 7, 1997
- - - --------------------------------------
Date
/s/ KEITH A. HAUSCHILDT
- - - --------------------------------------
Keith A. Hauschildt
Assistant Vice President and Controller
<PAGE> 1
Exhibit 10
Actuarial Opinion and Consent
<PAGE> 2
[GLENBROOK LIFE & ANNUITY COMPANY LETTERHEAD]
In my capacity as Vice President and Life Actuary of Glenbrook Life & Annuity
Company (the "Company"), I have provided actuarial advice concerning:
The preparation of the Registration Statement on Form S-6 filed by Glenbrook
Life A I M Variable Life Separate Account A and the Company with the Securities
and Exchange Commission under the Securities Act of 1933 with respect to
variable life insurance policies (the "Registration Statement"); and
The preparation of policy forms for the variable life policies described in the
Registration Statement (the "Policies").
It is my professional opinion that:
1. The illustrations of death benefits, net cash values, accumulated
premium, internal rates of return on net cash values and internal rates of
return on death benefits shown in Appendix A of the Prospectus, based on
the assumptions stated in the illustrations, are consistent with the
provisions of the Policies and with the Company's administrative
procedures.
2. The rate structure of the Policies has not been designed so as to make
the relationship between the initial premiums and policy benefits, as
shown in the illustrations, appear to be correspondingly more favorable to
prospective purchasers of Policies for male and female insureds, aged 45,
55, and 65, or for joint insureds (male/female aged 55 and male/female
ages 65) in the underwriting class illustrated than to prospective
purchasers of Policies for insureds of other sexes or ages. Insureds in
other underwriting classes may have higher cost of insurance charges.
3. The illustrations shown in Appendix A are for commonly used rating
classifications and for premium amounts and ages appropriate to the
markets in which this Policy is sold.
I hereby consent to the filing of this opinion as an Exhibit to this
Registration Statement and to the use of my name under the heading "Experts" in
the Prospectus.
By: /s/ DIANA B. MONTIGNEY
----------------------
Diana B. Montigney, F.S.A., M.A.A.A.
Vice President & Life Actuary
