As filed with the Securities and Exchange Commission on August 30, 1999
REGISTRATION NO. 333-12989
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
POST-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-6
---------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
---------------------
PHOENIX LIFE AND ANNUITY VARIABLE UNIVERSAL LIFE ACCOUNT
(EXACT NAME OF TRUST)
PHOENIX LIFE AND ANNUITY COMPANY
(NAME OF DEPOSITOR)
---------------------
ONE AMERICAN ROW
HARTFORD, CONNECTICUT 06102-5056
(COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
DONA D. YOUNG, ESQUIRE
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
PHOENIX LIFE AND ANNUITY COMPANY
ONE AMERICAN ROW
HARTFORD, CONNECTICUT 06102-5056
(NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE)
---------------------
<TABLE>
<CAPTION>
COPIES TO:
<S> <C>
MICHAEL BERENSON, ESQ. EDWIN L. KERR, ESQ.
JORDEN BURT BOROS CICCHETTI BERENSON & JOHNSON LLP COUNSEL
1025 THOMAS JEFFERSON ST. N.W. PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
SUITE 400 EAST ONE AMERICAN ROW
WASHINGTON, D.C. 20007-0805 HARTFORD, CONNECTICUT 06102-5056
</TABLE>
---------------------
It is proposed that this filing will become
effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on May 1, 1999 pursuant to paragraph (b) of Rule 485
[X] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following box:
[ ] this Post-Effective Amendment designates a new effective date
for a previously filed Post-Effective Amendment.
<PAGE>
VERSION A
(FLEX EDGE SUCCESS[registered trademark]
VARIABLE UNIVERSAL LIFE INSURANCE POLICY)
This Prospectus is not
being amended
<PAGE>
[VERSION B]
PHOENIX'S
CORPORATE EDGE
VARIABLE UNIVERSAL LIFE
INSURANCE POLICY
Issued by
PHOENIX LIFE
AND ANNUITY COMPANY
IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT US AT:
[envelope] ANDESA TPA, INC.
1605 N CEDAR CREST BLVD, SUITE 502
ALLENTOWN, PA 18104
[telephone] 610/439-5256
PROSPECTUS MAY 1, 1999
AS SUPPLEMENTED OCTOBER 29, 1999
This Prospectus describes an individual flexible premium variable universal
life insurance policy. The Policy provides lifetime insurance protection for as
long as it remains in force.
You may allocate net premiums and cash value to one or more of the
Subaccounts of the VUL Account and the Guaranteed Interest Account. The assets
of each Subaccount will be used to purchase, at Net Asset Value, shares of a
series in the following designated underlying Funds.
THE PHOENIX EDGE SERIES FUND
- ----------------------------
MANAGED BY PHOENIX INVESTMENT COUNSEL, INC.
[diamond] Phoenix Research Enhanced Index Series
[diamond] Phoenix-Aberdeen International Series
[diamond] Phoenix-Engemann Nifty Fifty Series
[diamond] Phoenix-Goodwin Balanced Series
[diamond] Phoenix-Goodwin Growth Series
[diamond] Phoenix-Goodwin Money Market Series
[diamond] Phoenix-Goodwin Multi-Sector Fixed Income Series
[diamond] Phoenix-Goodwin Strategic Allocation Series
[diamond] Phoenix-Goodwin Strategic Theme Series
[diamond] Phoenix-Hollister Value Equity Series
[diamond] Phoenix-Oakhurst Growth and Income Series
[diamond] Phoenix-Schafer Mid-Cap Value Series
[diamond] Phoenix-Seneca Mid-Cap Growth Series
MANAGED BY PHOENIX-ABERDEEN INTERNATIONAL ADVISORS, LLC
[diamond] Phoenix-Aberdeen New Asia Series
MANAGED BY DUFF & PHELPS INVESTMENT MANAGEMENT CO.
[diamond] Phoenix-Duff & Phelps Real Estate Securities Series
BT INSURANCE FUNDS TRUST
- ------------------------
MANAGED BY BANKERS TRUST COMPANY
[diamond] EAFE[registered trademark] Equity Index Fund
FEDERATED INSURANCE SERIES
- --------------------------
MANAGED BY FEDERATED INVESTMENT MANAGEMENT COMPANY
[diamond] Federated Fund for U.S. Government Securities II
[diamond] Federated High Income Bond Fund II
TEMPLETON VARIABLE PRODUCTS SERIES FUND
- ---------------------------------------
MANAGED BY TEMPLETON INVESTMENT COUNSEL, INC.
[diamond] Templeton Asset Allocation Fund -- Class 2
[diamond] Templeton International Fund -- Class 2
[diamond] Templeton Stock Fund -- Class 2
MANAGED BY TEMPLETON ASSET MANAGEMENT, LTD.
[diamond] Templeton Developing Markets Fund -- Class 2
MANAGED BY FRANKLIN MUTUAL ADVISERS, INC.
[diamond] Mutual Shares Investments Fund -- Class 2
WANGER ADVISORS TRUST
- ---------------------
MANAGED BY WANGER ASSET MANAGEMENT, L.P.
[diamond] Wanger Foreign Forty
[diamond] Wanger International Small Cap
[diamond] Wanger Twenty
[diamond] Wanger U.S. Small Cap
1
<PAGE>
IT MAY NOT BE IN YOUR BEST INTEREST TO PURCHASE A POLICY TO REPLACE AN
EXISTING LIFE INSURANCE POLICY OR ANNUITY CONTRACT. YOU MUST UNDERSTAND THE
BASIC FEATURES OF THE PROPOSED POLICY AND YOUR EXISTING COVERAGE BEFORE YOU
DECIDE TO REPLACE YOUR PRESENT COVERAGE. YOU MUST ALSO KNOW IF THE REPLACEMENT
WILL RESULT IN ANY TAXES.
THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, UNDERWRITTEN OR GUARANTEED BY,
ANY FINANCIAL INSTITUTION OR CREDIT UNION. IT IS NOT FEDERALLY INSURED OR
ENDORSED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER STATE OR
FEDERAL AGENCY. POLICY INVESTMENTS ARE SUBJECT TO RISK, INCLUDING THE
FLUCTUATION OF POLICY VALUES AND POSSIBLE LOSS OF PRINCIPAL INVESTED OR PREMIUMS
PAID.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES, NOR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED OR PRECEDED BY CURRENT
PROSPECTUSES FOR THE FUNDS. YOU SHOULD READ AND KEEP THESE PROSPECTUSES FOR
FUTURE REFERENCE.
2
<PAGE>
TABLE OF CONTENTS
Heading Page
- --------------------------------------------------------------------------------
PART I--GENERAL POLICY PROVISIONS.......................................... 6
SUMMARY ............................................................... 6
Availability....................................................... 6
Underwriting....................................................... 6
Charges Under the Policy........................................... 6
Deductions From Premiums........................................... 8
Sales Charge................................................... 8
State Premium Tax Charge....................................... 8
Deferred Acquisition Cost (DAC) Tax Charge..................... 8
Policy Value Charges............................................... 8
Administrative Charge.......................................... 8
Cost of Insurance.............................................. 8
Mortality and Expense Risk Fee................................. 8
Rider Charge................................................... 8
Charges for Federal Income Taxes............................... 8
Fund Charges................................................... 8
Other Charges...................................................... 10
Partial Surrender Fee.......................................... 10
Loan Interest Rate Expense Charge.............................. 10
Reduction in Charges............................................... 10
PHOENIX LIFE AND ANNUITY COMPANY AND THE VUL ACCOUNT................... 11
PLAC............................................................... 11
The VUL Account.................................................... 11
PERFORMANCE HISTORY.................................................... 11
INVESTMENTS OF THE VUL ACCOUNT......................................... 11
Participating Investment Funds..................................... 11
The Phoenix Edge Series Fund................................... 11
BT Insurance Funds Trust....................................... 12
Federated Insurance Series..................................... 12
Templeton Variable Products Series Fund........................ 12
Wanger Advisors Trust.......................................... 13
Investment Advisors................................................ 13
Services of the Advisors........................................... 14
Reinvestment and Redemption........................................ 14
Substitution of Investments........................................ 14
The Guaranteed Interest Account.................................... 14
PREMIUMS............................................................... 15
Minimum Premiums................................................... 15
Allocation of Issue Premium........................................ 15
Free Look Period................................................... 15
Account Value...................................................... 16
Transfer of Policy Value....................................... 16
Systematic Transfers for Dollar Cost Averaging................. 16
Automatic Asset Re-Balancing....................................... 16
Determination of Subaccount Values................................. 17
Death Benefit Under the Policy..................................... 17
Minimum Face Amount............................................ 17
Death Benefit Options.......................................... 17
Changes in Face Amount of Insurance................................ 18
Requests for Increase in Face Amount........................... 18
3
<PAGE>
Decreases in Face Amount and Partial Surrender:
Effect on Death Benefit........................................... 18
Requests for Decrease in Face Amount........................... 18
Surrenders......................................................... 18
General........................................................ 18
Full Surrenders................................................ 18
Partial Surrenders............................................. 18
Policy Loans....................................................... 18
Source of Loan................................................. 19
Interest....................................................... 19
Interest Credited on Loaned Value.............................. 19
Repayment...................................................... 19
Effect of Loan................................................. 19
Lapse.............................................................. 19
Additional Insurance Option........................................ 19
Additional Rider Benefits.......................................... 20
PART II--ADDITIONAL POLICY PROVISIONS...................................... 20
Postponement of Payments........................................... 20
Payment by Check................................................... 20
The Contract....................................................... 20
Suicide............................................................ 20
Incontestability................................................... 21
Change of Owner or Beneficiary..................................... 21
Assignment......................................................... 21
Misstatement of Age or Sex......................................... 21
Surplus............................................................ 21
PAYMENT OF PROCEEDS.................................................... 21
Surrender and Death Benefit Proceeds............................... 21
Payment Options.................................................... 21
Option 1--Lump sum............................................. 21
Option 2--Left to earn interest................................ 21
Option 3--Payment for a specific period........................ 21
Option 4--Life annuity with specified period certain........... 21
Option 5--Life annuity......................................... 22
Option 6--Payments of a specified amount....................... 22
Option 7--Joint survivorship annuity with 10-year period
certain...................................................... 22
PART III--OTHER IMPORTANT INFORMATION...................................... 22
FEDERAL TAX CONSIDERATIONS............................................. 22
Introduction....................................................... 22
PLAC's Tax Status.................................................. 22
Policy Benefits.................................................... 22
Death Benefit Proceeds......................................... 22
Full Surrender................................................. 22
Partial Surrender.............................................. 23
Loans.......................................................... 23
Business-Owned Policies............................................ 23
Modified Endowment Contracts....................................... 23
General........................................................ 23
Reduction in Benefits During the First Seven Years............. 23
Distributions Affected......................................... 23
Penalty Tax.................................................... 24
Material Change Rules.......................................... 24
Serial Purchase of Modified Endowment Contracts................ 24
Limitations on Unreasonable Mortality and Expense Charges.......... 24
Diversification Standards.......................................... 24
Change of Ownership or Insured or Assignment....................... 25
Other Taxes........................................................ 25
VOTING RIGHTS ......................................................... 25
4
<PAGE>
THE DIRECTORS AND EXECUTIVE OFFICERS OF PLAC........................... 25
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS ............................... 26
SALES OF POLICIES ..................................................... 26
STATE REGULATION ...................................................... 26
REPORTS ............................................................... 26
LEGAL PROCEEDINGS ..................................................... 26
LEGAL MATTERS ......................................................... 26
REGISTRATION STATEMENT ................................................ 26
YEAR 2000 ISSUE........................................................ 27
FINANCIAL STATEMENTS .................................................. 27
APPENDIX A GLOSSARY OF SPECIAL TERMS................................... 43
APPENDIX B PERFORMANCE HISTORY......................................... 44
APPENDIX C ILLUSTRATIONS............................................... 48
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, 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.
5
<PAGE>
PART I--GENERAL POLICY PROVISIONS
- --------------------------------------------------------------------------------
SUMMARY
- --------------------------------------------------------------------------------
This is a summary that describes the general provisions of the policy.
Certain provisions of the policy described in this prospectus may differ in
a particular state because of specific state requirements.
Throughout the prospectus, Phoenix Life and Annuity Company is referred to
as PLAC, we, us, or our and the policyholder is referred to as you or your.
We define the following terms in the Glossary of Appendix A:
ATTAINED AGE POLICY ANNIVERSARY
BENEFICIARY POLICY DATE
DEBT POLICY VALUE
FUNDS POLICY YEAR
GENERAL ACCOUNT SERIES
ISSUE PREMIUM SUBACCOUNTS
MONTHLY CALCULATION DATE TARGET PREMIUM
NET ASSET VALUE VALUATION DATE
PAYMENT DATE VALUATION PERIOD
PLANNED ANNUAL PREMIUM VUL ACCOUNT (ACCOUNT)
If there is ever a difference between the provisions within this prospectus
and the provisions of the policy, the policy provisions will control.
AVAILABILITY
The policy is available on a "case" basis. We may consider one person as a
case. All policies within a case are aggregated for purposes of determining
policy dates, loan rates and underwriting requirements. If an individual owns
the policy as part of a case, he or she may exercise all rights under the policy
through their employer or sponsoring organization. After termination of
employment or other such relationship, the individual may exercise such rights
directly with us.
For fully underwritten policies the age of the insured at the time of issue
generally must be between ages 18 through 85 as of his or her birthday nearest
the Policy Anniversary.
For policies that are underwritten using simplified or guaranteed issue
programs, generally the maximum age of the insured at the time of issue is age
70 for simplified and 64 for guaranteed issue.
The minimum face amount of insurance per policy issued is $50,000.
You can purchase a Policy to insure the life of another person provided that
you have an insurable interest in that life and the prospective Insured
consents.
UNDERWRITING
Currently, we offer three types of underwriting:
[diamond] Fully underwritten;
[diamond] Simplified issue underwriting; and
[diamond] Guaranteed issue underwriting.
Your cost of insurance charges will vary based on the type of underwriting
we use.
CHARGES UNDER THE POLICY
We deduct certain charges from your Policy to compensate us for:
1. our expenses in selling the Policy;
2. underwriting and issuing the Policy;
3. premium and federal taxes incurred on premiums
received;
4. providing insurance benefits under your Policy;
and
5. assuming certain risks in connection with the Policy.
These charges are summarized below. These charges are described more fully
following this chart.
6
<PAGE>
<TABLE>
<CAPTION>
CHARGES UNDER THE POLICY
- ---------------------------------------------------------------------------------------------------------------------------------
CHARGES CURRENT RATE GUARANTEED RATE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DEDUCTIONS FROM SALES CHARGE Policy years 1 - 7: 7.0% of premiums up Policy years 1 - 7: 9.0% of premiums.
PREMIUMS to the Target Premium and 0% on amounts Policy year 8 plus: 3.0% of all
in excess of the Target Premium. premiums.
Policy year 8 plus: 0% of all premiums.
----------------------------------------------------------------------------------------------------------
STATE PREMIUM 0.75% to 4.0% of each premium depending This charge will always equal the
TAX on your state's applicable rate. applicable state rate.
----------------------------------------------------------------------------------------------------------
DEFERRED ACQUISITION 1.5% of each premium up to the This charge will always equal the
COST TAX CHARGE Target Premium. actual cost to Us for the DAC tax.
(DAC TAX)
- ---------------------------------------------------------------------------------------------------------------------------------
POLICY VALUE ADMINISTRATIVE $5 per month ($60 annually) $10 per month ($120 annually) except
CHARGES CHARGE New York, $7.50 per month ($90
annually)
- ---------------------------------------------------------------------------------------------------------------------------------
COST OF INSURANCE A per thousand rate multiplied by the The maximum monthly cost of
CHARGE amount at risk each month. This insurance charge for each $1,000 of
charge varies by the Insured's issue insurance is shown on your policy's
age, policy duration, gender and schedule pages.
underwriting class.
----------------------------------------------------------------------------------------------------------
MORTALITY AND EXPENSE 0.50% annually in policy years 1-10 0.90% annually in all policy years
RISK CHARGE 0.25% annually in policy years 11+
----------------------------------------------------------------------------------------------------------
FUND CHARGES SEE FUND CHARGE TABLE SEE FUND CHARGE TABLE
- ---------------------------------------------------------------------------------------------------------------------------------
OTHER CHARGES PARTIAL SURRENDER FEE None 2.0% of the amount withdrawn, but not
greater than $25.
- ---------------------------------------------------------------------------------------------------------------------------------
TRANSFERS BETWEEN None $10 per transfer after the first 2
SUBACCOUNTS transfers in any given policy year,
(after 12 transfers in New York).
----------------------------------------------------------------------------------------------------------
LOAN INTEREST RATE The rates in effect before the 16(th) The Guaranteed rates before the
CHARGED policy year and before the Insured Insured reaches 65 for all states are:
reaches age 65 in all states except Policy year 1 - 10: 4.75%
New York and New Jersey are: Policy year 11 - 15: 4.50%
Policy year 1 - 10: 2.75% Policy year 16+: 4.25%
Policy year 11 - 15: 2.50%
Policy year 16+: 2.25%
The rates in effect before the 16(th)
policy year and before the Insured
reaches age 65 in New York and
New Jersey are:
Policy year 1 - 10: 4.75%
Policy year 11 - 15: 4.50%
Policy year 16+: 4.25%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
DEDUCTIONS FROM PREMIUMS
Before we allocate your premium to the Subaccounts or the Guaranteed
Interest Account we deduct a sales charge, a state premium tax and a federal tax
to cover the estimated cost to us for deferred acquisition costs.
SALES CHARGE
We deduct a sales charge from your premium for the costs we incur in the
sales and distribution of the policies.
STATE PREMIUM TAX CHARGE
States assess premium taxes at various rates. We deduct the applicable state
rate from each premium to cover the cost of the premium taxes assessed against
us by the state.
We may increase or decrease this charge if there is a change in the tax or
change of residence.
DEFERRED ACQUISITION COST ("DAC") TAX CHARGE
This tax is associated with our federal tax liability under Internal Revenue
Code Section 848.
POLICY VALUE CHARGES
On each Monthly Calculation Day, we deduct from your policy value the
following charges:
1. Administrative Charge
2. Cost of Insurance Charge
3. Mortality and Expense Risk Fee
4. A charge for the cost of riders if applicable
The amount deducted is allocated among the Subaccounts and the unloaned
portion of the Guaranteed Interest Account based on an allocation schedule
specified by you. You initially choose this schedule in your application.
1. ADMINISTRATIVE CHARGE
We assess a monthly charge for the expenses we incur in administering the
policy. This charge reimburses us for the cost of daily administration for
services such as billing and collections, monthly processing, updating daily
values and communicating with policyholders.
2. COST OF INSURANCE
We deduct a charge to cover the cost of insurance coverage on each monthly
calculation date. This charge is based on:
[diamond] Insured's gender;
[diamond] Insured's age at issue;
[diamond] Policy year in which we make the deduction;
[diamond] Insured's tobacco use classification;
[diamond] Rating class of the policy; and
[diamond] Underwriting classification of the case.
To determine the monthly cost of insurance, we multiply the appropriate cost
of insurance rate by the difference between your Policy's death benefit and the
policy value. Any change in the cost of insurance rates will apply to all
persons of the same sex, insurance age and risk class whose policies have been
in force for the same length of time.
3. MORTALITY AND EXPENSE RISK FEE
We charge the Subaccounts for the mortality and expense risks we assume.
This charge is deducted from the value of each Subaccount's assets attributable
to the policies.
The mortality risk we assume is that the group of lives we insure under our
policies may, on average, live for a shorter period of time than we estimated.
The expense risk we assume is that our cost of issuing and administering the
policies may be more than we estimated.
If all the money we collect from this charge is not required to cover the
cost of death benefits and other expenses, it will be a gain to us. If the money
we collect is not enough to cover our costs, we will still provide for death
benefits and expenses.
4. RIDER CHARGE
We will deduct any applicable monthly rider charges for the additional
benefit provided to you by the rider.
CHARGES FOR FEDERAL INCOME TAXES
We currently do not charge the VUL Account for federal income taxes
attributable to it. In the future, we may charge to cover these or any other tax
liability of the VUL Account.
FUND CHARGES
Please refer to the following chart for a listing of Fund Charges.
8
<PAGE>
<TABLE>
<CAPTION>
ANNUAL FUND EXPENSES FOR THE YEAR ENDING DECEMBER 31, 1998 AFTER REIMBURSEMENT
INVESTMENT OTHER OPERATING TOTAL ANNUAL
SERIES MANAGEMENT FEE RULE 12B-1 FEES EXPENSES FUND EXPENSES(1)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Phoenix Research Enhanced Index .45% 0% .10% .55%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International .75% 0% .23% .98%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia 1.00% 0% .25% 1.25%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities .75% 0% .25% 1.00%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty .90% 0% .15% 1.05%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced .55% 0% .13% .68%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth .62% 0% .07% .69%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market .40% 0% .15% .55%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income .50% 0% .14% .64%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation .58% 0% .10% .68%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme .75% 0% .24% .99%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity .70% 0% .15% .85%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income .70% 0% .15% .85%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value 1.05% 0% .15% 1.20%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth .80% 0% .25% 1.05%
- --------------------------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index 0% 0% .65% .65%
- --------------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond .60% 0% .18% .78%
- --------------------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities .52% 0% .33% .85%
- --------------------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments (Templeton) 0% .25% 1.00% 1.25%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation .60% .25% .18% 1.03%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets 1.25% .25% .41% 1.91%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton International .69% .25% .17% 1.11%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton Stock .70% .25% .19% 1.14%
- --------------------------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty .95% 0% .50% 1.45%
- --------------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap 1.27% 0% .28% 1.55%
- --------------------------------------------------------------------------------------------------------------------------------
Wanger Twenty .90% 0% .45% 1.35%
- -------------------------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap .96% 0% .06% 1.02%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Each Series pays a portion or all of its total annual expenses other than
the management fee. The Phoenix Research Enhanced Index Series will pay up
to .10%; the Phoenix-Goodwin Growth, Phoenix-Goodwin Multi-Sector Fixed
Income, Phoenix-Goodwin Strategic Allocation, Phoenix-Goodwin Money Market,
Phoenix-Goodwin Balanced, Phoenix-Engemann Nifty Fifty, Phoenix-Oakhurst
Growth and Income, Phoenix-Hollister Value Equity and Phoenix-Schafer
Mid-Cap Value Series will pay up to .15%; the Phoenix-Duff & Phelps Real
Estate Securities, Phoenix-Goodwin Strategic Theme, Phoenix-Aberdeen New
Asia and Phoenix-Seneca Mid-Cap Growth Series will pay up to .25%; and the
Phoenix-Aberdeen International Series will pay up to .40% for the fiscal
year ending December 31, 1998. Absent expense reimbursement, Total Annual
Expenses were:
<TABLE>
<S> <C> <C> <C>
Phoenix Research Enhanced Index .82% Phoenix-Goodwin Multi-Sector Fixed Income .64%
Phoenix-Aberdeen International .98% Phoenix-Goodwin Strategic Allocation .68%
Phoenix-Aberdeen New Asia 2.50% Phoenix-Goodwin Strategic Theme .99%
Phoenix-Duff & Phelps Real Estate Securities 1.01% Phoenix-Hollister Value Equity 2.46%
Phoenix-Engemann Nifty Fifty 2.58% Phoenix-Oakhurst Growth and Income 1.46%
Phoenix-Goodwin Balanced .68% Phoenix-Schafer Mid-Cap Value 2.77%
Phoenix-Goodwin Growth .69% Phoenix-Seneca Mid-Cap Growth 2.81%
Phoenix-Goodwin Money Market .55%
</TABLE>
The Wanger Foreign Forty will pay up to .45%, the Wanger U.S. Small Cap
Series will pay up to .50%, the Wanger International Small Cap will pay up
to .60%, and the Wanger Twenty will pay up to .40%. Absent expense
reimbursement, Total Annual Expenses are estimated to be approximately 1.45%
for Wanger Foreign Forty, 1.55% for Wanger International Small Cap, 1.35%
for Wanger Twenty and 1.02% for Wanger U.S. Small Cap for the fiscal year
ending December 31, 1999. Expenses may be higher or lower than those shown
but are subject to expense limitations as noted.
9
<PAGE>
OTHER CHARGES
PARTIAL SURRENDER FEE
We reserve the right to deduct a charge from each withdrawal.
LOAN INTEREST RATE EXPENSE CHARGE
We deduct a charge from the loan interest rate. This charge reimburses us
for expenses we incur in administering your loan. This rate varies by policy
year.
REDUCTION IN CHARGES
The Policy is available for purchase by individuals, corporations and other
groups. For group or sponsored arrangements (including our employees and their
family members) and for special exchange programs that we may make available, we
reserve the right to reduce or eliminate the sales load, mortality and expense
risk charge, monthly administrative charge, monthly cost of insurance charges or
other charges normally assessed on certain multiple life cases where it is
expected that the size or nature of such cases will result in savings of sales,
underwriting, administrative or other costs.
Eligibility for the amount of these reductions will be determined by a
number of factors including the number of Insureds, the total premium expected
to be paid, the total assets under management for the Policyowner, the nature of
the relationship among individual Insureds, the purpose for which the Policies
are being purchased, the expected persistency of individual Policies, and other
circumstances which in our opinion are rationally related to the expected
reduction in expenses. Any variations in the charge structure will be determined
in a uniform manner reflecting differences in costs of services and not unfairly
discriminatory to policyholders.
10
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY AND
THE VUL ACCOUNT
- --------------------------------------------------------------------------------
PLAC
We are an indirect subsidiary of Phoenix Home Life Mutual Insurance Company
("Phoenix"). Our executive office is located at One American Row, Hartford,
Connecticut 06102-5056, and our main administrative office is located at 100
Bright Meadow Boulevard, Enfield, Connecticut 06083-1900. We are a Connecticut
stock company, formed to write life insurance and annuity contracts. Formerly,
Phoenix was Savers Life Insurance Company of America, chartered in Missouri in
1981. We redomesticated to Connecticut in April, 1997.
THE VUL ACCOUNT
The VUL Account is a separate account of PLAC, established on July 1, 1996
and governed under the laws of Connecticut. It is registered with the SEC as a
unit investment trust under the Investment Company Act of 1940, as amended, and
meets the definition of a "separate account" under that Act. This registration
does not involve supervision of the management of the VUL Account or PLAC by the
SEC.
The VUL Account is divided into Subaccounts, each of which is available for
allocation of Policy Value. Each Subaccount will invest solely in shares of a
specific series of a mutual fund. In the future, we may establish additional
Subaccounts which will be made available to existing Policyowners to the extent
and on a basis decided by us. See "Investments of the VUL Account--Participating
Investment Funds."
PLAC does not guarantee the investment performance of the VUL Account or any
of its Subaccounts. Contributions to the overall Policy Value allocated to the
VUL Account depend on the chosen Fund's investment performance. Thus, you bear
the full investment risk for all monies invested in the VUL Account.
The VUL Account is part of the general business of PLAC, but the gains or
losses of the VUL Account belong solely to the VUL Account. The gains or losses
of any other business we may conduct do not affect the VUL Account. Under
Connecticut law, the assets of the VUL Account may not be taken to pay
liabilities arising out of any other business we may conduct. Nevertheless, all
obligations arising under the Policy are general corporate obligations of PLAC.
PERFORMANCE HISTORY
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We may include the performance history of the VUL Account Subaccounts in
advertisements, sales literature or reports. Performance information about each
Subaccount is based on past performance only and is not an indication of future
performance. See "Appendix B" for more information.
INVESTMENTS OF THE VUL ACCOUNT
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PARTICIPATING INVESTMENT FUNDS
THE PHOENIX EDGE SERIES FUND
Certain Subaccounts invest in corresponding Series of The Phoenix Edge
Series Fund. The following Series are currently available:
PHOENIX RESEARCH ENHANCED INDEX SERIES: The investment objective of the
Series is to seek high total return by investing in a broadly diversified
portfolio of equity securities of large and medium capitalization companies
within market sectors reflected in the S&P 500. The Series invests in a
portfolio of undervalued common stocks and other equity securities which appear
to offer growth potential and an overall volatility of return similar to that of
the S&P 500.
PHOENIX-ABERDEEN INTERNATIONAL SERIES: The investment objective of the
Series is to seek a high total return consistent with reasonable risk. The
Series invests primarily in an internationally diversified portfolio of equity
securities. It intends to reduce its risk by engaging in hedging transactions
involving options, futures contracts and foreign currency transactions. The
Phoenix-Aberdeen International Series provides a means for investors to invest a
portion of their assets outside the United States.
PHOENIX-ABERDEEN NEW ASIA SERIES: The investment objective of the Series is
to seek long-term capital appreciation. The Series invests primarily in a
diversified portfolio of equity securities of issuers organized and principally
operating in Asia, excluding Japan.
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES: The investment
objective of the Series is to seek capital appreciation and income with
approximately equal emphasis. Under normal circumstances, it invests in
marketable securities of publicly traded real estate investment trusts (REITs)
and companies that operate, develop, manage and/or invest in real estate located
primarily in the United States.
PHOENIX-ENGEMANN NIFTY FIFTY SERIES: The investment objective of the Series
is to seek long-term capital appreciation by investing in approximately 50
different securities which offer the best potential for long-term growth of
capital. At least 75% of the Series' assets will be invested in common stocks of
high quality growth companies. The remaining portion will be invested in common
stocks of small corporations with rapidly growing earnings per share or common
stocks believed to be undervalued.
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PHOENIX-GOODWIN BALANCED SERIES: The investment objective of the Series is
to seek reasonable income, long-term capital growth and conservation of capital.
The Phoenix-Goodwin Balanced Series invests based on combined considerations of
risk, income, capital enhancement and protection of capital value.
PHOENIX-GOODWIN GROWTH SERIES: The investment objective of the Series is to
achieve intermediate and long-term growth of capital, with income as a secondary
consideration. The Phoenix-Goodwin Growth Series invests principally in common
stocks of corporations believed by management to offer growth potential.
PHOENIX-GOODWIN MONEY MARKET SERIES: The investment objective of the Series
is to provide maximum current income consistent with capital preservation and
liquidity. The Phoenix-Goodwin Money Market Series invests exclusively in high
quality money market instruments.
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES: The investment objective
of the Series is to seek long-term total return. The Phoenix-Goodwin
Multi-Sector Fixed Income Series seeks to achieve its investment objective by
investing in a diversified portfolio of high yield and high quality fixed income
securities.
PHOENIX-GOODWIN STRATEGIC ALLOCATION SERIES: The investment objective of the
Series is to realize as high a level of total return over an extended period of
time as is considered consistent with prudent investment risk. The
Phoenix-Goodwin Strategic Allocation Series invests in stocks, bonds and money
market instruments in accordance with the Investment Advisor's appraisal of
investments most likely to achieve the highest total return.
PHOENIX-GOODWIN STRATEGIC THEME SERIES: The investment objective of the
Series is to seek long-term appreciation of capital by identifying securities
benefiting from long-term trends present in the United States and abroad. The
Phoenix-Goodwin Strategic Theme Series invests primarily in common stocks
believed to have substantial potential for capital growth.
PHOENIX-HOLLISTER VALUE EQUITY SERIES: The primary investment objective of
the Series is long-term capital appreciation, with a secondary investment
objective of current income. The Phoenix-Hollister Value Equity Series seeks to
achieve its objective by investing in a diversified portfolio of common stocks
that meet certain quantitative standards that indicate above average financial
soundness and intrinsic value relative to price.
PHOENIX-OAKHURST GROWTH AND INCOME SERIES: The investment objective of the
Series is to seek dividend growth, current income and capital appreciation by
investing in common stocks. The Phoenix-Oakhurst Growth and Income Series seeks
to achieve its objective by selecting securities primarily from equity
securities of the 1,000 largest companies traded in the United States, ranked by
market capitalization.
PHOENIX-SCHAFER MID-CAP VALUE SERIES: The primary investment objective of
the Series is to seek long-term capital appreciation, with current income as the
secondary investment objective. The Phoenix-Schafer Mid-Cap Value Series will
invest in common stocks of established companies having a strong financial
position and a low stock market valuation at the time of purchase which are
believed to offer the possibility of increase in value.
PHOENIX-SENECA MID-CAP GROWTH SERIES: The investment objective of the Series
is to seek capital appreciation primarily through investments in equity
securities of companies that have the potential for above average market
appreciation. The Series seeks to outperform the Standard & Poor's Mid-Cap 400
Index.
BT INSURANCE FUNDS TRUST
A certain Subaccount invests in a corresponding Series of the BT Insurance
Funds Trust. The following Series is currently available:
EAFE[registered trademark] EQUITY INDEX FUND: The Series seeks to match the
performance of the Morgan Stanley Capital International EAFE[registered
trademark] Index ("EAFE[registered trademark] Index"), which emphasizes major
market stock performance of companies in Europe, Australia and the Far East. The
Series invests in a statistically selected sample of the securities found in the
EAFE[registered trademark] Index.
FEDERATED INSURANCE SERIES
Certain Subaccounts invest in corresponding Series of the Federated
Insurance Series. The following Series are currently available:
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II: The investment objective
of the Series is to seek current income by investing primarily in U.S.
government securities, including mortgage-backed securities issued by U.S.
government agencies.
FEDERATED HIGH INCOME BOND FUND II: The investment objective of the Series
is to seek high current income by investing primarily in a diversified portfolio
of high-yield, lower-rated corporate bonds.
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Certain Subaccounts invest in Class 2 Shares of a corresponding Series of
the Templeton Variable Products Series Fund. The following Series are currently
available:
MUTUAL SHARES INVESTMENT FUND: The primary investment objective of the
Series is capital appreciation with income as a secondary objective. The Mutual
Shares Investments Series invests in domestic equity securities that the manager
believes are significantly undervalued.
TEMPLETON ASSET ALLOCATION FUND: The investment objective of the Series is a
high level of total return. The Templeton Asset Allocation Series invests in
stocks of
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companies of any nation, bonds of companies and governments of any nation and
in money market instruments. Changes in the asset mix will be made in an attempt
to capitalize on total return potential produced by changing economic
conditions throughout the world.
TEMPLETON DEVELOPING MARKETS FUND: The investment objective of the Series is
long-term capital appreciation. The Templeton Developing Markets Series invests
primarily in emerging market equity securities.
TEMPLETON INTERNATIONAL FUND: The investment objective of the Series is
long-term capital growth. The Templeton International Series invests primarily
in stocks of companies located outside the United States, including emerging
markets. Any income realized will be incidental. It also may invest in debt
securities of governments and companies located anywhere in the world.
TEMPLETON STOCK FUND: The investment objective of the Series is long-term
capital growth. The Templeton Stock Series invests primarily in common stocks
issued by companies in various nations throughout the world, including the U.S.
and emerging markets.
WANGER ADVISORS TRUST
Certain Subaccounts invest in corresponding Series of the Wanger Advisors
Trust. The following Series are currently available:
WANGER FOREIGN FORTY: The investment objective of the Series is to seek
long-term capital growth. The Wanger Foreign Forty Series invests primarily in
equity securities of foreign companies with market capitalization of $1 billion
to $10 billion and focuses its investments in 40 to 60 companies in the
developed markets.
WANGER INTERNATIONAL SMALL CAP: The investment objective of the Series is to
seek long-term capital growth. The Wanger International Small Cap Series invests
primarily in securities of non-U.S. companies with total common stock market
capitalization of less than $1 billion.
WANGER TWENTY: The investment objective of the Series is to seek long-term
capital growth. The Wanger Twenty Series invests primarily in the stocks of U.S.
companies with market capitalization of $1 billion to $10 billion and ordinarily
focuses its investments in 20 to 25 U.S. companies.
WANGER U.S. SMALL CAP: The investment objective of the Series is to seek
long-term capital growth. The Wanger U.S. Small Cap Series invests primarily in
securities of U.S. companies with total common stock market capitalization of
less than $1 billion.
Each Series will be subject to market fluctuations and the risks that come
with the ownership of any security, and there can be no assurance that any
Series will achieve its stated investment objective.
In addition to being sold to the Account, shares of all of the Funds also
may be sold to other separate accounts of Phoenix or its affiliates and shares
of certain Funds also may be sold to the separate accounts of other insurance
companies.
It is possible that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Fund(s) simultaneously. Although neither PLAC nor the Fund(s)
trustees currently foresee any such disadvantages either to variable life
insurance Policyowners or to variable annuity Contractowners, the Funds'
trustees intend to monitor events in order to identify any material conflicts
between variable life insurance Policyowners and variable annuity Contractowners
and to determine what action, if any, should be taken in response to such
conflicts. Material conflicts could, for example, result from:
[diamond] changes in state insurance laws;
[diamond] changes in federal income tax laws;
[diamond] changes in the investment management of any portfolio of the
Fund(s); or
[diamond] differences in voting instructions between those given by variable
life insurance Policyowners and those given by variable annuity
Contractowners.
We will, at our expense, remedy such material conflicts including, if
necessary, segregating the assets underlying the variable life insurance
policies and the variable annuity contracts and establishing a new registered
investment company.
INVESTMENT ADVISORS
Phoenix Investment Counsel, Inc. ("PIC") is the investment advisor to all
Series in The Phoenix Edge Series Fund except the Phoenix-Duff & Phelps Real
Estate Securities and Phoenix-Aberdeen New Asia Series. Based on Subadvisory
agreements with the Fund, PIC delegates certain investment decisions and
research functions to subadvisors for the following Series:
[diamond] J.P. Morgan Investment Management, Inc.
[bullet] Phoenix Research Enhanced Index Series
[diamond] Roger Engemann & Associates, Inc. ("Engemann")
[bullet] Phoenix-Engemann Nifty Fifty Series
[diamond] Seneca Capital Management, LLC ("Seneca")
[bullet] Phoenix-Seneca Mid-Cap Growth Series
[diamond] Schafer Capital Management, Inc.
[bullet] Phoenix-Schafer Mid-Cap Value Series
The investment advisor to the Phoenix-Duff & Phelps Real Estate Securities
Series is Duff & Phelps Investment Management Co. ("DPIM").
The investment advisor to the Phoenix-Aberdeen New Asia Series is
Phoenix-Aberdeen International Advisors
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LLC ("PAIA"). Pursuant to subadvisory agreements with the Fund, PAIA delegates
certain investment decisions and research functions with respect to the
Phoenix-Aberdeen New Asia Series to PIC and Aberdeen Fund Managers, Inc.
PIC, DPIM, Engemann and Seneca are indirect, less than wholly-owned
subsidiaries of Phoenix. PAIA is jointly owned and managed by PM Holdings, Inc.,
a subsidiary of Phoenix, and by Aberdeen Fund Managers, Inc.
The other investment advisors are:
[diamond] Bankers Trust Company
[bullet] EAFE[registered trademark] Equity Index Fund
[diamond] Federated Investment Management Company
[bullet] Federated Fund for U.S. Government Securities II
[bullet] Federated High Income Bond Fund II
[diamond] Templeton Investment Counsel, Inc.
[bullet] Templeton Asset Allocation Fund
[bullet] Templeton International Fund
[bullet] Templeton Stock Fund
[diamond] Templeton Asset Management, Ltd.
[bullet] Templeton Developing Markets Fund
[diamond] Franklin Mutual Advisers, Inc.
[bullet] Mutual Shares Investments Fund
[diamond] Wanger Asset Management, L.P.
[bullet] Wanger Foreign Forty
[bullet] Wanger International Small Cap
[bullet] Wanger Twenty
[bullet] Wanger U.S. Small Cap
SERVICES OF THE ADVISORS
The Advisors continuously furnish an investment program for each Series and
manage the investment and reinvestment of the assets of each Series subject at
all times to the authority and supervision of the Trustees of each Fund. A
detailed discussion of the investment advisors and subadvisors, and the
investment advisory and subadvisory agreements, is contained in the accompanying
prospectus for the Funds.
REINVESTMENT AND REDEMPTION
All dividend distributions of the Fund are automatically reinvested in
shares of the Fund at their net asset value on the date of distribution.
Likewise, all capital gains distributions of the Fund, if any, are reinvested at
the net asset value on the record date. We redeem Fund shares at their net asset
value to the extent necessary to make payments under the Policy.
SUBSTITUTION OF INVESTMENTS
We reserve the right to make additions to, deletions from, or substitutions
for the investments held by the VUL Account, subject to compliance with the law
as currently applicable or as subsequently changed. In the future, we may
establish additional Subaccounts within the VUL Account, each of which will
invest in shares of a designated portfolio of the Fund with a specified
investment objective. If and when marketing needs and investment conditions
warrant, and at our discretion, we may establish additional portfolios. These
will be made available under existing Policies to the extent and on a basis
determined by us.
If shares of any of the portfolios of the Fund should be no longer available
for investment or, if in the judgment of our management, further investment in
shares of any of the portfolios become inappropriate due to Policy objectives,
we may then substitute shares of another mutual fund for shares already
purchased, or to be purchased in the future. No substitution of mutual fund
shares held by the VUL Account may take place without prior approval of the
Securities and Exchange Commission and prior notice to you. In the event of a
change, you will be given the option of transferring the Policy Value of the
Subaccount in which the substitution is to occur to another Subaccount.
THE GUARANTEED INTEREST ACCOUNT
In addition to the VUL Account, you may allocate premium or transfer policy
value to the Guaranteed Interest Account. Amounts you allocate or transfer to
the Guaranteed Interest Account become part of Phoenix Life and Annuity's
general account assets. You do not share in the investment experience of those
assets. Rather, we guarantee a 3% rate of return on your allocated amount. For
amounts transferred to the Guaranteed Interest Account due to a policy loan, the
guaranteed rate is 2% in all states except New York and New Jersey. In New York
and New Jersey the rate credited to the Guaranteed Interest Account due to a
policy loan is 4%. Although we are not obligated to credit interest at a higher
rate than the minimum, we will credit excess interest, if any, as determined by
us based on information as to expected investment yields.
Because of exemptive and exclusionary provisions, we have not registered
interests in our general account under the Securities Act of 1933. Also, we have
not registered our general account as an investment company under the Investment
Company Act of 1940, as amended. Therefore, neither the general account nor any
of its interests are subject to these Acts, and the Securities and Exchange
Commission has not reviewed the general account disclosures. These disclosures
may, however, be subject to certain provisions of the federal securities law as
to the accuracy and completeness of statements made in this prospectus.
We reserve the right to limit total deposits, including transfers, to the
Guaranteed Interest Account to no more than $250,000 during any one-week period
per policy.
In general, you can make only one transfer per year from the Guaranteed
Interest Account. The amount that can be transferred out is limited to the
greater of $1,000 or
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25% of the Policy Value in the Guaranteed Interest Account as of the date of the
transfer. If you elect the Systematic Transfer Program, approximately equal
amounts may be transferred out of the Guaranteed Interest Account. Also, the
total Policy Value allocated to the Guaranteed Interest Account may be
transferred out of the Guaranteed Interest Account to one or more of the
Subaccounts of the VUL Account over a consecutive four-year period according to
the following schedule:
[diamond] Year One: 25% of the total value
[diamond] Year Two: 33% of remaining value
[diamond] Year Three: 50% of remaining value
[diamond] Year Four: 100% of remaining value
Transfers into the Guaranteed Interest Account and among the Subaccounts of
the VUL Account may be made at any time. Transfers from the Guaranteed Interest
Account are subject to the rules discussed in "Appendix C" and "Transfer of
Policy Value--Systematic Transfer Program."
PREMIUMS
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MINIMUM PREMIUMS
The Minimum Premium is determined by case size as follows:
[diamond] 5 or more lives: $100,000 annually for the first
five Policy Years
[diamond] Fewer than 5 lives: $250,000 annually for the first
five Policy Years
The Issue Premium is due on the Policy Date. The Insured must be alive when
the Issue Premium is paid. After that, premiums may be paid at any time while
the Policy is in force. Each premium payment must be at least $100. Additional
payments should be sent to the:
VUL COLI UNIT
PO BOX 22012
ALBANY, NY 12201-2012
The number of units credited to a Subaccount of the VUL Account will be
determined by dividing the portion of the net premium applied to that Subaccount
by the unit value of the Subaccount on the Payment Date.
Regardless of whether you choose the Guideline Premium Test or the Cash
Value Accumulation Test (see "Minimum Face Amount"), we reserve the right to
refund a premium paid in any year if it will exceed the maximum premium limit.
The maximum limit is established by law to qualify the Policy contract as life
insurance. This limit is applied to the sum of all premiums paid under the
Policy. If the total premium limit is exceeded, the Policyowner will receive the
excess, with interest at an annual rate of not less than 4%, not later than 60
days after the end of the Policy Year in which the limit was exceeded. The
Policy Value then will be adjusted to reflect the refund. The total premium
limit may be exceeded if additional premium is needed to prevent lapse or if we
subsequently determine that additional premium would be permitted by federal
laws or regulations.
ALLOCATION OF ISSUE PREMIUM
We will generally allocate the Issue Premium less applicable charges to the
VUL Account or to the Guaranteed Interest Account upon receipt of a completed
application, in accordance with the allocation instructions in the application
for a Policy. However, Policies issued in certain states, and Policies issued in
certain states pursuant to applications which state the Policy is intended to
replace existing insurance, are issued with a Temporary Money Market Allocation
Amendment. Under this Amendment, we temporarily allocate the entire issue
premium paid less applicable charges (along with any other premiums paid during
the Free Look period) to the Phoenix-Goodwin Money Market Subaccount of the VUL
Account, and, at the expiration of the Free Look period, the policy value of the
Money Market Subaccount is allocated among the Subaccounts of the VUL Account or
to the Guaranteed Interest Account in accordance with the applicant's allocation
instructions in the application for insurance.
FREE LOOK PERIOD
You have the right to review the Policy. If you are not satisfied with it,
you may cancel the Policy:
[diamond] by mailing it to us within 10 days after you
receive it (or longer in some states);
[diamond] within 10 days after we mail or deliver a written
notice telling you about your free look period; or
[diamond] within 45 days after completing the application, whichever occurs
latest (the "Free Look Period").
We treat a returned Policy as if we never issued it and, except for Policies
issued with a Temporary Money Market Allocation Amendment, we will return the
sum of the following as of the date we receive the returned Policy: (1) the then
current Policy Value less any unpaid loans and loan interest; plus (2) any
monthly deductions, partial surrender fees and other charges made under the
Policy. For Policies issued with the Temporary Money Market Amendment, the
amount returned will equal any premiums paid less any unrepaid loans and loan
interest, and less any partial surrender amounts paid.
We retain the right to decline to process an application within seven days
of our receipt of the completed application for insurance. If we decline to
process the application, we will return the premium paid. Even if we have
approved the application for processing, we retain the right to decline to issue
the Policy. If we decline to issue the Policy, we will refund to you the same
amount as would have been
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refunded under the Policy had it been issued but returned for refund during the
Free Look Period.
ACCOUNT VALUE
TRANSFER OF POLICY VALUE
Transfers among available Subaccounts or the Guaranteed Interest Account and
changes in premium payment allocations may be requested in writing. Requests for
transfers will be executed on the date the request is received at Andesa, TPA,
Inc.
Although currently there is no charge for transfers, in the future, we may
charge a fee of $10 for each transfer after the first two transfers in a Policy
Year (after twelve transfers in New York).
You may make only one transfer per Policy Year from the unloaned portion of
the Guaranteed Interest Account unless (1) the transfer(s) are made as part of a
Dollar Cost Averaging Program, or (2) we agree to make an exception to this
rule. Unless you have elected a Dollar Cost Averaging Program, the amount you
may transfer cannot exceed the greater of $1,000 or 25% of the value of the
unloaned portion of the Guaranteed Interest Account at the time of the transfer.
In addition, you may transfer the total value allocated to the unloaned portion
of the Guaranteed Interest Account out of the Guaranteed Interest Account to one
or more of the Subaccounts over a consecutive four-year period according to the
following schedule:
[diamond] Year One: 25% of the total value
[diamond] Year Two: 33% of the remaining value
[diamond] Year Three: 50% of the remaining value
[diamond] Year Four: 100% of the remaining value
Transfers into the Guaranteed Interest Account and among the Subaccounts may
be made anytime. We reserve the right to limit the number of Subaccounts you may
invest in at any one time or over the life of the Policy, if we are required to
do so by any federal or state law.
Because excessive exchanges between Subaccounts can hurt Fund performance,
we reserve the right to temporarily or even permanently terminate exchange
privileges or reject any specific exchange order from anyone whose transactions
appear to us to follow a timing pattern, including those who request more than
one exchange out of a Subaccount within any 30-day period. We will not accept
batched transfer instructions from registered representatives (acting under
powers of attorney for multiple Policyowners), unless the registered
representative's broker-dealer firm and PLAC have entered into a third-party
transfer service agreement.
If a policy has been issued with a Temporary Money Market Allocation
Amendment, no transfers may be made until the end of the Free Look Period.
SYSTEMATIC TRANSFERS FOR DOLLAR COST AVERAGING
You may elect to transfer funds automatically among the Subaccounts or the
unloaned portion of the Guaranteed Interest Account on a monthly, quarterly,
semiannual or annual basis under the Systematic Transfers for Dollar Cost
Averaging Program ("Dollar Cost Averaging Program"). Under the Dollar Cost
Averaging Program, the minimum transfer amounts are $25 monthly, $75 quarterly,
$150 semiannually or $300 annually. You must have an initial value of $1,000 in
the Guaranteed Interest Account or the Subaccount from which funds will be
transferred ("Sending Subaccount") and if the value in that Subaccount or the
Guaranteed Interest Account drops below the amount to be transferred, the entire
remaining balance will be transferred and all systematic transfers stop. Funds
may be transferred from only one Sending Subaccount or the Guaranteed Interest
Account, but may be allocated to more than one Subaccount ("Receiving
Subaccounts"). Under the Dollar Cost Averaging Program, Policyowners may make
more than one transfer per Policy Year from the Guaranteed Interest Account.
These transfers must be in approximately equal amounts and made over a minimum
18-month period.
Only one Dollar Cost Averaging Program can be active at any time. All
transfers under the Dollar Cost Averaging Program will be made on the basis of
the Guaranteed Interest Account and Subaccount on the first day of the month
following our receipt of the transfer request. If the first day of the month
falls on a holiday or weekend, then the transfer will be processed on the next
business day.
AUTOMATIC ASSET RE-BALANCING
Automated account re-balancing permits you to maintain a specified whole
number percentage of your account value in any combination of Subaccounts and
the Guaranteed Interest Account. We must receive a written request in order to
begin your automated asset re-balancing program ("Asset Re-Balancing"). Then, we
will make transfers at least quarterly to and from the Subaccounts and the
Guaranteed Interest Account to re-adjust your account value to your specified
percentage. Asset Re-Balancing allows you to maintain a specific fund
allocation. Quarterly re-balancing is based on your policy year. We will
re-balance your account value only on a monthly calculation date.
The effective date of the first Asset Re-Balancing will be the first monthly
calculation date after we receive your request at Andesa TPA, Inc. If we receive
your request before the end of the free look period, your first re-balancing
will occur at the end of the free look period.
You may not participate in both the Dollar Cost Averaging Program and the
Asset Re-Balancing at the same time.
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DETERMINATION OF SUBACCOUNT VALUES
We establish the unit value of each Subaccount of the VUL Account on the
first Valuation Date of that Subaccount. The unit value of a Subaccount on any
other Valuation Date is determined by multiplying the unit value of that
Subaccount on the just prior Valuation Date by the Net Investment Factor for
that Subaccount for the then current Valuation Period. The unit value of each
Subaccount on a day other than a Valuation Date is the unit value on the next
Valuation Date. Unit values are carried to six decimal places. The unit value of
each Subaccount on a Valuation Date is determined at the end of that day.
The Net Investment Factor for each Subaccount is determined by the
investment performance of the assets held by the Subaccount during the Valuation
Period. Each valuation will follow applicable law and accepted procedures. The
Net Investment Factor is determined by the formula:
(A) + (B)
--------- - (D) where:
(C)
(A) The value of the assets in the Subaccount on the current Valuation Date,
including accrued net investment income and realized and unrealized
capital gains and losses, but excluding the net value of any transactions
during the current Valuation Period.
(B) The amount of any dividend (or, if applicable, any capital gain
distribution) received by the Subaccount if the "ex-dividend" date for
shares of the Fund occurs during the current Valuation Period.
(C) The value of the assets in the Subaccount as of the just prior Valuation
Date, including accrued net investment income and realized and unrealized
capital gains and losses, and including the net value amount of any
deposits and withdrawals made during the Valuation Period ending on that
date.
(D) The charge, if any, for taxes and reserves for taxes on investment income,
and realized and unrealized capital gains.
DEATH BENEFIT UNDER THE POLICY
The death benefit is the amount we pay to the designated beneficiary(ies)
when the Insured dies. Upon receiving due proof of death, we pay the beneficiary
the death benefit amount determined as of the date the Insured dies. The
beneficiary may direct us to pay all or part of the benefit in cash or to apply
it under one or more of our payment options.
MINIMUM FACE AMOUNT
To qualify as life insurance under current federal tax laws, the Policy has
a minimum face amount of insurance. The minimum face is determined using one of
two allowable definitions of life insurance: (1) the Cash Value Accumulation
Test or (2) the Guideline Premium Test. You chose which test to use on the
application prior to the issuance of your Policy. You cannot change the way we
determine your minimum face amount after your policy is issued.
The Cash Value Accumulation Test determines the minimum face amount by
multiplying the account value plus the refund of sales load, if applicable, by
the minimum face amount percentage. The percentages depend upon the Insured's
age, gender and underwriting classification.
Under the Guideline Premium Test, the minimum face amount is also equal to
an applicable percentage of the account value plus refund of sales load, if
applicable, but the percentage varies only by age of insured.
DEATH BENEFIT OPTIONS
In your application you chose a face amount of insurance coverage and the
death benefit option. We offer three death benefit options:
[diamond] Option 1: the death benefit is the greater of the Policy's face
amount on the date of death or, the minimum face amount in effect
on the date of death.
[diamond] Option 2: the death benefit is the greater of: (a) the Policy's
face amount on the date of death plus the policy value on the date
of death or, (b) the minimum face amount in effect on the date of
death.
[diamond] Option 3: the death benefit is the greater of: (a) the Policy's
face amount on the date of death plus the sum of all premiums
paid, less withdrawals or, (b) the Policy's face amount on the
date of death or; (c) the minimum face amount in effect on the
date of death.
If the Insured dies while the policy is in force, we will pay the death
benefit based on the option in effect on the date of death, with the following
adjustments:
[diamond] Add back in any charges taken against the account value for the
period beyond the date of death;
[diamond] Deduct any policy debt outstanding on the date of death; and
[diamond] Deduct any charges accrued against the account value unpaid as of
the date of death.
You may change the Death Benefit Option from Option 1 to Option 2 or from
Option 2 to Option 1. You may not make a change either to or from Option 3.
Under death benefit Options 1 and 3, the death benefit is not affected by
your policy's investment experience. Under death benefit Option 2, the death
benefit amount may increase or decrease by the investment experience.
We pay interest on the death benefit from the date of death to the date the
death benefit is paid or a payment option becomes effective.
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CHANGES IN FACE AMOUNT OF INSURANCE
REQUESTS FOR INCREASE IN FACE AMOUNT
Any time while this policy is in force, you may request an increase in the
face amount of insurance provided under the Policy. Requests for face amount
increases must be made in writing, and we require additional evidence of
insurability. The effective date of the increase generally will be the policy
anniversary following approval of the increase. The increase may not be less
than $25,000. We will deduct any charges associated with the increase (the
increases in cost of insurance charges), from the policy value, whether or not
you pay an additional premium in connection with the increase. Also, a new Free
Look Period (see "The Policy--Free Look Period") will be established for the
amount of the increase. For a discussion of possible implications of a material
change in the Policy resulting from the increase, see "Material Change Rules."
DECREASES IN FACE AMOUNT AND PARTIAL SURRENDER: EFFECT ON
DEATH BENEFIT
REQUESTS FOR DECREASE IN FACE AMOUNT
You may request a decrease in Face Amount at any time after the first Policy
Year. Unless we agree otherwise, the decrease must be at least equal to $10,000
and the face amount remaining after the decrease must be at least $25,000. All
face amount decrease requests must be in writing and will be effective on the
first Monthly Calculation Day following the date we approve the request.
A partial surrender or a decrease in Face Amount generally decreases the
death benefit. If the change is a decrease in Face Amount, the death benefit
under a Policy would be reduced on the next Monthly Calculation Day. If the
change is a partial surrender, the death benefit under a Policy would be reduced
immediately. A decrease in the death benefit may have certain tax consequences.
See "Federal Tax Considerations."
SURRENDERS
GENERAL
At any time during the lifetime of the Insured and while the Policy is in
force, you may partially or fully surrender the Policy by sending a written
request to Andesa TPA, Inc. We may also require you to send the Policy to us.
The amount available for surrender is the cash surrender value at the end of the
Valuation Period during which the surrender request is received at Andesa TPA,
Inc.
The cash surrender value is:
[bullet] Policy Value; less
[bullet] Any outstanding debt.
There is no surrender charge.
FULL SURRENDERS
If the Policy is being fully surrendered, the Policy itself must be returned
to Andesa TPA, Inc., along with the written release and surrender of all claims
in a form satisfactory to us. You may elect to have the amount paid in a lump
sum or under a payment option. "Payment Options."
PARTIAL SURRENDERS
You may obtain a partial surrender of the Policy by requesting payment of
the Policy's Cash Surrender Value. It is possible to do this at any time during
the lifetime of the Insured, while the Policy is in force, with a written
request to Andesa TPA, Inc. We may require the return of the Policy before
payment is made. A partial surrender will be effective on the date the written
request is received or, if required, the date the Policy is received by us.
Surrender proceeds may be applied under any of the payment options described
under "Payment of Proceeds--Payment Options."
We reserve the right to deny partial surrenders of less than $500. In
addition, if the share of the Policy Value in any Subaccount or in the
Guaranteed Interest Account is reduced as a result of a partial surrender and is
less than $500, we reserve the right to require surrender of the entire
remaining balance in that Subaccount or the Guaranteed Interest Account.
Upon a partial surrender, the Policy Value will be reduced by the sum of the
partial surrender amount paid. This amount comes from a reduction in the
Policy's share in the value of each Subaccount or the Guaranteed Interest
Account based on the allocation requested at the time of the partial surrender.
If no allocation request is made, the withdrawals from each Subaccount will be
made in the same manner as that provided for monthly deductions.
The Cash Surrender Value will be reduced by the partial surrender amount
paid. The Face Amount of the Policy will be reduced by the same amount as the
Policy Value is reduced as described above.
Upon partial or full surrender, we generally will pay to you the amount
surrendered within seven days after we receive the written request for the
surrender. Under certain circumstances, the surrender payment may be postponed.
See "General Provisions--Postponement of Payments." For the federal tax effects
of partial and full surrenders, see "Federal Tax Considerations."
POLICY LOANS
You can take a loan against your policy any time while the policy is in
force. The maximum loan is:
[bullet] 90% of your Policy Value at the time the loan is
taken; less
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[bullet] any outstanding policy debt before the loan is
taken; less
[bullet] interest on the loan being made and on any outstanding policy debt
to the next policy anniversary date.
Your policy must be assigned to us as collateral for the loan.
SOURCE OF LOAN
We deduct your requested loan amount from the Subaccounts and the Guaranteed
Interest Account, based on the allocation requested at the time of the loan. We
liquidate shares taken from the Subaccounts and transfer the resulting dollars
to the Guaranteed Interest Account. These dollars become part of the loaned
portion of the Guaranteed Interest Account.
INTEREST
You will pay interest on the loan at the following noted effective annual
rates, compounded daily and payable in arrears:
In all states except New York and New Jersey, the loan interest rate in
effect following the policy anniversary nearest the Insured's 65(th) birthday
will be 2.25%. The rates in effect before the Insured reaches age 65 follow:
[diamond] Policy years 1-10: 2.75%
[diamond] Policy years 11-15: 2.50%
[diamond] Policy years 16 and thereafter: 2.25%
In New York and New Jersey only, the loan interest rate in effect following
the policy anniversary nearest the Insured's 65(th) birthday will be 4.25%. The
rates in effect before the Insured reaches age 65 follow:
[diamond] Policy years 1-10: 4.75%
[diamond] Policy years 11-15: 4.50%
[diamond] Policy years 16 and thereafter: 4.25%
Interest accrues daily, becoming part of the policy debt. Interest is due
and payable on the policy anniversary. If you do not pay the interest when due,
we will add it to your loan. We treat any interest which has been capitalized
the same as if it were a new loan. We deduct this capitalized interest from the
Subaccounts and the Guaranteed Interest Account in proportion to the non-loaned
account value in each.
INTEREST CREDITED ON LOANED VALUE
The amount equal to any policy loan is held in the Guaranteed Interest
Account. This amount is credited with interest at a rate of 2% (4% in New York
and New Jersey).
REPAYMENT
You may repay all or part of your policy debt at anytime while the policy is
in force.
If you do not repay the loan, we deduct the loan amount due from the cash
surrender value or the death benefit.
Failure to repay a policy loan or to pay loan interest will not terminate
the Policy unless the policy value becomes insufficient to maintain the Policy
in force.
In the future, PLAC may not allow Policy loans of less than $500, unless
such loan is used to pay a premium on another PLAC policy.
EFFECT OF LOAN
Your policy loan reduces the death benefit and cash surrender value under
the policy by the amount of the loan. Your repayment of the loan increases the
death benefit and cash surrender value by the amount of the repayment.
As long as a loan is outstanding, a portion of your policy value is equal to
the loan is held in the Guaranteed Interest Account. The Subaccount's investment
performance does not affect the this amount. Also, you may be subject to tax
consequences if you surrender your policy while there is outstanding debt.
LAPSE
Unlike conventional life insurance policies, the payment of the Issue
Premium, no matter how large, or the payment of additional premiums will not
necessarily continue the Policy in force to its maturity date.
If on any Monthly Calculation Day, the Policy Value is less than the
required monthly deduction, a grace period of 61 days will be allowed for the
payment of an amount equal to three times the required monthly deduction.
During the grace period, the Policy will continue in force but Subaccount
transfers, loans, partial or full surrenders will not be permitted. Failure to
pay the additional amount within the grace period will result in lapse of the
Policy, but not before 30 days after we have mailed written notice to you. If a
premium payment for the additional amount is received by us during the grace
period, any amount of premium over what is required to prevent lapse will be
allocated among the Subaccounts or to the Guaranteed Interest Account according
to the current premium allocation schedule. In determining the amount of
"excess" premium to be applied to the Subaccounts or the Guaranteed Interest
Account, we will deduct the premium tax and the amount needed to cover any
monthly deductions made during the grace period. If the Insured dies during the
grace period, the death benefit will equal the amount of the death benefit
immediately prior to the commencement of the grace period.
ADDITIONAL INSURANCE OPTION
While the Policy is in force and the Insured is insurable, the Policyowner
will have the option to purchase additional insurance on the same Insured with
the same
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guaranteed rates as the Policy. We will require evidence of insurability and
charges will be adjusted for the Insured's new attained age and any change in
risk classification.
ADDITIONAL RIDER BENEFITS
You may elect additional benefits under a Policy, and you may cancel these
benefits at anytime. A charge will be deducted monthly from the policy value for
each additional rider benefit chosen except where noted below. More details will
be included in the form of a rider to the Policy if any of these benefits are
chosen. The following benefits are currently available and additional riders may
be available as described in the Policy (if approved in your state).
[diamond] FLEXIBLE TERM INSURANCE RIDER. This rider provides annually renewable
term insurance coverage to age 100 on the Insured under the base
policy The initial rider death benefit cannot exceed 10 times the
initial base Policy. There is no charge for this rider.
[diamond] EXCHANGE OF INSURED RIDER: This rider allows the Policyowner to
exchange the insured on a given contract. There is no charge for this
rider.
Future charges against the policy will be based on the life of the
substitute insured.
The incontestability and suicide exclusion periods, as they apply to
the substitute insured, run from the date of the exchange. Any
assignments will continue to apply.
The exchange is subject to the following adjustments:
1. If the policy value of the original policy is insufficient to produce
a positive cash surrender value for the new policy, the owner must pay
an exchange adjustment in an amount that, when applied as premium,
will make the policy value of the new policy greater than zero.
2. In some cases, the amount of policy value which may be applied to the
new policy may result in a death benefit which exceeds the limit for
the new policy. In that event, we will apply such excess policy value
to reduce any loan against the policy, and the residual amount will be
returned to you in cash.
3. The exchange will also be subject to our receipt of repayment of the
amount of any policy debt under the exchange policy in excess of the
loan value of the new policy on the date of exchange.
The Internal Revenue Service has ruled that an exchange of Insureds
does not qualify for tax deferral under Code Section 1035. Therefore,
you must include in current gross income all previously unrecognized
gain in the Policy upon an exchange of the Insured.
PART II--ADDITIONAL POLICY PROVISIONS
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POSTPONEMENT OF PAYMENTS
Payment of any amount upon complete or partial surrender, Policy loan, or
benefits payable at death (in excess of the initial face amount) or maturity may
be postponed:
[diamond] for up to six months from the date of the request, for any
transactions dependent upon the value of the Guaranteed Interest
Account;
[diamond] whenever the NYSE is closed other than for customary weekend and
holiday closings or trading on the NYSE is restricted as determined by
the SEC; or
[diamond] whenever an emergency exists, as decided by the SEC as a result of
which disposal of securities is not reasonably practicable or it is
not reasonably practicable to determine the value of the VUL Account's
net assets.
Transfers also may be postponed under these circumstances.
PAYMENT BY CHECK
Payments under the Policy of any amounts derived from premiums paid by check
may be delayed until such time as the check has cleared your bank.
THE CONTRACT
The Policy and attached copy of the application are the entire contract.
Only statements in the application can be used to void the Policy. The
statements are considered representations and not warranties. Only an executive
officer of PLAC can agree to change or waive any provisions of the Policy.
SUICIDE
If the Insured commits suicide within two years after the Policy's Date of
Issue, the Policy will stop and become void. We will pay you the Policy Value
adjusted by the addition of any monthly deductions and other fees and charges,
minus any debt owed to us under the Policy.
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INCONTESTABILITY
We cannot contest this Policy or any attached rider after it has been in
force during the Insured's lifetime or for two years from the policy date.
CHANGE OF OWNER OR BENEFICIARY
The Beneficiary, as named in the Policy application or subsequently changed,
will receive the Policy benefits at the Insured's death. If the named
Beneficiary dies before the Insured, the contingent Beneficiary, if named,
becomes the Beneficiary. If no Beneficiary survives the Insured, the death
benefit payable under the Policy will be paid to your estate.
As long as the Policy is in force, the Policyowner and the Beneficiary may
be changed in writing, satisfactory to us. A change in Beneficiary will take
effect as of the date the notice is signed, whether or not the Insured is living
when we receive the notice. We will not, however, be liable for any payment made
or action taken before receipt of the notice.
ASSIGNMENT
The Policy may be assigned. We will not be bound by the assignment until a
written copy has been received and we will not be liable with respect to any
payment made prior to receipt. We assume no responsibility for determining
whether an assignment is valid.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, the death benefit will
be adjusted based on what the cost of insurance charge for the most recent
monthly deduction would have purchased based on the correct age and sex.
SURPLUS
This Policy is non-participating and does not pay dividends. Your policy
will not share in PLAC's profits or surplus earnings.
PAYMENT OF PROCEEDS
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SURRENDER AND DEATH BENEFIT PROCEEDS
Death benefit proceeds and the proceeds of full or partial surrenders will
be processed at unit values next computed after we receive the request for
surrender or due proof of death, provided such request is complete and in good
order. Payment of surrender or death proceeds usually will be made in one lump
sum within seven days, unless another payment option has been elected. Payment
of the death proceeds, however, may be delayed if the claim for payment of the
death proceeds needs to be investigated, e.g., to ensure payment of the proper
amount to the proper payee. Any such delay will not be beyond that reasonably
necessary to investigate such claims consistent with insurance practices
customary in the life insurance industry.
You may elect a payment option for payment of the death proceeds to the
Beneficiary. You may revoke or change a prior election, unless such right has
been waived. The Beneficiary may make or change an election before payment of
the death proceeds, unless you have made an election that does not permit such
further election or changes by the Beneficiary.
A written request in a form satisfactory to us is required to elect, change
or revoke a payment option.
The minimum amount of surrender or death benefit proceeds that may be
applied under any payment option is $1,000.
If the Policy is assigned as collateral security, we will pay any amount due
the assignee in one lump sum. Any remaining proceeds will remain under the
option elected.
PAYMENT OPTIONS
All or part of the surrender or death proceeds of a Policy may be applied
under one or more of the following payment options or such other payment options
or alternative versions of the options listed as we may choose to make available
in the future.
OPTION 1--LUMP SUM.
Payment in one lump sum.
OPTION 2--LEFT TO EARN INTEREST.
A payment of interest during the payee's lifetime on the amount payable as a
principal sum. Interest rates are guaranteed to be at least 3% per year.
OPTION 3--PAYMENT FOR A SPECIFIC PERIOD.
Equal installments are paid for a specified period of years whether the
payee lives or dies. The first payment will be on the date of settlement. The
assumed interest rate on the unpaid balance is guaranteed not to be less than 3%
per year.
OPTION 4--LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN.
Equal installments are paid until the later of:
[diamond] the death of the payee; or
[diamond] the end of the period certain.
The first payment will be on the date of settlement.
The period certain must be chosen at the time this option is elected. The
periods certain that you may choose from are as follows:
[diamond] ten years;
[diamond] twenty years; or
[diamond] until the installments paid refund the amount applied under this
option.
If the payee is not living when the final payment falls due, that payment
will be limited to the amount which
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needs to be added to the payments already made to equal the amount applied under
this option.
If, for the age of the payee, a period certain is chosen that is shorter
than another period certain paying the same installment amount, we will consider
the longer period certain as having been elected.
Any life annuity provided under Option 4 is computed using an interest rate
guaranteed to be no less than 3-3/8% per year, but any life annuity providing a
period certain of 20 years or more is computed using an interest rate guaranteed
to be no less than 3-1/4% per year.
OPTION 5--LIFE ANNUITY.
Equal installments are paid only during the lifetime of the payee. The first
payment will be on the date of settlement. Any life annuity as may be provided
under Option 5 is computed using an interest rate guaranteed to be no less than
3-1/2% per year.
OPTION 6--PAYMENTS OF A SPECIFIED AMOUNT.
Equal installments of a specified amount, out of the principal sum and
interest on that sum, are paid until the principal sum remaining is less than
the amount of the installment. When that happens, the principal sum remaining
with accrued interest will be paid as a final payment. The first payment will be
on the date of settlement. The payments will include interest on the remaining
principal at a guaranteed rate of at least 3% per year. This interest will be
credited at the end of each year. If the amount of interest credited at the end
of the year exceeds the income payments made in the last 12 months, that excess
will be paid in one sum on the date credited.
OPTION 7--JOINT SURVIVORSHIP ANNUITY WITH 10-YEAR PERIOD CERTAIN.
The first payment will be on the date of settlement. Equal installments are
paid until the latest of:
[diamond] the end of the 10-year period certain;
[diamond] the death of the Insured; or
[diamond] the death of the other named annuitant.
The other annuitant must have attained age 40, must be named at the time
this option is elected and cannot later be changed. Any joint survivorship
annuity that may be provided under this option is computed using a guaranteed
interest rate to equal at least 3-3/8% per year.
For additional information concerning the above payment options, see the
Policy.
PART III--OTHER IMPORTANT INFORMATION
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FEDERAL TAX CONSIDERATIONS
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INTRODUCTION
The ultimate effect of federal income taxes on values under the VUL Account
and on the economic benefit to you or your Beneficiary depends on our tax status
and upon the tax status of the individual concerned. The discussion contained
herein is general in nature and is not intended as tax advice. For complete
information on federal and state tax considerations, a qualified tax advisor
should be consulted. No attempt is made to consider any estate and inheritance
taxes, or any state, local or other tax laws. Because the discussion herein is
based upon our understanding of federal income tax laws as they are currently
interpreted, we cannot guarantee the tax status of any Policy. The Internal
Revenue Service (the "IRS") makes no representation regarding the likelihood of
continuation of current federal income tax laws, Treasury regulations or of the
current interpretations. We reserve the right to make changes to the Policy to
assure that it will continue to qualify as a life insurance contract for federal
income tax purposes.
PLAC'S TAX STATUS
We are taxed as a life insurance company under the Internal Revenue Code of
1986, as amended (the "Code"). For federal income tax purposes, neither the VUL
Account nor the Guaranteed Interest Account is a separate entity from PLAC and
their operations form a part of PLAC.
Investment income and realized capital gains on the assets of the VUL
Account are reinvested and taken into account in determining the value of the
VUL Account. Investment income of the VUL Account, including realized net
capital gains, is not taxed to us. Due to our tax status under current
provisions of the Code, no charge currently will be made to the VUL Account for
our federal income taxes which may be attributable to the VUL Account. We
reserve the right to make a deduction for taxes if our federal tax treatment is
determined to be other than what we currently believe it to be, if changes are
made affecting the tax treatment to our variable life insurance contracts, or if
changes occur in our tax status. If imposed, such charge would be equal to the
federal income taxes attributable to the investment results of the VUL Account.
POLICY BENEFITS
DEATH BENEFIT PROCEEDS
The Policy, whether or not it is a "modified endowment contract" (see the
discussion on modified endowment contracts), should be treated as meeting the
definition of a life insurance contract for federal income tax
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purposes under Section 7702 of the Code. As such, the death benefit proceeds
thereunder should be excludable from the gross income of the Beneficiary under
Code Section 101(a)(1). Also, a Policyowner should not be considered to be in
constructive receipt of the cash value, including investment income. See,
however, the sections below on possible taxation of amounts received under the
Policy, via full surrender, partial surrender or loan.
Code Section 7702 imposes certain conditions with respect to premiums
received under a Policy. We monitor the premiums to assure compliance with such
conditions. However, if the premium limitation is exceeded during the year, we
may return the excess premium, with interest, to the Policyowner within 60 days
after the end of the Policy Year, and maintain the qualification of the Policy
as life insurance for federal income tax purposes.
FULL SURRENDER
Upon full surrender of a Policy for its cash value, the excess, if any, of
the cash value (unreduced by any outstanding indebtedness) over the premiums
paid will be treated as ordinary income for federal income tax purposes. The
full surrender of a Policy that is a modified endowment contract may result in
the imposition of an additional 10% tax on any income received.
PARTIAL SURRENDER
If the Policy is a modified endowment contract, partial surrenders are fully
taxable to the extent of income in the Policy and are possibly subject to an
additional 10% tax. See the discussion on modified endowment contracts below. If
the Policy is not a modified endowment contract, partial surrenders still may be
taxable, as follows. Code Section 7702(f)(7) provides that where a reduction in
death benefits occurs during the first 15 years after a Policy is issued and
there is a cash distribution associated with that reduction, the Policyowner may
be taxed on all or a part of the amount distributed. A reduction in death
benefits may result from a partial surrender. After 15 years, the proceeds will
not be subject to tax, except to the extent such proceeds exceed the total
amount of premiums paid but not previously recovered. We suggest you consult
with your tax advisor in advance of a proposed decrease in death benefits or a
partial surrender as to the portion, if any, which would be subject to tax, and
in addition as to the impact such partial surrender might have under the new
rules affecting modified endowment contracts.
LOANS
We believe that any loan received under a Policy will be treated as your
indebtedness. If the Policy is a modified endowment contract, loans are fully
taxable to the extent of income in the Policy and are possibly subject to an
additional 10% tax. See the discussion on modified endowment contracts. If the
Policy is not a modified endowment contract, we believe that no part of any loan
under a Policy will constitute income to you.
The deductibility by a Policyowner of loan interest under a Policy may be
limited under Code Section 264, depending on the circumstances. A Policyowner
intending to fund premium payments through borrowing should consult a tax
advisor with respect to the tax consequences thereof. Under the "personal"
interest limitation provisions of the Code, interest on Policy loans used for
personal purposes is not tax deductible. Other rules may apply to allow all or
part of the interest expense as a deduction if the loan proceeds are used for
"trade or business" or "investment" purposes. See your tax advisor for further
guidance.
BUSINESS-OWNED POLICIES
If a business or a corporation owns the Policy, the Code may impose
additional restrictions. The Code limits the interest deduction on
business-owned Policy loans and may impose tax upon the inside build-up of
corporate-owned life insurance policies through the corporate alternative
minimum tax.
MODIFIED ENDOWMENT CONTRACTS
GENERAL
Pursuant to Code Section 72(e), loans and other amounts received under
modified endowment contracts will, in general, be taxed to the extent of
accumulated income (generally, the excess of cash value over premiums paid).
Life insurance policies can be modified endowment contracts if they fail to meet
what is known as "the 7-pay test." The measuring stick for this test is a
hypothetical life insurance policy of equal face amount which requires 7 equal
annual premiums but which, after the seventh year is "fully paid-up," continuing
to provide a level death benefit without the need for any further premiums. A
Policy becomes a modified endowment contract, if, at any time during the first
seven years, the cumulative premium paid on the Policy exceeds the cumulative
premium that would have been paid under the hypothetical policy. Premiums paid
during a Policy Year but which are returned by us with interest within 60 days
after the end of the Policy Year will be excluded from the 7-pay test. A life
insurance policy received in exchange for a modified endowment contract will be
treated as a modified endowment contract.
REDUCTION IN BENEFITS DURING THE FIRST SEVEN YEARS
If there is a reduction in death benefits during the first seven Policy
Years, the premiums are redetermined for purposes of the 7-pay test as if the
Policy originally had been issued at the reduced death benefit level and the new
limitation is applied to the cumulative amount paid for each of the first seven
Policy Years.
DISTRIBUTIONS AFFECTED
If a Policy fails to meet the 7-pay test, it is considered a modified
endowment contract only as to distributions in the year in which the test is
failed and all subsequent Policy Years. However, distributions made in
anticipation of such
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failure (there is a presumption that distributions made within two years prior
to such failure were "made in anticipation") also are considered distributions
under a modified endowment contract. If the Policy satisfies the 7-pay test for
seven years, distributions and loans generally will not be subject to the
modified endowment contract rules.
PENALTY TAX
Any amounts taxable under the modified endowment contract rule will be
subject to an additional 10% excise tax, with certain exceptions. This
additional tax will not apply in the case of distributions that are:
[diamond] made on or after the taxpayer attains age 59 1/2;
[diamond] attributable to the taxpayer's disability (within the meaning of
Code Section 72(m)(7)); or
[diamond] part of a series of substantially equal periodic payments (not less
often than annually) made for the life (or life expectancy) of the
taxpayer or the joint lives (or life expectancies) of the taxpayer
and his Beneficiary.
MATERIAL CHANGE RULES
Any determination of whether the Policy meets the 7-pay test will begin
again any time the Policy undergoes a "material change," which includes any
increase in death benefits or any increase in or addition of a qualified
additional benefit, with the following two exceptions.
[diamond] First, if an increase is attributable to premiums paid "necessary to
fund" the lowest death benefit and qualified additional benefits
payable in the first seven Policy Years or to the crediting of
interest or dividends with respect to these premiums, the "increase"
does not constitute a material change.
[diamond] Second, to the extent provided in regulations, if the death benefit
or qualified additional benefit increases as a result of a
cost-of-living adjustment based on an established broad-based index
specified in the Policy, this does not constitute a material change
if:
[bullet] the cost-of-living determination period does not exceed the
remaining premium payment period under the Policy; and
[bullet] the cost-of-living increase is funded ratably over the
remaining premium payment period of the Policy.
A reduction in death benefits is not considered a material change unless
accompanied by a reduction in premium payments.
A material change may occur at any time during the life of the Policy
(within the first seven years or thereafter), and future taxation of
distributions or loans would depend upon whether the Policy satisfied the
applicable 7-pay test from the time of the material change. An exchange of
policies is considered to be a material change for all purposes.
SERIAL PURCHASE OF MODIFIED ENDOWMENT CONTRACTS
All modified endowment contracts issued by the same insurer (or affiliated
companies of the insurer) to the same Policyowner within the same calendar year
will be treated as one modified endowment contract in determining the taxable
portion of any loans or distributions made to the Policyowner. The Treasury has
been given specific legislative authority to issue regulations to prevent the
avoidance of the new distribution rules for modified endowment contracts. A
qualified tax advisor should be consulted about the tax consequences of the
purchase of more than one modified endowment contract within any calendar year.
LIMITATIONS ON UNREASONABLE MORTALITY AND EXPENSE CHARGES
The Code imposes limitations on unreasonable mortality and expense charges
for purposes of ensuring that a Policy qualifies as a life insurance contract
for federal income tax purposes. The mortality charges taken into account to
compute permissible premium levels may not exceed those charges required to be
used in determining the federal income tax reserve for the Policy, unless
Treasury regulations prescribe a higher level of charge. In addition, the
expense charges taken into account under the guideline premium test are required
to be reasonable, as defined by the Treasury regulations. We will comply with
the limitations for calculating the premium we are permitted to receive from
you.
DIVERSIFICATION STANDARDS
To comply with the Diversification Regulations under Code Section 817(h),
("Diversification Regulations") each Series of the Fund is required to diversify
its investments. The Diversification Regulations generally require that on the
last day of each calendar quarter the Series assets be invested in no more than:
[diamond] 55% in any 1 investment
[diamond] 70% in any 2 investments
[diamond] 80% in any 3 investments
[diamond] 90% in any 4 investments
A "look-through" rule applies to treat a pro rata portion of each asset of a
Series as an asset of the VUL Account; therefore, each Series of the Fund will
be tested for compliance with the percentage limitations. For purposes of these
diversification rules, all securities of the same issuer are treated as a single
investment, but each United States government agency or instrumentality is
treated as a separate issuer.
The general diversification requirements are modified if any of the assets
of the VUL Account are direct obligations of the United States Treasury. In this
case, there is no limit on the investment that may be made in
24
<PAGE>
Treasury securities, and for purposes of determining whether assets other
than Treasury securities are adequately diversified, the generally applicable
percentage limitations are increased based on the value of the VUL Account's
investment in Treasury securities. Notwithstanding this modification of the
general diversification requirements, the portfolios of the Funds will be
structured to comply with the general diversification standards because they
serve as an investment vehicle for certain variable annuity contracts that must
comply with these standards.
In connection with the issuance of the Diversification Regulations, the
Treasury announced that such regulations do not provide guidance concerning the
extent to which you may direct your investments to particular divisions of a
separate account. It is possible that a revenue ruling or other form of
administrative pronouncement in this regard may be issued in the near future. It
is not clear, at this time, what such a revenue ruling or other pronouncement
would provide. It is possible that the Policy may need to be modified to comply
with such future Treasury announcements. For these reasons, we reserve the right
to modify the Policy, as necessary, to prevent you from being considered the
owner of the assets of the VUL Account.
We intend to comply with the Diversification Regulations to assure that the
Policies continue to qualify as a life insurance contract for federal income tax
purposes.
CHANGE OF OWNERSHIP OR INSURED OR ASSIGNMENT
Changing the Policyowner or the Insured or an exchange or assignment of the
Policy may have tax consequences depending on the circumstances. Code Section
1035 provides that a life insurance contract can be exchanged for another life
insurance contract, without recognition of gain or loss, assuming that no money
or other property is received in the exchange, and that the Policies relate to
the same Insured. If the surrendered Policy is subject to a policy loan, this
may be treated as the receipt of money on the exchange. We recommend that any
person contemplating such actions seek the advice of a qualified tax consultant.
OTHER TAXES
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Policyowner or Beneficiary. We do not make any
representations or guarantees regarding the tax consequences of any Policy with
respect to these types of taxes.
VOTING RIGHTS
- --------------------------------------------------------------------------------
We will vote the Funds' shares held by the Subaccounts at any regular and
special meetings of shareholders of the Funds. To the extent required by law,
such voting will be pursuant to instructions received from you. However, if the
1940 Act or any regulation thereunder should be amended or if the present
interpretation thereof should change, and as a result, we decide that we are
permitted to vote the Funds' shares at our own discretion, we may elect to do
so.
The number of votes that you have the right to cast will be determined by
applying your percentage interest in a Subaccount to the total number of votes
attributable to the Subaccount. In determining the number of votes, fractional
shares will be recognized.
Funds' shares held in a Subaccount for which no timely instructions are
received, and Funds' shares which are not otherwise attributable to
Policyowners, will be voted by PLAC in proportion to the voting instructions
that are received with respect to all Policies participating in that Subaccount.
Instructions to abstain on any item to be voted upon will be applied to reduce
the votes eligible to be cast by PLAC.
You will receive proxy materials, reports and other materials related to the
Funds.
We 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 subclassification or investment objective of one or
more of the portfolios of the Funds or to approve or disapprove an investment
advisory contract for the Funds. In addition, PLAC itself may disregard voting
instructions in favor of changes initiated by a Policyowner in the investment
policies or the Investment Advisor of the Funds if PLAC 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 or we decide
that the change would have an adverse effect on the General Account because the
proposed investment policy for a Series may result in overly speculative or
unsound investments. In the event PLAC does disregard voting instructions, a
summary of that action and the reasons for such action will be included in the
next periodic report to Policyowners.
THE DIRECTORS AND
EXECUTIVE OFFICERS OF PLAC
- ------------------------------------------------------------
PLAC is managed by its Board of Directors. The following are the Directors
and Executive Officers of PLAC:
NAME AND TITLE PRINCIPAL OCCUPATION
Robert W. Fiondella, Chairman of the Board,
Director, Chairman President and Chief
and President Executive Officer
Richard H. Booth, Executive Vice President
Director, Executive
Vice President
25
<PAGE>
Philip R. McLoughlin, Executive Vice President and
Director and Executive Chief Investment Officer
Vice President
David W. Searfoss, Executive Vice President and
Director and Executive Chief Financial Officer
Vice President and CFO
Dona D. Young, Executive Vice President,
Director and Executive Individual Insurance and
Vice President General Counsel
Joseph E. Kelleher, Senior Vice President
Director and Senior
Vice President
Robert G. Lautensack, Senior Vice President
Director and Senior
Vice President
Simon Y. Tan, Senior Vice President,
Director and Senior Individual Market
Vice President Development
Robert G. Chipkin, Senior Vice President
Director
Carl T. Chadburn, Executive Vice President
Director
The above positions reflect the last held position in our parent company,
Phoenix Home Life Mutual Insurance Company, during the last five years.
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS
- --------------------------------------------------------------------------------
We hold the assets of the VUL Account. The assets of the VUL Account are
kept physically segregated and held separate and apart from our General Account.
We maintain records of all purchases and redemptions of shares of the Funds.
SALES OF POLICIES
- --------------------------------------------------------------------------------
Policies may be purchased from registered representatives of W.S. Griffith &
Co., Inc. ("WSG"), a New York corporation incorporated on August 7, 1970,
licensed to sell Phoenix insurance policies as well as policies, annuity
contracts and funds of companies affiliated with Phoenix. WSG, an indirect
subsidiary of Phoenix, is registered as a broker-dealer with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and is a member of the National
Association of Securities Dealers, Inc. Phoenix Equity Planning Corporation
("PEPCO") serves as national distributor of the Policies. PEPCO is an indirect
subsidiary of Phoenix Investment Partners, Ltd. ("PXP"), in which Phoenix owns
a majority interest.
Policies also may be purchased from other broker-dealers registered under
the 1934 Act whose representatives are authorized by applicable law to sell
Policies under terms of agreements provided by PEPCO. Sales commissions will be
paid to registered representatives on purchase payments we receive under these
Policies. PLAC will pay a maximum total sales commission of 19% of premiums to
PEPCO. Additionally, agents or selling brokers may receive asset-based
compensation. The maximum asset-based compensation is 0.90% of the policy value.
To the extent that the sales charge under the Policies is less than the sales
commissions paid with respect to the Policies, we will pay the shortfall from
our General Account assets, which will include any profits we may derive under
the Policies.
STATE REGULATION
- --------------------------------------------------------------------------------
We are subject to the provisions of the Connecticut insurance laws
applicable to stock life insurance companies and to regulation and supervision
by the Connecticut Superintendent of Insurance. We also are subject to the
applicable insurance laws of all the other states and jurisdictions in which we
do insurance business.
State regulation of PLAC includes certain limitations on the investments
which we may make, including investments for the VUL Account and the Guaranteed
Interest Account. This regulation does not include, however, any supervision
over the investment policies of the VUL Account.
REPORTS
- --------------------------------------------------------------------------------
All Policyowners will be furnished with those reports required by the 1940
Act and related regulations or by any other applicable law or regulation.
LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
The VUL Account is not engaged in any litigation. PLAC is not involved in
any litigation that would have a material adverse effect on our ability to meet
our obligations under the Policies.
LEGAL MATTERS
- --------------------------------------------------------------------------------
Edwin L. Kerr, Counsel of Phoenix Home Life Mutual Insurance Company, has
passed upon the organization of PLAC, its authority to issue variable life
insurance Policies and the validity of the Policy, and upon legal matters
relating to the federal securities and income tax laws for PLAC.
REGISTRATION STATEMENT
- --------------------------------------------------------------------------------
A Registration Statement has been filed with the SEC, under the Securities
Act of 1933 ("1933 Act") with respect to the securities offered. This Prospectus
is a summary of the contents of the Policy and other legal documents and
26
<PAGE>
does not contain all the information set forth in the Registration Statement
and its exhibits. We refer you to the registration statement and its exhibits
for further information concerning the VUL Account, PLAC and the Policy.
YEAR 2000 ISSUE
- --------------------------------------------------------------------------------
Many existing computer programs use only two digits to identify the year in
a date field. This is commonly referred to as the "Year 2000 Issue." Companies
must consider the impact of the upcoming change in the century on their computer
systems. The Year 2000 Issue, if not adequately addressed, could result in
computer system failures or miscalculations causing disruptions of operations
and the possible inability of companies to process transactions. We believe that
the Year 2000 Issue is an important business priority requiring careful analysis
of every business system in order to be assured that all information systems
applications are century compliant.
PLAC's ultimate parent, Phoenix, has been addressing the Year 2000 Issue in
earnest since 1995 when, with consultants, a comprehensive inventory and
assessment of all business systems, including those of our subsidiaries, was
conducted. Phoenix has identified and pursued a number of strategies to address
the issue, including:
[diamond] upgrading systems with compliant versions;
[diamond] developing or acquiring new systems to replace those that are
obsolete;
[diamond] repairing existing systems by converting code or hardware; and
[diamond] preparing contingency plans to address difficulties that may arise.
Based on current assessments, those computer systems deemed critical to
customer service and business continuity are compliant. Testing will continue
through 1999. Additionally Phoenix has obtained Year 2000 assurances from
business partners.
THE BOTTOM LINE IS THAT PHOENIX WILL BE BOTH READY AND TESTED FOR THE NEW
MILLENNIUM.
More details about our Year 2000 program are available on our Web site:
www.phl.com.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The financial statements of PLAC contained herein should be considered only
as bearing upon PLAC's ability to meet its obligations under the Policy, and
they should not be considered as bearing on the investment performance of the
VUL Account. The financial statements of the VUL Account are for the Subaccounts
available for the period ended December 31, 1998.
27
<PAGE>
PHOENIX LIFE AND
ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
FINANCIAL STATEMENTS DECEMBER 31, 1998
28
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
Report of Independent Accountants............................................30
Balance Sheet................................................................31
Statement of Income, Comprehensive Income and Equity.........................32
Statement of Cash Flows......................................................33
Notes to Financial Statements.............................................34-41
29
<PAGE>
[PriceWaterhouseCoopers Logo & Address]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholder of
Phoenix Life and Annuity Company
In our opinion, the accompanying balance sheet and the related statements of
income, comprehensive income and equity and of cash flows present fairly, in all
material respects, the financial position of Phoenix Life and Annuity Company at
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years ended December 31, 1998 and 1997 and for the periods from March
30, 1996 to December 31, 1996 and from January 1, 1996 to March 29, 1996, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
[PriceWaterhouseCoopers Logo]
February 11, 1999
30
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
BALANCE SHEET
- --------------------------------------------------------------------------------
DECEMBER 31,
1998 1997
(IN THOUSANDS)
ASSETS
Available-for-sale debt securities, at fair value $ 9,781 $ 7,209
Short-term investments 1,754 3,671
------- -------
Total investments 11,535 10,880
Cash and cash equivalents 99 48
Accrued investment income 169 152
Goodwill 701 798
Other assets 13
------- -------
Total assets $12,517 $11,878
======= =======
LIABILITIES
Deferred income taxes $ 151 $ 66
Other liabilities 2 3
------- -------
Total liabilities 153 69
EQUITY
Common stock, $100 par value, 40,000 shares
authorized, 25,000 shares issued and outstanding 2,500 2,500
Additional paid-in-capital 8,664 8,664
Retained earnings 867 514
Accumulated other comprehensive income 333 131
------- -------
Total equity 12,364 11,809
------- -------
Total liabilities and equity $12,517 $11,878
======= =======
The accompanying notes are an integral part of these statements.
31
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
STATEMENT OF INCOME, COMPREHENSIVE INCOME AND EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIODS FROM MARCH 30, 1996 TO
DECEMBER 31, 1996 (SUCCESSOR PERIOD) AND JANUARY 1, 1996 TO MARCH 29, 1996
(PREDECESSOR PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1996
SUCCESSOR SUCCESSOR SUCCESSOR PREDECESSOR
PERIOD PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C> <C>
REVENUES
Net investment income $ 688 $ 624 $ 433 $ 95
Net realized investment losses (1)
------- ------- ------- -------
Total revenues 688 624 432 95
------- ------- ------- -------
EXPENSES
Amortization of goodwill 97 90 81
Other operating expenses 63 4 (3)
------- ------- ------- -------
Total expenses 160 94 81 (3)
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 528 530 351 98
Income taxes 175 189 129
------- ------- ------- -------
NET INCOME 353 341 222 98
------- ------- ------- -------
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX
Unrealized gains on securities arising during period 202 86 39
Reclassification adjustment for losses included
in net income 6
------- ------- ------- -------
Total other comprehensive income 202 86 45
------- ------- ------- -------
COMPREHENSIVE INCOME 555 427 267 98
Acquisition adjustment to record purchase price (107) 1,076
Capital contribution 49 4,000
------- ------- ------- -------
NET INCREASE IN EQUITY 555 369 5,343 98
EQUITY, BEGINNING OF PERIOD 11,809 11,440 6,097 5,999
------- ------- ------- -------
EQUITY, END OF PERIOD $12,364 $11,809 $11,440 $ 6,097
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
32
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIODS FROM MARCH 30, 1996 TO
DECEMBER 31, 1996 (SUCCESSOR PERIOD) AND JANUARY 1, 1996 TO MARCH 29, 1996
(PREDECESSOR PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1996
SUCCESSOR SUCCESSOR SUCCESSOR PREDECESSOR
PERIOD PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 353 $ 341 $ 222 $ 98
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY OPERATIONS
Goodwill amortization 97 90 81
Deferred income taxes (24) (2) (2)
Increase in accrued investment income (17) (34) (104) (9)
Decrease in receivable from affiliate 899
Other, net (29) (60) (18)
------- ------- ------- -------
Net cash provided by operating activities 380 335 179 988
------- ------- ------- -------
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of available-for-sale debt securities (2,246) (1,527) (5,167)
Change in short-term investments, net 1,917 1,036 (1,002)
------- ------- ------- -------
Net cash used for investing activities (329) (491) (6,169)
------- ------- ------- -------
CASH FLOW FROM FINANCING ACTIVITIES
Capital contribution from parent 49 4,000
------- ------- ------- -------
Net cash provided by financing activities 49 4,000
------- ------- ------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 51 (107) (1,990) 988
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 48 155 2,145 1,157
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 99 $ 48 $ 155 $ 2,145
======= ======= ======= =======
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 213 $ 182 $ 113 $
------- ------- ------- -------
</TABLE>
The accompanying notes are an integral part of these statements.
33
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS
Phoenix Life and Annuity Company is a life insurance company domiciled in
the State of Connecticut and is licensed in 35 states. On March 29, 1996, PM
Holdings, Inc. acquired Savers Life Insurance Company of America from
Central United Life Insurance Company, renamed the acquired company Phoenix
Life and Annuity Company and redomiciled the company from Missouri to
Connecticut. PM Holdings accounted for the acquisition of Phoenix Life and
Annuity under the purchase method of accounting. The assets and liabilities
of Phoenix Life and Annuity were recorded at their fair value as of the date
of acquisition and intangible assets associated with the acquisition were
recorded in the accounts of the acquired company. PM Holdings is a
wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements have been prepared in accordance with generally
accepted accounting principles (GAAP). The preparation of financial
statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
The financial statements for the period subsequent to the March 29, 1996
acquisition are sometimes referred to as the "successor period." The
financial statements for the period prior to the acquisition are sometimes
referred to as the "predecessor period."
VALUATION OF INVESTMENTS
Investments in debt securities include U.S. government and agency bonds.
Phoenix Life and Annuity classifies its debt security investments as
available-for-sale. These investments are presented at fair value with
unrealized gains or losses included as a separate component of equity. Debt
securities are considered impaired when a decline in value is considered to
be other than temporary.
Short-term investments are carried at amortized cost, which approximates
market value. Phoenix considers highly liquid investments purchased with a
maturity date of one year or less to be short-term investments.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand and money market
instruments.
GOODWILL
Goodwill represents the excess of the cost of the business acquired on March
29, 1996 over the fair value of its tangible net assets. During 1997,
Phoenix Life and Annuity recorded a $58 thousand dollar reduction in
goodwill, representing a refund and a subsequent adjustment of a portion of
the purchase price. Goodwill is amortized on a straight-line method over a
period of 10 years, the expected period of benefit from the acquisition.
Management periodically reevaluates the propriety of the carrying value of
long-lived assets including goodwill. Assets are considered impaired if
carrying value exceeds the expected future undiscounted cash flows. Such
analyses are performed at least annually or more frequently if warranted by
events or circumstances affecting Phoenix Life and Annuity's business. At
this time, management believes that no impairment of goodwill has occurred
and that no reduction of the carrying value is warranted.
34
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
INCOME TAXES
Phoenix Life and Annuity is included in the life/nonlife consolidated
federal income tax return filed by Phoenix. In accordance with a tax sharing
agreement with Phoenix, the provision for federal income taxes is computed
as if Phoenix Life and Annuity were filing a separate federal income tax
return, except those benefits arising from income tax credits and net
operating and capital losses are allocated to those subsidiaries producing
such attributes to the extent they are utilized in Phoenix's consolidated
federal income tax return.
Deferred income taxes result from temporary differences between the tax
basis of assets and liabilities and their recorded amounts for financial
reporting purposes. These differences result primarily from unrealized gains
or losses on investments and goodwill.
RECENT ACCOUNTING PRONOUNCEMENTS
Phoenix Life and Annuity adopted Statement of Financial Accounting Standard
(SFAS) No. 130, "Reporting Comprehensive Income," as of January 1, 1998.
This statement establishes standards for the reporting and display of
comprehensive income and its components in a full set of financial
statements. This statement defines the components of comprehensive income as
those items that were previously reported only as components of equity and
were excluded from net income.
3. INVESTMENTS
Information pertaining to Phoenix Life and Annuity's investments, net
investment income and unrealized investment gains and losses follows:
DEBT SECURITIES
The amortized cost and fair value of investments in debt securities as of
December 31, 1998 were as follows:
<TABLE>
<CAPTION>
GROSS
AMORTIZED UNREALIZED FAIR
COST GAINS VALUE
(IN THOUSANDS)
<S> <C> <C> <C>
AVAILABLE-FOR-SALE:
U.S. government and agency bonds $5,127 $ 340 $5,467
Corporate securities 4,143 171 4,314
------ ------ ------
TOTAL DEBT SECURITIES $9,270 $ 511 $9,781
====== ====== ======
</TABLE>
The amortized cost and fair value of investments in debt securities as of
December 31, 1997 were as follows:
<TABLE>
<CAPTION>
GROSS
AMORTIZED UNREALIZED FAIR
COST GAINS VALUE
(IN THOUSANDS)
AVAILABLE-FOR-SALE:
<S> <C> <C> <C>
U.S. government and agency bonds $6,008 $ 177 $6,185
Corporate securities 999 25 1,024
------ ------ ------
TOTAL DEBT SECURITIES $7,007 $ 202 $7,209
====== ====== ======
</TABLE>
35
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The amortized cost and fair value of these investments, by contractual
maturity, as of December 31, 1998 are shown below. Actual maturities may
differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties, or
Phoenix Life and Annuity may have the right to put or sell the obligations
back to the issuers.
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
(IN THOUSANDS)
<S> <C> <C>
Due after one year through five years $5,128 $5,468
Due after five years through ten years 1,057 1,058
Due after ten years 3,085 3,255
------ ------
Total $9,270 $9,781
====== ======
</TABLE>
NET INVESTMENT INCOME
The components of net investment income for the years ended December 31,
1998 and 1997 and from March 30, 1996 to December 31, 1996 (successor
period) and January 1, 1996 to March 29, 1996 (predecessor period) were as
follows:
<TABLE>
<CAPTION>
1998 1997 1996 1996
SUCCESSOR SUCCESSOR SUCCESSOR PREDECESSOR
PERIOD PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Debt security investments $583 $376 $226
Short-term investments 115 259 214 $ 95
---- ---- ---- ----
698 635 440 95
Less investment expenses 10 11 7
---- ---- ---- ----
Net investment income $688 $624 $433 $ 95
==== ==== ==== ====
</TABLE>
UNREALIZED INVESTMENT GAINS AND LOSSES
Unrealized gains on investments carried at fair value at December 31, were
as follows:
<TABLE>
<CAPTION>
1998 1997 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Unrealized investment gains $311 $132 $ 60
Deferred income taxes 109 46 21
---- ---- ----
Net unrealized investment gains $202 $ 86 $ 39
==== ==== ====
</TABLE>
36
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4. GOODWILL
Phoenix Life and Annuity, formerly Savers Life Insurance Company of America,
was acquired by way of a stock purchase agreement on March 29, 1996 and was
accounted for under the purchase method of accounting. The assets and
liabilities were recorded at fair value as of the date of acquisition and
goodwill of approximately $1.0 million was pushed-down to Phoenix Life and
Annuity from PM Holdings.
Goodwill was as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
(IN THOUSANDS)
<S> <C> <C>
Goodwill $969 $969
Accumulated amortization (268) (171)
---- ----
Total $701 $798
==== ====
</TABLE>
5. INCOME TAXES
A summary of income taxes in the Statement of Income, Comprehensive Income
and Equity for the years ended December 31, 1998 and 1997 and the period
from March 30, 1996 to December 31, 1996 (successor period) is presented
below. No income taxes were recorded for the period from January 1, 1996 to
March 29, 1996 (predecessor period).
<TABLE>
<CAPTION>
1998 1997 1996
SUCCESSOR SUCCESSOR SUCCESSOR
PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C>
Current income taxes $199 $191 $131
Deferred income taxes (24) (2) (2)
---- ---- ----
Total $175 $189 $129
==== ==== ====
</TABLE>
37
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The income taxes attributable to the successor and predecessor periods are
different than the amounts determined by multiplying income before taxes by
the statutory income tax rate. In the predecessor period, Savers Life was a
consolidated subsidiary of a thrift under the control of the Resolution
Trust Corporation. During the predecessor period, an interagency agreement
between the Resolution Trust Corporation and the Internal Revenue Service
stated that the Internal Revenue Service would not impose income taxes on
consolidated subsidiaries of thrifts under Resolution Trust Corporation
control. Accordingly, no provision for the predecessor period was recorded.
The sources and the tax effect of the differences between the provision and
the result of multiplying the income before taxes by the statutory federal
income tax rate for the years ended December 31, 1998 and 1997 and periods
from March 30, 1996 to December 31, 1996 (successor period) and January 1,
1996 to March 29, 1996 (predecessor period) were as follows:
<TABLE>
<CAPTION>
1998 1997 1996 1996
SUCCESSOR SUCCESSOR SUCCESSOR PREDECESSOR
PERIOD PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income tax expense
at statutory rate $185 35% $186 35% $123 35% $ 34 35%
Goodwill (10) (2%) 3 1% 7 2%
Other (1) 0% (34) (35%)
---- ---- ---- ----
Income taxes $175 33% $189 36% $129 37% $ 0%
==== ==== ==== ====
</TABLE>
The deferred income tax liability represents the tax effects of temporary
differences. The components were as follows:
<TABLE>
<CAPTION>
1998 1997
SUCCESSOR SUCCESSOR
PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C>
Net unrealized investment gains $179 $ 70
Investments 9 12
Goodwill (37) (16)
---- ----
Deferred tax liability, net $151 $ 66
==== ====
</TABLE>
38
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. COMPREHENSIVE INCOME
The components of, and related tax effects for, other comprehensive income
are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997 1996
SUCCESSOR SUCCESSOR SUCCESSOR
PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C>
UNREALIZED GAINS ON SECURITIES
AVAILABLE-FOR-SALE ARISING DURING PERIOD:
Before-tax amount $311 $132 $ 60
Tax expense 109 46 21
---- ---- ----
Net-of-tax amount 202 86 39
---- ---- ----
RECLASSIFICATION ADJUSTMENT FOR GAINS OR
LOSSES REALIZED IN NET INCOME:
Before-tax amount 9
Tax expense 3
---- ---- ----
Net-of-tax amount 6
---- ---- ----
NET UNREALIZED GAINS ON SECURITIES
AVAILABLE-FOR-SALE:
Before-tax amount 311 132 69
Tax expense 109 46 24
---- ---- ----
Net-of-tax amount $202 $ 86 $ 45
==== ==== ====
</TABLE>
The following table summarizes accumulated other comprehensive income
balances:
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
SUCCESSOR SUCCESSOR
PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C>
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of year $131 $ 45
Change during period 202 86
---- ----
Balance, end of year $333 $131
</TABLE>
7. RELATED PARTY TRANSACTIONS
Phoenix and its affiliates provide services and facilities to Phoenix Life
and Annuity and are reimbursed through a cost allocation process. Investment
related expenses are allocated to Phoenix Life and Annuity from PM Holdings.
Phoenix Investment Counsel, Inc., a wholly-owned subsidiary of Phoenix
Investment Partners entered into a contract to manage the general account
investments of Phoenix Life and Annuity. PM Holdings owns approximately 60%
of the outstanding common stock of Phoenix Investment Partners.
39
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
8. FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS
Financial instruments that are subject to fair value disclosure requirements
(insurance contracts are excluded) are carried in the financial statements
at amounts that approximate fair value. The fair values presented for
certain financial instruments are estimates which, in many cases, may differ
significantly from the amounts which could be realized upon immediate
liquidation. In cases where market prices are not available, estimates of
fair value are based on discounted cash flow analyses which utilize current
interest rates for similar financial instruments which have comparable terms
and credit quality.
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:
SHORT-TERM INVESTMENTS, CASH AND CASH EQUIVALENTS
For these short-term investments, the carrying amount approximates fair
value.
DEBT SECURITIES
Fair values are based on quoted market prices, where available, or quoted
market prices of comparable instruments. Fair values of private placement
debt securities are estimated using discounted cash flows that apply
interest rates currently being offered with similar terms to borrowers of
similar credit quality.
9. STATUTORY FINANCIAL INFORMATION
Phoenix's insurance subsidiaries are required to file annual statements with
state regulatory authorities prepared on an accounting basis prescribed or
permitted by such authorities. As of December 31, 1998, Phoenix Life and
Annuity had no material practices that were not prescribed by the Insurance
Department of the State of Connecticut. Statutory equity differs from equity
reported in accordance with generally accepted accounting principles for
life insurance companies primarily because investment reserves are based on
different assumptions and income tax expense reflects only taxes paid or
currently payable.
The following is a reconciliation of the statutory net income of Phoenix
Life and Annuity, as reported to regulatory authorities, to the net income
as reported in these financial statements:
<TABLE>
<CAPTION>
1998 1997 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Statutory net income $426 $428 $369
Amortization of goodwill (97) (90) (81)
Deferred income taxes 24 3
Other, net 32
---- ---- ----
Net income, as reported $353 $341 $320
==== ==== ====
</TABLE>
40
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The following is a reconciliation of the statutory equity and asset
valuation reserve of Phoenix Life and Annuity, as reported to regulatory
authorities, to equity as reported in these financial statements at:
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
(IN THOUSANDS)
<S> <C> <C>
Statutory equity and asset valuation reserve $11,301 $10,875
Goodwill 701 798
Investment valuation allowances 513 202
Deferred income tax and other liabilities (151) (66)
------- -------
Equity, as reported $12,364 $11,809
======= =======
</TABLE>
The Connecticut Insurance Holding Act limits the maximum amount of annual
dividends or other distributions available to stockholders of Connecticut
insurance companies without prior approval of the Insurance Commissioner.
Under current law, the maximum dividend distribution which may be made by
Phoenix Life and Annuity during 1998 without prior approval is subject to
restrictions relating to statutory surplus.
10. INDEMNIFICATION
Prior to the acquisition, Savers Life had reinsurance contracts with three
unaffiliated reinsurers which it had assumed between 1986 and 1989 and which
it assigned to Winterthur Life Re Insurance Company in October 1995. Under
the terms of the stock purchase agreement, Central United Life has
indemnified Phoenix for any liability in excess of $15,000 resulting from
these reinsurance contracts. Phoenix considers any liability to Phoenix Life
and Annuity as a result of these contracts to be remote and has indemnified
Phoenix Life and Annuity.
41
<PAGE>
PHOENIX LIFE AND ANNUITY
VARIABLE UNIVERSAL LIFE ACCOUNT
As of December 31, 1998, there had been no sales of the product described in
this Prospectus and, therefore, no deposits were made to Phoenix Life and
Annuity Variable Universal Life Account. Accordingly, no financial statements
are available for the VUL Account.
42
<PAGE>
APPENDIX A
GLOSSARY OF SPECIAL TERMS
- --------------------------------------------------------------------------------
The following is a list of terms and their meanings when used in this
prospectus.
ATTAINED AGE: The age of the Insured on the birthday nearest the most recent
Policy Anniversary.
BENEFICIARY: The person or persons specified by the Policyowner as entitled to
receive the death benefits under a Policy.
DEATH BENEFIT GUARANTEE: An additional benefit rider available with the Policy
that guarantees a death benefit equal to the initial face amount or the face
amount as later increased or decreased, provided that Minimum Required Premiums
are paid. See "Additional Rider Benefits."
DEBT: Outstanding loans against a Policy, plus accrued interest.
FUNDS: The Phoenix Edge Series Fund, BT Insurance Funds Trust, Federated
Insurance Series, Templeton Variable Products Series Fund and Wanger Advisors
Trust.
GENERAL ACCOUNT: The general asset account of PLAC.
INSURED: The person upon whose life the Policy is issued.
IN WRITING (WRITTEN REQUEST): In a written form satisfactory to PLAC and
delivered to VPMO.
ISSUE PREMIUM: The premium payment made in connection with issuing the Policy.
MONTHLY CALCULATION DAY: The first Monthly Calculation Day is the same day as
the Policy Date. Subsequent Monthly Calculation Days are the same day of each
month thereafter or, if such day does not fall within a given month, the last
day of that month will be the Monthly Calculation Day.
NET ASSET VALUE: The worth of one share of a Series of a Fund at the end of a
valuation period. Net Asset Value is computed by adding the value of a Series'
holdings plus other assets, minus liabilities and then dividing the result by
the number of shares outstanding.
PAYMENT DATE: The Valuation Date on which we receive a premium payment or loan
repayment, unless it is received after the close of the New York Stock Exchange
("NYSE"), in which case it will be the next Valuation Date.
PLANNED ANNUAL PREMIUM: The premium amount that the Policyowner agrees to pay
each Policy Year. It must be at least equal to the minimum required premium for
the face amount of insurance selected but may be no greater than the maximum
premium allowed for the face amount selected.
POLICY ANNIVERSARY: Each anniversary of the Policy Date.
POLICY DATE: The Policy Date as shown on the Schedule Page of the Policy. It is
the date from which we measure Policy Years and Policy Anniversaries.
POLICY VALUE: The sum of a Policy's share in the values of each Subaccount of
the VUL Account plus the Policy's share in the values of the Guaranteed Interest
Account.
POLICY YEAR: The first Policy Year is the 1-year period from the Policy Date up
to, but not including, the first Policy Anniversary. Each succeeding Policy Year
is the 1-year period from the Policy Anniversary up to, but not including, the
next Policy Anniversary.
SERIES: A separate investment portfolio of the Fund.
SUBACCOUNTS: Accounts within the VUL Account to which nonloaned assets under a
Policy are allocated.
TARGET PREMIUM: The level annual premium at which the sales load is reduced on a
current basis.
VALUATION DATE: For any Subaccount, each date on which we calculate the net
asset value of a Fund.
VALUATION PERIOD: For any Subaccount, the period in days from the end of one
Valuation Date through the next.
VUL ACCOUNT (ACCOUNT): PLAC Variable Universal Life Account, a separate account
of the company.
43
<PAGE>
APPENDIX B
PERFORMANCE HISTORY
- --------------------------------------------------------------------------------
THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE
PERFORMANCE. THEY DO NOT ILLUSTRATE HOW ACTUAL PERFORMANCE WILL AFFECT THE
BENEFITS UNDER A POLICY BECAUSE THEY DO NOT REFLECT COST OF INSURANCE, PREMIUM
TAX CHARGES, PREMIUM SALES CHARGES AND SURRENDER CHARGES, IF APPLICABLE. FOR
THIS INFORMATION SEE APPENDIX C "ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES
AND CASH SURRENDER VALUES." Performance information may be expressed as yield
and effective yield of the Phoenix-Goodwin Money Market Subaccount, as yield of
the Phoenix-Goodwin Multi-Sector Fixed Income Subaccount and as total return of
any Subaccount. Current yield for the Phoenix-Goodwin Money Market Subaccount
will be based on the income earned by the Subaccount over a given 7-day period
(less a hypothetical charge reflecting deductions for expenses taken during the
period) and then annualized, i.e., the income earned in the period is assumed to
be earned every seven days over a 52-week period and is stated in terms of an
annual percentage return on the investment. Effective yield is calculated
similarly but reflects the compounding effect of earnings on reinvested
dividends. Yield and effective yield reflect the Mortality and Expense Risk
charge on the VUL Account level.
Yield calculations of the Phoenix-Goodwin Money Market Subaccount used for
illustration purposes are based on the consideration of a hypothetical
participant's account having a balance of exactly one Unit at the beginning of a
7-day period, which period will end on the date of the most recent financial
statements. The yield for the Subaccount during this 7-day period will be the
change in the value of the hypothetical participant's account's original Unit.
The following is an example of this yield calculation for the Phoenix-Goodwin
Money Market Subaccount based on a 7-day period ending December 31, 1998.
Example:
Assumptions:
Value of hypothetical pre-existing account with exactly one
unit at the beginning of the period:..................... 1.501512
Value of the same account (excluding capital changes) at the
end of the 7-day period:................................. 1.50245
Calculation:
Ending account value .................................... 1.50245
Less beginning account value ............................ 1.501512
Net change in account value ............................. 0.000938
Base period return:
(adjusted change/beginning account value) ............... 0.000625
Current yield = return x (365/7) = ........................ 3.26%
Effective yield = [(1 + return)(365/7)] - 1 = ............. 3.31%
The current yield and effective yield information will fluctuate, and
publication of yield information may not provide a basis for comparison with
bank deposits, other investments which are insured and/or pay a fixed yield for
a stated period of time, or other investment companies, due to charges which
will be deducted on the VUL Account level.
For the Phoenix-Goodwin Multi-Sector Fixed Income Subaccount, quotations of
yield will be based on all investment income per unit earned during a given
30-day period (including dividends and interest), less expenses accrued during
the period ("net investment income"), and are computed by dividing net
investment income by the maximum offering price per unit on the last day of the
period.
When a Subaccount advertises its total return, it usually will be calculated
for one year, five years, and ten years or since inception if the Subaccount has
not been in existence for at least ten years. Total return is measured by
comparing the value of a hypothetical $10,000 investment in the Subaccount at
the beginning of the relevant period to the value of the investment at the end
of the period, assuming the reinvestment of all distributions at net asset value
and the deduction of the Mortality and Expense Risk, Issue Expense and Monthly
Administrative Charges.
For those Subaccounts within the VUL Account that have not been available
for one of the quoted periods, the average annual total return quotations will
show the investment performance such Subaccount would have achieved (reduced by
the applicable charges) had it been available to invest in shares of the Fund
for the period quoted.
The following performance tables display historical investment results of
the Subaccounts of the VUL Account. This information may be useful in helping
potential investors in deciding which Subaccounts to choose and in assessing the
competence of the investment advisors. The performance figures shown should be
considered in light of the investment objectives and policies, characteristics
and quality of the Subaccounts and market conditions during the periods of time
quoted. The performance figures should not be considered as estimates or
predictions of future performance. Investment return of the Subaccounts are not
guaranteed and will fluctuate. Below are quotations of average annual total
return calculated as described above for all Subaccounts with at least one year
of results. POLICY CHARGES (INCLUDING COST OF INSURANCE, PREMIUM TAX CHARGES,
PREMIUM SALES CHARGES AND SURRENDER CHARGES) ARE NOT REFLECTED.
44
<PAGE>
<TABLE>
===================================================================================================================================
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED DECEMBER 31, 1998(1,3)
===================================================================================================================================
<CAPTION>
SERIES INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Phoenix Research Enhanced Index Series..................... 7/15/97 27.99% N/A N/A 22.48%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series...................... 5/1/90 24.38% 11.47% N/A 9.41%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series........................... 9/17/96 -7.25% N/A N/A -19.21%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series........ 5/1/95 -23.54% N/A N/A 10.03%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series........................ 3/2/98 N/A N/A N/A 22.97%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series............................ 5/1/92 15.64% 11.41% N/A 11.00%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series.............................. 1/1/83 26.35% 16.84% 18.67% 17.90%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series........................ 10/10/82 2.09% 3.24% 3.93% 4.97%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series........... 1/1/83 -6.92% 5.20% 7.78% 8.67%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series................ 9/17/84 17.36% 11.33% 12.59% 12.34%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series..................... 1/29/96 40.62% N/A N/A 21.65%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity Series...................... 3/2/98 N/A N/A N/A 7.87%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series.................. 3/2/98 N/A N/A N/A 17.31%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series....................... 3/2/98 N/A N/A N/A -13.78%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series....................... 3/2/98 N/A N/A N/A 18.57%
- -----------------------------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index Fund............... 8/22/97 18.18% N/A N/A 7.07%
- -----------------------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II........... 3/28/94 4.58% N/A N/A 4.89%
- -----------------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II......................... 3/1/94 -0.25% N/A N/A 7.72%
- -----------------------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(2)............... 5/1/98 N/A N/A N/A 0.98%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(2).............. 11/28/88 3.07% 9.64% 10.40% 10.24%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund -- Class 2(2)............ 9/15/96 -23.45% N/A N/A -24.14%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(2)................. 5/1/92 5.95% 9.77% N/A 12.28%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(2)......................... 11/4/88 -1.86% 9.18% 10.48% 10.18%
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty....................................... 2/1/99 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap............................. 5/1/95 13.06% N/A N/A 19.55%
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger Twenty.............................................. 2/1/99 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap...................................... 5/1/95 5.59% N/A N/A 25.06%
===================================================================================================================================
</TABLE>
(1) The average annual total return is the annual compound return that results
from holding an initial investment of $10,000 for the time period indicated.
Returns are net of $150 Issue Expense Charge, $5 Monthly Administrative Fee,
Investment Management Fees and Mortality and Expense Risk Charges.
(2) Because Class 2 shares were not offered until May 1, 1997 (November 10, 1998
for Mutual Shares Investments), performance shown for periods prior to that
date represent the historical results of Class 1 shares. Performance since
that date reflect Class 2's high annual fees and expenses resulting from its
Rule 12b-1 plan. Maximum annual plan expenses are 0.25%.
(3) Performance data quoted represents the investment return of the appropriate
Series adjusted for the PLAC Flex Edge Success charges had the Subaccount
started on the inception date of the appropriate Series.
Advertisements, sales literature and other communications may contain
information about any Series' or Advisor's current investment strategies and
management style. Current strategies and style may change to respond to a
changing market and economic conditions. From time to time, the Series may
discuss specific portfolio holdings or industries in such communications. To
illustrate components of overall performance, the Series may separate their
cumulative and average annual returns into income results and capital gains or
losses; or cite separately, as a return figure, the equity or bond portion of a
Series' portfolio; or compare a Series' equity or bond return figure to
well-known indices of market performance including, but not limited to, the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"), Dow Jones
Industrial Average, First Boston High Yield Index and Salomon Brothers Corporate
and Government Bond Indices.
Occasionally, The VUL Account may include in advertisements containing total
return, the ranking of those performance figures relating to such figures for
groups of Subaccounts having similar investment objectives as categorized by
ranking services such as:
Lipper Analytical Services, Inc. Morningstar, Inc.
CDA Investment Technologies, Inc. Weisenberger Financial Services, Inc.
45
<PAGE>
Additionally, the Funds may compare a Series' performance results to other
investment or savings vehicles (such as certificates of deposit) and may refer
to results published in various publications such as:
Changing Times Forbes
Fortune Money
Barrons Business Week
Investor's Business Daily The Stanger Register
Stanger's Investment Advisor The Wall Street Journal
The New York Times Consumer Reports
Registered Representative Financial Planning
Financial Services Weekly Financial World
U.S. News and World Report Standard & Poor's
The Outlook Personal Investor
The Funds may occasionally illustrate the benefits of tax deferral by
comparing taxable investments to investments made through tax-deferred
retirement plans. The total return also may be used to compare the performance
of a Series against certain widely acknowledged outside standards or indices for
stock and bond market performance such as:
S&P 500 Dow Jones Industrial Average
Europe Australia Far East Index (EAFE) Consumers Price Index
Shearson Lehman Corporate Index Shearson Lehman T-Bond Index
The S&P 500 is a commonly quoted market value-weighted and unmanaged index
showing the changes in the aggregate market value of 500 common stocks relative
to the base period 1940-43. The S&P 500 is composed almost entirely of common
stocks of companies listed on the NYSE, although the common stocks of a few
companies listed on the American Stock Exchange or traded over the counter are
included. The 500 companies represented include 400 industrial, 60
transportation and 40 financial services concerns. The S&P 500 represents about
70-80% of the market value of all issues traded on the NYSE.
The Funds' Annual Reports, available upon request and without charge,
contain a discussion of the performance of the Funds and a comparison of that
performance to a securities market index.
46
<PAGE>
ANNUAL TOTAL RETURN(1,3)
<TABLE>
============================================================================================================================
<CAPTION>
Series 1983 1984 1985 1986 1987 1988 1989 1990 1991
============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Phoenix Research Enhanced Index Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series N/A N/A N/A N/A N/A N/A N/A -8.63% 18.79%
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series 31.84% 9.79% 33.85% 19.51% 6.08% 3.09% 34.53% 3.32% 41.60%
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series 7.51% 9.34% 7.17% 5.66% 5.67% 6.60% 8.03% 7.51% 5.14%
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series 5.16% 10.45% 19.65% 18.34% 0.28% 9.61% 6.92% 4.54% 18.66%
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series N/A -1.31% 26.33% 14.77% 11.66% 1.53% 18.53% 5.15% 28.27%
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index Fund N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(2) N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(2) N/A N/A N/A N/A N/A 0.21% 12.13% -8.95% 26.42%
- ----------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund -- Class 2(2) N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(2) N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(2) N/A N/A N/A N/A N/A -0.99% 13.48% -11.99% 26.22%
- ----------------------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Wanger Twenty N/A N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Wanger US Small Cap N/A N/A N/A N/A N/A N/A N/A N/A N/A
============================================================================================================================
</TABLE>
ANNUAL TOTAL RETURN(1,3)
<TABLE>
================================================================================================================
<CAPTION>
Series 1992 1993 1994 1995 1996 1997 1998
================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Phoenix Research Enhanced Index Series N/A N/A N/A N/A N/A 5.46% 30.64%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series -13.52% 37.33% -0.73% 8.72% 17.71% 11.16% 26.92%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series N/A N/A N/A N/A -0.06% -32.94% -5.21%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series N/A N/A N/A 17.19% 32.10% 21.09% -21.83%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series N/A N/A N/A N/A N/A N/A 25.45%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series 9.06% 7.75% -3.61% 22.37% 9.68% 17.00% 18.07%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series 9.41% 18.75% 0.66% 29.85% 11.69% 20.12% 28.98%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series 2.75% 2.06% 3.01% 4.86% 4.19% 4.35% 4.26%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series 9.23% 14.99% -6.21% 22.56% 11.52% 10.21% -4.91%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series 9.79% 10.12% -2.19% 17.27% 8.18% 19.78% 19.84%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series N/A N/A N/A N/A 9.55% 16.25% 43.55%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity Series N/A N/A N/A N/A N/A N/A 10.07%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series N/A N/A N/A N/A N/A N/A 19.67%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series N/A N/A N/A N/A N/A N/A -11.95%
- ----------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series N/A N/A N/A N/A N/A N/A 20.97%
- ----------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index Fund N/A N/A N/A N/A N/A -6.87% 20.64%
- ----------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II N/A N/A 1.99% 7.90% 3.37% 7.71% 6.80%
- ----------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II N/A N/A -4.26% 19.42% 13.40% 12.92% 1.88%
- ----------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(2) N/A N/A N/A N/A N/A N/A 2.62%
- ----------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(2) 6.97% 24.86% -4.00% 21.29% 17.64% 14.37% 5.27%
- ----------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund -- Class 2(2) N/A N/A N/A N/A 1.05% -29.95% -21.69%
- ----------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(2) -6.80% 45.85% -3.27% 14.56% 22.77% 12.76% 8.17%
- ----------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(2) 6.02% 32.68% -3.25% 23.97% 21.17% 10.75% 0.24%
- ----------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------
Wanger International Small Cap N/A N/A N/A 33.96% 31.15% -2.24% 15.41%
- ----------------------------------------------------------------------------------------------------------------
Wanger Twenty N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------
Wanger US Small Cap N/A N/A N/A 16.01% 45.64% 28.41% 7.83%
================================================================================================================
</TABLE>
(1) Rates are net of Mortality and Expense Risk Charges and Investment
Management fees for the Subaccounts.
(2) Because Class 2 shares were not offered until May 1, 1997 (November 10, 1998
for Mutual Shares Investments), performance shown for periods prior to that
date represent the historical results of Class 1 shares. Performance since
that date reflect Class 2's high annual fees and expenses resulting from
its Rule 12b-1 plan. Maximum annual plan expenses are 0.25%.
(3) Performance data quoted represents the investment return of the appropriate
Series adjusted for the PLAC Flex Edge Success charges had the
Subaccount started on the inception date of the appropriate Series.
THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE.
47
<PAGE>
APPENDIX C
<TABLE>
<CAPTION>
<S> <C>
ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES ("ACCOUNT VALUES") AND CASH SURRENDER VALUES
- -------------------------------------------------------------------------------------------
</TABLE>
The tables on the following pages illustrate how a Policy's death benefits,
account values and Cash Surrender Value could vary over time assuming constant
hypothetical gross (after tax) annual investment returns of 0%, 6% and 12%. The
Policy benefits will differ from those shown in the tables if the annual
investment returns are not absolutely constant. That is, the figures will be
different if the returns averaged 0%, 6% or 12% over a period of years but went
above or below those figures in individual Policy Years. The Policy benefits
also will differ, depending on your premium allocations to each Subaccount of
the VUL Account, if the overall actual rates of return averaged 0%, 6% or 12%,
but went above or below those figures for the individual Subaccounts. The tables
are for standard risk males and females who are nonsmokers. In states where cost
of insurance rates are not based on the Insured's sex, the tables designated
"male" apply to all standard risk insureds who are nonsmokers. Account Values
and Cash Surrender Values may be lower for risk classes involving higher
mortality risk. Planned premium payments are assumed to be paid at the beginning
of each Policy Year.
The death benefit, account value and Cash Surrender Value amounts reflect
the following current charges:
1. Monthly Administrative Charge of $5 per month ($10 per month guaranteed
maximum in all states except New York and New Jersey. In New York and
New Jersey guaranteed maximum is $7.50 per month.).
2. An average Premium Tax Charge of 2.25%.
3. A Federal Tax Charge of 1.5%.
4. Cost of Insurance Charge. The tables illustrate cost of insurance at
both the current rates and at the maximum rates guaranteed in the
Policies. See "Charges and Deductions--Cost of Insurance."
5. Mortality and Expense Risk Charge, which is a monthly charge equivalent
to .40% on an annual basis (or .25% on an annual basis after the 10th
Policy Year) of your policy value. See "Charges and
Deductions--Mortality and Expense Risk Charge."
These illustrations also assume an average investment advisory fee of .70%
on an annual basis, of the average daily net asset value of each of the Series
of the Funds. These illustrations also assume other ongoing average Fund
expenses of .30%. All other Fund expenses, except capital items such as
brokerage commissions, are paid by the Advisor or PLAC. Management may decide to
limit the amount of expense reimbursement in the future. If expense
reimbursement had not been in place for the fiscal year ended December 31, 1998,
average total operating expenses for the Series would have been approximately
1.43% of the average net assets. See "Charges and Deductions--Investment
Management Charge."
Taking into account the Mortality and Expense Risk Charge and the investment
advisory fees and expenses, the gross annual investment return rates of 0%, 6%
and 12% on the Funds' assets are equivalent to net annual investment return
rates of approximately -1.00%, 5.00% and 11.00%, respectively. For individual
illustrations, interest rates ranging between 0% and 12% may be selected in
place of the 0%, 6% and 12% rates.
The hypothetical returns shown in the tables are without any tax charges
that may be attributable to the VUL Account in the future. If such tax charges
are imposed in the future, then in order to produce after tax returns equal to
those illustrated for 0%, 6% and 12%, a sufficiently higher amount in excess of
the hypothetical interest rates would have to be earned. See "Charges and
Deductions--Other Charges--Taxes."
The second column of each table shows the amount that would accumulate if an
amount equal to the premiums paid were invested to earn interest, after taxes,
at 5% compounded annually. These tables show that if a Policy is returned in its
very early years for payment of its Cash Surrender Value, that Cash Surrender
Value may be low in comparison to the amount of the premiums accumulated with
interest. Thus, the cost of owning a Policy for a relatively short time may be
high.
On request, we will furnish the Policyowner with a comparable illustration
based on the age and sex of the proposed insured person(s), standard risk
assumptions and the initial face amount and planned premium chosen.
48
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 739 739 100,000 788 788 100,000 837 837 100,000
2 1,000 2,153 1,464 1,464 100,000 1,608 1,608 100,000 1,758 1,758 100,000
3 1,000 3,310 2,175 2,175 100,000 2,461 2,461 100,000 2,772 2,772 100,000
4 1,000 4,526 2,871 2,871 100,000 3,348 3,348 100,000 3,887 3,887 100,000
5 1,000 5,802 3,550 3,550 100,000 4,269 4,269 100,000 5,113 5,113 100,000
6 1,000 7,142 4,213 4,213 100,000 5,226 5,226 100,000 6,461 6,461 100,000
7 1,000 8,549 4,858 4,858 100,000 6,216 6,216 100,000 7,943 7,943 100,000
8 1,000 10,027 5,551 5,551 100,000 7,314 7,314 100,000 9,647 9,647 100,000
9 1,000 11,578 6,222 6,222 100,000 8,449 8,449 100,000 11,518 11,518 100,000
10 1,000 13,207 6,869 6,869 100,000 9,622 9,622 100,000 13,572 13,572 100,000
11 1,000 14,917 7,544 7,544 100,000 10,894 10,894 100,000 15,902 15,902 100,000
12 1,000 16,713 8,196 8,196 100,000 12,213 12,213 100,000 18,471 18,471 100,000
13 1,000 18,599 8,823 8,823 100,000 13,580 13,580 100,000 21,303 21,303 100,000
14 1,000 20,579 9,426 9,426 100,000 14,996 14,996 100,000 24,429 24,429 100,000
15 1,000 22,657 10,002 10,002 100,000 16,463 16,463 100,000 27,879 27,879 100,000
16 1,000 24,840 10,551 10,551 100,000 17,983 17,983 100,000 31,689 31,689 100,000
17 1,000 27,132 11,072 11,072 100,000 19,557 19,557 100,000 35,901 35,901 100,000
18 1,000 29,539 11,562 11,562 100,000 21,187 21,187 100,000 40,558 40,558 100,000
19 1,000 32,066 12,021 12,021 100,000 22,875 22,875 100,000 45,710 45,710 103,761
20 1,000 34,719 12,447 12,447 100,000 24,623 24,623 100,000 51,386 51,386 113,564
@65 1,000 69,761 13,933 13,933 100,000 48,311 48,311 100,000 166,339 166,339 276,123
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
29.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
49
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 533 533 100,000 574 574 100,000 616 616 100,000
2 1,000 2,153 1,045 1,045 100,000 1,162 1,162 100,000 1,284 1,284 100,000
3 1,000 3,310 1,536 1,536 100,000 1,761 1,761 100,000 2,007 2,007 100,000
4 1,000 4,526 2,003 2,003 100,000 2,371 2,371 100,000 2,788 2,788 100,000
5 1,000 5,802 2,444 2,444 100,000 2,989 2,989 100,000 3,632 3,632 100,000
6 1,000 7,142 2,858 2,858 100,000 3,613 3,613 100,000 4,544 4,544 100,000
7 1,000 8,549 3,240 3,240 100,000 4,241 4,241 100,000 5,527 5,527 100,000
8 1,000 10,027 3,652 3,652 100,000 4,936 4,936 100,000 6,656 6,656 100,000
9 1,000 11,578 4,029 4,029 100,000 5,635 5,635 100,000 7,877 7,877 100,000
10 1,000 13,207 4,372 4,372 100,000 6,336 6,336 100,000 9,201 9,201 100,000
11 1,000 14,917 4,690 4,690 100,000 7,057 7,057 100,000 10,661 10,661 100,000
12 1,000 16,713 4,970 4,970 100,000 7,780 7,780 100,000 12,252 12,252 100,000
13 1,000 18,599 5,210 5,210 100,000 8,503 8,503 100,000 13,984 13,984 100,000
14 1,000 20,579 5,410 5,410 100,000 9,225 9,225 100,000 15,875 15,875 100,000
15 1,000 22,657 5,563 5,563 100,000 9,943 9,943 100,000 17,940 17,940 100,000
16 1,000 24,840 5,670 5,670 100,000 10,653 10,653 100,000 20,197 20,197 100,000
17 1,000 27,132 5,720 5,720 100,000 11,348 11,348 100,000 22,664 22,664 100,000
18 1,000 29,539 5,708 5,708 100,000 12,022 12,022 100,000 25,363 25,363 100,000
19 1,000 32,066 5,626 5,626 100,000 12,665 12,665 100,000 28,317 28,317 100,000
20 1,000 34,719 5,464 5,464 100,000 13,270 13,270 100,000 31,554 31,554 100,000
@ 65 1,000 69,761 -- -- -- 14,385 14,385 100,000 96,379 96,379 159,990
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
29.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
50
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 767 767 100,000 816 816 100,000 866 866 100,000
2 1,000 2,153 1,517 1,517 100,000 1,665 1,665 100,000 1,818 1,818 100,000
3 1,000 3,310 2,251 2,251 100,000 2,545 2,545 100,000 2,863 2,863 100,000
4 1,000 4,526 2,968 2,968 100,000 3,459 3,459 100,000 4,012 4,012 100,000
5 1,000 5,802 3,666 3,666 100,000 4,406 4,406 100,000 5,272 5,272 100,000
6 1,000 7,142 4,346 4,346 100,000 5,386 5,386 100,000 6,656 6,656 100,000
7 1,000 8,549 5,005 5,005 100,000 6,401 6,401 100,000 8,175 8,175 100,000
8 1,000 10,027 5,713 5,713 100,000 7,524 7,524 100,000 9,920 9,920 100,000
9 1,000 11,578 6,400 6,400 100,000 8,687 8,687 100,000 11,839 11,839 100,000
10 1,000 13,207 7,066 7,066 100,000 9,894 9,894 100,000 13,949 13,949 100,000
11 1,000 14,917 7,761 7,761 100,000 11,201 11,201 100,000 16,342 16,342 100,000
12 1,000 16,713 8,439 8,439 100,000 12,563 12,563 100,000 18,986 18,986 100,000
13 1,000 18,599 9,100 9,100 100,000 13,983 13,983 100,000 21,908 21,908 100,000
14 1,000 20,579 9,743 9,743 100,000 15,461 15,461 100,000 25,139 25,139 100,000
15 1,000 22,657 10,369 10,369 100,000 17,003 17,003 100,000 28,713 28,713 100,000
16 1,000 24,840 10,977 10,977 100,000 18,609 18,609 100,000 32,667 32,667 100,000
17 1,000 27,132 11,566 11,566 100,000 20,282 20,282 100,000 37,042 37,042 100,000
18 1,000 29,539 12,135 12,135 100,000 22,025 22,025 100,000 41,886 41,886 100,000
19 1,000 32,066 12,682 12,682 100,000 23,841 23,841 100,000 47,245 47,245 107,247
20 1,000 34,719 13,206 13,206 100,000 25,731 25,731 100,000 53,157 53,157 117,479
@ 65 1,000 69,761 17,096 17,096 100,000 52,587 52,587 100,000 175,593 175,593 291,484
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
36.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
51
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 578 578 100,000 621 621 100,000 664 664 100,000
2 1,000 2,153 1,137 1,137 100,000 1,259 1,259 100,000 1,387 1,387 100,000
3 1,000 3,310 1,677 1,677 100,000 1,915 1,915 100,000 2,174 2,174 100,000
4 1,000 4,526 2,194 2,194 100,000 2,586 2,586 100,000 3,029 3,029 100,000
5 1,000 5,802 2,688 2,688 100,000 3,270 3,270 100,000 3,957 3,957 100,000
6 1,000 7,142 3,156 3,156 100,000 3,967 3,967 100,000 4,964 4,964 100,000
7 1,000 8,549 3,598 3,598 100,000 4,676 4,676 100,000 6,057 6,057 100,000
8 1,000 10,027 4,071 4,071 100,000 5,459 5,459 100,000 7,311 7,311 100,000
9 1,000 11,578 4,517 4,517 100,000 6,258 6,258 100,000 8,680 8,680 100,000
10 1,000 13,207 4,937 4,937 100,000 7,073 7,073 100,000 10,173 10,173 100,000
11 1,000 14,917 5,343 5,343 100,000 7,926 7,926 100,000 11,836 11,836 100,000
12 1,000 16,713 5,723 5,723 100,000 8,800 8,800 100,000 13,662 13,662 100,000
13 1,000 18,599 6,077 6,077 100,000 9,695 9,695 100,000 15,669 15,669 100,000
14 1,000 20,579 6,401 6,401 100,000 10,611 10,611 100,000 17,875 17,875 100,000
15 1,000 22,657 6,695 6,695 100,000 11,547 11,547 100,000 20,303 20,303 100,000
16 1,000 24,840 6,957 6,957 100,000 12,502 12,502 100,000 22,976 22,976 100,000
17 1,000 27,132 7,184 7,184 100,000 13,476 13,476 100,000 25,923 25,923 100,000
18 1,000 29,539 7,373 7,373 100,000 14,468 14,468 100,000 29,173 29,173 100,000
19 1,000 32,066 7,520 7,520 100,000 15,473 15,473 100,000 32,760 32,760 100,000
20 1,000 34,719 7,624 7,624 100,000 16,493 16,493 100,000 36,724 36,724 100,000
@ 65 1,000 69,761 5,283 5,283 100,000 28,664 28,664 100,000 118,365 118,365 196,486
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
36.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
52
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 738 738 100,739 787 787 100,788 836 836 100,836
2 1,000 2,153 1,462 1,462 101,463 1,606 1,606 101,606 1,755 1,755 101,756
3 1,000 3,310 2,171 2,171 102,172 2,457 2,457 102,457 2,766 2,766 102,767
4 1,000 4,526 2,864 2,864 102,864 3,340 3,340 103,341 3,877 3,877 103,878
5 1,000 5,802 3,540 3,540 103,540 4,257 4,257 104,257 5,097 5,097 105,098
6 1,000 7,142 4,198 4,198 104,199 5,207 5,207 105,207 6,437 6,437 106,437
7 1,000 8,549 4,837 4,837 104,838 6,189 6,189 106,189 7,906 7,906 107,906
8 1,000 10,027 5,524 5,524 105,524 7,276 7,276 107,276 9,593 9,593 109,594
9 1,000 11,578 6,186 6,186 106,186 8,397 8,397 108,397 11,442 11,442 111,443
10 1,000 13,207 6,821 6,821 106,822 9,551 9,551 109,552 13,466 13,466 113,467
11 1,000 14,917 7,486 7,486 107,487 10,805 10,805 110,805 15,762 15,762 115,763
12 1,000 16,713 8,126 8,126 108,126 12,100 12,100 112,101 18,287 18,287 118,287
13 1,000 18,599 8,738 8,738 108,739 13,437 13,437 113,438 21,061 21,061 121,062
14 1,000 20,579 9,323 9,323 109,323 14,817 14,817 114,817 24,112 24,112 124,112
15 1,000 22,657 9,878 9,878 109,878 16,238 16,238 116,239 27,466 27,466 127,466
16 1,000 24,840 10,402 10,402 110,403 17,703 17,703 117,704 31,154 31,154 131,155
17 1,000 27,132 10,895 10,895 110,895 19,211 19,211 119,212 35,211 35,211 135,212
18 1,000 29,539 11,353 11,353 111,353 20,761 20,761 120,761 39,673 39,673 139,673
19 1,000 32,066 11,774 11,774 111,775 22,353 22,353 122,353 44,580 44,580 144,581
20 1,000 34,719 12,157 12,157 112,157 23,985 23,985 123,986 49,978 49,978 149,979
@ 65 1,000 69,761 12,653 12,653 112,653 43,733 43,733 143,734 159,872 159,872 265,388
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
28.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
53
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 531 531 100,532 573 573 100,573 614 614 100,615
2 1,000 2,153 1,041 1,041 101,042 1,157 1,157 101,158 1,279 1,279 101,279
3 1,000 3,310 1,528 1,528 101,529 1,752 1,752 101,752 1,996 1,996 101,996
4 1,000 4,526 1,990 1,990 101,990 2,355 2,355 102,355 2,769 2,769 102,769
5 1,000 5,802 2,423 2,423 102,424 2,963 2,963 102,963 3,600 3,600 103,601
6 1,000 7,142 2,828 2,828 102,829 3,575 3,575 103,575 4,494 4,494 104,495
7 1,000 8,549 3,200 3,200 103,200 4,186 4,186 104,187 5,453 5,453 105,454
8 1,000 10,027 3,598 3,598 103,599 4,860 4,860 104,861 6,550 6,550 106,550
9 1,000 11,578 3,960 3,960 103,960 5,533 5,533 105,533 7,729 7,729 107,729
10 1,000 13,207 4,284 4,284 104,285 6,202 6,202 106,203 8,997 8,997 108,997
11 1,000 14,917 4,581 4,581 104,581 6,883 6,883 106,883 10,386 10,386 110,386
12 1,000 16,713 4,836 4,836 104,837 7,558 7,558 107,559 11,885 11,885 111,885
13 1,000 18,599 5,049 5,049 105,050 8,224 8,224 108,225 13,502 13,502 113,503
14 1,000 20,579 5,218 5,218 105,218 8,879 8,879 108,879 15,249 15,249 115,249
15 1,000 22,657 5,338 5,338 105,338 9,516 9,516 109,517 17,133 17,133 117,134
16 1,000 24,840 5,406 5,406 105,407 10,132 10,132 110,133 19,166 19,166 119,167
17 1,000 27,132 5.415 5.415 105,416 10,717 10,717 110,718 21,355 21,355 121,356
18 1,000 29,539 5,359 5,359 105,359 11,262 11,262 111,263 23,709 23,709 123,710
19 1,000 32,066 5,228 5,228 105,229 11,756 11,756 111,757 26,236 26,236 126,237
20 1,000 34,719 5,015 5,015 105,015 12,186 12,186 112,187 28,944 28,944 128,945
@ 65 1,000 69,761 -- -- -- 9,000 9,000 109,000 74,813 74,813 174,814
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
28.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
54
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 766 766 100,767 816 816 100,816 865 865 100,866
2 1,000 2,153 1,516 1,516 101,517 1,663 1,663 101,664 1,816 1,816 101,817
3 1,000 3,310 2,248 2,248 102,249 2,542 2,542 102,542 2,859 2,859 102,860
4 1,000 4,526 2,963 2,963 102,963 3,453 3,453 103,453 4,004 4,004 104,005
5 1,000 5,802 3,658 3,658 103,659 4,396 4,396 104,396 5,260 5,260 105,260
6 1,000 7,142 4,334 4,334 104,334 5,371 5,371 105,371 6,636 6,636 106,637
7 1,000 8,549 4,988 4,988 104,988 6,378 6,378 106,379 8,145 8,145 108,145
8 1,000 10,027 5,689 5,689 105,690 7,492 7,492 107,492 9,876 9,876 109,876
9 1,000 11,578 6,369 6,369 106,369 8,643 8,643 108,643 11,775 11,775 111,775
10 1,000 13,207 7,026 7,026 107,027 9,833 9,833 109,834 13,859 13,859 113,860
11 1,000 14,917 7,712 7,712 107,713 11,125 11,125 111,126 16,223 16,223 116,224
12 1,000 16,713 8,380 8,380 108,380 12,467 12,467 112,468 18,830 18,830 118,830
13 1,000 18,599 9,029 9,029 109,029 13,862 13,862 113,863 21,704 21,704 121,705
14 1,000 20,579 9,658 9,658 109,659 15,312 15,312 115,313 24,876 24,876 124,876
15 1,000 22,657 10,269 10,269 110,269 16,819 16,819 116,820 28,375 28,375 128,376
16 1,000 24,840 10,858 10,858 110,859 18,384 18,384 118,384 32,236 32,236 132,236
17 1,000 27,132 11,426 11,426 111,427 20,008 20,008 120,008 36,495 36,495 136,496
18 1,000 29,539 11,972 11,972 111,972 21,693 21,693 121,694 41,195 41,195 141,195
19 1,000 32,066 12,493 12,493 112,493 23,439 23,439 123,440 46,380 46,380 146,380
20 1,000 34,719 12,987 12,987 112,988 25,248 25,248 125,249 52,099 52,099 152,100
@ 65 1,000 69,761 16,202 16,202 116,203 49,514 49,514 149,514` 171,193 171,193 284,180
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
36.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
55
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 577 577 100,577 620 620 100,620 663 663 100,663
2 1,000 2,153 1,134 1,134 101,134 1,256 1,256 101,256 1,383 1,383 101,383
3 1,000 3,310 1,670 1,670 101,670 1,907 1,907 101,907 2,165 2,165 102,165
4 1,000 4,526 2,183 2,183 102,183 2,572 2,572 102,572 3,012 3,012 103,013
5 1,000 5,802 2,670 2,670 102,671 3,248 3,248 103,249 3,930 3,930 103,930
6 1,000 7,142 3,131 3,131 103,131 3,934 3,934 103,935 4,921 4,921 104,922
7 1,000 8,549 3,562 3,562 103,563 4,629 4,629 104,629 5,994 5,994 105,994
8 1,000 10,027 4,024 4,024 104,024 5,393 5,393 105,394 7,220 7,220 107,220
9 1,000 11,578 4,457 4,457 104,457 6,169 6,169 106,170 8,551 8,551 108,551
10 1,000 13,207 4,860 4,860 104,861 6,957 6,957 106,957 9,997 9,997 109,997
11 1,000 14,917 5,248 5,248 105,248 7,775 7,775 107,775 11,598 11,598 111,598
12 1,000 16,713 5,606 5,606 105,607 8,607 8,607 108,607 13,345 13,345 113,346
13 1,000 18,599 5,936 5,936 105,936 9,453 9,453 109,453 15,253 15,253 115,254
14 1,000 20,579 6,233 6,233 106,234 10,310 10,310 110,311 17,337 17,337 117,337
15 1,000 22,657 6,497 6,497 106,498 11,178 11,178 111,178 19,612 19,612 119,612
16 1,000 24,840 6,725 6,725 106,726 12,052 12,052 112,053 22,096 22,096 122,096
17 1,000 27,132 6,915 6,915 106,916 12,932 12,932 112,932 24,809 24,809 124,810
18 1,000 29,539 7,065 7,065 107,065 13,814 13,814 113,814 27,773 27,773 127,773
19 1,000 32,066 7,167 7,167 107,168 14,691 14,691 114,691 31,006 31,006 131,007
20 1,000 34,719 7,223 7,223 107,223 15,563 15,563 115,563 34,538 34,538 134,538
@ 65 1,000 69,761 4,168 4,168 104,169 23,882 23,882 123,882 104,286 104,286 204,286
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
36.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
56
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 738 738 101,000 787 787 101,000 836 836 101,000
2 1,000 2,153 1,462 1,462 102,000 1,605 1,605 102,000 1,755 1,755 102,000
3 1,000 3,310 2,170 2,170 103,000 2,456 2,456 103,000 2,766 2,766 103,000
4 1,000 4,526 2,862 2,862 104,000 3,339 3,339 104,000 3,877 3,877 104,000
5 1,000 5,802 3,537 3,537 105,000 4,255 4,255 105,000 5,097 5,097 105,000
6 1,000 7,142 4,194 4,194 106,000 5,203 5,203 106,000 6,436 6,436 106,000
7 1,000 8,549 4,830 4,830 107,000 6,184 6,184 107,000 7,906 7,906 107,000
8 1,000 10,027 5,514 5,514 108,000 7,270 7,270 108,000 9,595 9,595 108,000
9 1,000 11,578 6,172 6,172 109,000 8,390 8,390 109,000 11,447 11,447 109,000
10 1,000 13,207 6,804 6,804 110,000 9,544 9,544 110,000 13,477 13,477 110,000
11 1,000 14,917 7,464 7,464 111,000 10,796 10,796 111,000 15,781 15,781 111,000
12 1,000 16,713 8,098 8,098 112,000 12,091 12,091 112,000 18,316 18,316 112,000
13 1,000 18,599 8,704 8,704 113,000 13,429 13,429 113,000 21,108 21,108 113,000
14 1,000 20,579 9,280 9,280 114,000 14,809 14,809 114,000 24,182 24,182 114,000
15 1,000 22,657 9,825 9,825 115,000 16,233 16,233 115,000 27,570 27,570 115,000
16 1,000 24,840 10,337 10,337 116,000 17,701 17,701 116,000 31,306 31,306 116,000
17 1,000 27,132 10,814 10,814 117,000 19,214 19,214 117,000 35,426 35,426 117,000
18 1,000 29,539 11,254 11,254 118,000 20,772 20,772 118,000 39,975 39,975 118,000
19 1,000 32,066 11,654 11,654 119,000 22,375 22,375 119,000 44,997 44,997 119,000
20 1,000 34,719 12,011 12,011 120,000 24,022 24,022 120,000 50,548 50,548 120,000
@ 65 1,000 69,761 11,529 11,529 131,000 44,643 44,643 131,000 163,874 163,874 272,032
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
26.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
57
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 531 531 101,000 572 572 101,000 614 614 101,000
2 1,000 2,153 1,039 1,039 102,000 1,155 1,155 102,000 1,277 1,277 102,000
3 1,000 3,310 1,523 1,523 103,000 1,747 1,747 103,000 1,992 1,992 103,000
4 1,000 4,526 1,981 1,981 104,000 2,346 2,346 104,000 2,761 2,761 104,000
5 1,000 5,802 2,408 2,408 105,000 2,949 2,949 105,000 3,588 3,588 105,000
6 1,000 7,142 2,804 2,804 106,000 3,553 3,553 106,000 4,476 4,476 106,000
7 1,000 8,549 3,165 3,165 107,000 4,155 4,155 107,000 5,428 5,428 107,000
8 1,000 10,027 3,550 3,550 108,000 4,817 4,817 108,000 6,517 6,517 108,000
9 1,000 11,578 3,894 3,894 109,000 5,474 5,474 109,000 7,686 7,686 109,000
10 1,000 13,207 4,197 4,197 110,000 6,126 6,126 110,000 8,945 8,945 110,000
11 1,000 14,917 4,467 4,467 111,000 6,784 6,784 111,000 10,324 10,324 111,000
12 1,000 16,713 4,691 4,691 112,000 7,433 7,433 112,000 11,814 11,814 112,000
13 1,000 18,599 4,865 4,865 113,000 8,067 8,067 113,000 13,425 13,425 113,000
14 1,000 20,579 4,987 4,987 114,000 8,684 8,684 114,000 15,168 15,168 114,000
15 1,000 22,657 5,052 5,052 115,000 9,278 9,278 115,000 17,054 17,054 115,000
16 1,000 24,840 5,055 5,055 116,000 9,842 9,842 116,000 19,097 19,097 116,000
17 1,000 27,132 4,985 4,985 117,000 10,366 10,366 117,000 21,307 21,307 117,000
18 1,000 29,539 4,835 4,835 118,000 10,839 10,839 118,000 23,697 23,697 118,000
19 1,000 32,066 4,593 4,593 119,000 11,246 11,246 119,000 26,282 26,282 119,000
20 1,000 34,719 4,245 4,245 120,000 11,573 11,573 120,000 29,077 29,077 120,000
@ 65 1,000 69,761 -- -- -- 4,293 4,293 131,000 83,148 83,148 138,027
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
26.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
58
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 766 766 101,000 816 816 101,000 865 865 101,000
2 1,000 2,153 1,516 1,516 102,000 1,663 1,663 102,000 1,816 1,816 102,000
3 1,000 3,310 2,248 2,248 103,000 2,541 2,541 103,000 2,859 2,859 103,000
4 1,000 4,526 2,962 2,962 104,000 3,452 3,452 104,000 4,004 4,004 104,000
5 1,000 5,802 3,656 3,656 105,000 4,394 4,394 105,000 5,260 5,260 105,000
6 1,000 7,142 4,330 4,330 106,000 5,369 5,369 106,000 6,637 6,637 106,000
7 1,000 8,549 4,983 4,983 107,000 6,376 6,376 107,000 8,146 8,146 107,000
8 1,000 10,027 5,682 5,682 108,000 7,489 7,489 108,000 9,879 9,879 108,000
9 1,000 11,578 6,358 6,358 109,000 8,639 8,639 109,000 11,781 11,781 109,000
10 1,000 13,207 7,012 7,012 110,000 9,829 9,829 110,000 13,871 13,871 110,000
11 1,000 14,917 7,695 7,695 111,000 11,121 11,121 111,000 16,242 16,242 111,000
12 1,000 16,713 8,358 8,358 112,000 12,463 12,463 112,000 18,859 18,859 112,000
13 1,000 18,599 9,002 9,002 113,000 13,859 13,859 113,000 21,748 21,748 113,000
14 1,000 20,579 9,626 9,626 114,000 15,310 15,310 114,000 24,940 24,940 114,000
15 1,000 22,657 10,229 10,229 115,000 16,820 16,820 115,000 28,466 28,466 115,000
16 1,000 24,840 10,811 10,811 116,000 18,388 18,388 116,000 32,364 32,364 116,000
17 1,000 27,132 11,370 11,370 117,000 20,018 20,018 117,000 36,673 36,673 117,000
18 1,000 29,539 11,904 11,904 118,000 21,710 21,710 118,000 41,438 41,438 118,000
19 1,000 32,066 12,412 12,412 119,000 23,467 23,467 119,000 46,708 46,708 119,000
20 1,000 34,719 12,892 12,892 120,000 25,289 25,289 120,000 52,539 52,539 120,000
@ 65 1,000 69,761 15,626 15,626 131,000 50,269 50,269 131,000 173,758 173,758 288,440
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
33.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
59
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @5.0% @0% @0% @0% @6% @6% @6% @0% @12% @12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 576 576 101,000 619 619 101,000 662 662 101,000
2 1,000 2,153 1,132 1,132 102,000 1,254 1,254 102,000 1,382 1,382 102,000
3 1,000 3,310 1,666 1,666 103,000 1,904 1,904 103,000 2,162 2,162 103,000
4 1,000 4,526 2,176 2,176 104,000 2,566 2,566 104,000 3,008 3,008 104,000
5 1,000 5,802 2,659 2,659 105,000 3,239 3,239 105,000 3,922 3,922 105,000
6 1,000 7,142 3,114 3,114 106,000 3,920 3,920 106,000 4,910 4,910 106,000
7 1,000 8,549 3,537 3,537 107,000 4,607 4,607 107,000 5,978 5,978 107,000
8 1,000 10,027 3,989 3,989 108,000 5,364 5,364 108,000 7,200 7,200 108,000
9 1,000 11,578 4,409 4,409 109,000 6,130 6,130 109,000 8,527 8,527 109,000
10 1,000 13,207 4,798 4,798 110,000 6,906 6,906 110,000 9,970 9,970 110,000
11 1,000 14,917 5,166 5,166 111,000 7,710 7,710 111,000 11,569 11,569 111,000
12 1,000 16,713 5,503 5,503 112,000 8,526 8,526 112,000 13,317 13,317 112,000
13 1,000 18,599 5,807 5,807 113,000 9,353 9,353 113,000 15,230 15,230 113,000
14 1,000 20,579 6,073 6,073 114,000 10,190 10,190 114,000 17,323 17,323 114,000
15 1,000 22,657 6,301 6,301 115,000 11,033 11,033 115,000 19,616 19,616 115,000
16 1,000 24,840 6,487 6,487 116,000 11,880 11,880 116,000 22,128 22,128 116,000
17 1,000 27,132 6,628 6,628 117,000 12,729 12,729 117,000 24,884 24,884 117,000
18 1,000 29,539 6,720 6,720 118,000 13,576 13,576 118,000 27,909 27,909 118,000
19 1,000 32,066 6,756 6,756 119,000 14,414 14,414 119,000 31,228 31,228 119,000
20 1,000 34,719 6,733 6,733 120,000 15,241 15,241 120,000 34,877 34,877 120,000
@ 65 1,000 69,761 1,497 1,497 131,000 22,481 22,481 131,000 110,980 110,980 184,228
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
33.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
60
<PAGE>
[VERSION C]
PHOENIX'S
EXECUTIVE BENEFIT
VARIABLE UNIVERSAL LIFE
INSURANCE POLICY
Issued by
PHOENIX LIFE
AND ANNUITY COMPANY
IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT US AT:
[envelope] ANDESA TPA, INC.
1605 N CEDAR CREST BLVD, SUITE 502
ALLENTOWN, PA 18104
[telephone] 610/439-5256
PROSPECTUS MAY 1, 1999
AS SUPPLEMENTED OCTOBER 29, 1999
This Prospectus describes an individual flexible premium variable universal life
insurance policy. The Policy provides lifetime insurance protection for as long
as it remains in force.
You may allocate net premiums and cash value to one or more of the Subaccounts
of the VUL Account and the Guaranteed Interest Account. The assets of each
Subaccount will be used to purchase, at Net Asset Value, shares of a series in
the following designated underlying Funds.
THE PHOENIX EDGE SERIES FUND
- ----------------------------
MANAGED BY PHOENIX INVESTMENT COUNSEL, INC.
[diamond] Phoenix Research Enhanced Index Series
[diamond] Phoenix-Aberdeen International Series
[diamond] Phoenix-Engemann Nifty Fifty Series
[diamond] Phoenix-Goodwin Balanced Series
[diamond] Phoenix-Goodwin Growth Series
[diamond] Phoenix-Goodwin Money Market Series
[diamond] Phoenix-Goodwin Multi-Sector Fixed Income Series
[diamond] Phoenix-Goodwin Strategic Allocation Series
[diamond] Phoenix-Goodwin Strategic Theme Series
[diamond] Phoenix-Hollister Value Equity Series
[diamond] Phoenix-Oakhurst Growth and Income Series
[diamond] Phoenix-Schafer Mid-Cap Value Series
[diamond] Phoenix-Seneca Mid-Cap Growth Series
MANAGED BY PHOENIX-ABERDEEN INTERNATIONAL ADVISORS, LLC
[diamond] Phoenix-Aberdeen New Asia Series
MANAGED BY DUFF & PHELPS INVESTMENT MANAGEMENT CO.
[diamond] Phoenix-Duff & Phelps Real Estate Securities Series
BT INSURANCE FUNDS TRUST
- ------------------------
MANAGED BY BANKERS TRUST COMPANY
[diamond] EAFE[registered trademark] Equity Index Fund
FEDERATED INSURANCE SERIES
- --------------------------
MANAGED BY FEDERATED INVESTMENT MANAGEMENT COMPANY
[diamond] Federated Fund for U.S. Government Securities II
[diamond] Federated High Income Bond Fund II
TEMPLETON VARIABLE PRODUCTS SERIES FUND
- ---------------------------------------
MANAGED BY TEMPLETON INVESTMENT COUNSEL, INC.
[diamond] Templeton Asset Allocation Fund -- Class 2
[diamond] Templeton International Fund -- Class 2
[diamond] Templeton Stock Fund -- Class 2
MANAGED BY TEMPLETON ASSET MANAGEMENT, LTD.
[diamond] Templeton Developing Markets Fund -- Class 2
MANAGED BY FRANKLIN MUTUAL ADVISERS, INC.
[diamond] Mutual Shares Investments Fund -- Class 2
WANGER ADVISORS TRUST
- ---------------------
MANAGED BY WANGER ASSET MANAGEMENT, L.P.
[diamond] Wanger Foreign Forty
[diamond] Wanger International Small Cap
[diamond] Wanger Twenty
[diamond] Wanger U.S. Small Cap
1
<PAGE>
IT MAY NOT BE IN YOUR BEST INTEREST TO PURCHASE A POLICY TO REPLACE AN
EXISTING LIFE INSURANCE POLICY OR ANNUITY CONTRACT. YOU MUST UNDERSTAND THE
BASIC FEATURES OF THE PROPOSED POLICY AND YOUR EXISTING COVERAGE BEFORE YOU
DECIDE TO REPLACE YOUR PRESENT COVERAGE. YOU MUST ALSO KNOW IF THE REPLACEMENT
WILL RESULT IN ANY TAXES.
THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, UNDERWRITTEN OR GUARANTEED BY,
ANY FINANCIAL INSTITUTION OR CREDIT UNION. IT IS NOT FEDERALLY INSURED OR
ENDORSED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER STATE OR
FEDERAL AGENCY. POLICY INVESTMENTS ARE SUBJECT TO RISK, INCLUDING THE
FLUCTUATION OF POLICY VALUES AND POSSIBLE LOSS OF PRINCIPAL INVESTED OR PREMIUMS
PAID.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES, NOR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED OR PRECEDED BY CURRENT
PROSPECTUSES FOR THE FUNDS. YOU SHOULD READ AND KEEP THESE PROSPECTUSES FOR
FUTURE REFERENCE.
2
<PAGE>
TABLE OF CONTENTS
Heading Page
- --------------------------------------------------------------------------------
PART I--GENERAL POLICY PROVISIONS.......................................... 6
SUMMARY ............................................................... 6
Availability....................................................... 6
Underwriting....................................................... 6
Charges Under the Policy........................................... 6
Deductions From Premiums........................................... 8
Sales Charge................................................... 8
State Premium Tax Charge....................................... 8
Deferred Acquisition Cost (DAC) Tax Charge..................... 8
Policy Value Charges............................................... 8
Administrative Charge.......................................... 8
Cost of Insurance.............................................. 8
Mortality and Expense Risk Fee................................. 8
Rider Charge................................................... 8
Charges for Federal Income Taxes............................... 8
Fund Charges................................................... 8
Other Charges...................................................... 10
Partial Surrender Fee.......................................... 10
Loan Interest Rate Expense Charge.............................. 10
Reduction in Charges............................................... 10
PHOENIX LIFE AND ANNUITY COMPANY AND THE VUL ACCOUNT................... 11
PLAC............................................................... 11
The VUL Account.................................................... 11
PERFORMANCE HISTORY.................................................... 11
INVESTMENTS OF THE VUL ACCOUNT......................................... 11
Participating Investment Funds..................................... 11
The Phoenix Edge Series Fund................................... 11
BT Insurance Funds Trust....................................... 12
Federated Insurance Series..................................... 12
Templeton Variable Products Series Fund........................ 12
Wanger Advisors Trust.......................................... 13
Investment Advisors................................................ 13
Services of the Advisors........................................... 14
Reinvestment and Redemption........................................ 14
Substitution of Investments........................................ 14
The Guaranteed Interest Account.................................... 14
PREMIUMS............................................................... 15
Minimum Premiums................................................... 15
Allocation of Issue Premium........................................ 15
Free Look Period................................................... 15
Account Value...................................................... 16
Transfer of Policy Value....................................... 16
Systematic Transfers for Dollar Cost Averaging................. 16
Automatic Asset Re-Balancing....................................... 16
Determination of Subaccount Values................................. 16
Death Benefit Under the Policy..................................... 17
Minimum Face Amount............................................ 17
Death Benefit Options.......................................... 17
Changes in Face Amount of Insurance................................ 18
Requests for Increase in Face Amount........................... 18
3
<PAGE>
Decreases in Face Amount and Partial Surrender: Effect on
Death Benefit...................................................... 18
Requests for Decrease in Face Amount........................... 18
Surrenders......................................................... 18
General........................................................ 18
Full Surrenders................................................ 18
Partial Surrenders............................................. 18
Policy Loans....................................................... 19
Source of Loan................................................. 19
Interest....................................................... 19
Interest Credited on Loaned Value.............................. 19
Repayment...................................................... 19
Effect of Loan................................................. 19
Lapse.............................................................. 19
Additional Insurance Option........................................ 20
Additional Rider Benefits.......................................... 20
PART II--ADDITIONAL POLICY PROVISIONS...................................... 20
Postponement of Payments........................................... 20
Payment by Check................................................... 20
The Contract....................................................... 21
Suicide............................................................ 21
Incontestability................................................... 21
Change of Owner or Beneficiary..................................... 21
Assignment......................................................... 21
Misstatement of Age or Sex......................................... 21
Surplus............................................................ 21
PAYMENT OF PROCEEDS.................................................... 21
Surrender and Death Benefit Proceeds............................... 21
Payment Options.................................................... 21
Option 1--Lump sum............................................. 21
Option 2--Left to earn interest................................ 21
Option 3--Payment for a specific period........................ 21
Option 4--Life annuity with specified period certain........... 22
Option 5--Life annuity......................................... 22
Option 6--Payments of a specified amount....................... 22
Option 7--Joint survivorship annuity with 10-year
period certain....................................... 22
PART III--OTHER IMPORTANT INFORMATION...................................... 22
FEDERAL TAX CONSIDERATIONS............................................. 22
Introduction....................................................... 22
PLAC's Tax Status.................................................. 22
Policy Benefits.................................................... 23
Death Benefit Proceeds......................................... 23
Full Surrender................................................. 23
Partial Surrender.............................................. 23
Loans.......................................................... 23
Business-Owned Policies............................................ 23
Modified Endowment Contracts....................................... 23
General........................................................ 23
Reduction in Benefits During the First Seven Years............. 24
Distributions Affected......................................... 24
Penalty Tax.................................................... 24
Material Change Rules.......................................... 24
Serial Purchase of Modified Endowment Contracts................ 24
Limitations on Unreasonable Mortality and Expense Charges.......... 24
Diversification Standards.......................................... 24
Change of Ownership or Insured or Assignment....................... 25
Other Taxes........................................................ 25
VOTING RIGHTS ......................................................... 25
4
<PAGE>
THE DIRECTORS AND EXECUTIVE OFFICERS OF PLAC........................... 26
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS ............................... 26
SALES OF POLICIES ..................................................... 26
STATE REGULATION ...................................................... 26
REPORTS ............................................................... 26
LEGAL PROCEEDINGS ..................................................... 26
LEGAL MATTERS ......................................................... 27
REGISTRATION STATEMENT ................................................ 27
YEAR 2000 ISSUE........................................................ 27
FINANCIAL STATEMENTS .................................................. 27
APPENDIX A GLOSSARY OF SPECIAL TERMS................................... 43
APPENDIX B PERFORMANCE HISTORY......................................... 44
APPENDIX C ILLUSTRATIONS............................................... 48
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, 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.
5
<PAGE>
PART I--GENERAL POLICY PROVISIONS
- --------------------------------------------------------------------------------
SUMMARY
- --------------------------------------------------------------------------------
This is a summary that describes the general provisions of the policy.
Certain provisions of the policy described in this prospectus may differ in
a particular state because of specific state requirements.
Throughout the prospectus, Phoenix Life and Annuity Company is referred to
as we, us, or our and the policyholder is referred to as you or your.
We define the following terms in the Glossary of Appendix A:
ATTAINED AGE POLICY ANNIVERSARY
BENEFICIARY POLICY DATE
DEBT POLICY VALUE
FUNDS POLICY YEAR
GENERAL ACCOUNT SERIES
ISSUE PREMIUM SUBACCOUNTS
MONTHLY CALCULATION DATE TARGET PREMIUM
NET ASSET VALUE VALUATION DATE
PAYMENT DATE VALUATION PERIOD
PLANNED ANNUAL PREMIUM VUL ACCOUNT (ACCOUNT)
If there is ever a difference between the provisions within this prospectus
and the provisions of the policy, the policy provisions will control.
AVAILABILITY
The policy is available on a "case" basis. We may consider one person as a
case. All policies within a case are aggregated for purposes of determining
policy dates, loan rates and underwriting requirements. If an individual owns
the policy as part of a case, he or she may exercise all rights under the policy
through their employer or sponsoring organization. After termination of
employment or other such relationship, the individual may exercise such rights
directly with us.
For fully underwritten policies the age of the insured at the time of issue
generally must be between ages 18 through 85 as of his or her birthday nearest
the Policy Anniversary.
For policies that are underwritten using simplified or guaranteed issue
programs, generally the maximum age of the insured at the time of issue is age
70 for simplified and 64 for guaranteed issue.
The minimum face amount of insurance per policy issued is $50,000.
You can purchase a Policy to insure the life of another person provided that
you have an insurable interest in that life and the prospective Insured
consents.
UNDERWRITING
Currently, we offer three types of underwriting:
[diamond] fully underwritten;
[diamond] simplified issue underwriting; and
[diamond] guaranteed issue underwriting.
Your cost of insurance charges will vary based on the type of underwriting
we use.
CHARGES UNDER THE POLICY
We deduct certain charges from your Policy to compensate us for:
1. our expenses in selling the Policy;
2. underwriting and issuing the Policy;
3. premium and federal taxes incurred on premiums received;
4. providing insurance benefits under your Policy; and
5. assuming certain risks in connection with the Policy.
These charges are summarized below. These charges are described more fully
following this chart.
6
<PAGE>
<TABLE>
CHARGES UNDER THE POLICY
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CHARGES CURRENT RATE GUARANTEED RATE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DEDUCTIONS FROM SALES CHARGE Policy years 1 - 7: 5.0% of premiums Policy years 1 - 7: 5.0% of premiums
PREMIUMS up to the Target Premium and 0% on up to the Target Premium and 3.0% on
amounts in excess of the Target amounts in excess of the Target
Premium. Premium.
Policy year 8 plus: 0% of all Policy year 8 plus: 2.0% of all
premiums. premiums.
--------------------------------------------------------------------------------------------------------
STATE PREMIUM 0.75% to 4.0% of each premium up to This charge will always equal the
TAX the Target Premium depending on your applicable state rate.
state's applicable rate.
--------------------------------------------------------------------------------------------------------
DEFERRED ACQUISITION 1.5% of each premium up to the This charge will always equal the
COST TAX CHARGE Target Premium. actual cost to Us for the DAC tax.
(DAC TAX)
- -------------------------------------------------------------------------------------------------------------------------------
POLICY VALUE CHARGES ADMINISTRATIVE CHARGE $5 per month ($60 annually) $10 per month ($120 annually) except
New York, $7.50 per month ($90
annually)
- -------------------------------------------------------------------------------------------------------------------------------
COST OF INSURANCE A per thousand rate multiplied by the The maximum monthly cost of
CHARGE amount at risk each month. This insurance charge for each $1,000 of
charge varies by the Insured's insurance is shown on your
issue age, policy duration, policy's schedule pages.
gender and underwriting class.
--------------------------------------------------------------------------------------------------------
MORTALITY AND EXPENSE 0.40% annually in policy years 1-10 0.90% annually in all policy years
RISK CHARGE 0.25% annually in policy years 11+
--------------------------------------------------------------------------------------------------------
FUND CHARGES SEE FUND CHARGE TABLE SEE FUND CHARGE TABLE
- -------------------------------------------------------------------------------------------------------------------------------
OTHER CHARGES PARTIAL SURRENDER None 2.0% of the amount withdrawn, but not
FEE greater than $25.
- -------------------------------------------------------------------------------------------------------------------------------
TRANSFERS BETWEEN None $10 per transfer after the first 2
SUBACCOUNTS transfers in any given policy year,
(after 12 transfers in New York).
--------------------------------------------------------------------------------------------------------
LOAN INTEREST RATE The rates in effect before the 16(th) The Guaranteed rates before the
CHARGED policy year and before the Insured Insured reaches 65 for all states
reaches age 65 in all states except are:
New York and New Jersey are: Policy year 1 - 10: 4.75%
Policy year 1 - 10: 2.75% Policy year 11 - 15: 4.50%
Policy year 11 - 15: 2.50% Policy year 16+: 4.25%
Policy year 16+: 2.25%
The rates in effect before the 16(th)
policy year and before the Insured
reaches age 65 in New York and New
Jersey are:
Policy year 1 - 10: 4.75%
Policy year 11 - 15: 4.50%
Policy year 16+: 4.25%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
DEDUCTIONS FROM PREMIUMS
Before we allocate your premium to the Subaccounts or the Guaranteed
Interest Account we deduct a sales charge, a state premium tax and a federal tax
to cover the estimated cost to us for deferred acquisition costs.
SALES CHARGE
We deduct a sales charge from your premium for the costs we incur in the
sales and distribution of the policies. We will refund a portion the sales
charge to you as part of the cash surrender value if you surrender your policy
within the first three policy years according to the following schedule:
Policy Year 1: 100.00%
Policy Year 2: 66.67%
Policy Year 3: 33.33%
STATE PREMIUM TAX CHARGE
States assess premium taxes at various rates. We deduct the applicable state
rate from each premium to cover the cost of the premium taxes assessed against
us by the state.
We may increase or decrease this charge if there is a change in the tax or
change of residence.
DEFERRED ACQUISITION COST ("DAC") TAX CHARGE
This tax is associated with our federal tax liability under Internal Revenue
Code Section 848.
POLICY VALUE CHARGES
On each Monthly Calculation Day, we deduct from your policy value the
following charges:
1. Administrative Charge
2. Cost of Insurance Charge
3. Mortality and Expense Risk Fee
4. A charge for the cost of riders if applicable
The amount deducted is allocated among the Subaccounts and the unloaned
portion of the Guaranteed Interest Account based on an allocation schedule
specified by you. You initially choose this schedule in your application.
1. ADMINISTRATIVE CHARGE
We assess a monthly charge for the expenses we incur in administering the
policy. This charge reimburses us for the cost of daily administration for
services such as billing and collections, monthly processing, updating daily
values and communicating with policyholders.
2. COST OF INSURANCE
We deduct a charge to cover the cost of insurance coverage on each monthly
calculation date. This charge is based on:
[diamond] Insured's gender;
[diamond] Insured's age at issue;
[diamond] Policy year in which we make the deduction;
[diamond] Insured's tobacco use classification;
[diamond] Rating class of the policy; and
[diamond] Underwriting classification of the case.
To determine the monthly cost of insurance, we multiply the appropriate cost
of insurance rate by the difference between your Policy's death benefit and the
policy value. Any change in the cost of insurance rates will apply to all
persons of the same sex, insurance age and risk class whose policies have been
in force for the same length of time.
3. MORTALITY AND EXPENSE RISK FEE
We charge the Subaccounts for the mortality and expense risks we assume.
This charge is deducted from the value of each Subaccount's assets attributable
to the policies.
The mortality risk we assume is that the group of lives we insure under our
policies may, on average, live for a shorter period of time than we estimated.
The expense risk we assume is that our cost of issuing and administering the
policies may be more than we estimated.
If all the money we collect from this charge is not required to cover the
cost of death benefits and other expenses, it will be a gain to us. If the money
we collect is not enough to cover our costs, we will still provide for death
benefits and expenses.
4. RIDER CHARGE
We will deduct any applicable monthly rider charges for the additional
benefit provided to you by the rider.
CHARGES FOR FEDERAL INCOME TAXES
We currently do not charge the VUL Account for federal income taxes
attributable to it. In the future, we may charge to cover these or any other tax
liability of the VUL Account.
FUND CHARGES
Please refer to the following chart for a listing of Fund Charges.
8
<PAGE>
ANNUAL FUND EXPENSES FOR THE YEAR ENDING DECEMBER 31, 1998 AFTER REIMBURSEMENT
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
INVESTMENT OTHER OPERATING TOTAL ANNUAL(1)
SERIES MANAGEMENT FEE RULE 12B-1 FEES EXPENSES FUND EXPENSES
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Phoenix Research Enhanced Index .45% 0% .10% .55%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International .75% 0% .23% .98%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia 1.00% 0% .25% 1.25%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities .75% 0% .25% 1.00%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty .90% 0% .15% 1.05%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced .55% 0% .13% .68%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth .62% 0% .07% .69%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market .40% 0% .15% .55%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income .50% 0% .14% .64%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation .58% 0% .10% .68%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme .75% 0% .24% .99%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity .70% 0% .15% .85%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income .70% 0% .15% .85%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value 1.05% 0% .15% 1.20%
- --------------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth .80% 0% .25% 1.05%
- --------------------------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index 0% 0% .65% .65%
- --------------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond .60% 0% .18% .78%
- --------------------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities .52% 0% .33% .85%
- --------------------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments (Templeton) 0% .25% 1.00% 1.25%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation .60% .25% .18% 1.03%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets 1.25% .25% .41% 1.91%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton International .69% .25% .17% 1.11%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton Stock .70% .25% .19% 1.14%
- --------------------------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty .95% 0% .50% 1.45%
- --------------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap 1.27% 0% .28% 1.55%
- --------------------------------------------------------------------------------------------------------------------------------
Wanger Twenty .90% 0% .45% 1.35%
- --------------------------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap .96% 0% .06% 1.02%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Each Series pays a portion or all of its total annual expenses other than
the management fee. The Phoenix Research Enhanced Index Series will pay up
to .10%; the Phoenix-Goodwin Growth, Phoenix-Goodwin Multi-Sector Fixed
Income, Phoenix-Goodwin Strategic Allocation, Phoenix-Goodwin Money Market,
Phoenix-Goodwin Balanced, Phoenix-Engemann Nifty Fifty, Phoenix-Oakhurst
Growth and Income, Phoenix-Hollister Value Equity and Phoenix-Schafer
Mid-Cap Value Series will pay up to .15%; the Phoenix-Duff & Phelps Real
Estate Securities, Phoenix-Goodwin Strategic Theme, Phoenix-Aberdeen New
Asia and Phoenix-Seneca Mid-Cap Growth Series will pay up to .25%; and the
Phoenix-Aberdeen International Series will pay up to .40% for the fiscal
year ending December 31, 1998. Absent expense reimbursement, Total Annual
Expenses were:
<TABLE>
<S> <C> <C> <C>
Phoenix Research Enhanced Index .82% Phoenix-Goodwin Multi-Sector Fixed Income .64%
Phoenix-Aberdeen International .98% Phoenix-Goodwin Strategic Allocation .68%
Phoenix-Aberdeen New Asia 2.50% Phoenix-Goodwin Strategic Theme .99%
Phoenix-Duff & Phelps Real Estate Securities 1.01% Phoenix-Hollister Value Equity 2.46%
Phoenix-Engemann Nifty Fifty 2.58% Phoenix-Oakhurst Growth and Income 1.46%
Phoenix-Goodwin Balanced .68% Phoenix-Schafer Mid-Cap Value 2.77%
Phoenix-Goodwin Growth .69% Phoenix-Seneca Mid-Cap Growth 2.81%
Phoenix-Goodwin Money Market .55%
</TABLE>
The Wanger Foreign Forty will pay up to .45%, the Wanger U.S. Small Cap
Series will pay up to .50%, the Wanger International Small Cap will pay up
to .60%, and the Wanger Twenty will pay up to .40%. Absent expense
reimbursement, Total Annual Expenses are estimated to be approximately 1.45%
for Wanger Foreign Forty, 1.55% for Wanger International Small Cap, 1.35%
for Wanger Twenty and 1.02% for Wanger U.S. Small Cap for the fiscal year
ending December 31, 1999. Expenses may be higher or lower than those shown
but are subject to expense limitations as noted.
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OTHER CHARGES
PARTIAL SURRENDER FEE
We reserve the right to deduct a charge from each withdrawal.
LOAN INTEREST RATE EXPENSE CHARGE
We deduct a charge from the loan interest rate. This charge reimburses us
for expenses we incur in administering your loan. This rate varies by policy
year.
REDUCTION IN CHARGES
The Policy is available for purchase by individuals, corporations and other
groups. For group or sponsored arrangements (including our employees and their
family members) and for special exchange programs that we may make available, we
reserve the right to reduce or eliminate the sales load, mortality and expense
risk charge, monthly administrative charge, monthly cost of insurance charges or
other charges normally assessed on certain multiple life cases where it is
expected that the size or nature of such cases will result in savings of sales,
underwriting, administrative or other costs.
Eligibility for the amount of these reductions will be determined by a
number of factors including the number of Insureds, the total premium expected
to be paid, the total assets under management for the Policyowner, the nature of
the relationship among individual Insureds, the purpose for which the Policies
are being purchased, the expected persistency of individual Policies, and other
circumstances which in our opinion, are rationally related to the expected
reduction in expenses. Any variations in the charge structure will be determined
in a uniform manner reflecting differences in costs of services and not unfairly
discriminatory to policyholders.
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PHOENIX LIFE AND ANNUITY COMPANY AND THE VUL ACCOUNT
- --------------------------------------------------------------------------------
PLAC
We are an indirect subsidiary of Phoenix Home Life Mutual Insurance Company
("Phoenix"). Our executive office is located at One American Row, Hartford,
Connecticut 06102-5056, and our main administrative office is located at 100
Bright Meadow Boulevard, Enfield, Connecticut 06083-1900. We are a Connecticut
stock company, formed to write life insurance and annuity contracts. Formerly
Phoenix was Savers Life Insurance Company of America, chartered in Missouri
in 1981. We redomesticated to Connecticut in April, 1997.
THE VUL ACCOUNT
The VUL Account is a separate account of PLAC, established on July 1, 1996
and governed under the laws of Connecticut. It is registered with the SEC as a
unit investment trust under the Investment Company Act of 1940, as amended, and
meets the definition of a "separate account" under that Act. This registration
does not involve supervision of the management of the VUL Account or PLAC by the
SEC.
The VUL Account is divided into Subaccounts, each of which is available for
allocation of Policy Value. Each Subaccount will invest solely in shares of a
specific series of a mutual fund. In the future, we may establish additional
Subaccounts which will be made available to existing Policyowners to the extent
and on a basis decided by us. See "Investments of the VUL Account--Participating
Investment Funds."
PLAC does not guarantee the investment performance of the VUL Account or any
of its Subaccounts. Contributions to the overall Policy Value allocated to the
VUL Account depend on the chosen Fund's investment performance. Thus, you bear
the full investment risk for all monies invested in the VUL Account.
The VUL Account is part of the general business of PLAC, but the gains or
losses of the VUL Account belong solely to the VUL Account. The gains or losses
of any other business we may conduct do not affect the VUL Account. Under
Connecticut law, the assets of the VUL Account may not be taken to pay
liabilities arising out of any other business we may conduct. Nevertheless, all
obligations arising under the Policy are general corporate obligations of PLAC.
PERFORMANCE HISTORY
- --------------------------------------------------------------------------------
We may include the performance history of the VUL Account Subaccounts in
advertisements, sales literature or reports. Performance information about each
Subaccount is based on past performance only and is not an indication of future
performance. See "Appendix B" for more information.
INVESTMENTS OF THE VUL ACCOUNT
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PARTICIPATING INVESTMENT FUNDS
THE PHOENIX EDGE SERIES FUND
Certain Subaccounts invest in corresponding Series of The Phoenix Edge
Series Fund. The following Series are currently available:
PHOENIX RESEARCH ENHANCED INDEX SERIES: The investment objective of the
Series is to seek high total return by investing in a broadly diversified
portfolio of equity securities of large and medium capitalization companies
within market sectors reflected in the S&P 500. The Series invests in a
portfolio of undervalued common stocks and other equity securities which appear
to offer growth potential and an overall volatility of return similar to that of
the S&P 500.
PHOENIX-ABERDEEN INTERNATIONAL SERIES: The investment objective of the
Series is to seek a high total return consistent with reasonable risk. The
Series invests primarily in an internationally diversified portfolio of equity
securities. It intends to reduce its risk by engaging in hedging transactions
involving options, futures contracts and foreign currency transactions. The
Phoenix-Aberdeen International Series provides a means for investors to invest a
portion of their assets outside the United States.
PHOENIX-ABERDEEN NEW ASIA SERIES: The investment objective of the Series is
to seek long-term capital appreciation. The Series invests primarily in a
diversified portfolio of equity securities of issuers organized and principally
operating in Asia, excluding Japan.
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES: The investment
objective of the Series is to seek capital appreciation and income with
approximately equal emphasis. Under normal circumstances, it invests in
marketable securities of publicly traded real estate investment trusts (REITs)
and companies that operate, develop, manage and/or invest in real estate located
primarily in the United States.
PHOENIX-ENGEMANN NIFTY FIFTY SERIES: The investment objective of the Series
is to seek long-term capital appreciation by investing in approximately 50
different securities which offer the best potential for long-term growth of
capital. At least 75% of the Series' assets will be invested in common stocks of
high quality growth companies. The remaining portion will be invested in common
stocks of small corporations with rapidly growing earnings per share or common
stocks believed to be undervalued.
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PHOENIX-GOODWIN BALANCED SERIES: The investment objective of the Series is
to seek reasonable income, long-term capital growth and conservation of capital.
The Phoenix-Goodwin Balanced Series invests based on combined considerations of
risk, income, capital enhancement and protection of capital value.
PHOENIX-GOODWIN GROWTH SERIES: The investment objective of the Series is to
achieve intermediate and long-term growth of capital, with income as a secondary
consideration. The Phoenix-Goodwin Growth Series invests principally in common
stocks of corporations believed by management to offer growth potential.
PHOENIX-GOODWIN MONEY MARKET SERIES: The investment objective of the Series
is to provide maximum current income consistent with capital preservation and
liquidity. The Phoenix-Goodwin Money Market Series invests exclusively in high
quality money market instruments.
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES: The investment objective
of the Series is to seek long-term total return. The Phoenix-Goodwin
Multi-Sector Fixed Income Series seeks to achieve its investment objective by
investing in a diversified portfolio of high yield and high quality fixed income
securities.
PHOENIX-GOODWIN STRATEGIC ALLOCATION SERIES: The investment objective of the
Series is to realize as high a level of total return over an extended period of
time as is considered consistent with prudent investment risk. The
Phoenix-Goodwin Strategic Allocation Series invests in stocks, bonds and money
market instruments in accordance with the Investment Advisor's appraisal of
investments most likely to achieve the highest total return.
PHOENIX-GOODWIN STRATEGIC THEME SERIES: The investment objective of the
Series is to seek long-term appreciation of capital by identifying securities
benefiting from long-term trends present in the United States and abroad. The
Phoenix-Goodwin Strategic Theme Series invests primarily in common stocks
believed to have substantial potential for capital growth.
PHOENIX-HOLLISTER VALUE EQUITY SERIES: The primary investment objective of
the Series is long-term capital appreciation, with a secondary investment
objective of current income. The Phoenix-Hollister Value Equity Series seeks to
achieve its objective by investing in a diversified portfolio of common stocks
that meet certain quantitative standards that indicate above average financial
soundness and intrinsic value relative to price.
PHOENIX-OAKHURST GROWTH AND INCOME SERIES: The investment objective of the
Series is to seek dividend growth, current income and capital appreciation by
investing in common stocks. The Phoenix-Oakhurst Growth and Income Series seeks
to achieve its objective by selecting securities primarily from equity
securities of the 1,000 largest companies traded in the United States, ranked by
market capitalization.
PHOENIX-SCHAFER MID-CAP VALUE SERIES: The primary investment objective of
the Series is to seek long-term capital appreciation, with current income as the
secondary investment objective. The Phoenix-Schafer Mid-Cap Value Series will
invest in common stocks of established companies having a strong financial
position and a low stock market valuation at the time of purchase which are
believed to offer the possibility of increase in value.
PHOENIX-SENECA MID-CAP GROWTH SERIES: The investment objective of the Series
is to seek capital appreciation primarily through investments in equity
securities of companies that have the potential for above average market
appreciation. The Series seeks to outperform the Standard & Poor's Mid-Cap 400
Index.
BT INSURANCE FUNDS TRUST
A certain Subaccount invests in a corresponding Series of the BT Insurance
Funds Trust. The following Series is currently available:
EAFE[registered trademark] EQUITY INDEX FUND: The Series seeks to match the
performance of the Morgan Stanley Capital International EAFE[registered
trademark] Index ("EAFE[registered trademark] Index"), which emphasizes major
market stock performance of companies in Europe, Australia and the Far East. The
Series invests in a statistically selected sample of the securities found in the
EAFE[registered trademark] Index.
FEDERATED INSURANCE SERIES
Certain Subaccounts invest in corresponding Series of the Federated
Insurance Series. The following Series are currently available:
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II: The investment objective
of the Series is to seek current income by investing primarily in U.S.
government securities, including mortgage-backed securities issued by U.S.
government agencies.
FEDERATED HIGH INCOME BOND FUND II: The investment objective of the Series
is to seek high current income by investing primarily in a diversified portfolio
of high-yield, lower-rated corporate bonds.
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Certain Subaccounts invest in Class 2 Shares of a corresponding Series of
the Templeton Variable Products Series Fund. The following Series are currently
available:
MUTUAL SHARES INVESTMENT FUND: The primary investment objective of the
Series is capital appreciation with income as a secondary objective. The Mutual
Shares Investments Series invests in domestic equity securities that the manager
believes are significantly undervalued.
TEMPLETON ASSET ALLOCATION FUND: The investment objective of the Series is a
high level of total return. The Templeton Asset Allocation Series invests in
stocks of
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companies of any nation, bonds of companies and governments of any nation and in
money market instruments. Changes in the asset mix will be made in an attempt to
capitalize on total return potential produced by changing economic conditions
throughout the world.
TEMPLETON DEVELOPING MARKETS FUND: The investment objective of the Series is
long-term capital appreciation. The Templeton Developing Markets Series invests
primarily in emerging market equity securities.
TEMPLETON INTERNATIONAL FUND: The investment objective of the Series is
long-term capital growth. The Templeton International Series invests primarily
in stocks of companies located outside the United States, including emerging
markets. Any income realized will be incidental. It also may invest in debt
securities of governments and companies located anywhere in the world.
TEMPLETON STOCK FUND: The investment objective of the Series is long-term
capital growth. The Templeton Stock Series invests primarily in common stocks
issued by companies in various nations throughout the world, including the U.S.
and emerging markets.
WANGER ADVISORS TRUST
Certain Subaccounts invest in corresponding Series of the Wanger Advisors
Trust. The following Series are currently available:
WANGER FOREIGN FORTY: The investment objective of the Series is to seek
long-term capital growth. The Wanger Foreign Forty Series invests primarily in
equity securities of foreign companies with market capitalization of $1 billion
to $10 billion and focuses its investments in 40 to 60 companies in the
developed markets.
WANGER INTERNATIONAL SMALL CAP: The investment objective of the Series is to
seek long-term capital growth. The Wanger International Small Cap Series invests
primarily in securities of non-U.S. companies with total common stock market
capitalization of less than $1 billion.
WANGER TWENTY: The investment objective of the Series is to seek long-term
capital growth. The Wanger Twenty Series invests primarily in the stocks of U.S.
companies with market capitalization of $1 billion to $10 billion and ordinarily
focuses its investments in 20 to 25 U.S. companies.
WANGER U.S. SMALL CAP: The investment objective of the Series is to seek
long-term capital growth. The Wanger U.S. Small Cap Series invests primarily in
securities of U.S. companies with total common stock market capitalization of
less than $1 billion.
Each Series will be subject to market fluctuations and the risks that come
with the ownership of any security, and there can be no assurance that any
Series will achieve its stated investment objective.
In addition to being sold to the Account, shares of all of the Funds also
may be sold to other separate accounts of Phoenix or its affiliates and shares
of certain Funds also may be sold to the separate accounts of other insurance
companies.
It is possible that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Fund(s) simultaneously. Although neither PLAC nor the Fund(s)
trustees currently foresee any such disadvantages either to variable life
insurance Policyowners or to variable annuity Contractowners, the Funds'
trustees intend to monitor events in order to identify any material conflicts
between variable life insurance Policyowners and variable annuity Contractowners
and to determine what action, if any, should be taken in response to such
conflicts. Material conflicts could, for example, result from:
[diamond] changes in state insurance laws;
[diamond] changes in federal income tax laws;
[diamond] changes in the investment management of any portfolio of the Fund(s);
or
[diamond] differences in voting instructions between those given by variable
life insurance Policyowners and those given by variable annuity
Contractowners.
We will, at our expense, remedy such material conflicts including, if
necessary, segregating the assets underlying the variable life insurance
policies and the variable annuity contracts and establishing a new registered
investment company.
INVESTMENT ADVISORS
Phoenix Investment Counsel, Inc. ("PIC") is the investment advisor to all
Series in The Phoenix Edge Series Fund except the Phoenix-Duff & Phelps Real
Estate Securities and Phoenix-Aberdeen New Asia Series. Based on Subadvisory
agreements with the Fund, PIC delegates certain investment decisions and
research functions to subadvisors for the following Series:
[diamond] J.P. Morgan Investment Management, Inc.
[bullet] Phoenix Research Enhanced Index Series
[diamond] Roger Engemann & Associates, Inc. ("Engemann")
[bullet] Phoenix-Engemann Nifty Fifty Series
[diamond] Seneca Capital Management, LLC ("Seneca")
[bullet] Phoenix-Seneca Mid-Cap Growth Series
[diamond] Schafer Capital Management, Inc.
[bullet] Phoenix-Schafer Mid-Cap Value Series
The investment advisor to the Phoenix-Duff & Phelps Real Estate Securities
Series is Duff & Phelps Investment Management Co. ("DPIM").
The investment advisor to the Phoenix-Aberdeen New Asia Series is
Phoenix-Aberdeen International Advisors
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LLC ("PAIA"). Pursuant to Subadvisory agreements with the Fund, PAIA delegates
certain investment decisions and research functions with respect to the
Phoenix-Aberdeen New Asia Series to PIC and Aberdeen Fund Managers, Inc.
PIC, DPIM, Engemann and Seneca are indirect, less than wholly-owned
subsidiaries of Phoenix. PAIA is jointly owned and managed by PM Holdings, Inc.,
a subsidiary of Phoenix, and by Aberdeen Fund Managers, Inc.
The other investment advisors are:
[diamond] Bankers Trust Company
[bullet] EAFE[registered trademark] Equity Index Fund
[diamond] Federated Investment Management Company
[bullet] Federated Fund for U.S. Government Securities II
[bullet] Federated High Income Bond Fund II
[diamond] Templeton Investment Counsel, Inc.
[bullet] Templeton Asset Allocation Fund
[bullet] Templeton International Fund
[bullet] Templeton Stock Fund
[diamond] Templeton Asset Management, Ltd.
[bullet] Templeton Developing Markets Fund
[diamond] Franklin Mutual Advisers, Inc.
[bullet] Mutual Shares Investments Fund
[diamond] Wanger Asset Management, L.P.
[bullet] Wanger Foreign Forty
[bullet] Wanger International Small Cap
[bullet] Wanger Twenty
[bullet] Wanger U.S. Small Cap
SERVICES OF THE ADVISORS
The Advisors continuously furnish an investment program for each Series and
manage the investment and reinvestment of the assets of each Series subject at
all times to the authority and supervision of the Trustees of each Fund. A
detailed discussion of the investment advisors and subadvisors, and the
investment advisory and Subadvisory agreements, is contained in the accompanying
prospectus for the Funds.
REINVESTMENT AND REDEMPTION
All dividend distributions of the Fund are automatically reinvested in
shares of the Fund at their net asset value on the date of distribution.
Likewise, all capital gains distributions of the Fund, if any, are reinvested at
the net asset value on the record date. We redeem Fund shares at their net asset
value to the extent necessary to make payments under the Policy.
SUBSTITUTION OF INVESTMENTS
We reserve the right to make additions to, deletions from, or substitutions
for the investments held by the VUL Account, subject to compliance with the law
as currently applicable or as subsequently changed. In the future, we may
establish additional Subaccounts within the VUL Account, each of which will
invest in shares of a designated portfolio of the Fund with a specified
investment objective. If and when marketing needs and investment conditions
warrant, and at our discretion, we may establish additional portfolios. These
will be made available under existing Policies to the extent and on a basis
determined by us.
If shares of any of the portfolios of the Fund should be no longer available
for investment or, if in the judgment of our management, further investment in
shares of any of the portfolios become inappropriate due to Policy objectives,
we may then substitute shares of another mutual fund for shares already
purchased, or to be purchased in the future. No substitution of mutual fund
shares held by the VUL Account may take place without prior approval of the
Securities and Exchange Commission and prior notice to you. In the event of a
change, you will be given the option of transferring the Policy Value of the
Subaccount in which the substitution is to occur to another Subaccount.
THE GUARANTEED INTEREST ACCOUNT
In addition to the VUL Account, you may allocate premium or transfer policy
value to the Guaranteed Interest Account. Amounts you allocate or transfer to
the Guaranteed Interest Account become part of Phoenix Life and Annuity's
general account assets. You do not share in the investment experience of those
assets. Rather, we guarantee a 3% rate of return on your allocated amount. For
amounts transferred to the Guaranteed Interest Account due to a policy loan, the
guaranteed rate is 2% in all states except New York and New Jersey. In New York
and New Jersey the rate credited to the Guaranteed Interest Account due to a
policy loan is 4%. Although we are not obligated to credit interest at a higher
rate than the minimum, we will credit excess interest, if any, as determined by
us based on information as to expected investment yields.
Because of exemptive and exclusionary provisions, we have not registered
interests in our general account under the Securities Act of 1933. Also, we have
not registered our general account as an investment company under the Investment
Company Act of 1940, as amended. Therefore, neither the general account nor any
of its interests are subject to these Acts, and the Securities and Exchange
Commission has not reviewed the general account disclosures. These disclosures
may, however, be subject to certain provisions of the federal securities law as
to the accuracy and completeness of statements made in this prospectus.
We reserve the right to limit total deposits, including transfers, to the
Guaranteed Interest Account to no more than $250,000 during any one-week period
per policy.
In general, you can make only one transfer per year from the Guaranteed
Interest Account. The amount that can be transferred out is limited to the
greater of $1,000 or
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25% of the Policy Value in the Guaranteed Interest Account as of the date of the
transfer. If you elect the Systematic Transfer Program, approximately equal
amounts may be transferred out of the Guaranteed Interest Account. Also, the
total Policy Value allocated to the Guaranteed Interest Account may be
transferred out of the Guaranteed Interest Account to one or more of the
Subaccounts of the VUL Account over a consecutive four-year period according to
the following schedule:
[diamond] Year One: 25% of the total value
[diamond] Year Two: 33% of remaining value
[diamond] Year Three: 50% of remaining value
[diamond] Year Four: 100% of remaining value
Transfers into the Guaranteed Interest Account and among the Subaccounts of
the VUL Account may be made at any time. Transfers from the Guaranteed Interest
Account are subject to the rules discussed in "Appendix C" and "Transfer of
Policy Value--Systematic Transfer Program."
PREMIUMS
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MINIMUM PREMIUMS
The Minimum Premium is determined by case size as follows:
[diamond] 5 or more lives: $100,000 annually for the first
five Policy Years
[diamond] Fewer than 5 lives: $250,000 annually for the first
five Policy Years
The Issue Premium is due on the Policy Date. The Insured must be alive when
the Issue Premium is paid. After that, premiums may be paid at any time while
the Policy is in force. Each premium payment must be at least $100. Additional
payments should be sent to the:
VUL COLI UNIT
PO BOX 22012
ALBANY, NY 12201-2012
The number of units credited to a Subaccount of the VUL Account will be
determined by dividing the portion of the net premium applied to that Subaccount
by the unit value of the Subaccount on the Payment Date.
Regardless of whether you choose the Guideline Premium Test or the Cash
Value Accumulation Test (see "Minimum Face Amount"), we reserve the right to
refund a premium paid in any year if it will exceed the maximum premium limit.
The maximum limit is established by law to qualify the Policy contract as life
insurance. This limit is applied to the sum of all premiums paid under the
Policy. If the total premium limit is exceeded, the Policyowner will receive the
excess, with interest at an annual rate of not less than 4%, not later than 60
days after the end of the Policy Year in which the limit was exceeded. The
Policy Value then will be adjusted to reflect the refund. The total premium
limit may be exceeded if additional premium is needed to prevent lapse or if we
subsequently determine that additional premium would be permitted by federal
laws or regulations.
ALLOCATION OF ISSUE PREMIUM
We will generally allocate the Issue Premium less applicable charges to the
VUL Account or to the Guaranteed Interest Account upon receipt of a completed
application, in accordance with the allocation instructions in the application
for a Policy. However, Policies issued in certain states, and Policies issued in
certain states pursuant to applications which state the Policy is intended to
replace existing insurance, are issued with a Temporary Money Market Allocation
Amendment. Under this Amendment, we temporarily allocate the entire issue
premium paid less applicable charges (along with any other premiums paid during
the Free Look period) to the Phoenix-Goodwin Money Market Subaccount of
the VUL Account, and, at the expiration of the Free Look period, the
policy value of the Money Market Subaccount is allocated among the Subaccounts
of the VUL Account or to the Guaranteed Interest Account in accordance with the
applicant's allocation instructions in the application for insurance.
FREE LOOK PERIOD
You have the right to review the Policy. If you are not satisfied with it,
you may cancel the Policy:
[diamond] by mailing it to us within 10 days after you receive it (or longer in
some states); or
[diamond] within 10 days after we mail or deliver a written notice telling you
about your free look period; or
[diamond] within 45 days after completing the application,
whichever occurs latest (the "Free Look Period").
We treat a returned Policy as if we never issued it and, except for Policies
issued with a Temporary Money Market Allocation Amendment, we will return the
sum of the following as of the date we receive the returned Policy: (1) the then
current Policy Value less any unpaid loans and loan interest; plus (2) any
monthly deductions, partial surrender fees and other charges made under the
Policy. For Policies issued with the Temporary Money Market Amendment the amount
returned will equal any premiums paid less any unrepaid loans and loan interest,
and less any partial surrender amounts paid.
We retain the right to decline to process an application within seven days
of our receipt of the completed application for insurance. If we decline to
process the application, we will return the premium paid. Even if we have
approved the application for processing, we retain the right to decline to issue
the Policy. If we decline to issue the Policy, we will refund to you the same
amount as would have been refunded under the Policy had it been issued but
returned for refund during the Free Look Period.
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ACCOUNT VALUE
TRANSFER OF POLICY VALUE
Transfers among available Subaccounts or the Guaranteed Interest Account and
changes in premium payment allocations may be requested in writing. Requests for
transfers will be executed on the date the request is received at Andesa, TPA,
Inc.
Although currently there is no charge for transfers, in the future, we may
charge a fee of $10 for each transfer after the first two transfers in a Policy
Year (after twelve transfers in New York).
You may make only one transfer per Policy Year from the unloaned portion of
the Guaranteed Interest Account unless (1) the transfer(s) are made as part of a
Dollar Cost Averaging Program, or (2) we agree to make an exception to this
rule. Unless you have elected a Dollar Cost Averaging Program, the amount you
may transfer cannot exceed the greater of $1,000 or 25% of the value of the
unloaned portion of the Guaranteed Interest Account at the time of the transfer.
In addition, you may transfer the total value allocated to the unloaned portion
of the Guaranteed Interest Account out of the Guaranteed Interest Account to one
or more of the Subaccounts over a consecutive four-year period according to the
following schedule:
[diamond] Year One: 25% of the total value
[diamond] Year Two: 33% of the remaining value
[diamond] Year Three: 50% of the remaining value
[diamond] Year Four: 100% of the remaining value
Transfers into the Guaranteed Interest Account and among the Subaccounts may
be made anytime. We reserve the right to limit the number of Subaccounts you may
invest in at any one time or over the life of the Policy, if we are required to
do so by any federal or state law.
Because excessive exchanges between Subaccounts can hurt Fund performance,
we reserve the right to temporarily or even permanently terminate exchange
privileges or reject any specific exchange order from anyone whose transactions
appear to us to follow a timing pattern, including those who request more than
one exchange out of a Subaccount within any 30-day period. We will not accept
batched transfer instructions from registered representatives (acting under
powers of attorney for multiple Policyowners), unless the registered
representative's broker-dealer firm and PLAC have entered into a third-party
transfer service agreement.
If a policy has been issued with a Temporary Money Market Allocation
Amendment, no transfers may be made until the end of the Free Look Period.
SYSTEMATIC TRANSFERS FOR DOLLAR COST AVERAGING
You may elect to transfer funds automatically among the Subaccounts or the
unloaned portion of the Guaranteed Interest Account on a monthly, quarterly,
semiannual or annual basis under the Systematic Transfers for Dollar Cost
Averaging Program ("Dollar Cost Averaging Program"). Under the Dollar Cost
Averaging Program, the minimum transfer amounts are $25 monthly, $75 quarterly,
$150 semiannually or $300 annually. You must have an initial value of $1,000 in
the Guaranteed Interest Account or the Subaccount from which funds will be
transferred ("Sending Subaccount") and if the value in that Subaccount or the
Guaranteed Interest Account drops below the amount to be transferred, the entire
remaining balance will be transferred and all systematic transfers stop. Funds
may be transferred from only one Sending Subaccount or the Guaranteed Interest
Account, but may be allocated to more than one Subaccount ("Receiving
Subaccounts"). Under the Dollar Cost Averaging Program, Policyowners may make
more than one transfer per Policy Year from the Guaranteed Interest Account.
These transfers must be in approximately equal amounts and made over a minimum
18-month period.
Only one Dollar Cost Averaging Program can be active at any time. All
transfers under the Dollar Cost Averaging Program will be made on the basis of
the Guaranteed Interest Account and Subaccount on the first day of the month
following our receipt of the transfer request. If the first day of the month
falls on a holiday or weekend, then the transfer will be processed on the next
business day.
AUTOMATIC ASSET RE-BALANCING
Automated account re-balancing permits you to maintain a specified whole
number percentage of your account value in any combination of Subaccounts and
the Guaranteed Interest Account. We must receive a written request in order to
begin your automated asset re-balancing program ("Asset Re-Balancing"). Then, we
will make transfers at least quarterly to and from the Subaccounts and the
Guaranteed Interest Account to re-adjust your account value to your specified
percentage. Asset Re-Balancing allows you to maintain a specific fund
allocation. Quarterly re-balancing is based on your policy year. We will
re-balance your account value only on a monthly calculation date.
The effective date of the first Asset Re-Balancing will be the first monthly
calculation date after we receive your request at Andesa TPA, Inc. If we receive
your request before the end of the Free Look Period, your first re-balancing
will occur at the end of the Free Look Period.
You may not participate in both the Dollar Cost Averaging Program and the
Asset Re-Balancing at the same time.
DETERMINATION OF SUBACCOUNT VALUES
We establish the unit value of each Subaccount of the VUL Account on the
first Valuation Date of that Subaccount. The unit value of a Subaccount on any
other
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Valuation Date is determined by multiplying the unit value of that Subaccount on
the just prior Valuation Date by the Net Investment Factor for that Subaccount
for the then current Valuation Period. The unit value of each Subaccount on a
day other than a Valuation Date is the unit value on the next Valuation Date.
Unit values are carried to six decimal places. The unit value of each Subaccount
on a Valuation Date is determined at the end of that day.
The Net Investment Factor for each Subaccount is determined by the
investment performance of the assets held by the Subaccount during the Valuation
Period. Each valuation will follow applicable law and accepted procedures. The
Net Investment Factor is determined by the formula:
(A) + (B)
--------- - (D) where:
(C)
(A) The value of the assets in the Subaccount on the current Valuation Date,
including accrued net investment income and realized and unrealized
capital gains and losses, but excluding the net value of any transactions
during the current Valuation Period.
(B) The amount of any dividend (or, if applicable, any capital gain
distribution) received by the Subaccount if the "ex-dividend" date for
shares of the Fund occurs during the current Valuation Period.
(C) The value of the assets in the Subaccount as of the just prior Valuation
Date, including accrued net investment income and realized and unrealized
capital gains and losses, and including the net value amount of any
deposits and withdrawals made during the Valuation Period ending on that
date.
(D) The charge, if any, for taxes and reserves for taxes on investment income,
and realized and unrealized capital gains.
DEATH BENEFIT UNDER THE POLICY
The death benefit is the amount we pay to the designated beneficiary(ies)
when the Insured dies. Upon receiving due proof of death, we pay the beneficiary
the death benefit amount determined as of the date the Insured dies. The
beneficiary may direct us to pay all or part of the benefit in cash or to apply
it under one or more of our payment options.
MINIMUM FACE AMOUNT
To qualify as life insurance under current federal tax laws, the Policy has
a minimum face amount of insurance. The minimum face is determined using one of
two allowable definitions of life insurance: (1) the Cash Value Accumulation
Test or (2) the Guideline Premium Test. You chose which test to use on the
application prior to the issuance of your Policy. You cannot change the way we
determine your minimum face amount after your policy is issued.
The Cash Value Accumulation Test determines the minimum face amount by
multiplying the account value plus the refund of sales load, if applicable, by
the minimum face amount percentage. The percentages depend upon the Insured's
age, gender and underwriting classification.
Under the Guideline Premium Test, the minimum face amount is also equal to
an applicable percentage of the account value plus refund of sales load, if
applicable, but the percentage varies only by age of insured.
DEATH BENEFIT OPTIONS
In your application you chose a face amount of insurance coverage and the
death benefit option. We offer three death benefit options:
[diamond] Option 1: the death benefit is the greater of the Policy's face amount
on the date of death or, the minimum face amount in effect on the date
of death.
[diamond] Option 2: the death benefit is the greater of: (a) the Policy's face
amount on the date of death plus the policy value on the date of death
or, (b) the minimum face amount in effect on the date of death.
[diamond] Option 3: the death benefit is the greater of: (a) the Policy's face
amount on the date of death plus the sum of all premiums paid, less
withdrawals or, (b) the Policy's face amount on the date of death or;
(c) the minimum face amount in effect on the date of death.
If the Insured dies while the policy is in force, we will pay the death
benefit based on the option in effect on the date of death, with the following
adjustments:
[diamond] Add back in any charges taken against the account value for the period
beyond the date of death; and
[diamond] Deduct any policy debt outstanding on the date of death; and
[diamond] Deduct any charges accrued against the account value unpaid as of the
date of death.
You may change the Death Benefit Option from Option 1 to Option 2 or from
Option 2 to Option 1. You may not make a change either to or from Option 3.
Under death benefit Options 1 and 3, the death benefit is not affected by
your policy's investment experience. Under death benefit Option 2, the death
benefit amount may increase or decrease by the investment experience.
We pay interest on the death benefit from the date of death to the date the
death benefit is paid or a payment option becomes effective.
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CHANGES IN FACE AMOUNT OF INSURANCE
REQUESTS FOR INCREASE IN FACE AMOUNT
Any time while this policy is in force, you may request an increase in the
face amount of insurance provided under the Policy. Requests for face amount
increases must be made in writing, and we require additional evidence of
insurability. The effective date of the increase generally will be the policy
anniversary following approval of the increase. The increase may not be less
than $25,000. We will deduct any charges associated with the increase (the
increases in cost of insurance charges), from the policy value, whether or not
you pay an additional premium in connection with the increase. Also, a new Free
Look Period (see "The Policy--Free Look Period") will be established for the
amount of the increase. For a discussion of possible implications of a
material change in the Policy resulting from the increase, see "Material Change
Rules."
DECREASES IN FACE AMOUNT AND PARTIAL SURRENDER: EFFECT ON DEATH BENEFIT
REQUESTS FOR DECREASE IN FACE AMOUNT
You may request a decrease in Face Amount at any time after the first Policy
Year. Unless we agree otherwise, the decrease must be at least equal to $10,000
and the face amount remaining after the decrease must be at least $25,000. All
face amount decrease requests must be in writing and will be effective on the
first Monthly Calculation Day following the date we approve the request.
A partial surrender or a decrease in Face Amount generally decreases the
death benefit. If the change is a decrease in Face Amount, the death benefit
under a Policy would be reduced on the next Monthly Calculation Day. If the
change is a partial surrender, the death benefit under a Policy would be reduced
immediately. A decrease in the death benefit may have certain tax consequences.
See "Federal Tax Considerations."
SURRENDERS
GENERAL
At any time during the lifetime of the Insured and while the Policy is in
force, you may partially or fully surrender the Policy by sending a written
request to Andesa TPA, Inc. We may also require you to send the Policy to us.
The amount available for surrender is the cash surrender value at the end of the
Valuation Period during which the surrender request is received at Andesa TPA,
Inc.
The cash surrender value is:
[bullet] Policy Value; less
[bullet] Any outstanding debt; plus
[bullet] The refund of sales charge, if applicable.
There is no surrender charge.
If the policy is surrendered within the first three policy years, you will
receive a refund of sales charge as part of your cash surrender value. A portion
of the first year sales charge will be returned to you according to the
following schedule:
[diamond] Full surrender in Policy Year 1: 100.00%
[diamond] Fully surrender in Policy Year 2: 66.67%
[diamond] Fully surrender in Policy Year 3: 33.33%
FULL SURRENDERS
If the Policy is being fully surrendered, the Policy itself must be returned
to Andesa TPA, Inc., along with the written release and surrender of all claims
in a form satisfactory to us. You may elect to have the amount paid in a lump
sum or under a payment option. "Payment Options."
PARTIAL SURRENDERS
You may obtain a partial surrender of the Policy by requesting payment of
the Policy's Cash Surrender Value. It is possible to do this at any time during
the lifetime of the Insured, while the Policy is in force, with a written
request to Andesa TPA, Inc. We may require the return of the Policy before
payment is made. A partial surrender will be effective on the date the written
request is received or, if required, the date the Policy is received by us.
Surrender proceeds may be applied under any of the payment options described
under "Payment of Proceeds--Payment Options."
We reserve the right to deny partial surrenders of less than $500. In
addition, if the share of the Policy Value in any Subaccount or in the
Guaranteed Interest Account is reduced as a result of a partial surrender and is
less than $500, we reserve the right to require surrender of the entire
remaining balance in that Subaccount or the Guaranteed Interest Account.
Upon a partial surrender, the Policy Value will be reduced by the sum of
the partial surrender amount paid. This amount comes from a reduction in the
Policy's share in the value of each Subaccount or the Guaranteed Interest
Account based on the allocation requested at the time of the partial surrender.
If no allocation request is made, the withdrawals from each Subaccount will be
made in the same manner as that provided for monthly deductions.
The Cash Surrender Value will be reduced by the partial surrender amount
paid plus the partial surrender fee. The Face Amount of the Policy will be
reduced by the same amount as the Policy Value is reduced as described above.
Upon partial or full surrender, we generally will pay to you the amount
surrendered within seven days after we receive the written request for the
surrender. Under certain circumstances, the surrender payment may be postponed.
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See "General Provisions--Postponement of Payments." For the federal tax effects
of partial and full surrenders, see "Federal Tax Considerations."
POLICY LOANS
You can take a loan against your policy any time while the policy is
in force. The maximum loan is:
[bullet] 90% of your Policy Value at the time the loan is taken; less
[bullet] any outstanding policy debt before the loan is taken; less
[bullet] interest on the loan being made and on any outstanding policy debt
to the next policy anniversary date.
Your policy must be assigned to us as collateral for the loan.
SOURCE OF LOAN
We deduct your requested loan amount from the Subaccounts and the Guaranteed
Interest Account, based on the allocation requested at the time of the loan. We
liquidate shares taken from the Subaccounts and transfer the resulting dollars
to the Guaranteed Interest Account. These dollars become part of the loaned
portion of the Guaranteed Interest Account.
INTEREST
You will pay interest on the loan at the following noted effective annual
rates, compounded daily and payable in arrears:
In all states except New York and New Jersey, the loan interest rate in
effect following the policy anniversary nearest the Insured's 65(th) birthday
will be 2.25%. The rates in effect before the Insured reaches age 65 follow:
[diamond] Policy years 1-10: 2.75%
[diamond] Policy years 11-15: 2.50%
[diamond] Policy years 16 and thereafter: 2.25%
In New York and New Jersey only, the loan interest rate in effect following
the policy anniversary nearest the Insured's 65(th) birthday will be 4.25%. The
rates in effect before the Insured reaches age 65 follow:
[diamond] Policy years 1-10: 4.75%
[diamond] Policy years 11-15: 4.50%
[diamond] Policy years 16 and thereafter: 4.25%
Interest accrues daily, becoming part of the policy debt. Interest is due
and payable on the policy anniversary. If you do not pay the interest when due,
we will add it to your loan. We treat any interest which has been capitalized
the same as if it were a new loan. We deduct this capitalized interest from the
Subaccounts and the Guaranteed Interest Account in proportion to the non-loaned
account value in each.
INTEREST CREDITED ON LOANED VALUE
The amount equal to any policy loan is held in the Guaranteed Interest
Account. This amount is credited with interest at a rate of 2% (4% in New York
and New Jersey).
REPAYMENT
You may repay all or part of your policy debt at anytime while the policy is
in force.
If you do not repay the loan, we deduct the loan amount due from the cash
surrender value or the death benefit.
Failure to repay a policy loan or to pay loan interest will not terminate
the Policy unless the policy value becomes insufficient to maintain the Policy
in force.
In the future, PLAC may not allow Policy loans of less than $500, unless
such loan is used to pay a premium on another PLAC policy.
EFFECT OF LOAN
Your policy loan reduces the death benefit and cash surrender value under
the policy by the amount of the loan. Your repayment of the loan increases the
death benefit and cash surrender value by the amount of the repayment.
As long as a loan is outstanding, a portion of your policy value is equal to
the loan is held in the Guaranteed Interest Account. The Subaccount's investment
performance does not affect the this amount. Also, you may be subject to tax
consequences if you surrender your policy while there is outstanding debt.
LAPSE
Unlike conventional life insurance policies, the payment of the Issue
Premium, no matter how large, or the payment of additional premiums will not
necessarily continue the Policy in force to its maturity date.
If on any Monthly Calculation Day during the first three Policy Years, the
Policy Value plus the refund of any applicable sales charge is insufficient to
cover the monthly deduction, a grace period of 61 days will be allowed for the
payment of an amount equal to three times the required monthly deduction. If on
any Monthly Calculation Day during any subsequent Policy Year, the Policy Value
is less than the required monthly deduction, a grace period of 61 days will be
allowed for the payment of an amount equal to three times the required monthly
deduction.
During the grace period, the Policy will continue In Force but Subaccount
transfers, loans, partial or full surrenders will not be permitted. Failure to
pay the additional amount within the grace period will result in lapse of the
Policy, but not before 30 days after we have mailed written notice to you. If a
premium payment for the additional amount is received by us during the grace
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period, any amount of premium over what is required to prevent lapse will be
allocated among the Subaccounts or to the Guaranteed Interest Account according
to the current premium allocation schedule. In determining the amount of
"excess" premium to be applied to the Subaccounts or the Guaranteed Interest
Account, we will deduct the premium tax and the amount needed to cover any
monthly deductions made during the grace period. If the Insured dies during the
grace period, the death benefit will equal the amount of the death benefit
immediately prior to the commencement of the grace period.
ADDITIONAL INSURANCE OPTION
While the Policy is in force and the Insured is insurable, the Policyowner
will have the option to purchase additional insurance on the same Insured with
the same guaranteed rates as the Policy. We will require evidence of
insurability and charges will be adjusted for the Insured's new attained age and
any change in risk classification.
ADDITIONAL RIDER BENEFITS
You may elect additional benefits under a Policy, and you may cancel these
benefits at anytime. A charge will be deducted monthly from the policy value for
each additional rider benefit chosen except where noted below. More details will
be included in the form of a rider to the Policy if any of these benefits is
chosen. The following benefits are currently available and additional riders may
be available as described in the Policy (if approved in your state).
[diamond] FLEXIBLE TERM INSURANCE RIDER. This rider provides annually renewable
term insurance coverage to age 100 on the Insured under the base
policy. The initial rider death benefit cannot exceed 10 times the
initial base Policy. There is no charge for this rider.
[diamond] EXCHANGE OF INSURED RIDER: This rider allows the Policyowner to
exchange the insured on a given contract. There is no charge for this
rider.
Future charges against the policy will be based on the life of the
substitute insured.
The incontestability and suicide exclusion periods, as they apply to
the substitute insured run from the date of the exchange. Any
assignments will continue to apply.
The exchange is subject to the following adjustments:
1. If the policy value of the original policy is insufficient to produce a
positive cash surrender value for the new policy, the owner must pay an
exchange adjustment in an amount that, when applied as premium, will make
the policy value of the new policy greater than zero.
2. In some cases, the amount of policy value which may be applied to the new
policy may result in a death benefit which exceeds the limit for the new
policy. In that event, we will apply such excess policy value to reduce any
loan against the policy, and the residual amount will be returned to you in
cash.
3. The exchange will also be subject to our receipt of repayment of the amount
of any policy debt under the exchange policy in excess of the loan value of
the new policy on the date of exchange.
The Internal Revenue Service has ruled that an exchange of Insureds does not
qualify for tax deferral under Code Section 1035. Therefore, you must
include in current gross income all previously unrecognized gain in the
Policy upon an exchange of the Insured.
PART II--ADDITIONAL POLICY PROVISIONS
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POSTPONEMENT OF PAYMENTS
Payment of any amount upon complete or partial surrender, Policy loan, or
benefits payable at death (in excess of the initial face amount) or maturity may
be postponed:
[diamond] for up to six months from the date of the request, for any
transactions dependent upon the value of the Guaranteed Interest
Account;
[diamond] whenever the NYSE is closed other than for customary weekend and
holiday closings or trading on the NYSE is restricted as determined by
the SEC; or
[diamond] whenever an emergency exists, as decided by the SEC as a result of
which disposal of securities is not reasonably practicable or it is
not reasonably practicable to determine the value of the VUL Account's
net assets.
Transfers also may be postponed under these circumstances.
PAYMENT BY CHECK
Payments under the Policy of any amounts derived from premiums paid by check
may be delayed until such time as the check has cleared your bank.
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THE CONTRACT
The Policy and attached copy of the application are the entire contract.
Only statements in the application can be used to void the Policy. The
statements are considered representations and not warranties. Only an executive
SUICIDE
If the Insured commits suicide within two years after the Policy's Date of
Issue, the Policy will stop and become void. We will pay you the Policy Value
adjusted by the addition of any monthly deductions and other fees and charges,
minus any debt owed to us under the Policy.
INCONTESTABILITY
We cannot contest this Policy or any attached rider after it has been in
force during the Insured's lifetime or for two years from the policy date.
CHANGE OF OWNER OR BENEFICIARY
The Beneficiary, as named in the Policy application or subsequently changed,
will receive the Policy benefits at the Insured's death. If the named
Beneficiary dies before the Insured, the contingent Beneficiary, if named,
becomes the Beneficiary. If no Beneficiary survives the Insured, the death
benefit payable under the Policy will be paid to your estate.
As long as the Policy is in force, the Policyowner and the Beneficiary may
be changed in writing, satisfactory to us. A change in Beneficiary will take
effect as of the date the notice is signed, whether or not the Insured is living
when we receive the notice. We will not, however, be liable for any payment made
or action taken before receipt of the notice.
ASSIGNMENT
The Policy may be assigned. We will not be bound by the assignment until a
written copy has been received and we will not be liable with respect to any
payment made prior to receipt. We assume no responsibility for determining
whether an assignment is valid.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, the death benefit will
be adjusted based on what the cost of insurance charge for the most recent
monthly deduction would have purchased based on the correct age and sex.
SURPLUS
This Policy is non-participating and does not pay dividends. Your policy
will not share in PLAC's profits or surplus earnings.
PAYMENT OF PROCEEDS
- --------------------------------------------------------------------------------
SURRENDER AND DEATH BENEFIT PROCEEDS
Death benefit proceeds and the proceeds of full or partial surrenders will
be processed at unit values next computed after we receive the request for
surrender or due proof of death, provided such request is complete and in good
order. Payment of surrender or death proceeds usually will be made in one lump
sum within seven days, unless another payment option has been elected. Payment
of the death proceeds, however, may be delayed if the claim for payment of the
death proceeds needs to be investigated, e.g., to ensure payment of the proper
amount to the proper payee. Any such delay will not be beyond that reasonably
necessary to investigate such claims consistent with insurance practices
customary in the life insurance industry.
You may elect a payment option for payment of the death proceeds to the
Beneficiary. You may revoke or change a prior election, unless such right has
been waived. The Beneficiary may make or change an election before payment of
the death proceeds, unless you have made an election that does not permit such
further election or changes by the Beneficiary.
A written request in a form satisfactory to us is required to elect, change
or revoke a payment option.
The minimum amount of surrender or death benefit proceeds that may be
applied under any payment option is $1,000.
If the Policy is assigned as collateral security, we will pay any amount due
the assignee in one lump sum. Any remaining proceeds will remain under the
option elected.
PAYMENT OPTIONS
All or part of the surrender or death proceeds of a Policy may be applied
under one or more of the following payment options or such other payment options
or alternative versions of the options listed as we may choose to make available
in the future.
OPTION 1--LUMP SUM.
Payment in one lump sum.
OPTION 2--LEFT TO EARN INTEREST.
A payment of interest during the payee's lifetime on the amount payable as a
principal sum. Interest rates are guaranteed to be at least 3% per year.
OPTION 3--PAYMENT FOR A SPECIFIC PERIOD.
Equal installments are paid for a specified period of years whether the
payee lives or dies. The first payment will be on the date of settlement. The
assumed interest rate on the unpaid balance is guaranteed not to be less than 3%
per year.
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OPTION 4--LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN.
Equal installments are paid until the later of:
[diamond] the death of the payee; or
[diamond] the end of the period certain.
The first payment will be on the date of settlement.
The period certain must be chosen at the time this option is elected. The
periods certain that you may choose from are as follows:
[diamond] ten years;
[diamond] twenty years; or
[diamond] until the installments paid refund the amount applied under this
option.
If the payee is not living when the final payment falls due, that payment
will be limited to the amount which needs to be added to the payments already
made to equal the amount applied under this option.
If, for the age of the payee, a period certain is chosen that is shorter
than another period certain paying the same installment amount, we will consider
the longer period certain as having been elected.
Any life annuity provided under Option 4 is computed using an interest rate
guaranteed to be no less than 3-3/8% per year, but any life annuity providing a
period certain of 20 years or more is computed using an interest rate guaranteed
to be no less than 3-1/4% per year.
OPTION 5--LIFE ANNUITY.
Equal installments are paid only during the lifetime of the payee. The first
payment will be on the date of settlement. Any life annuity as may be provided
under Option 5 is computed using an interest rate guaranteed to be no less than
3-1/2% per year.
OPTION 6--PAYMENTS OF A SPECIFIED AMOUNT.
Equal installments of a specified amount, out of the principal sum and
interest on that sum, are paid until the principal sum remaining is less than
the amount of the installment. When that happens, the principal sum remaining
with accrued interest will be paid as a final payment. The first payment will be
on the date of settlement. The payments will include interest on the remaining
principal at a guaranteed rate of at least 3% per year. This interest will be
credited at the end of each year. If the amount of interest credited at the end
of the year exceeds the income payments made in the last 12 months, that excess
will be paid in one sum on the date credited.
OPTION 7--JOINT SURVIVORSHIP ANNUITY WITH 10-YEAR PERIOD CERTAIN.
The first payment will be on the date of settlement. Equal installments are
paid until the latest of:
[diamond] the end of the 10-year period certain;
[diamond] the death of the Insured; or
[diamond] the death of the other named annuitant.
The other annuitant must have attained age 40, must be named at the time
this option is elected and cannot later be changed. Any joint survivorship
annuity that may be provided under this option is computed using a guaranteed
interest rate to equal at least 3-3/8% per year.
For additional information concerning the above payment options, see the
Policy.
PART III--OTHER IMPORTANT INFORMATION
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FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
INTRODUCTION
The ultimate effect of federal income taxes on values under the VUL Account
and on the economic benefit to you or your Beneficiary depends on our tax status
and upon the tax status of the individual concerned. The discussion contained
herein is general in nature and is not intended as tax advice. For complete
information on federal and state tax considerations, a qualified tax advisor
should be consulted. No attempt is made to consider any estate and inheritance
taxes, or any state, local or other tax laws. Because the discussion herein is
based upon our understanding of federal income tax laws as they are currently
interpreted, we cannot guarantee the tax status of any Policy. The Internal
Revenue Service (the "IRS") makes no representation regarding the likelihood of
continuation of current federal income tax laws, Treasury regulations or of the
current interpretations. We reserve the right to make changes to the Policy to
assure that it will continue to qualify as a life insurance contract for federal
income tax purposes.
PLAC'S TAX STATUS
We are taxed as a life insurance company under the Internal Revenue Code of
1986, as amended (the "Code"). For federal income tax purposes, neither the VUL
Account nor the Guaranteed Interest Account is a separate entity from PLAC and
their operations form a part of PLAC.
Investment income and realized capital gains on the assets of the VUL
Account are reinvested and taken into account in determining the value of the
VUL Account. Investment income of the VUL Account, including realized net
capital gains, is not taxed to us. Due to our tax status under current
provisions of the Code, no charge currently will be made to the VUL Account for
our federal
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income taxes which may be attributable to the VUL Account. We reserve the right
to make a deduction for taxes if our federal tax treatment is determined to be
other than what we currently believe it to be, if changes are made affecting the
tax treatment to our variable life insurancecontracts, or if changes occur in
our tax status. If imposed, such charge would be equal to the federal income
taxes attributable to the investment results of the VUL Account.
POLICY BENEFITS
DEATH BENEFIT PROCEEDS
The Policy, whether or not it is a "modified endowment contract" (see the
discussion on modified endowment contracts), should be treated as meeting the
definition of a life insurance contract for federal income tax purposes under
Section 7702 of the Code. As such, the death benefit proceeds thereunder should
be excludable from the gross income of the Beneficiary under Code Section
101(a)(1). Also, a Policyowner should not be considered to be in constructive
receipt of the cash value, including investment income. See, however, the
sections below on possible taxation of amounts received under the Policy, via
full surrender, partial surrender or loan.
Code Section 7702 imposes certain conditions with respect to premiums
received under a Policy. We monitor the premiums to assure compliance with such
conditions. However, if the premium limitation is exceeded during the year, we
may return the excess premium, with interest, to the Policyowner within 60 days
after the end of the Policy Year, and maintain the qualification of the Policy
as life insurance for federal income tax purposes.
FULL SURRENDER
Upon full surrender of a Policy for its cash value, the excess, if any, of
the cash value (unreduced by any outstanding indebtedness) over the premiums
paid will be treated as ordinary income for federal income tax purposes. The
full surrender of a Policy that is a modified endowment contract may result in
the imposition of an additional 10% tax on any income received.
PARTIAL SURRENDER
If the Policy is a modified endowment contract, partial surrenders are fully
taxable to the extent of income in the Policy and are possibly subject to an
additional 10% tax. See the discussion on modified endowment contracts below. If
the Policy is not a modified endowment contract, partial surrenders still may be
taxable, as follows. Code Section 7702(f)(7) provides that where a reduction in
death benefits occurs during the first 15 years after a Policy is issued and
there is a cash distribution associated with that reduction, the Policyowner may
be taxed on all or a part of the amount distributed. A reduction in death
benefits may result from a partial surrender. After 15 years, the proceeds will
not be subject to tax, except to the extent such proceeds exceed the total
amount of premiums paid but not previously recovered. We suggest you consult
with your tax advisor in advance of a proposed decrease in death benefits or a
partial surrender as to the portion, if any, which would be subject to tax, and
in addition as to the impact such partial surrender might have under the new
rules affecting modified endowment contracts.
LOANS
We believe that any loan received under a Policy will be treated as your
indebtedness. If the Policy is a modified endowment contract, loans are fully
taxable to the extent of income in the Policy and are possibly subject to an
additional 10% tax. See the discussion on modified endowment contracts. If the
Policy is not a modified endowment contract, we believe that no part of any loan
under a Policy will constitute income to you.
The deductibility by a Policyowner of loan interest under a Policy may be
limited under Code Section 264, depending on the circumstances. A Policyowner
intending to fund premium payments through borrowing should consult a tax
advisor with respect to the tax consequences thereof. Under the "personal"
interest limitation provisions of the Code, interest on Policy loans used for
personal purposes is not tax deductible. Other rules may apply to allow all or
part of the interest expense as a deduction if the loan proceeds are used for
"trade or business" or "investment" purposes. See your tax advisor for further
guidance.
BUSINESS-OWNED POLICIES
If a business or a corporation owns the Policy, the Code may impose
additional restrictions. The Code limits the interest deduction on
business-owned Policy loans and may impose tax upon the inside build-up of
corporate-owned life insurance policies through the corporate alternative
minimum tax.
MODIFIED ENDOWMENT CONTRACTS
GENERAL
Pursuant to Code Section 72(e), loans and other amounts received under
modified endowment contracts will, in general, be taxed to the extent of
accumulated income (generally, the excess of cash value over premiums paid).
Life insurance policies can be modified endowment contracts if they fail to meet
what is known as "the 7-pay test." The measuring stick for this test is a
hypothetical life insurance policy of equal face amount which requires 7 equal
annual premiums but which, after the seventh year is "fully paid-up," continuing
to provide a level death benefit without the need for any further premiums. A
Policy becomes a modified endowment contract, if, at any time during the first
seven years, the cumulative premium paid on the Policy exceeds the cumulative
premium that would have been paid under the hypothetical policy. Premiums paid
during a Policy Year but which are returned by us with interest within 60 days
after the end of the Policy Year will be excluded from the 7-pay test. A life
insurance policy
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received in exchange for a modified endowment contract will be treated as a
modified endowment contract.
REDUCTION IN BENEFITS DURING THE FIRST SEVEN YEARS
If there is a reduction in death benefits during the first seven Policy
Years, the premiums are redetermined for purposes of the 7-pay test as if the
Policy originally had been issued at the reduced death benefit level and the new
limitation is applied to the cumulative amount paid for each of the first seven
Policy Years.
DISTRIBUTIONS AFFECTED
If a Policy fails to meet the 7-pay test, it is considered a modified
endowment contract only as to distributions in the year in which the test is
failed and all subsequent Policy Years. However, distributions made in
anticipation of such failure (there is a presumption that distributions made
within two years prior to such failure were "made in anticipation") also are
considered distributions under a modified endowment contract. If the Policy
satisfies the 7-pay test for seven years, distributions and loans generally will
not be subject to the modified endowment contract rules.
PENALTY TAX
Any amounts taxable under the modified endowment contract rule will be
subject to an additional 10% excise tax, with certain exceptions. This
additional tax will not apply in the case of distributions that are:
[diamond] made on or after the taxpayer attains age 59 1/2;
[diamond] attributable to the taxpayer's disability (within the meaning of Code
Section 72(m)(7)); or
[diamond] part of a series of substantially equal periodic payments (not less
often than annually) made for the life (or life expectancy) of the
taxpayer or the joint lives (or life expectancies) of the taxpayer and
his Beneficiary.
MATERIAL CHANGE RULES
Any determination of whether the Policy meets the 7-pay test will begin
again any time the Policy undergoes a "material change," which includes any
increase in death benefits or any increase in or addition of a qualified
additional benefit, with the following two exceptions.
[diamond] First, if an increase is attributable to premiums paid "necessary to
fund" the lowest death benefit and qualified additional benefits
payable in the first seven Policy Years or to the crediting of
interest or dividends with respect to these premiums, the "increase"
does not constitute a material change.
[diamond] Second, to the extent provided in regulations, if the death benefit or
qualified additional benefit increases as a result of a cost-of-living
adjustment based on an established broad-based index specified in the
Policy, this does not constitute a material change if:
[bullet] the cost-of-living determination period does not exceed the
remaining premium payment period under the Policy; and
[bullet] the cost-of-living increase is funded ratably over the
remaining premium payment period of the Policy.
A reduction in death benefits is not considered a material change unless
accompanied by a reduction in premium payments.
A material change may occur at any time during the life of the Policy
(within the first seven years or thereafter), and future taxation of
distributions or loans would depend upon whether the Policy satisfied the
applicable 7-pay test from the time of the material change. An exchange of
policies is considered to be a material change for all purposes.
SERIAL PURCHASE OF MODIFIED ENDOWMENT CONTRACTS
All modified endowment contracts issued by the same insurer (or affiliated
companies of the insurer) to the same Policyowner within the same calendar year
will be treated as one modified endowment contract in determining the taxable
portion of any loans or distributions made to the Policyowner. The Treasury has
been given specific legislative authority to issue regulations to prevent the
avoidance of the new distribution rules for modified endowment contracts. A
qualified tax advisor should be consulted about the tax consequences of the
purchase of more than one modified endowment contract within any calendar year.
LIMITATIONS ON UNREASONABLE MORTALITY AND EXPENSE CHARGES
The Code imposes limitations on unreasonable mortality and expense charges
for purposes of ensuring that a Policy qualifies as a life insurance contract
for federal income tax purposes. The mortality charges taken into account to
compute permissible premium levels may not exceed those charges required to be
used in determining the federal income tax reserve for the Policy, unless
Treasury regulations prescribe a higher level of charge. In addition, the
expense charges taken into account under the guideline premium test are required
to be reasonable, as defined by the Treasury regulations. We will comply with
the limitations for calculating the premium we are permitted to receive from
you.
DIVERSIFICATION STANDARDS
To comply with the Diversification Regulations under Code Section 817(h),
("Diversification Regulations") each Series of the Fund is required to diversify
its investments. The Diversification Regulations generally require that on the
last day of each calendar quarter the Series assets be invested in no more than:
24
<PAGE>
[diamond] 55% in any 1 investment
[diamond] 70% in any 2 investments
[diamond] 80% in any 3 investments
[diamond] 90% in any 4 investments
A "look-through" rule applies to treat a pro rata portion of each asset of a
Series as an asset of the VUL Account; therefore, each Series of the Fund will
be tested for compliance with the percentage limitations. For purposes of these
diversification rules, all securities of the same issuer are treated as a single
investment, but each United States government agency or instrumentality is
treated as a separate issuer.
The general diversification requirements are modified if any of the assets
of the VUL Account are direct obligations of the United States Treasury. In this
case, there is no limit on the investment that may be made in Treasury
securities, and for purposes of determining whether assets other than Treasury
securities are adequately diversified, the generally applicable percentage
limitations are increased based on the value of the VUL Account's investment in
Treasury securities. Notwithstanding this modification of the general
diversification requirements, the portfolios of the Funds will be structured to
comply with the general diversification standards because they serve as an
investment vehicle for certain variable annuity contracts that must comply with
these standards.
In connection with the issuance of the Diversification Regulations, the
Treasury announced that such regulations do not provide guidance concerning the
extent to which you may direct your investments to particular divisions of a
separate account. It is possible that a revenue ruling or other form of
administrative pronouncement in this regard may be issued in the near future. It
is not clear, at this time, what such a revenue ruling or other pronouncement
will provide. It is possible that the Policy may need to be modified to comply
with such future Treasury announcements. For these reasons, we reserve the right
to modify the Policy, as necessary, to prevent you from being considered the
owner of the assets of the VUL Account.
We intend to comply with the Diversification Regulations to assure that the
Policies continue to qualify as a life insurance contract for federal income tax
purposes.
CHANGE OF OWNERSHIP OR INSURED OR ASSIGNMENT
Changing the Policyowner or the Insured or an exchange or assignment of the
Policy may have tax consequences depending on the circumstances. Code Section
1035 provides that a life insurance contract can be exchanged for another life
insurance contract, without recognition of gain or loss, assuming that no money
or other property is received in the exchange, and that the Policies relate to
the same Insured. If the surrendered Policy is subject to a policy loan, this
may be treated as the receipt of money on the exchange. We recommend that any
person contemplating such actions seek the advice of a qualified tax consultant.
OTHER TAXES
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Policyowner or Beneficiary. We do not make any
representations or guarantees regarding the tax consequences of any Policy with
respect to these types of taxes.
VOTING RIGHTS
- --------------------------------------------------------------------------------
We will vote the Funds' shares held by the Subaccounts at any regular and
special meetings of shareholders of the Funds. To the extent required by law,
such voting will be pursuant to instructions received from you. However, if the
1940 Act or any regulation thereunder should be amended or if the present
interpretation thereof should change, and as a result, we decide that we are
permitted to vote the Funds' shares at our own discretion, we may elect to do
so.
The number of votes that you have the right to cast will be determined by
applying your percentage interest in a Subaccount to the total number of votes
attributable to the Subaccount. In determining the number of votes, fractional
shares will be recognized.
Funds' shares held in a Subaccount for which no timely instructions are
received, and Funds' shares which are not otherwise attributable to
Policyowners, will be voted by PLAC in proportion to the voting instructions
that are received with respect to all Policies participating in that Subaccount.
Instructions to abstain on any item to be voted upon will be applied to reduce
the votes eligible to be cast by PLAC.
You will receive proxy materials, reports and other materials related to the
Funds.
We 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 subclassification or investment objective of one or
more of the portfolios of the Funds or to approve or disapprove an investment
advisory contract for the Funds. In addition, PLAC itself may disregard voting
instructions in favor of changes initiated by a Policyowner in the investment
policies or the Investment Advisor of the Funds if PLAC 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 or we decide
that the change would have an adverse effect on the General Account because the
proposed investment policy for a Series may result in overly speculative or
unsound investments. In the event PLAC does disregard voting instructions, a
summary of
25
<PAGE>
that action and the reasons for such action will be included in the next
periodic report to Policyowners.
THE DIRECTORS AND EXECUTIVE OFFICERS OF PLAC
- --------------------------------------------------------------------------------
PLAC is managed by its Board of Directors. The following are the Directors
and Executive Officers of PLAC:
NAME AND TITLE PRINCIPAL OCCUPATION
Robert W. Fiondella, Chairman of the Board,
Director, Chairman President and Chief
and President Executive Officer
Richard H. Booth, Executive Vice President
Director, Executive
Vice President
Philip R. McLoughlin, Executive Vice President and
Director and Executive Chief Investment Officer
Vice President
David W. Searfoss, Executive Vice President and
Director and Executive Chief Financial Officer
Vice President and CFO
Dona D. Young, Executive Vice President,
Director and Executive Individual Insurance and
Vice President General Counsel
Joseph E. Kelleher, Senior Vice President
Director and Senior
Vice President
Robert G. Lautensack, Senior Vice President
Director and Senior
Vice President
Simon Y. Tan, Senior Vice President,
Director and Senior Individual Market
Vice President Development
Robert G. Chipkin, Senior Vice President
Director
Carl T. Chadburn, Executive Vice President
Director
The above positions reflect the last held position in our parent company,
Phoenix Home Life Mutual Insurance Company, during the last five years.
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS
- --------------------------------------------------------------------------------
We hold the assets of the VUL Account. The assets of the VUL Account are
kept physically segregated and held separate and apart from our General Account.
We maintain records of all purchases and redemptions of shares of the Funds.
SALES OF POLICIES
- --------------------------------------------------------------------------------
Policies may be purchased from registered representatives of W.S. Griffith &
Co., Inc. ("WSG"), a New York corporation incorporated on August 7, 1970,
licensed to sell Phoenix insurance policies as well as policies, annuity
contracts and funds of companies affiliated with Phoenix. WSG, an indirect
subsidiary of Phoenix, is registered as a broker-dealer with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and is a member of the National
Association of Securities Dealers, Inc. Phoenix Equity Planning Corporation
("PEPCO") serves as national distributor of the Policies. PEPCO is an indirect
subsidiary of Phoenix Investment Partners, Ltd. ("PXP"), in which Phoenix owns a
majority interest.
Policies also may be purchased from other broker-dealers registered under
the 1934 Act whose representatives are authorized by applicable law to sell
Policies under terms of agreements provided by PEPCO. Sales commissions will be
paid to registered representatives on purchase payments we receive under these
Policies. PLAC will pay a maximum total sales commission of 15% of premiums to
PEPCO. Additionally, agents or selling brokers may receive asset-based
compensation. The maximum asset-based compensation is 0.90% of the policy value.
To the extent that the sales charge under the Policies is less than the sales
commissions paid with respect to the Policies, we will pay the shortfall from
our General Account assets, which will include any profits we may derive under
the Policies.
STATE REGULATION
- --------------------------------------------------------------------------------
We are subject to the provisions of the Connecticut insurance laws
applicable to stock life insurance companies and to regulation and supervision
by the Connecticut Superintendent of Insurance. We also are subject to the
applicable insurance laws of all the other states and jurisdictions in which we
do insurance business.
State regulation of PLAC includes certain limitations on the investments
which we may make, including investments for the VUL Account and the Guaranteed
Interest Account. This regulation does not include, however, any supervision
over the investment policies of the VUL Account.
REPORTS
- --------------------------------------------------------------------------------
All Policyowners will be furnished with those reports required by the 1940
Act and related regulations or by any other applicable law or regulation.
26
<PAGE>
LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
The VUL Account is not engaged in any litigation. PLAC is not involved in
any litigation that would have a material adverse effect on our ability to meet
our obligations under the Policies.
LEGAL MATTERS
- --------------------------------------------------------------------------------
Edwin L. Kerr, Counsel of Phoenix Home Life Mutual Insurance Company, has
passed upon the organization of PLAC, its authority to issue variable life
insurance Policies and the validity of the Policy, and upon legal matters
relating to the federal securities and income tax laws for PLAC.
REGISTRATION STATEMENT
- --------------------------------------------------------------------------------
A Registration Statement has been filed with the SEC, under the Securities
Act of 1933 ("1933 Act") with respect to the securities offered. This Prospectus
is a summary of the contents of the Policy and other legal documents and does
not contain all the information set forth in the Registration Statement and its
exhibits. We refer you to the registration statement and its exhibits for
further information concerning the VUL Account, PLAC and the Policy.
YEAR 2000 ISSUE
- --------------------------------------------------------------------------------
Many existing computer programs use only two digits to identify the year in
a date field. This is commonly referred to as the "Year 2000 Issue." Companies
must consider the impact of the upcoming change in the century on their computer
systems. The Year 2000 Issue, if not adequately addressed, could result in
computer system failures or miscalculations causing disruptions of operations
and the possible inability of companies to process transactions. We believe that
the Year 2000 Issue is an important business priority requiring careful analysis
of every business system in order to be assured that all information systems
applications are century compliant.
PLAC's ultimate parent, Phoenix Home Life Insurance Company, ("Phoenix") has
been addressing the Year 2000 Issue in earnest since 1995 when, with
consultants, a comprehensive inventory and assessment of all business systems,
including those of our subsidiaries, was conducted. Phoenix has identified and
pursued a number of strategies to address the issue, including:
[diamond] upgrading systems with compliant versions;
[diamond] developing or acquiring new systems to replace those that are
obsolete;
[diamond] repairing existing systems by converting code or hardware; and
[diamond] preparing contingency plans to address difficulties that may arise.
Based on current assessments, those computer systems deemed critical to
customer service and business continuity are compliant. Testing will continue
through 1999. Additionally Phoenix has obtained Year 2000 assurances from
business partners.
THE BOTTOM LINE IS THAT PHOENIX WILL BE BOTH READY AND TESTED FOR THE NEW
MILLENNIUM.
More details about our Year 2000 program are available on our Web site:
www.phl.com.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The financial statements of PLAC contained herein should be considered only
as bearing upon PLAC's ability to meet its obligations under the Policy, and
they should not be considered as bearing on the investment performance of the
VUL Account. The financial statements of the VUL Account are for the Subaccounts
available for the period ended December 31, 1998.
27
<PAGE>
PHOENIX LIFE AND
ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
FINANCIAL STATEMENTS DECEMBER 31, 1998
28
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
Report of Independent Accountants............................................30
Balance Sheet................................................................31
Statement of Income, Comprehensive Income and Equity.........................32
Statement of Cash Flows......................................................33
Notes to Financial Statements.............................................34-41
29
<PAGE>
[PriceWaterhouseCoopers Logo & Address]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholder of
Phoenix Life and Annuity Company
In our opinion, the accompanying balance sheet and the related statements of
income, comprehensive income and equity and of cash flows present fairly, in all
material respects, the financial position of Phoenix Life and Annuity Company at
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years ended December 31, 1998 and 1997 and for the periods from March
30, 1996 to December 31, 1996 and from January 1, 1996 to March 29, 1996, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
[PriceWaterhouseCoopers Logo]
February 11, 1999
30
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
BALANCE SHEET
- --------------------------------------------------------------------------------
DECEMBER 31,
1998 1997
(IN THOUSANDS)
ASSETS
Available-for-sale debt securities, at fair value $ 9,781 $ 7,209
Short-term investments 1,754 3,671
------- -------
Total investments 11,535 10,880
Cash and cash equivalents 99 48
Accrued investment income 169 152
Goodwill 701 798
Other assets 13
------- -------
Total assets $12,517 $11,878
======= =======
LIABILITIES
Deferred income taxes $ 151 $ 66
Other liabilities 2 3
------- -------
Total liabilities 153 69
EQUITY
Common stock, $100 par value, 40,000 shares
authorized, 25,000 shares issued and outstanding 2,500 2,500
Additional paid-in-capital 8,664 8,664
Retained earnings 867 514
Accumulated other comprehensive income 333 131
------- -------
Total equity 12,364 11,809
------- -------
Total liabilities and equity $12,517 $11,878
======= =======
The accompanying notes are an integral part of these statements.
31
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
STATEMENT OF INCOME, COMPREHENSIVE INCOME AND EQUITY
YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIODS FROM MARCH 30, 1996 TO
DECEMBER 31, 1996 (SUCCESSOR PERIOD) AND JANUARY 1, 1996 TO MARCH 29, 1996
(PREDECESSOR PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1996
SUCCESSOR SUCCESSOR SUCCESSOR PREDECESSOR
PERIOD PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C> <C>
REVENUES
Net investment income $ 688 $ 624 $ 433 $ 95
Net realized investment losses (1)
------- ------- ------- -------
Total revenues 688 624 432 95
------- ------- ------- -------
EXPENSES
Amortization of goodwill 97 90 81
Other operating expenses 63 4 (3)
------- ------- ------- -------
Total expenses 160 94 81 (3)
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 528 530 351 98
Income taxes 175 189 129
------- ------- ------- -------
NET INCOME 353 341 222 98
------- ------- ------- -------
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX
Unrealized gains on securities arising during period 202 86 39
Reclassification adjustment for losses included
in net income 6
------- ------- ------- -------
Total other comprehensive income 202 86 45
------- ------- ------- -------
COMPREHENSIVE INCOME 555 427 267 98
Acquisition adjustment to record purchase price (107) 1,076
Capital contribution 49 4,000
------- ------- ------- -------
NET INCREASE IN EQUITY 555 369 5,343 98
EQUITY, BEGINNING OF PERIOD 11,809 11,440 6,097 5,999
------- ------- ------- -------
EQUITY, END OF PERIOD $12,364 $11,809 $11,440 $ 6,097
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
32
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIODS FROM MARCH 30, 1996 TO
DECEMBER 31, 1996 (SUCCESSOR PERIOD) AND JANUARY 1, 1996 TO MARCH 29, 1996
(PREDECESSOR PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1996
SUCCESSOR SUCCESSOR SUCCESSOR PREDECESSOR
PERIOD PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 353 $ 341 $ 222 $ 98
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY OPERATIONS
Goodwill amortization 97 90 81
Deferred income taxes (24) (2) (2)
Increase in accrued investment income (17) (34) (104) (9)
Decrease in receivable from affiliate 899
Other, net (29) (60) (18)
------- ------- ------- -------
Net cash provided by operating activities 380 335 179 988
------- ------- ------- -------
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of available-for-sale debt securities (2,246) (1,527) (5,167)
Change in short-term investments, net 1,917 1,036 (1,002)
------- ------- ------- -------
Net cash used for investing activities (329) (491) (6,169)
------- ------- ------- -------
CASH FLOW FROM FINANCING ACTIVITIES
Capital contribution from parent 49 4,000
------- ------- ------- -------
Net cash provided by financing activities 49 4,000
------- ------- ------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 51 (107) (1,990) 988
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 48 155 2,145 1,157
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 99 $ 48 $ 155 $ 2,145
======= ======= ======= =======
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 213 $ 182 $ 113 $
------- ------- ------- -------
</TABLE>
The accompanying notes are an integral part of these statements.
33
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS
Phoenix Life and Annuity Company is a life insurance company domiciled in
the State of Connecticut and is licensed in 35 states. On March 29, 1996, PM
Holdings, Inc. acquired Savers Life Insurance Company of America from
Central United Life Insurance Company, renamed the acquired company Phoenix
Life and Annuity Company and redomiciled the company from Missouri to
Connecticut. PM Holdings accounted for the acquisition of Phoenix Life and
Annuity under the purchase method of accounting. The assets and liabilities
of Phoenix Life and Annuity were recorded at their fair value as of the date
of acquisition and intangible assets associated with the acquisition were
recorded in the accounts of the acquired company. PM Holdings is a
wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements have been prepared in accordance with generally
accepted accounting principles (GAAP). The preparation of financial
statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
The financial statements for the period subsequent to the March 29, 1996
acquisition are sometimes referred to as the "successor period." The
financial statements for the period prior to the acquisition are sometimes
referred to as the "predecessor period."
VALUATION OF INVESTMENTS
Investments in debt securities include U.S. government and agency bonds.
Phoenix Life and Annuity classifies its debt security investments as
available-for-sale. These investments are presented at fair value with
unrealized gains or losses included as a separate component of equity. Debt
securities are considered impaired when a decline in value is considered to
be other than temporary.
Short-term investments are carried at amortized cost, which approximates
market value. Phoenix considers highly liquid investments purchased with a
maturity date of one year or less to be short-term investments.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand and money market
instruments.
GOODWILL
Goodwill represents the excess of the cost of the business acquired on March
29, 1996 over the fair value of its tangible net assets. During 1997,
Phoenix Life and Annuity recorded a $58 thousand dollar reduction in
goodwill, representing a refund and a subsequent adjustment of a portion of
the purchase price. Goodwill is amortized on a straight-line method over a
period of 10 years, the expected period of benefit from the acquisition.
Management periodically reevaluates the propriety of the carrying value of
long-lived assets including goodwill. Assets are considered impaired if
carrying value exceeds the expected future undiscounted cash flows. Such
analyses are performed at least annually or more frequently if warranted by
events or circumstances affecting Phoenix Life and Annuity's business. At
this time, management believes that no impairment of goodwill has occurred
and that no reduction of the carrying value is warranted.
34
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
INCOME TAXES
Phoenix Life and Annuity is included in the life/nonlife consolidated
federal income tax return filed by Phoenix. In accordance with a tax sharing
agreement with Phoenix, the provision for federal income taxes is computed
as if Phoenix Life and Annuity were filing a separate federal income tax
return, except those benefits arising from income tax credits and net
operating and capital losses are allocated to those subsidiaries producing
such attributes to the extent they are utilized in Phoenix's consolidated
federal income tax return.
Deferred income taxes result from temporary differences between the tax
basis of assets and liabilities and their recorded amounts for financial
reporting purposes. These differences result primarily from unrealized gains
or losses on investments and goodwill.
RECENT ACCOUNTING PRONOUNCEMENTS
Phoenix Life and Annuity adopted Statement of Financial Accounting Standard
(SFAS) No. 130, "Reporting Comprehensive Income," as of January 1, 1998.
This statement establishes standards for the reporting and display of
comprehensive income and its components in a full set of financial
statements. This statement defines the components of comprehensive income as
those items that were previously reported only as components of equity and
were excluded from net income.
3. INVESTMENTS
Information pertaining to Phoenix Life and Annuity's investments, net
investment income and unrealized investment gains and losses follows:
DEBT SECURITIES
The amortized cost and fair value of investments in debt securities as of
December 31, 1998 were as follows:
<TABLE>
<CAPTION>
GROSS
AMORTIZED UNREALIZED FAIR
COST GAINS VALUE
(IN THOUSANDS)
<S> <C> <C> <C>
AVAILABLE-FOR-SALE:
U.S. government and agency bonds $5,127 $ 340 $5,467
Corporate securities 4,143 171 4,314
------ ------ ------
TOTAL DEBT SECURITIES $9,270 $ 511 $9,781
====== ====== ======
</TABLE>
The amortized cost and fair value of investments in debt securities as of
December 31, 1997 were as follows:
<TABLE>
<CAPTION>
GROSS
AMORTIZED UNREALIZED FAIR
COST GAINS VALUE
(IN THOUSANDS)
AVAILABLE-FOR-SALE:
<S> <C> <C> <C>
U.S. government and agency bonds $6,008 $ 177 $6,185
Corporate securities 999 25 1,024
------ ------ ------
TOTAL DEBT SECURITIES $7,007 $ 202 $7,209
====== ====== ======
</TABLE>
35
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The amortized cost and fair value of these investments, by contractual
maturity, as of December 31, 1998 are shown below. Actual maturities may
differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties, or
Phoenix Life and Annuity may have the right to put or sell the obligations
back to the issuers.
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
(IN THOUSANDS)
<S> <C> <C>
Due after one year through five years $5,128 $5,468
Due after five years through ten years 1,057 1,058
Due after ten years 3,085 3,255
------ ------
Total $9,270 $9,781
====== ======
</TABLE>
NET INVESTMENT INCOME
The components of net investment income for the years ended December 31,
1998 and 1997 and from March 30, 1996 to December 31, 1996 (successor
period) and January 1, 1996 to March 29, 1996 (predecessor period) were as
follows:
<TABLE>
<CAPTION>
1998 1997 1996 1996
SUCCESSOR SUCCESSOR SUCCESSOR PREDECESSOR
PERIOD PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Debt security investments $583 $376 $226
Short-term investments 115 259 214 $ 95
---- ---- ---- ----
698 635 440 95
Less investment expenses 10 11 7
---- ---- ---- ----
Net investment income $688 $624 $433 $ 95
==== ==== ==== ====
</TABLE>
UNREALIZED INVESTMENT GAINS AND LOSSES
Unrealized gains on investments carried at fair value at December 31, were
as follows:
<TABLE>
<CAPTION>
1998 1997 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Unrealized investment gains $311 $132 $ 60
Deferred income taxes 109 46 21
---- ---- ----
Net unrealized investment gains $202 $ 86 $ 39
==== ==== ====
</TABLE>
36
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4. GOODWILL
Phoenix Life and Annuity, formerly Savers Life Insurance Company of America,
was acquired by way of a stock purchase agreement on March 29, 1996 and was
accounted for under the purchase method of accounting. The assets and
liabilities were recorded at fair value as of the date of acquisition and
goodwill of approximately $1.0 million was pushed-down to Phoenix Life and
Annuity from PM Holdings.
Goodwill was as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
(IN THOUSANDS)
<S> <C> <C>
Goodwill $969 $969
Accumulated amortization (268) (171)
---- ----
Total $701 $798
==== ====
</TABLE>
5. INCOME TAXES
A summary of income taxes in the Statement of Income, Comprehensive Income
and Equity for the years ended December 31, 1998 and 1997 and the period
from March 30, 1996 to December 31, 1996 (successor period) is presented
below. No income taxes were recorded for the period from January 1, 1996 to
March 29, 1996 (predecessor period).
<TABLE>
<CAPTION>
1998 1997 1996
SUCCESSOR SUCCESSOR SUCCESSOR
PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C>
Current income taxes $199 $191 $131
Deferred income taxes (24) (2) (2)
---- ---- ----
Total $175 $189 $129
==== ==== ====
</TABLE>
37
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The income taxes attributable to the successor and predecessor periods are
different than the amounts determined by multiplying income before taxes by
the statutory income tax rate. In the predecessor period, Savers Life was a
consolidated subsidiary of a thrift under the control of the Resolution
Trust Corporation. During the predecessor period, an interagency agreement
between the Resolution Trust Corporation and the Internal Revenue Service
stated that the Internal Revenue Service would not impose income taxes on
consolidated subsidiaries of thrifts under Resolution Trust Corporation
control. Accordingly, no provision for the predecessor period was recorded.
The sources and the tax effect of the differences between the provision and
the result of multiplying the income before taxes by the statutory federal
income tax rate for the years ended December 31, 1998 and 1997 and periods
from March 30, 1996 to December 31, 1996 (successor period) and January 1,
1996 to March 29, 1996 (predecessor period) were as follows:
<TABLE>
<CAPTION>
1998 1997 1996 1996
SUCCESSOR SUCCESSOR SUCCESSOR PREDECESSOR
PERIOD PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income tax expense
at statutory rate $185 35% $186 35% $123 35% $ 34 35%
Goodwill (10) (2%) 3 1% 7 2%
Other (1) 0% (34) (35%)
---- ---- ---- ----
Income taxes $175 33% $189 36% $129 37% $ 0%
==== ==== ==== ====
</TABLE>
The deferred income tax liability represents the tax effects of temporary
differences. The components were as follows:
<TABLE>
<CAPTION>
1998 1997
SUCCESSOR SUCCESSOR
PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C>
Net unrealized investment gains $179 $ 70
Investments 9 12
Goodwill (37) (16)
---- ----
Deferred tax liability, net $151 $ 66
==== ====
</TABLE>
38
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. COMPREHENSIVE INCOME
The components of, and related tax effects for, other comprehensive income
are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997 1996
SUCCESSOR SUCCESSOR SUCCESSOR
PERIOD PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C> <C>
UNREALIZED GAINS ON SECURITIES
AVAILABLE-FOR-SALE ARISING DURING PERIOD:
Before-tax amount $311 $132 $ 60
Tax expense 109 46 21
---- ---- ----
Net-of-tax amount 202 86 39
---- ---- ----
RECLASSIFICATION ADJUSTMENT FOR GAINS OR
LOSSES REALIZED IN NET INCOME:
Before-tax amount 9
Tax expense 3
---- ---- ----
Net-of-tax amount 6
---- ---- ----
NET UNREALIZED GAINS ON SECURITIES
AVAILABLE-FOR-SALE:
Before-tax amount 311 132 69
Tax expense 109 46 24
---- ---- ----
Net-of-tax amount $202 $ 86 $ 45
==== ==== ====
</TABLE>
The following table summarizes accumulated other comprehensive income
balances:
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
SUCCESSOR SUCCESSOR
PERIOD PERIOD
(IN THOUSANDS)
<S> <C> <C>
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of year $131 $ 45
Change during period 202 86
---- ----
Balance, end of year $333 $131
</TABLE>
7. RELATED PARTY TRANSACTIONS
Phoenix and its affiliates provide services and facilities to Phoenix Life
and Annuity and are reimbursed through a cost allocation process. Investment
related expenses are allocated to Phoenix Life and Annuity from PM Holdings.
Phoenix Investment Counsel, Inc., a wholly-owned subsidiary of Phoenix
Investment Partners entered into a contract to manage the general account
investments of Phoenix Life and Annuity. PM Holdings owns approximately 60%
of the outstanding common stock of Phoenix Investment Partners.
39
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
8. FAIR VALUE DISCLOSURES OF FINANCIAL INSTRUMENTS
Financial instruments that are subject to fair value disclosure requirements
(insurance contracts are excluded) are carried in the financial statements
at amounts that approximate fair value. The fair values presented for
certain financial instruments are estimates which, in many cases, may differ
significantly from the amounts which could be realized upon immediate
liquidation. In cases where market prices are not available, estimates of
fair value are based on discounted cash flow analyses which utilize current
interest rates for similar financial instruments which have comparable terms
and credit quality.
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:
SHORT-TERM INVESTMENTS, CASH AND CASH EQUIVALENTS
For these short-term investments, the carrying amount approximates fair
value.
DEBT SECURITIES
Fair values are based on quoted market prices, where available, or quoted
market prices of comparable instruments. Fair values of private placement
debt securities are estimated using discounted cash flows that apply
interest rates currently being offered with similar terms to borrowers of
similar credit quality.
9. STATUTORY FINANCIAL INFORMATION
Phoenix's insurance subsidiaries are required to file annual statements with
state regulatory authorities prepared on an accounting basis prescribed or
permitted by such authorities. As of December 31, 1998, Phoenix Life and
Annuity had no material practices that were not prescribed by the Insurance
Department of the State of Connecticut. Statutory equity differs from equity
reported in accordance with generally accepted accounting principles for
life insurance companies primarily because investment reserves are based on
different assumptions and income tax expense reflects only taxes paid or
currently payable.
The following is a reconciliation of the statutory net income of Phoenix
Life and Annuity, as reported to regulatory authorities, to the net income
as reported in these financial statements:
<TABLE>
<CAPTION>
1998 1997 1996
(IN THOUSANDS)
<S> <C> <C> <C>
Statutory net income $426 $428 $369
Amortization of goodwill (97) (90) (81)
Deferred income taxes 24 3
Other, net 32
---- ---- ----
Net income, as reported $353 $341 $320
==== ==== ====
</TABLE>
40
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The following is a reconciliation of the statutory equity and asset
valuation reserve of Phoenix Life and Annuity, as reported to regulatory
authorities, to equity as reported in these financial statements at:
<TABLE>
<CAPTION>
DECEMBER 31,
1998 1997
(IN THOUSANDS)
<S> <C> <C>
Statutory equity and asset valuation reserve $11,301 $10,875
Goodwill 701 798
Investment valuation allowances 513 202
Deferred income tax and other liabilities (151) (66)
------- -------
Equity, as reported $12,364 $11,809
======= =======
</TABLE>
The Connecticut Insurance Holding Act limits the maximum amount of annual
dividends or other distributions available to stockholders of Connecticut
insurance companies without prior approval of the Insurance Commissioner.
Under current law, the maximum dividend distribution which may be made by
Phoenix Life and Annuity during 1998 without prior approval is subject to
restrictions relating to statutory surplus.
10. INDEMNIFICATION
Prior to the acquisition, Savers Life had reinsurance contracts with three
unaffiliated reinsurers which it had assumed between 1986 and 1989 and which
it assigned to Winterthur Life Re Insurance Company in October 1995. Under
the terms of the stock purchase agreement, Central United Life has
indemnified Phoenix for any liability in excess of $15,000 resulting from
these reinsurance contracts. Phoenix considers any liability to Phoenix Life
and Annuity as a result of these contracts to be remote and has indemnified
Phoenix Life and Annuity.
41
<PAGE>
PHOENIX LIFE AND ANNUITY
VARIABLE UNIVERSAL LIFE ACCOUNT
As of December 31, 1998, there had been no sales of the product described in
this Prospectus and, therefore, no deposits were made to Phoenix Life and
Annuity Variable Universal Life Account. Accordingly, no financial statements
are available for the VUL Account.
42
<PAGE>
APPENDIX A
GLOSSARY OF SPECIAL TERMS
- --------------------------------------------------------------------------------
The following is a list of terms and their meanings when used in this
prospectus.
ATTAINED AGE: The age of the Insured on the birthday nearest the most recent
Policy Anniversary.
BENEFICIARY: The person or persons specified by the Policyowner as entitled to
receive the death benefits under a Policy.
DEBT: Outstanding loans against a Policy, plus accrued interest.
FUNDS: The Phoenix Edge Series Fund, BT Insurance Funds Trust, Federated
Insurance Series, Templeton Variable Products Series Fund and Wanger Advisors
Trust.
GENERAL ACCOUNT: The general asset account of PLAC.
ISSUE PREMIUM: The premium payment made in connection with issuing the Policy.
MONTHLY CALCULATION DAY: The first Monthly Calculation Day is the same day as
the Policy Date. Subsequent Monthly Calculation Days are the same day of each
month thereafter or, if such day does not fall within a given month, the last
day of that month will be the Monthly Calculation Day.
NET ASSET VALUE: The worth of one share of a Series of a Fund at the end of a
valuation period. Net Asset Value is computed by adding the value of a Series'
holdings plus other assets, minus liabilities and then dividing the result by
the number of shares outstanding.
PAYMENT DATE: The Valuation Date on which we receive a premium payment or loan
repayment, unless it is received after the close of the New York Stock Exchange
("NYSE"), in which case it will be the next Valuation Date.
PLANNED ANNUAL PREMIUM: The premium amount that the Policyowner agrees to pay
each Policy Year. It must be at least equal to the minimum required premium for
the face amount of insurance selected but may be no greater than the maximum
premium allowed for the face amount selected.
POLICY ANNIVERSARY: Each anniversary of the Policy Date.
POLICY DATE: The Policy Date as shown on the Schedule Page of the Policy. It is
the date from which we measure Policy Years and Policy Anniversaries.
POLICY VALUE: The sum of a Policy's share in the values of each Subaccount of
the VUL Account plus the Policy's share in the values of the Guaranteed Interest
Account.
POLICY YEAR: The first Policy Year is the 1-year period from the Policy Date up
to, but not including, the first Policy Anniversary. Each succeeding Policy Year
is the 1-year period from the Policy Anniversary up to, but not including, the
next Policy Anniversary.
SERIES: A separate investment portfolio of the Fund.
SUBACCOUNTS: Accounts within the VUL Account to which nonloaned assets under a
Policy are allocated.
TARGET PREMIUM: The level annual premium at which the sales load is reduced on a
current basis.
VALUATION DATE: For any Subaccount, each date on which we calculate the net
asset value of a Fund.
VALUATION PERIOD: For any Subaccount, the period in days from the end of one
Valuation Date through the next.
VUL ACCOUNT (ACCOUNT): PLAC Variable Universal Life Account, a separate account
of the company.
43
<PAGE>
APPENDIX B
PERFORMANCE HISTORY
- --------------------------------------------------------------------------------
THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE
PERFORMANCE. THEY DO NOT ILLUSTRATE HOW ACTUAL PERFORMANCE WILL AFFECT THE
BENEFITS UNDER A POLICY BECAUSE THEY DO NOT REFLECT COST OF INSURANCE, PREMIUM
TAX CHARGES, PREMIUM SALES CHARGES AND SURRENDER CHARGES, IF APPLICABLE. FOR
THIS INFORMATION SEE APPENDIX C "ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES
AND CASH SURRENDER VALUES." Performance information may be expressed as yield
and effective yield of the Phoenix-Goodwin Money Market Subaccount, as yield of
the Phoenix-Goodwin Multi-Sector Fixed Income Subaccount and as total return of
any Subaccount. Current yield for the Phoenix-Goodwin Money Market Subaccount
will be based on the income earned by the Subaccount over a given 7-day period
(less a hypothetical charge reflecting deductions for expenses taken during the
period) and then annualized, i.e., the income earned in the period is assumed to
be earned every seven days over a 52-week period and is stated in terms of an
annual percentage return on the investment. Effective yield is calculated
similarly but reflects the compounding effect of earnings on reinvested
dividends. Yield and effective yield reflect the Mortality and Expense Risk
charge on the VUL Account level.
Yield calculations of the Phoenix-Goodwin Money Market Subaccount used for
illustration purposes are based on the consideration of a hypothetical
participant's account having a balance of exactly one Unit at the beginning of a
7-day period, which period will end on the date of the most recent financial
statements. The yield for the Subaccount during this 7-day period will be the
change in the value of the hypothetical participant's account's original Unit.
The following is an example of this yield calculation for the Phoenix-Goodwin
Money Market Subaccount based on a 7-day period ending December 31, 1998.
Example:
Assumptions:
Value of hypothetical pre-existing account with exactly one
unit at the beginning of the period:..................... 1.501512
Value of the same account (excluding capital changes) at the
end of the 7-day period:................................. 1.50245
Calculation:
Ending account value .................................... 1.50245
Less beginning account value ............................ 1.501512
Net change in account value ............................. 0.000938
Base period return:
(adjusted change/beginning account value) ............... 0.000625
Current yield = return x (365/7) = ........................ 3.26%
Effective yield = [(1 + return)(365/7)] - 1 = ............. 3.31%
The current yield and effective yield information will fluctuate, and
publication of yield information may not provide a basis for comparison with
bank deposits, other investments which are insured and/or pay a fixed yield for
a stated period of time, or other investment companies, due to charges which
will be deducted on the VUL Account level.
For the Phoenix-Goodwin Multi-Sector Fixed Income Subaccount, quotations of
yield will be based on all investment income per unit earned during a given
30-day period (including dividends and interest), less expenses accrued during
the period ("net investment income"), and are computed by dividing net
investment income by the maximum offering price per unit on the last day of the
period.
When a Subaccount advertises its total return, it usually will be calculated
for one year, five years, and ten years or since inception if the Subaccount has
not been in existence for at least ten years. Total return is measured by
comparing the value of a hypothetical $10,000 investment in the Subaccount at
the beginning of the relevant period to the value of the investment at the end
of the period, assuming the reinvestment of all distributions at net asset value
and the deduction of the Mortality and Expense Risk, Issue Expense and Monthly
Administrative Charges.
For those Subaccounts within the VUL Account that have not been available
for one of the quoted periods, the average annual total return quotations will
show the investment performance such Subaccount would have achieved (reduced by
the applicable charges) had it been available to invest in shares of the Fund
for the period quoted.
The following performance tables display historical investment results of
the Subaccounts of the VUL Account. This information may be useful in helping
potential investors in deciding which Subaccounts to choose and in assessing the
competence of the investment advisors. The performance figures shown should be
considered in light of the investment objectives and policies, characteristics
and quality of the Subaccounts and market conditions during the periods of time
quoted. The performance figures should not be considered as estimates or
predictions of future performance. Investment return of the Subaccounts are not
guaranteed and will fluctuate. Below are quotations of average annual total
return calculated as described above for all Subaccounts with at least one year
of results. POLICY CHARGES (INCLUDING COST OF INSURANCE, PREMIUM TAX CHARGES,
PREMIUM SALES CHARGES AND SURRENDER CHARGES) ARE NOT REFLECTED.
44
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED DECEMBER 31, 1998(1,3)
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SERIES INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Phoenix Research Enhanced Index Series..................... 7/15/97 27.99% N/A N/A 22.48%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series...................... 5/1/90 24.38% 11.47% N/A 9.41%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series........................... 9/17/96 -7.25% N/A N/A -19.21%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series........ 5/1/95 -23.54% N/A N/A 10.03%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series........................ 3/2/98 N/A N/A N/A 22.97%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series............................ 5/1/92 15.64% 11.41% N/A 11.00%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series.............................. 1/1/83 26.35% 16.84% 18.67% 17.90%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series........................ 10/10/82 2.09% 3.24% 3.93% 4.97%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series........... 1/1/83 -6.92% 5.20% 7.78% 8.67%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series................ 9/17/84 17.36% 11.33% 12.59% 12.34%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series..................... 1/29/96 40.62% N/A N/A 21.65%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity Series...................... 3/2/98 N/A N/A N/A 7.87%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series.................. 3/2/98 N/A N/A N/A 17.31%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series....................... 3/2/98 N/A N/A N/A -13.78%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series....................... 3/2/98 N/A N/A N/A 18.57%
- -----------------------------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index Fund............... 8/22/97 18.18% N/A N/A 7.07%
- -----------------------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II........... 3/28/94 4.58% N/A N/A 4.89%
- -----------------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II......................... 3/1/94 -0.25% N/A N/A 7.72%
- -----------------------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund-- Class 2(2)................ 5/1/98 N/A N/A N/A 0.98%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund-- Class 2(2)............... 11/28/88 3.07% 9.64% 10.40% 10.24%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund-- Class 2(2)............. 9/15/96 -23.45% N/A N/A -24.14%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton International Fund-- Class 2(2).................. 5/1/92 5.95% 9.77% N/A 12.28%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Stock Fund-- Class 2(2).......................... 11/4/88 -1.86% 9.18% 10.48% 10.18%
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty....................................... 2/1/99 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap............................. 5/1/95 13.06% N/A N/A 19.55%
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger Twenty.............................................. 2/1/99 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap...................................... 5/1/95 5.59% N/A N/A 25.06%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average annual total return is the annual compound return that results
from holding an initial investment of $10,000 for the time period indicated.
Returns are net of $150 Issue Expense Charge, $5 Monthly Administrative Fee,
Investment Management Fees and Mortality and Expense Risk Charges.
(2) Because Class 2 shares were not offered until May 1, 1997 (November 10, 1998
for Mutual Shares Investments), performance shown for periods prior to that
date represent the historical results of Class 1 shares. Performance since
that date reflect Class 2's high annual fees and expenses resulting from its
Rule 12b-1 plan. Maximum annual plan expenses are 0.25%.
(3) Performance data quoted represents the investment return of the appropriate
Series adjusted for the PLAC Flex Edge Success charges had the Subaccount
started on the inception date of the appropriate Series.
Advertisements, sales literature and other communications may contain
information about any Series' or Advisor's current investment strategies and
management style. Current strategies and style may change to respond to a
changing market and economic conditions. From time to time, the Series may
discuss specific portfolio holdings or industries in such communications. To
illustrate components of overall performance, the Series may separate their
cumulative and average annual returns into income results and capital gains or
losses; or cite separately, as a return figure, the equity or bond portion of a
Series' portfolio; or compare a Series' equity or bond return figure to
well-known indices of market performance including, but not limited to, the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"), Dow Jones
Industrial Average, First Boston High Yield Index and Salomon Brothers Corporate
and Government Bond Indices.
Occasionally, The VUL Account may include in advertisements containing total
return, the ranking of those performance figures relating to such figures for
groups of Subaccounts having similar investment objectives as categorized by
ranking services such as:
Lipper Analytical Services, Inc. Morningstar, Inc.
CDA Investment Technologies, Inc. Weisenberger Financial Services, Inc.
45
<PAGE>
Additionally, the Funds may compare a Series' performance results to other
investment or savings vehicles (such as certificates of deposit) and may refer
to results published in various publications such as:
Changing Times Forbes
Fortune Money
Barrons Business Week
Investor's Business Daily The Stanger Register
Stanger's Investment Advisor The Wall Street Journal
The New York Times Consumer Reports
Registered Representative Financial Planning
Financial Services Weekly Financial World
U.S. News and World Report Standard & Poor's
The Outlook Personal Investor
The Funds may occasionally illustrate the benefits of tax deferral by
comparing taxable investments to investments made through tax-deferred
retirement plans. The total return also may be used to compare the performance
of a Series against certain widely acknowledged outside standards or indices for
stock and bond market performance such as:
S&P 500 Dow Jones Industrial Average
Europe Australia Far East Index (EAFE) Consumers Price Index
Shearson Lehman Corporate Index Shearson Lehman T-Bond Index
The S&P 500 is a commonly quoted market value-weighted and unmanaged index
showing the changes in the aggregate market value of 500 common stocks relative
to the base period 1940-43. The S&P 500 is composed almost entirely of common
stocks of companies listed on the NYSE, although the common stocks of a few
companies listed on the American Stock Exchange or traded over the counter are
included. The 500 companies represented include 400 industrial, 60
transportation and 40 financial services concerns. The S&P 500 represents about
70-80% of the market value of all issues traded on the NYSE.
The Funds' Annual Reports, available upon request and without charge,
contain a discussion of the performance of the Funds and a comparison of that
performance to a securities market index.
46
<PAGE>
<TABLE>
ANNUAL TOTAL RETURN(1,3)
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SERIES 1983 1984 1985 1986 1987 1988 1989 1990 1991
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Phoenix Research Enhanced Index Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series N/A N/A N/A N/A N/A N/A N/A -8.63% 18.79%
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series 31.84% 9.79% 33.85% 19.51% 6.08% 3.09% 34.53% 3.32% 41.60%
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series 7.51% 9.34% 7.17% 5.66% 5.67% 6.60% 8.03% 7.51% 5.14%
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series 5.16% 10.45% 19.65% 18.34% 0.28% 9.61% 6.92% 4.54% 18.66%
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series N/A -1.31% 26.33% 14.77% 11.66% 1.53% 18.53% 5.15% 28.27%
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index Fund N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(2) N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(2) N/A N/A N/A N/A N/A 0.21% 12.13% -8.95% 26.42%
- --------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund -- Class 2(2) N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(2) N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(2) N/A N/A N/A N/A N/A -0.99% 13.48% -11.99% 26.22%
- --------------------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Wanger Twenty N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Wanger US Small Cap N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
ANNUAL TOTAL RETURN(1,3) (continued)
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
SERIES 1992 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Phoenix Research Enhanced Index Series N/A N/A N/A N/A N/A 5.46% 30.64%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series -13.52% 37.33% -0.73% 8.72% 17.71% 11.16% 26.92%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series N/A N/A N/A N/A -0.06% -32.94% -5.21%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series N/A N/A N/A 17.19% 32.10% 21.09% -21.83%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series N/A N/A N/A N/A N/A N/A 25.45%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series 9.06% 7.75% -3.61% 22.37% 9.68% 17.00% 18.07%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series 9.41% 18.75% 0.66% 29.85% 11.69% 20.12% 28.98%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series 2.75% 2.06% 3.01% 4.86% 4.19% 4.35% 4.26%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series 9.23% 14.99% -6.21% 22.56% 11.52% 10.21% -4.91%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series 9.79% 10.12% -2.19% 17.27% 8.18% 19.78% 19.84%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series N/A N/A N/A N/A 9.55% 16.25% 43.55%
- ------------------------------------------------------------------------------------------------------------
hoenix-Hollister Value Equity Series N/A N/A N/A N/A N/A N/A 10.07%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series N/A N/A N/A N/A N/A N/A 19.67%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series N/A N/A N/A N/A N/A N/A -11.95%
- ------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series N/A N/A N/A N/A N/A N/A 20.97%
- ------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index Fund N/A N/A N/A N/A N/A -6.87% 20.64%
- ------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II N/A N/A 1.99% 7.90% 3.37% 7.71% 6.80%
- ------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II N/A N/A -4.26% 19.42% 13.40% 12.92% 1.88%
- ------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(2) N/A N/A N/A N/A N/A N/A 2.62%
- ------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(2) 6.97% 24.86% -4.00% 21.29% 17.64% 14.37% 5.27%
- ------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund -- Class 2(2) N/A N/A N/A N/A 1.05% -29.95% -21.69%
- ------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(2) -6.80% 45.85% -3.27% 14.56% 22.77% 12.76% 8.17%
- ------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(2) 6.02% 32.68% -3.25% 23.97% 21.17% 10.75% 0.24%
- ------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty N/A N/A N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------
Wanger International Small Cap N/A N/A N/A 33.96% 31.15% -2.24% 15.41%
- ------------------------------------------------------------------------------------------------------------
Wanger Twenty N/A N/A N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------
Wanger US Small Cap N/A N/A N/A 16.01% 45.64% 28.41% 7.83%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Rates are net of Mortality and Expense Risk Charges and Investment
Management fees for the Subaccounts.
(2) Because Class 2 shares were not offered until May 1, 1997 (November 10, 1998
for Mutual Shares Investments), performance shown for periods prior to that
date represent the historical results of Class 1 shares. Performance since
that date reflect Class 2's high annual fees and expenses resulting from its
Rule 12b-1 plan. Maximum annual plan expenses are 0.25%.
(3) Performance data quoted represents the investment return of the appropriate
Series adjusted for the PLAC Flex Edge Success charges had the Subaccount
started on the inception date of the appropriate Series.
THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE.
47
<PAGE>
APPENDIX C
ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES ("ACCOUNT VALUES") AND CASH
SURRENDER VALUES
- --------------------------------------------------------------------------------
The tables on the following pages illustrate how a Policy's death benefits,
account values and Cash Surrender Value could vary over time assuming constant
hypothetical gross (after tax) annual investment returns of 0%, 6% and 12%. The
Policy benefits will differ from those shown in the tables if the annual
investment returns are not absolutely constant. That is, the figures will be
different if the returns averaged 0%, 6% or 12% over a period of years but went
above or below those figures in individual Policy Years. The Policy benefits
also will differ, depending on your premium allocations to each Subaccount of
the VUL Account, if the overall actual rates of return averaged 0%, 6% or 12%,
but went above or below those figures for the individual Subaccounts. The tables
are for standard risk males and females who are nonsmokers. In states where cost
of insurance rates are not based on the Insured's sex, the tables designated
"male" apply to all standard risk insureds who are nonsmokers. Account Values
and Cash Surrender Values may be lower for risk classes involving higher
mortality risk. Planned premium payments are assumed to be paid at the beginning
of each Policy Year.
The death benefit, account value and Cash Surrender Value amounts reflect
the following current charges:
1. Monthly Administrative Charge of $5 per month ($10 per month guaranteed
maximum in all states except New York and New Jersey. In New York and
New Jersey guaranteed maximum is $7.50 per month.).
2. An average Premium Tax Charge of 2.25%.
3. A Federal Tax Charge of 1.5%.
4. Cost of Insurance Charge. The tables illustrate cost of insurance at
both the current rates and at the maximum rates guaranteed in the
Policies. See "Charges and Deductions--Cost of Insurance."
5. Mortality and Expense Risk Charge, which is a monthly charge equivalent
to .40% on an annual basis (or .25% on an annual basis after the 10th
Policy Year) of your policy value. See "Charges and
Deductions--Mortality and Expense Risk Charge."
These illustrations also assume an average investment advisory fee of .70%
on an annual basis, of the average daily net asset value of each of the Series
of the Funds. These illustrations also assume other ongoing average Fund
expenses of .30%. All other Fund expenses, except capital items such as
brokerage commissions, are paid by the Advisor or PLAC. Management may decide to
limit the amount of expense reimbursement in the future. If expense
reimbursement had not been in place for the fiscal year ended December 31, 1998,
average total operating expenses for the Series would have been approximately
1.43% of the average net assets. See "Charges and Deductions--Investment
Management Charge."
Taking into account the Mortality and Expense Risk Charge and the investment
advisory fees and expenses, the gross annual investment return rates of 0%, 6%
and 12% on the Funds' assets are equivalent to net annual investment return
rates of approximately -1.00%, 5.00% and 11.00%, respectively. For individual
illustrations, interest rates ranging between 0% and 12% may be selected in
place of the 0%, 6% and 12% rates.
The hypothetical returns shown in the tables are without any tax charges
that may be attributable to the VUL Account in the future. If such tax charges
are imposed in the future, then in order to produce after tax returns equal to
those illustrated for 0%, 6% and 12%, a sufficiently higher amount in excess of
the hypothetical interest rates would have to be earned. See "Charges and
Deductions--Other Charges--Taxes."
The second column of each table shows the amount that would accumulate if an
amount equal to the premiums paid were invested to earn interest, after taxes,
at 5% compounded annually. These tables show that if a Policy is returned in its
very early years for payment of its Cash Surrender Value, that Cash Surrender
Value may be low in comparison to the amount of the premiums accumulated with
interest. Thus, the cost of owning a Policy for a relatively short time may be
high.
On request, we will furnish the Policyowner with a comparable illustration
based on the age and sex of the proposed insured person(s), standard risk
assumptions and the initial face amount and planned premium chosen.
48
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 1 of 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 760 810 100,000 810 860 100,000 860 910 100,000
2 1,000 2,153 1,506 1,539 100,000 1,653 1,687 100,000 1,807 1,840 100,000
3 1,000 3,310 2,238 2,255 100,000 2,532 2,549 100,000 2,851 2,868 100,000
4 1,000 4,526 2,955 2,955 100,000 3,447 3,447 100,000 4,001 4,001 100,000
5 1,000 5,802 3,657 3,657 100,000 4,398 4,398 100,000 5,267 5,267 100,000
6 1,000 7,142 4,343 4,343 100,000 5,387 5,387 100,000 6,661 6,661 100,000
7 1,000 8,549 5,011 5,011 100,000 6,412 6,412 100,000 8,193 8,193 100,000
8 1,000 10,027 5,708 5,708 100,000 7,526 7,526 100,000 9,934 9,934 100,000
9 1,000 11,578 6,383 6,383 100,000 8,680 8,680 100,000 11,847 11,847 100,000
10 1,000 13,207 7,034 7,034 100,000 9,873 9,873 100,000 13,950 13,950 100,000
11 1,000 14,917 7,708 7,708 100,000 11,158 11,158 100,000 16,322 16,322 100,000
12 1,000 16,713 8,358 8,358 100,000 12,490 12,490 100,000 18,936 18,936 100,000
13 1,000 18,599 8,984 8,984 100,000 13,871 13,871 100,000 21,820 21,820 100,000
14 1,000 20,579 9,585 9,585 100,000 15,301 15,301 100,000 25,002 25,002 100,000
15 1,000 22,657 10,159 10,159 100,000 16,783 16,783 100,000 28,514 28,514 100,000
16 1,000 24,840 10,706 10,706 100,000 18,319 18,319 100,000 32,395 32,395 100,000
17 1,000 27,132 11,226 11,226 100,000 19,910 19,910 100,000 36,684 36,684 100,000
18 1,000 29,539 11,715 11,715 100,000 21,558 21,558 100,000 41,428 41,428 100,000
19 1,000 32,066 12,173 12,173 100,000 23,265 23,265 100,000 46,673 46,673 105,948
20 1,000 34,719 12,597 12,597 100,000 25,033 25,033 100,000 52,448 52,448 115,911
@ 65 1,000 69,761 14,074 14,074 100,000 49,047 49,047 100,000 169,394 169,394 281,194
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
29.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
49
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 2 of 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 573 623 100,000 617 667 100,000 661 711 100,000
2 1,000 2,153 1,126 1,159 100,000 1,250 1,283 100,000 1,379 1,413 100,000
3 1,000 3,310 1,657 1,674 100,000 1,897 1,914 100,000 2,159 2,176 100,000
4 1,000 4,526 2,165 2,165 100,000 2,558 2,558 100,000 3,005 3,005 100,000
5 1,000 5,802 2,646 2,646 100,000 3,230 3,230 100,000 3,921 3,921 100,000
6 1,000 7,142 3,100 3,100 100,000 3,912 3,912 100,000 4,913 4,913 100,000
7 1,000 8,549 3,523 3,523 100,000 4,602 4,602 100,000 5,986 5,986 100,000
8 1,000 10,027 3,935 3,935 100,000 5,320 5,320 100,000 7,173 7,173 100,000
9 1,000 11,578 4,314 4,314 100,000 6,043 6,043 100,000 8,459 8,459 100,000
10 1,000 13,207 4,659 4,659 100,000 6,772 6,772 100,000 9,855 9,855 100,000
11 1,000 14,917 4,974 4,974 100,000 7,515 7,515 100,000 11,390 11,390 100,000
12 1,000 16,713 5,252 5,252 100,000 8,262 8,262 100,000 13,062 13,062 100,000
13 1,000 18,599 5,491 5,491 100,000 9,011 9,011 100,000 14,886 14,886 100,000
14 1,000 20,579 5,688 5,688 100,000 9,761 9,761 100,000 16,880 16,880 100,000
15 1,000 22,657 5,840 5,840 100,000 10,507 10,507 100,000 19,059 19,059 100,000
16 1,000 24,840 5,945 5,945 100,000 11,248 11,248 100,000 21,445 21,445 100,000
17 1,000 27,132 5,993 5,993 100,000 11,976 11,976 100,000 24,056 24,056 100,000
18 1,000 29,539 5,980 5,980 100,000 12,684 12,684 100,000 26,916 26,916 100,000
19 1,000 32,066 5,897 5,897 100,000 13,365 13,365 100,000 30,052 30,052 100,000
20 1,000 34,719 5,735 5,735 100,000 14,010 14,010 100,000 33,493 33,493 100,000
@ 65 1,000 69,761 -- -- -- 15,866 15,866 100,000 92,905 92,905 157,939
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
29.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
50
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 1 of 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 787 837 100,000 838 888 100,000 889 939 100,000
2 1,000 2,153 1,559 1,592 100,000 1,710 1,743 100,000 1,867 1,901 100,000
3 1,000 3,310 2,314 2,331 100,000 2,616 2,633 100,000 2,943 2,960 100,000
4 1,000 4,526 3,053 3,053 100,000 3,558 3,558 100,000 4,126 4,126 100,000
5 1,000 5,802 3,774 3,774 100,000 4,534 4,534 100,000 5,426 5,426 100,000
6 1,000 7,142 4,476 4,476 100,000 5,547 5,547 100,000 6,855 6,855 100,000
7 1,000 8,549 5,158 5,158 100,000 6,597 6,597 100,000 8,426 8,426 100,000
8 1,000 10,027 5,870 5,870 100,000 7,737 7,737 100,000 10,208 10,208 100,000
9 1,000 11,578 6,561 6,561 100,000 8,919 8,919 100,000 12,169 12,169 100,000
10 1,000 13,207 7,233 7,233 100,000 10,147 10,147 100,000 14,330 14,330 100,000
11 1,000 14,917 7,926 7,926 100,000 11,467 11,467 100,000 16,764 16,764 100,000
12 1,000 16,713 8,602 8,602 100,000 12,842 12,842 100,000 19,453 19,453 100,000
13 1,000 18,599 9,261 9,261 100,000 14,274 14,274 100,000 22,426 22,426 100,000
14 1,000 20,579 9,903 9,903 100,000 15,767 15,767 100,000 25,713 25,713 100,000
15 1,000 22,657 10,527 10,527 100,000 17,324 17,324 100,000 29,350 29,350 100,000
16 1,000 24,840 11,133 11,133 100,000 18,946 18,946 100,000 33,373 33,373 100,000
17 1,000 27,132 11,720 11,720 100,000 20,635 20,635 100,000 37,826 37,826 100,000
18 1,000 29,539 12,287 12,287 100,000 22,396 22,396 100,000 42,756 42,756 100,050
19 1,000 32,066 12,833 12,833 100,000 24,230 24,230 100,000 48,207 48,207 109,430
20 1,000 34,719 13,356 13,356 100,000 26,140 26,140 100,000 54,219 54,219 119,824
@ 65 1,000 69,761 17,232 17,232 100,000 53,230 53,230 100,000 178,723 178,723 296,681
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
36.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
51
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 2 of 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 618 668 100,000 664 714 100,000 709 759 100,000
2 1,000 2,153 1,218 1,251 100,000 1,347 1,381 100,000 1,483 1,516 100,000
3 1,000 3,310 1,798 1,814 100,000 2,051 2,068 100,000 2,327 2,343 100,000
4 1,000 4,526 2,356 2,356 100,000 2,773 2,773 100,000 3,246 3,246 100,000
5 1,000 5,802 2,890 2,890 100,000 3,512 3,512 100,000 4,246 4,246 100,000
6 1,000 7,142 3,399 3,399 100,000 4,267 4,267 100,000 5,333 5,333 100,000
7 1,000 8,549 3,881 3,881 100,000 5,037 5,037 100,000 6,517 6,517 100,000
8 1,000 10,027 4,355 4,355 100,000 5,843 5,843 100,000 7,829 7,829 100,000
9 1,000 11,578 4,803 4,803 100,000 6,667 6,667 100,000 9,263 9,263 100,000
10 1,000 13,207 5,225 5,225 100,000 7,510 7,510 100,000 10,830 10,830 100,000
11 1,000 14,917 5,629 5,629 100,000 8,385 8,385 100,000 12,566 12,566 100,000
12 1,000 16,713 6,006 6,006 100,000 9,283 9,283 100,000 14,474 14,474 100,000
13 1,000 18,599 6,357 6,357 100,000 10,203 10,203 100,000 16,571 16,571 100,000
14 1,000 20,579 6,680 6,680 100,000 11,145 11,145 100,000 18,878 18,878 100,000
15 1,000 22,657 6,971 6,971 100,000 12,109 12,109 100,000 21,419 21,419 100,000
16 1,000 24,840 7,231 7,231 100,000 13,094 13,094 100,000 24,218 24,218 100,000
17 1,000 27,132 7,456 7,456 100,000 14,099 14,099 100,000 27,305 27,305 100,000
18 1,000 29,539 7,643 7,643 100,000 15,124 15,124 100,000 30,713 30,713 100,000
19 1,000 32,066 7,789 7,789 100,000 16,165 16,165 100,000 34,475 34,475 100,000
20 1,000 34,719 7,891 7,891 100,000 17,222 17,222 100,000 38,635 38,635 100,000
@ 65 1,000 69,761 5,543 5,543 100,000 30,019 30,019 100,000 123,983 123,983 205,663
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
36.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
52
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 1 of 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 759 809 100,760 809 859 100,810 859 909 100,860
2 1,000 2,153 1,504 1,537 101,505 1,651 1,684 101,652 1,805 1,838 101,806
3 1,000 3,310 2,234 2,251 102,235 2,528 2,544 102,528 2,846 2,863 102,847
4 1,000 4,526 2,949 2,949 102,949 3,439 3,439 103,440 3,991 3,991 103,992
5 1,000 5,802 3,647 3,647 103,648 4,385 4,385 104,386 5,251 5,251 105,252
6 1,000 7,142 4,328 4,328 104,329 5,367 5,367 105,368 6,635 6,635 106,636
7 1,000 8,549 4,989 4,989 104,990 6,384 6,384 106,384 8,155 8,155 108,156
8 1,000 10,027 5,679 5,679 105,680 7,487 7,487 107,488 9,879 9,879 109,879
9 1,000 11,578 6,346 6,346 106,347 8,626 8,626 108,627 11,769 11,769 111,770
10 1,000 13,207 6,986 6,986 106,987 9,801 9,801 109,802 13,841 13,841 113,842
11 1,000 14,917 7,649 7,649 107,650 11,066 11,066 111,068 16,178 16,178 116,179
12 1,000 16,713 8,286 8,286 108,287 12,374 12,374 112,374 18,747 18,747 118,748
13 1,000 18,599 8,897 8,897 108,898 13,724 13,724 113,725 21,571 21,571 121,571
14 1,000 20,579 9,480 9,480 109,481 15,117 15,117 115,118 24,676 24,676 124,677
15 1,000 22,657 10,033 10,033 110,034 16,553 16,553 116,554 28,090 28,090 128,091
16 1,000 24,840 10,555 10,555 110,556 18,033 18,033 118,033 31,846 31,846 131,847
17 1,000 27,132 11,046 11,046 111,047 19,556 19,556 119,557 35,977 35,977 135,977
18 1,000 29,539 11,502 11,502 111,503 21,122 21,122 121,123 40,520 40,520 140,521
19 1,000 32,066 11,921 11,921 111,922 22,731 22,731 122,732 45,519 45,519 145,519
20 1,000 34,719 12,302 12,302 112,303 24,382 24,382 124,383 51,017 51,017 151,018
@ 65 1,000 69,761 12,779 12,779 112,780 44,393 44,393 144,394 163,040 163,040 270,647
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
28.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
53
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 2 of 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 571 621 100,572 615 665 100,616 659 709 100,661
2 1,000 2,153 1,122 1,155 101,123 1,245 1,278 101,246 1,374 1,407 101,375
3 1,000 3,310 1,648 1,665 101,649 1,887 1,904 101,888 2,148 2,164 102,149
4 1,000 4,526 2,150 2,150 102,151 2,541 2,541 102,541 2,984 2,984 102,985
5 1,000 5,802 2,624 2,624 102,625 3,202 3,202 103,203 3,886 3,886 103,887
6 1,000 7,142 3,068 3,068 103,069 3,871 3,871 103,872 4,859 4,859 104,860
7 1,000 8,549 3,479 3,479 103,480 4,542 4,542 104,544 5,907 5,907 105,907
8 1,000 10,027 3,877 3,877 103,879 5,238 5,238 105,239 7,058 7,058 107,059
9 1,000 11,578 4,240 4,240 104,241 5,933 5,933 105,934 8,299 8,299 108,299
10 1,000 13,207 4,565 4,565 104,566 6,628 6,628 106,628 9,636 9,636 109,637
11 1,000 14,917 4,857 4,857 104,859 7,329 7,329 107,329 11,094 11,094 111,095
12 1,000 16,713 5,110 5,110 105,111 8,025 8,025 108,026 12,669 12,669 112,669
13 1,000 18,599 5,319 5,319 105,321 8,713 8,713 108,715 14,370 14,370 114,372
14 1,000 20,579 5,484 5,484 105,485 9,391 9,391 109,392 16,210 16,210 116,211
15 1,000 22,657 5,601 5,601 105,602 10,052 10,052 110,054 18,197 18,197 118,198
16 1,000 24,840 5,666 5,666 105,667 10,694 10,694 110,695 20,344 20,344 120,346
17 1,000 27,132 5,672 5,672 105,673 11,306 11,306 111,307 22,660 22,660 122,661
18 1,000 29,539 5,612 5,612 105,613 11,878 11,878 111,879 25,153 25,153 125,154
19 1,000 32,066 5,478 5,478 105,479 12,402 12,402 112,402 27,835 27,835 127,836
20 1,000 34,719 5,262 5,262 105,263 12,862 12,862 112,863 30,715 30,715 130,716
@ 65 1,000 69,761 -- -- -- 10,125 10,125 110,126 80,243 80,243 180,244
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
28.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
54
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 1 of 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 787 837 100,787 838 888 100,838 889 939 100,890
2 1,000 2,153 1,558 1,591 101,558 1,709 1,742 101,710 1,866 1,899 101,867
3 1,000 3,310 2,311 2,328 102,312 2,613 2,629 102,614 2,939 2,956 102,941
4 1,000 4,526 3,048 3,048 103,049 3,551 3,551 103,553 4,119 4,119 104,120
5 1,000 5,802 3,766 3,766 103,767 4,524 4,524 104,525 5,414 5,414 105,415
6 1,000 7,142 4,464 4,464 104,464 5,532 5,532 105,532 6,835 6,835 106,836
7 1,000 8,549 5,141 5,141 105,142 6,574 6,574 106,575 8,395 8,395 108,396
8 1,000 10,027 5,846 5,846 105,847 7,704 7,704 107,705 10,162 10,162 110,163
9 1,000 11,578 6,530 6,530 106,531 8,874 8,874 108,875 12,103 12,103 112,105
10 1,000 13,207 7,192 7,192 107,193 10,085 10,085 110,086 14,237 14,237 114,238
11 1,000 14,917 7,876 7,876 107,877 11,388 11,388 111,389 16,641 16,641 116,643
12 1,000 16,713 8,541 8,541 108,543 12,743 12,743 112,744 19,293 19,293 119,294
13 1,000 18,599 9,188 9,188 109,189 14,151 14,151 114,152 22,217 22,217 122,218
14 1,000 20,579 9,816 9,816 109,817 15,615 15,615 115,615 25,443 25,443 125,444
15 1,000 22,657 10,424 10,424 110,425 17,136 17,136 117,137 29,003 29,003 129,004
16 1,000 24,840 11,012 11,012 111,013 18,715 18,715 118,716 32,931 32,931 132,932
17 1,000 27,132 11,578 11,578 111,579 20,355 20,355 120,356 37,265 37,265 137,266
18 1,000 29,539 12,122 12,122 112,122 22,057 22,057 122,058 42,048 42,048 142,049
19 1,000 32,066 12,641 12,641 112,641 23,820 23,820 123,822 47,324 47,324 147,325
20 1,000 34,719 13,134 13,134 113,134 25,647 25,647 125,648 53,145 53,145 153,146
@ 65 1,000 69,761 16,330 16,330 116,330 50,178 50,178 150,179 174,371 174,371 289,457
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
36.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
55
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 2 of 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 617 667 100,618 662 712 100,663 708 758 100,709
2 1,000 2,153 1,214 1,248 101,215 1,343 1,377 101,344 1,478 1,512 101,480
3 1,000 3,310 1,790 1,807 101,791 2,043 2,059 102,044 2,317 2,334 102,318
4 1,000 4,526 2,343 2,343 102,345 2,758 2,758 102,760 3,228 3,228 103,229
5 1,000 5,802 2,871 2,871 102,872 3,489 3,489 103,489 4,216 4,216 104,218
6 1,000 7,142 3,371 3,371 103,373 4,232 4,232 104,232 5,288 5,288 105,289
7 1,000 8,549 3,843 3,843 103,844 4,986 4,986 104,988 6,449 6,449 106,450
8 1,000 10,027 4,305 4,305 104,306 5,773 5,773 105,774 7,731 7,731 107,732
9 1,000 11,578 4,738 4,738 104,740 6,573 6,573 106,573 9,125 9,125 109,126
10 1,000 13,207 5,143 5,143 105,144 7,386 7,386 107,387 10,641 10,641 110,642
11 1,000 14,917 5,527 5,527 105,528 8,224 8,224 108,225 12,311 12,311 112,312
12 1,000 16,713 5,882 5,882 105,883 9,077 9,077 109,079 14,135 14,135 114,136
13 1,000 18,599 6,208 6,208 106,209 9,946 9,946 109,947 16,128 16,128 116,129
14 1,000 20,579 6,502 6,502 106,503 10,827 10,827 110,827 18,306 18,306 118,307
15 1,000 22,657 6,763 6,763 106,764 11,718 11,718 111,719 20,685 20,685 120,686
16 1,000 24,840 6,987 6,987 106,988 12,618 12,618 112,619 23,284 23,284 123,285
17 1,000 27,132 7,175 7,175 107,175 13,525 13,525 113,526 26,125 26,125 126,125
18 1,000 29,539 7,320 7,320 107,322 14,435 14,435 114,436 29,229 29,229 129,230
19 1,000 32,066 7,420 7,420 107,421 15,342 15,342 115,342 32,618 32,618 132,620
20 1,000 34,719 7,472 7,472 107,473 16,244 16,244 116,245 36,323 36,323 136,324
@ 65 1,000 69,761 4,385 4,385 104,386 25,015 25,015 125,016 109,760 109,760 209,761
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
36.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
56
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 1 of 2
MALE 35ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 759 809 101,000 809 859 101,000 859 909 101,000
2 1,000 2,153 1,503 1,537 102,000 1,651 1,684 102,000 1,804 1,838 102,000
3 1,000 3,310 2,233 2,250 103,000 2,527 2,544 103,000 2,846 2,862 103,000
4 1,000 4,526 2,947 2,947 104,000 3,438 3,438 104,000 3,991 3,991 104,000
5 1,000 5,802 3,644 3,644 105,000 4,383 4,383 105,000 5,250 5,250 105,000
6 1,000 7,142 4,323 4,323 106,000 5,364 5,364 106,000 6,635 6,635 106,000
7 1,000 8,549 4,983 4,983 107,000 6,380 6,380 107,000 8,157 8,157 107,000
8 1,000 10,027 5,670 5,670 108,000 7,483 7,483 108,000 9,882 9,882 108,000
9 1,000 11,578 6,333 6,333 109,000 8,622 8,622 109,000 11,777 11,777 109,000
10 1,000 13,207 6,969 6,969 110,000 9,795 9,795 110,000 13,855 13,855 110,000
11 1,000 14,917 7,628 7,628 111,000 11,060 11,060 111,000 16,200 16,200 111,000
12 1,000 16,713 8,260 8,260 112,000 12,368 12,368 112,000 18,781 18,781 112,000
13 1,000 18,599 8,864 8,864 113,000 13,719 13,719 113,000 21,623 21,623 113,000
14 1,000 20,579 9,439 9,439 114,000 15,114 15,114 114,000 24,754 24,754 114,000
15 1,000 22,657 9,982 9,982 115,000 16,553 16,553 115,000 28,205 28,205 115,000
16 1,000 24,840 10,493 10,493 116,000 18,037 18,037 116,000 32,010 32,010 116,000
17 1,000 27,132 10,968 10,968 117,000 19,567 19,567 117,000 36,209 36,209 117,000
18 1,000 29,539 11,407 11,407 118,000 21,143 21,143 118,000 40,844 40,844 118,000
19 1,000 32,066 11,805 11,805 119,000 22,764 22,764 119,000 45,963 45,963 119,000
20 1,000 34,719 12,161 12,161 120,000 24,432 24,432 120,000 51,621 51,621 120,000
@ 65 1,000 69,761 11,670 11,670 131,000 43,378 43,378 131,000 166,984 166,984 227,195
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
26.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
57
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 2 of 2
MALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 571 621 101,000 615 665 101,000 659 709 101,000
2 1,000 2,153 1,120 1,153 102,000 1,243 1,277 102,000 1,373 1,406 102,000
3 1,000 3,310 1,644 1,661 103,000 1,884 1,900 103,000 2,144 2,161 103,000
4 1,000 4,526 2,142 2,142 104,000 2,533 2,533 104,000 2,978 2,978 104,000
5 1,000 5,802 2,610 2,610 105,000 3,190 3,190 105,000 3,876 3,876 105,000
6 1,000 7,142 3,046 3,046 106,000 3,852 3,852 106,000 4,845 4,845 106,000
7 1,000 8,549 3,447 3,447 107,000 4,515 4,515 107,000 5,887 5,887 107,000
8 1,000 10,027 3,833 3,833 108,000 5,200 5,200 108,000 7,033 7,033 108,000
9 1,000 11,578 4,179 4,179 109,000 5,882 5,882 109,000 8,267 8,267 109,000
10 1,000 13,207 4,483 4,483 110,000 6,561 6,561 110,000 9,599 9,599 110,000
11 1,000 14,917 4,751 4,751 111,000 7,242 7,242 111,000 11,052 11,052 111,000
12 1,000 16,713 4,972 4,972 112,000 7,914 7,914 112,000 12,624 12,624 112,000
13 1,000 18,599 5,145 5,145 113,000 8,574 8,574 113,000 14,326 14,326 113,000
14 1,000 20,579 5,265 5,265 114,000 9,219 9,219 114,000 16,172 16,172 114,000
15 1,000 22,657 5,328 5,328 115,000 9,841 9,841 115,000 18,172 18,172 115,000
16 1,000 24,840 5,329 5,329 116,000 10,436 10,436 116,000 20,343 20,343 116,000
17 1,000 27,132 5,258 5,258 117,000 10,992 10,992 117,000 22,697 22,697 117,000
18 1,000 29,539 5,107 5,107 118,000 11,500 11,500 118,000 25,249 25,249 118,000
19 1,000 32,066 4,864 4,864 119,000 11,945 11,945 119,000 28,015 28,015 119,000
20 1,000 34,719 4,515 4,515 120,000 12,312 12,312 120,000 31,014 31,014 120,000
@ 65 1,000 69,761 -- -- -- 5,772 5,772 131,000 89,942 89,942 149,304
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
26.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
58
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 1 of 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFIT--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING CURRENT CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 787 837 101,000 838 888 101,000 889 939 101,000
2 1,000 2,153 1,557 1,591 102,000 1,708 1,742 102,000 1,866 1,899 102,000
3 1,000 3,310 2,311 2,328 103,000 2,613 2,629 103,000 2,939 2,956 103,000
4 1,000 4,526 3,047 3,047 104,000 3,551 3,551 104,000 4,119 4,119 104,000
5 1,000 5,802 3,764 3,764 105,000 4,523 4,523 105,000 5,414 5,414 105,000
6 1,000 7,142 4,460 4,460 106,000 5,530 5,530 106,000 6,836 6,836 106,000
7 1,000 8,549 5,136 5,136 107,000 6,572 6,572 107,000 8,397 8,397 107,000
8 1,000 10,027 5,839 5,839 108,000 7,702 7,702 108,000 10,167 10,167 108,000
9 1,000 11,578 6,520 6,520 109,000 8,871 8,871 109,000 12,112 12,112 109,000
10 1,000 13,207 7,179 7,179 110,000 10,082 10,082 110,000 14,252 14,252 110,000
11 1,000 14,917 7,860 7,860 111,000 11,386 11,386 111,000 16,664 16,664 111,000
12 1,000 16,713 8,521 8,521 112,000 12,741 12,741 112,000 19,326 19,326 112,000
13 1,000 18,599 9,163 9,163 113,000 14,150 14,150 113,000 22,266 22,266 113,000
14 1,000 20,579 9,785 9,785 114,000 15,616 15,616 114,000 25,514 25,514 114,000
15 1,000 22,657 10,387 10,387 115,000 17,140 17,140 115,000 29,103 29,103 115,000
16 1,000 24,840 10,967 10,967 116,000 18,725 18,725 116,000 33,071 33,071 116,000
17 1,000 27,132 11,524 11,524 117,000 20,371 20,371 117,000 37,457 37,457 117,000
18 1,000 29,539 12,057 12,057 118,000 22,081 22,081 118,000 42,308 42,308 118,000
19 1,000 32,066 12,563 12,563 119,000 23,856 23,856 119,000 47,673 47,673 119,000
20 1,000 34,719 13,041 13,041 120,000 25,698 25,698 120,000 53,611 53,611 120,000
@ 65 1,000 69,761 15,762 15,762 131,000 50,981 50,981 131,000 176,926 176,926 293,698
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
33.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
59
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY Page 2 of 2
FEMALE 35 ADVANTAGE SELECT FACE AMOUNT: $100,000
INITIAL ANNUAL PREMIUM: $1,000
PHOENIX'S EXECUTIVE BENEFITXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING GUARANTEED CHARGES
<CAPTION>
CASH CASH CASH
ASSUMED PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 0% @ 0% @ 0% @ 6% @ 6% @ 6% @ 12% @ 12% @ 12%
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 617 667 101,000 662 712 101,000 708 758 101,000
2 1,000 2,153 1,213 1,246 102,000 1,342 1,376 102,000 1,478 1,511 102,000
3 1,000 3,310 1,787 1,804 103,000 2,040 2,057 103,000 2,315 2,332 103,000
4 1,000 4,526 2,338 2,338 104,000 2,754 2,754 104,000 3,224 3,224 104,000
5 1,000 5,802 2,861 2,861 105,000 3,480 3,480 105,000 4,210 4,210 105,000
6 1,000 7,142 3,356 3,356 106,000 4,219 4,219 106,000 5,279 5,279 106,000
7 1,000 8,549 3,820 3,820 107,000 4,968 4,968 107,000 6,438 6,438 107,000
8 1,000 10,027 4,273 4,273 108,000 5,748 5,748 108,000 7,717 7,717 108,000
9 1,000 11,578 4,695 4,695 109,000 6,539 6,539 109,000 9,110 9,110 109,000
10 1,000 13,207 5,085 5,085 110,000 7,342 7,342 110,000 10,626 10,626 110,000
11 1,000 14,917 5,451 5,451 111,000 8,169 8,169 111,000 12,298 12,298 111,000
12 1,000 16,713 5,786 5,786 112,000 9,008 9,008 112,000 14,128 14,128 112,000
13 1,000 18,599 6,087 6,087 113,000 9,861 9,861 113,000 16,131 16,131 113,000
14 1,000 20,579 6,351 6,351 114,000 10,723 10,723 114,000 18,326 18,326 114,000
15 1,000 22,657 6,577 6,577 115,000 11,595 11,595 115,000 20,731 20,731 115,000
16 1,000 24,840 6,761 6,761 116,000 12,471 12,471 116,000 23,369 23,369 116,000
17 1,000 27,132 6,900 6,900 117,000 13,352 13,352 117,000 26,265 26,265 117,000
18 1,000 29,539 6,990 6,990 118,000 14,232 14,232 118,000 29,447 29,447 118,000
19 1,000 32,066 7,024 7,024 119,000 15,105 15,105 119,000 32,941 32,941 119,000
20 1,000 34,719 7,000 7,000 120,000 15,970 15,970 120,000 36,786 36,786 120,000
@ 65 1,000 69,761 1,756 1,756 131,000 23,835 23,835 131,000 116,859 116,859 193,986
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
33.
Death benefit, account value and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no Policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.00%
(includes average fund operating expenses of 0.30% applicable to the investment
Subaccounts of the VUL Separate Account). Hypothetical gross interest rates are
presented for illustrative purposes only to illustrate funds allocated entirely
to the investment Subaccounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 3% also is
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
60
<PAGE>
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.
RULE 484 UNDERTAKING
Section 5.9 of the Connecticut Corporation Law & Practice, provides that a
corporation may indemnify any director or officer of the corporation made, or
threatened to be made, a party to an action or proceeding other than one by or
in the right of the corporation to procure a judgment in its favor, whether
civil or criminal, including an action by or in the right of any other
corporation of any type or kind, by reason of the fact that he, his testator or
intestate, served such other corporation in any capacity at the request of the
indemnifying corporation.
Article V of the Bylaws of the Company provides that: "Each person who is or
was a director or officer of the Company (including the heirs, executors,
administrators or estate of such person) shall be indemnified by the Company as
of right to full extent permitted or authorized by the laws of the State of
Connecticut against any liability, cost or expense asserted against him and
incurred by him by reason of his capacity as a director or officer, or arising
out of his status as a director or officer."
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.
REPRESENTATION PURSUANT TO SECTION 26(E)(2)(A) UNDER THE INVESTMENT COMPANY
ACT OF 1940.
Pursuant to Section 26(e)(2)(A) of the Investment Company Act of 1940, as
amended, Phoenix Life and Annuity Company represents that the fees and charges
deducted under the Policies, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred and the risks to be
assumed thereunder by Phoenix Life and Annuity Company.
CONTENTS OF REGISTRATION STATEMENT
This Form S-6 Registration Statement comprises the following papers and
documents:
The facing sheet.
The Prospectus describing Phoenix Life and Annuity Company's Flex Edge
Success, consisting of 54 pages.
The Prospectus describing Phoenix Life and Annuity Company's Corporate Edge,
consisting of 60 pages.
The Prospectus describing Phoenix Life and Annuity Company's Executive
Benefit, consisting of 60 pages.
The undertaking to file reports.
The Rule 484 undertaking.
Representation Pursuant to Section 26(e)(2)(A) under the Investment Company
Act of 1940.
The signature pages.
The powers of attorney, filed via Edgar with the Registration Statement on
September 27, 1996 and incorporated herein by reference.
Written consents of the following persons:
(a) Edwin L. Kerr, Esq.*
(b) PricewaterhouseCoopers, LLP*
(c) Paul M. Fischer, FSA, CLU, ChFC*
II-1
<PAGE>
The following exhibits:
1. The following exhibits correspond to those required by paragraph A to the
instructions as to exhibits in Form N-8B-2:
A. (1) Resolution of the Board of Directors of Depositor establishing
the VUL Account, filed via Edgar with the Registration Statement
on September 27, 1996 and incorporated herein by reference.
(2) Not Applicable.
(3) Distribution of Policies:
(a) Master Service and Distribution Compliance Agreement between
Depositor and Phoenix Equity Planning Corporation dated
October 27, 1997, filed via Edgar with Pre-Effective
Amendment No. 2 on November 4, 1997 and incorporated herein
by reference.
(b) Form of Broker Dealer Supervisory and Service Agreement
between Phoenix Equity Planning Corporation and Independent
Brokers with respect to the sale of Policies filed via Edgar
with Pre-Effective Amendment No. 2 on November 4, 1997 and
incorporated herein by reference.
(c) Not Applicable.
(4) Not Applicable.
(5) Specimen Policies with optional riders.
(a) Flexible Premium Variable Universal Life Insurance Policy
Form Number V604 of Depositor filed via Edgar with
Pre-Effective Amendment No. 1 on March 14, 1997 and
incorporated herein by reference.
(b) Flexible Premium Variable Universal Life Insurance Policy
Form V606 of Depositor to be filed by amendment.
(c) Flexible Premium Variable Universal Life Insurance Policy
Form V608 of Depositor to be filed by amendment.
(6) (a) Charter of Phoenix Life and Annuity Company, filed via Edgar
with the Registration Statement on September 27, 1996 and
incorporated herein by reference.
(1) Certificate of Incorporation dated November 2, 1981.
(2) Certificate of Amendment of its Articles of Incorporation
dated March 16, 1984.
(3) Certificate of Amendment of its Articles of Incorporation
dated April 18, 1985.
(4) Certificate of Amendment of its Articles of Incorporation
dated December 3, 1992.
(5) Certificate of Amendment of its Articles of Incorporation
dated May 9, 1996.
(b) Certificate of Redomestication and Amended and Restated
Certificate of Incorporation dated April 21, 1997 filed via
Edgar with Pre-Effective Amendment No. 2 on November 4, 1997
and incorporated herein by reference.
(c) By-Laws of Phoenix Life and Annuity Company filed via Edgar
with Post-Effective Amendment No. 1 on April 29, 1998 and
incorporated herein by reference.
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Form of application for Flex Edge Success filed via Edgar with
Pre-Effective Amendment No. 1 on March 14, 1997 and incorporated
herein by reference.
(11) Memorandum describing transfer and redemption procedures and
method of computing adjustments in payments and cash values upon
conversion to fixed benefit policies filed via Edgar with
Pre-Effective Amendment No. 1 on March 14, 1997 and incorporated
herein by reference.
II-2
<PAGE>
2. Opinion of Edwin L. Kerr, Esq., Counsel of Depositor as to the legality of
the securities being registered filed via Edgar with Post-Effective
Amendment No. 1 on April 29, 1998 and incorporated herein by reference.
3. Not Applicable. No financial statement will be omitted from the Prospectus
pursuant to Instruction 1(b) or (c) of Part I.
4. Not Applicable.
5. Not Applicable.
6. Consent of PricewaterhouseCoopers, LLP.*
7. Consent of Edwin L. Kerr, Esq.*
8. Consent of Paul M. Fischer, FSA, CLU, ChFC.*
- --------------
*Filed by amendment.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Phoenix Life and Annuity Variable Universal Life Account, has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized, in the City of Hartford,
State of Connecticut on the 30th day of August, 1999.
PHOENIX LIFE AND ANNUITY VARIABLE UNIVERSAL LIFE ACCOUNT
--------------------------------------------------------
(Registrant)
By: PHOENIX LIFE AND ANNUITY COMPANY
------------------------------------------------
(Depositor)
By: /s/ Dona D. Young
------------------------------------------------
*Dona D. Young, Executive Vice President,
Individual Insurance and General Counsel
ATTEST: /s/Emily J. Poriss
-------------------
Emily J. Poriss, Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 30th day of August, 1999.
SIGNATURE TITLE
--------- -----
_______________________________ Director, Executive Vice President
*Richard H. Booth
_______________________________ Director
Carl T. Chadburn
_______________________________ Director
*Robert G. Chipkin
_______________________________ Director, Chairman of the Board, President
*Robert W. Fiondella
_______________________________ Director, Senior Vice President
*Joseph E. Kelleher
_______________________________ Director, Senior Vice President
*Robert G. Lautensack
_______________________________ Director, Executive Vice President
*Philip R. McLoughlin
_______________________________ Director, Executive Vice President, Chief
*David W. Searfoss Financial Officer
_______________________________ Director, Senior Vice President
*Simon Y. Tan
_______________________________ Director, Executive Vice President
*Dona D. Young
By: /s/ Dona D. Young
------------------------------------
* Dona D. Young as Attorney-in-Fact pursuant to Powers of Attorney, copies of
which were previously filed.
