As filed with the Securities and Exchange Commission on October 29, 1999
REGISTRATION NO. 333-12989
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
POST-EFFECTIVE AMENDMENT NO. 4
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, INDIVIDUAL INSURANCE AND GENERAL COUNSEL
PHOENIX LIFE AND ANNUITY COMPANY
ONE AMERICAN ROW
HARTFORD, CONNECTICUT 06102-5056
(NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE)
--------------------
COPIES TO:
<TABLE>
<CAPTION>
<S> <C> <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
[x] on October 29, 1999 pursuant to paragraph (b) of Rule 485
[ ] 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 by
this filing.
<PAGE>
[VERSION B]
PHOENIX CORPORATE EDGE
VARIABLE UNIVERSAL LIFE
INSURANCE POLICY
Issued by
PHOENIX LIFE AND
ANNUITY COMPANY
FOR POLICYHOLDER SERVICE, PLEASE CONTACT US AT:
[envelope] ANDESA TPA, INC.
1605 N CEDAR CREST BLVD, SUITE 502
ALLENTOWN, PA 18104
[telephone] 610/439-5256
PROSPECTUS 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
<TABLE>
<CAPTION>
Heading Page
- ------------------------------------------------------------------------------------------------------
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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 Rebalancing.............................................................. 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
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
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............................................................................. 20
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................................. 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.......................................................................... 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 7 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
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
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......................................................... 49
APPENDIX B PERFORMANCE HISTORY............................................................... 50
APPENDIX C ILLUSTRATIONS..................................................................... 54
</TABLE>
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 DAY 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 his or her 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 3 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 in the following 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: 7.0% of premiums Policy years 1 - 7: 9.0% of premiums.
PREMIUMS up to the target premium and 0% on Policy year 8+: 3.0% of all premiums.
amounts in excess of the target
premium.
Policy year 8+: 0% of all premiums.
---------------------------------------------------------------------------------------------------------
STATE PREMIUM 0.75% to 4.0% of each premium This charge will always equal the
TAX depending on your state's applicable applicable state rate.
rate.
---------------------------------------------------------------------------------------------------------
DEFERRED ACQUISITION 1.5% of each premium. This charge will always equal the
COST TAX CHARGE 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 maximum monthly cost of
CHARGE the amount at risk each month. This insurance charge for each $1,000 of
charge varies by the Insured's insurance is shown on your policy's
issue age, policy duration, gender schedule pages.
and 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 16th 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 16th
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 the following charges from your
policy value:
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 select 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 of
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 day. 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 CHARGE
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 taxes 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
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:
[bullet] the number of insureds,
[bullet] the total premium expected to be paid,
[bullet] the total assets under management for the policyowner,
[bullet] the nature of the relationship among individual insureds,
[bullet] the purpose for which the policies are being purchased,
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,
PLAC 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 high total return. The Phoenix Research Enhanced Index Series invests
in a broadly diversified portfolio of equity securities of large and medium
capitalization companies within market sectors reflected in the S&P 500. It
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 a high total return consistent with reasonable risk. The
Phoenix-Aberdeen International 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 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
long-term capital appreciation. The Phoenix-Aberdeen New Asia 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 capital appreciation and income with approximately
equal emphasis. Under normal circumstances, the Phoenix-Duff & Phelps Real
Estate Securities Series 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 long-term capital appreciation. The Phoenix-Engemann Nifty Fifty Series
invests in approximately 50 different securities which offer the best potential
for long-term growth of capital. At least 75% of the Series' assets are invested
in common stocks of high quality growth companies. The remaining portion is
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
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
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 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 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 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 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 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 long-term capital appreciation, with current income as the
secondary investment objective. The Phoenix-Schafer Mid-Cap Value Series invests
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 capital appreciation primarily through investments in equity securities of
companies that have the potential for above average market appreciation. The
Phoenix-Seneca Mid-Cap Growth 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
stock market 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 current income. The Federated Fund for U.S. Government
Securities II invests 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 high current income. The Federated High Income Bond Fund II invests 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.
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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 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, including emerging market countries.
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.
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 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
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 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 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. 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 may be
sold to other separate accounts of Phoenix or its affiliates. Shares of certain
Funds may also be sold to the separate accounts of other insurance companies.
It is possible that in the future there may be no advantage for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither PLAC nor the Funds'
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 remedy such material conflicts at our expense 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").
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The investment advisor to the Phoenix-Aberdeen New Asia Series is
Phoenix-Aberdeen International Advisors 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] Franklin Mutual Advisers, Inc.
[bullet] Mutual Shares Investments Fund
[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] 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 no longer be 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 from 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 any excess interest as determined by us
based on expected investment yield information.
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
regarding accuracy and completeness of statements made in this prospectus.
We reserve the right to limit total deposits to the Guaranteed Interest
Account, including transfers, to no more than $250,000 during any one-week
period per policy.
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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 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 to one or more of the Subaccounts over a
consecutive 4-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 may
be made at any time. Transfers from the Guaranteed Interest Account are subject
to the rules discussed above and in "Transfer of Policy Value" and "Systematic
Transfer for Dollar Cost Averaging."
PREMIUMS
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MINIMUM PREMIUMS
The minimum premium is determined by case size as follows:
[bullet] 5 or more lives: $100,000 annually for the first 5 policy years
[bullet] Fewer than 5 lives: $250,000 annually for the first 5 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 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 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 will
then 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 say 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. At the
expiration of the Free Look Period, the policy value of the Money Market
Subaccount is allocated among the Subaccounts 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.
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 7 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
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application for processing, we retain the right to decline to issue the policy.
If we decline to issue the policy, we will refund the same amount to you as
would have been 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 there currently is no charge for transfers, in the future we may
charge a fee of $10 for each transfer after the first 2 transfers in a policy
year (12 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 to one or more of the Subaccounts over a
consecutive 4-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 deteriorate 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
[bullet] $25 monthly,
[bullet] $75 quarterly,
[bullet] $150 semiannually, or
[bullet] $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").
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 this 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 REBALANCING
Automated asset rebalancing 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 rebalancing program ("asset rebalancing"). Then, we
will make transfers at least quarterly to and from the Subaccounts and the
Guaranteed Interest Account to readjust your account value to your specified
percentage. Asset rebalancing allows you to maintain a specific fund allocation.
Quarterly rebalancing
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is based on your policy year. We will rebalance your account value only on a
monthly calculation day.
The effective date of the first asset rebalancing will be the first monthly
calculation day after we receive your request at Andesa TPA, Inc. If we receive
your request before the end of the Free Look Period, your first rebalancing will
occur at the end of the Free Look Period.
You may not participate in both the Dollar Cost Averaging Program and asset
rebalancing at the same time.
DETERMINATION OF SUBACCOUNT VALUES
We establish the unit value of each Subaccount 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 6 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, any capital gain distribution, if
applicable) 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 amount is determined using
1 of 2 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 select a face amount of insurance coverage and the
death benefit option. We offer 3 death benefit options:
[diamond] Option 1--The death benefit is the greater of:
(a) the policy's face amount on the date of death or
(b) 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:
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[bullet] add back in any charges taken against the account value for the
period beyond the date of death;
[bullet] deduct any policy debt outstanding on the date of death; and
[bullet] 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.
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 "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 (see "Payment of Proceeds--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. (See
"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.
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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 will generally pay the amount surrendered
within 7 days after we receive the written request for the surrender. Under
certain circumstances, the surrender payment may be postponed (see "Additional
Policy 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 65th birthday is
2.25%. The rates in effect before the Insured reaches age 65 are:
[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 65th birthday is 4.25%. The rates
in effect before the Insured reaches age 65 are:
[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 nonloaned
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 equal to
the loan is held in the Guaranteed Interest Account. The Subaccount's investment
performance does not affect 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 3 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 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. Future charges against the
policy will be based on the life of the substitute Insured. There is
no charge for this rider.
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 6 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 per the SEC, as a result of which
[bullet] disposal of securities is not reasonably practicable or
[bullet] it is not reasonably practicable to determine the value of
the VUL Account's net assets.
Transfers may also 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
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officer of PLAC can agree to change or waive any provisions of the policy.
SUICIDE
If the Insured commits suicide within 2 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 2 years from the policy date.
CHANGE OF OWNER OR BENEFICIARY
The beneficiary, as named in the policy application or as 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 nonparticipating 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 7 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 is paid in one lump sum.
OPTION 2--LEFT TO EARN INTEREST.
A payment of interest is paid 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.
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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] 10 years;
[diamond] 20 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
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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. This discussion 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 this discussion 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 ("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 ("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 is made 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
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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
"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 tax consequences. 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 7 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 7 YEARS
If there is a reduction in death benefits during the first 7 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 7
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 2 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 7 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 7 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 7 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),
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
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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. 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.
25
<PAGE>
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 and
Director, Chairman President
and President
Richard H. Booth, Executive Vice President
Director and Executive
Vice President
Philip R. McLoughlin, Executive Vice President and
Director, Executive Chief Investment Officer
Vice President and CIO
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
Vice President
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 5 years.
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS
- --------------------------------------------------------------------------------
We hold the assets of the VUL Account. They 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.
26
<PAGE>
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 2 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
throughout 1999. Additionally Phoenix has obtained Year 2000 assurances from
business partners.
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 Phoenix Life and Annuity Company are
available for the periods ended June 30, 1999 and December 31, 1998.
27
<PAGE>
PHOENIX LIFE AND
ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF
PM HOLDINGS, INC.)
CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1999
28
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
Balance Sheets at June 30, 1999 and December 31, 1998 (unaudited) ............30
Statement of Income, Comprehensive Income and Equity for the Six
Months Ended June 30, 1999 and 1998 (unaudited)..............................31
Statement of Cash Flows for the Six Months Ended June 30, 1999
and 1998 (unaudited).........................................................32
Notes to Condensed Financial Statements (unaudited)...........................33
29
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
BALANCE SHEET(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Available-for-sale debt securities, at fair value $ 9,163 $ 9,781
Short-term investments 1,975 1,754
-------- --------
Total investments 11,138 11,535
Cash and cash equivalents 64 99
Accrued investment income 185 169
Due and uncollected premium 331
Receivable from parent Phoenix Home Life 1,060
Deferred income tax asset 84
Goodwill 653 701
Other assets 5 13
-------- --------
Total assets $ 13,520 $ 12,517
======== ========
LIABILITIES
Reserves for future policy benefits $ 1,071
Income taxes payable 117
Deferred income tax liability $ 151
Other liabilities 2
-------- --------
Total liabilities 1,188 153
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 1,238 867
Accumulated other comprehensive (loss) income (70) 333
-------- --------
Total equity 12,332 12,364
-------- --------
Total liabilities and equity $ 13,520 $ 12,517
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
30
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
STATEMENT OF INCOME, COMPREHENSIVE INCOME AND EQUITY (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1999 1998
(IN THOUSANDS)
REVENUES
<S> <C> <C>
Premiums $ 636
Consideration received on reinsurance assumed 915
Net investment income 344 $ 339
-------- --------
Total revenues 1,895 339
-------- --------
BENEFITS, LOSSES AND EXPENSES
Policy benefits and payments 1,138
Commissions and reinsurance allowances 93
Amortization of goodwill 48 48
Other operating expenses 46
-------- --------
Total expenses 1,325 48
-------- --------
INCOME BEFORE INCOME TAXES 570 291
Income taxes 199 102
-------- --------
NET INCOME 371 189
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX
Unrealized (losses) gains on securities arising during period (403) 85
-------- --------
Total other comprehensive (loss) income (403) 85
-------- --------
COMPREHENSIVE (LOSS) INCOME (32) 274
EQUITY, BEGINNING OF PERIOD 2,364 11,809
-------- --------
EQUITY, END OF PERIOD $ 12,332 $ 12,083
======== ========
</TABLE>
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 CASH FLOWS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1999 1998
(IN THOUSANDS)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 371 $ 189
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY OPERATIONS
Goodwill amortization 48 48
Deferred income taxes (19) (4)
Increase in accrued investment income (16) (39)
Increase in due and uncollected premium (331)
Increase in receivable from parent (1,060)
Increase in policy liabilities and accruals 1,071
Other, net 122 3
------- -------
Net cash provided by operating activities $ 186 $ 197
------- -------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of available-for-sale debt securities (2,098)
Change in short-term investments, net (221) 1,874
------- -------
Net cash used for investing activities (221) (224)
------- -------
CASH FLOW FROM FINANCING ACTIVITIES
Capital contribution from parent ------- -------
Net cash provided by financing activities ------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (35) (27)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 99 48
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 64 $ 21
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 89 $ 106
------- -------
</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.)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
BASIS OF PRESENTATION
The condensed unaudited financial statements include the accounts of Phoenix
Life and Annuity Company (PLAC). These condensed unaudited financial statements
have been prepared in accordance with generally accepted accounting principles
(GAAP). The information furnished includes all adjustments and accruals
consisting only of normal, recurring accrual adjustments which are, in the
opinion of management, necessary for a fair presentation of results for the
interim periods.
The results of operations for any interim period are not necessarily indicative
of results for the full year. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with GAAP have
been condensed or omitted. Certain reclassifications have been made to prior
year amounts to conform with the current year presentation. The June 30, 1999
Condensed Financial Statements (Unaudited) should be read in conjunction with
the accompanying December 31, 1998 Financial Statements.
REINSURANCE
Effective January 1, 1999 PLAC entered into an Indemnity Reinsurance Agreement
with its indirect parent Phoenix Home Life Insurance Company (Phoenix). Under
the Agreement, PLAC assumed from Phoenix 100 percent of its net retained risk
for a block of yearly renewable rate term policies and incurred an initial
reinsurance allowance of $50 thousand that was recorded as an expense in 1999.
These policies constitute a closed block in a run-off stage and, as of June 30,
1999, reserves for future policy benefits totaled $1.1 million.
SUBSEQUENT EVENTS
In July, 1999, PLAC introduced a survivorship universal life policy and recorded
initial sales of this product during the third quarter of 1999.
33
<PAGE>
PHOENIX LIFE AND
ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
FINANCIAL STATEMENTS DECEMBER 31, 1998
34
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
Report of Independent Accountants............................................36
Balance Sheet................................................................37
Statement of Income, Comprehensive Income and Equity.........................38
Statement of Cash Flows......................................................39
Notes to Financial Statements.............................................40-47
35
<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
36
<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.
37
<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.
38
<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.
39
<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.
40
<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>
41
<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>
42
<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>
43
<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>
44
<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.
45
<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>
46
<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.
47
<PAGE>
PHOENIX LIFE AND ANNUITY
VARIABLE UNIVERSAL LIFE ACCOUNT
There have been no deposits made to Phoenix Life and Annuity
Variable Universal Life Account as of the date of this prospectus;
therefore, no financial statements are available for the VUL Account.
48
<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): Phoenix Life and Annuity Variable Universal Life Account,
a separate account of the company.
49
<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.
50
<PAGE>
<TABLE>
===================================================================================================================================
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED DECEMBER 31, 1998(1,2)
===================================================================================================================================
<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 30.18% N/A N/A 24.03%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series...................... 5/1/90 26.55% 12.14% N/A 9.94%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series........................... 9/17/96 -5.55% N/A N/A -18.42%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series........ 5/1/95 -22.26% N/A N/A 10.79%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series........................ 3/2/98 N/A N/A N/A 25.15%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series............................ 5/1/92 17.58% 12.07% N/A 11.58%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series.............................. 12/31/82 27.80% 17.47% 19.24% 18.69%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series........................ 10/8/82 3.96% 3.87% 4.43% 5.58%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series........... 12/31/82 -5.67% 5.77% 8.28% 9.39%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series................ 9/17/84 19.07% 11.96% 13.11% 13.10%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series..................... 1/29/96 42.98% N/A N/A 22.60%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity Series...................... 3/2/98 N/A N/A N/A 9.64%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series.................. 3/2/98 N/A N/A N/A 19.25%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series....................... 3/2/98 N/A N/A N/A -12.38%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series....................... 3/2/98 N/A N/A N/A 20.51%
- -----------------------------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index Fund............... 8/22/97 20.35% N/A N/A 8.60%
- -----------------------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II........... 3/28/94 6.50% N/A N/A 5.55%
- -----------------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II......................... 3/1/94 1.59% N/A N/A 8.40%
- -----------------------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(3)............... 11/2/98 N/A N/A N/A 2.39%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(3).............. 11/28/88 4.96% 10.31% 10.91% 11.10%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund -- Class 2(3)............ 9/27/96 -22.03% N/A N/A -23.38%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(3)................. 5/11/92 7.93% 10.17% N/A 12.57%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(3)......................... 11/3/88 -0.11% 9.83% 10.98% 10.95%
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty....................................... 2/1/99 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap............................. 5/1/95 14.78% N/A N/A 20.27%
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger Twenty.............................................. 2/1/99 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap...................................... 5/1/95 7.19% N/A N/A 25.69%
===================================================================================================================================
</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 $5 monthly administrative fee, investment
management fees and mortality and expense risk charges.
(2) Performance data quoted represents the investment return of the appropriate
Series adjusted for the Phoenix Corporate Edge charges had the Subaccount
started on the inception date of the appropriate Series.
(3) Standardized performance for Class 2 shares reflects a "blended" figure,
combining: (a) for periods prior to Class 2's inception on May 1, 1997
(November 16, 1998 for Mutual Shares Investments Fund), historical results
of Class 1 shares; and (b) for periods after May 1, 1997 (November 16,
1998), Class 2's results reflecting an additional 12b-1 fee expense which
also affects all future performance. Maximum annual plan expenses are
0.25%.
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.
51
<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.
52
<PAGE>
<TABLE>
ANNUAL TOTAL RETURN(1,2)
==========================================================================================================
<CAPTION>
SERIES 1983 1984 1985 1986 1987 1988 1989 1990
==========================================================================================================
<S> <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
- ----------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate N/A N/A N/A N/A N/A N/A N/A N/A
Securities Series
- ----------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series 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
- ----------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series 32.89% 10.67% 34.92% 20.47% 6.93% 3.92% 36.19% 4.05%
- ----------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series 8.37% 10.23% 8.03% 6.51% 6.51% 7.45% 9.20% 8.22%
- ----------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income 6.00% 11.35% 20.61% 19.29% 1.08% 10.49% 8.24% 5.22%
Series
- ----------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series N/A N/A 27.34% 15.69% 12.56% 2.34% 19.90% 5.77%
- ----------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series 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
- ----------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series 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
- ----------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series 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
- ----------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government N/A N/A N/A N/A N/A N/A N/A N/A
Securities II
- ----------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(3) N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(3) N/A N/A N/A N/A N/A N/A 13.03% -8.21%
- ----------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund --
Class 2(3) N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(3) N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(3) N/A N/A N/A N/A N/A N/A 14.39% -11.28%
- ----------------------------------------------------------------------------------------------------------
Wanger Foreign Forty 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
- ----------------------------------------------------------------------------------------------------------
Wanger Twenty 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
==========================================================================================================
</TABLE>
<TABLE>
ANNUAL TOTAL RETURN(1,2) (continued)
=============================================================================================================
<CAPTION>
SERIES 1991 1992 1993 1994 1995 1996 1997 1998
=============================================================================================================
<S> <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 31.69%
- -------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series 19.74% -12.83% 38.46% 0.06% 9.59% 18.66% 12.05% 27.94%
- -------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series N/A N/A N/A N/A N/A N/A -32.41% -4.45%
- -------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate N/A N/A N/A N/A N/A 33.13% 22.07% -21.20%
Securities Series
- -------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series N/A N/A N/A N/A N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series N/A 9.63% 8.61% -2.84% 23.35% 10.57% 17.94% 19.02%
- -------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series 42.75% 10.30% 19.71% 1.46% 30.89% 12.59% 21.09% 30.02%
- -------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series 5.98% 3.58% 2.88% 3.84% 5.70% 5.03% 5.19% 5.10%
- -------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income 19.59% 10.08% 15.92% -5.49% 23.54% 12.43% 11.09% -4.15%
Series
- -------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series 29.32% 10.66% 11.01% -1.41% 18.20% 9.06% 20.74% 20.80%
- -------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series N/A N/A N/A N/A N/A N/A 17.17% 44.72%
- -------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity Series 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
- -------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series 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
- -------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index
Fund N/A N/A N/A N/A N/A N/A N/A 21.60%
- -------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government N/A N/A N/A N/A 8.77% 4.20% 8.58% 7.66%
Securities II
- -------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II N/A N/A N/A N/A 20.38% 14.31% 13.83% 2.70%
- -------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(3) N/A N/A N/A N/A N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(3) 27.44% 7.83% 25.87% -3.23% 22.26% 18.59% 15.27% 6.10%
- -------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund --
Class 2(3) N/A N/A N/A N/A N/A N/A -29.39% -21.04%
- -------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(3) N/A N/A 46.47% -2.86% 15.05% 23.30% 13.51% 9.08%
- -------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(3) 27.23% 6.87% 33.74% -2.47% 24.96% 22.15% 11.60% 0.98%
- -------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty 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 32.04% -1.46% 16.34%
- -------------------------------------------------------------------------------------------------------------
Wanger Twenty 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 46.63% 29.43% 8.69%
=============================================================================================================
</TABLE>
(1) Performance data quoted represents the investment return of the appropriate
Series adjusted for the Phoenix Corporate Edge charges had the Subaccount
started on the inception date of the appropriate Series.
(2) Rates are net of investment management fees for the Phoenix Corporate Edge
Subaccounts. The actual inception date of Phoenix Corporate Edge was October
29, 1999.
(3) Standardized performance for Class 2 shares reflects a "blended" figure,
combining: (a) for periods prior to Class 2's inception on May 1, 1997
(November 16, 1998 for Mutual Shares Investments Fund), historical results
of Class 1 shares; and (b) for periods after May 1, 1997 (November 16,
1998), Class 2's results reflecting an additional 12b-1 fee expense which
also affects all future performance. Maximum annual plan expenses are 0.25%.
THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE.
53
<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. A sales charge of 7.0% of premiums up to the target premium and 0% on
amounts in excess of the target premium in policy years 1-7 and 0% of
all premiums in policy years 8+.
2. 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.).
3. An average premium tax charge of 2.25%.
4. A federal tax charge of 1.5%.
5. 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 under the Policy" table.
6. Mortality and expense risk charge, which is a monthly charge equivalent
to .50% on an annual basis (or .25% on an annual basis after the 10th
policy year) of your policy value. See "Charges under the Policy" table.
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. They 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 "Annual Fund Expenses" table.
Taking into account 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.
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.
54
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING CURRENT CHARGES
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 1,050 739 739 100,000 788 788 100,000 837 837 100,000
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 45,709 45,709 104,407
20 1,000 34,719 12,447 12,447 100,000 24,623 24,623 100,000 51,384 51,384 114,089
@ 65 1,000 69,761 14,129 14,129 100,000 45,775 45,775 100,000 150,272 150,272 257,523
</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%.
55
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING GUARANTEED CHARGES
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 1,050 530 530 100,000 571 571 100,000 613 613 100,000
2 1,000 2,153 1,038 1,038 100,000 1,153 1,153 100,000 1,274 1,274 100,000
3 1,000 3,310 1,522 1,522 100,000 1,745 1,745 100,000 1,987 1,987 100,000
4 1,000 4,526 1,980 1,980 100,000 2,343 2,343 100,000 2,755 2,755 100,000
5 1,000 5,802 2,411 2,411 100,000 2,947 2,947 100,000 3,581 3,581 100,000
6 1,000 7,142 2,813 2,813 100,000 3,555 3,555 100,000 4,468 4,468 100,000
7 1,000 8,549 3,182 3,182 100,000 4,162 4,162 100,000 5,420 5,420 100,000
8 1,000 10,027 3,579 3,579 100,000 4,833 4,833 100,000 6,510 6,510 100,000
9 1,000 11,578 3,941 3,941 100,000 5,503 5,503 100,000 7,684 7,684 100,000
10 1,000 13,207 4,266 4,266 100,000 6,173 6,173 100,000 8,949 8,949 100,000
11 1,000 14,917 4,553 4,553 100,000 6,838 6,838 100,000 10,312 10,312 100,000
12 1,000 16,713 4,801 4,801 100,000 7,498 7,498 100,000 11,784 11,784 100,000
13 1,000 18,599 5,007 5,007 100,000 8,151 8,151 100,000 13,374 13,374 100,000
14 1,000 20,579 5,172 5,172 100,000 8,795 8,795 100,000 15,094 15,094 100,000
15 1,000 22,657 5,290 5,290 100,000 9,425 9,425 100,000 16,957 16,957 100,000
16 1,000 24,840 5,360 5,360 100,000 10,039 10,039 100,000 18,975 18,975 100,000
17 1,000 27,132 5,374 5,374 100,000 10,628 10,628 100,000 21,160 21,160 100,000
18 1,000 29,539 5,326 5,326 100,000 11,185 11,185 100,000 23,527 23,527 100,000
19 1,000 32,066 5,208 5,208 100,000 11,701 11,701 100,000 26,093 26,093 100,000
20 1,000 34,719 5,011 5,011 100,000 12,167 12,167 100,000 28,875 28,875 100,000
@ 65 1,000 69,761 -- -- -- 11,746 11,746 100,000 75,203 75,203 128,877
</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%.
56
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING CURRENT CHARGES
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 1,050 767 767 100,000 816 816 100,000 866 866 100,000
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 37,041 37,041 104,563
18 1,000 29,539 12,135 12,135 100,000 22,025 22,025 100,000 41,866 41,866 114,715
19 1,000 32,066 12,682 12,682 100,000 23,841 23,841 100,000 47,183 47,183 125,519
20 1,000 34,719 13,206 13,206 100,000 25,731 25,731 100,000 53,040 53,040 137,032
@ 65 1,000 69,761 16,912 16,912 100,000 49,592 49,592 100,000 156,229 156,229 303,794
</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%.
57
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING GUARANTEED CHARGES
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 1,050 575 575 100,000 618 618 100,000 661 661 100,000
2 1,000 2,153 1,129 1,129 100,000 1,251 1,251 100,000 1,377 1,377 100,000
3 1,000 3,310 1,661 1,661 100,000 1,897 1,897 100,000 2,154 2,154 100,000
4 1,000 4,526 2,170 2,170 100,000 2,556 2,556 100,000 2,994 2,994 100,000
5 1,000 5,802 2,653 2,653 100,000 3,226 3,226 100,000 3,902 3,902 100,000
6 1,000 7,142 3,108 3,108 100,000 3,905 3,905 100,000 4,883 4,883 100,000
7 1,000 8,549 3,535 3,535 100,000 4,591 4,591 100,000 5,942 5,942 100,000
8 1,000 10,027 3,992 3,992 100,000 5,348 5,348 100,000 7,155 7,155 100,000
9 1,000 11,578 4,421 4,421 100,000 6,116 6,116 100,000 8,471 8,471 100,000
10 1,000 13,207 4,822 4,822 100,000 6,896 6,896 100,000 9,902 9,902 100,000
11 1,000 14,917 5,193 5,193 100,000 7,688 7,688 100,000 11,458 11,458 100,000
12 1,000 16,713 5,537 5,537 100,000 8,492 8,492 100,000 13,154 13,154 100,000
13 1,000 18,599 5,852 5,852 100,000 9,309 9,309 100,000 15,004 15,004 100,000
14 1,000 20,579 6,136 6,136 100,000 10,136 10,136 100,000 17,023 17,023 100,000
15 1,000 22,657 6,389 6,389 100,000 10,974 10,974 100,000 19,227 19,227 100,000
16 1,000 24,840 6,607 6,607 100,000 11,820 11,820 100,000 21,636 21,636 100,000
17 1,000 27,132 6,790 6,790 100,000 12,673 12,673 100,000 24,271 24,271 100,000
18 1,000 29,539 6,935 6,935 100,000 13,531 13,531 100,000 27,154 27,154 100,000
19 1,000 32,066 7,036 7,036 100,000 14,389 14,389 100,000 30,309 30,309 100,000
20 1,000 34,719 7,094 7,094 100,000 15,248 15,248 100,000 33,770 33,770 100,000
@ 65 1,000 69,761 4,952 4,952 100,000 23,676 23,676 100,000 91,373 91,373 177,679
</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%.
58
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING CURRENT CHARGES
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 1,050 738 738 100,739 787 787 100,788 836 836 100,836
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 12,990 12,990 112,990 41,902 41,902 141,902 144,518 144,518 247,661
</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%.
59
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING GUARANTEED CHARGES
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 1,050 528 528 100,529 570 570 100,570 611 611 100,611
2 1,000 2,153 1,034 1,034 101,034 1,149 1,149 101,149 1,269 1,269 101,270
3 1,000 3,310 1,514 1,514 101,514 1,735 1,735 101,736 1,977 1,977 101,977
4 1,000 4,526 1,967 1,967 101,967 2,327 2,327 102,328 2,736 2,736 102,736
5 1,000 5,802 2,391 2,391 102,391 2,922 2,922 102,922 3,549 3,549 103,549
6 1,000 7,142 2,784 2,784 102,784 3,517 3,517 103,517 4,419 4,419 104,419
7 1,000 8,549 3,142 3,142 103,143 4,108 4,108 104,109 5,347 5,347 105,348
8 1,000 10,027 3,527 3,527 103,527 4,759 4,759 104,759 6,407 6,407 106,407
9 1,000 11,578 3,873 3,873 103,873 5,404 5,404 105,404 7,539 7,539 107,539
10 1,000 13,207 4,181 4,181 104,181 6,042 6,042 106,043 8,751 8,751 108,751
11 1,000 14,917 4,447 4,447 104,448 6,670 6,670 106,670 10,046 10,046 110,046
12 1,000 16,713 4,672 4,672 104,673 7,285 7,285 107,286 11,432 11,432 111,432
13 1,000 18,599 4,853 4,853 104,854 7,885 7,885 107,885 12,914 12,914 112,915
14 1,000 20,579 4,989 4,989 104,990 8,465 8,465 108,466 14,501 14,501 114,501
15 1,000 22,657 5,076 5,076 105,077 9,022 9,022 109,022 16,196 16,196 116,197
16 1,000 24,840 5,112 5,112 105,112 9,549 9,549 109,550 18,009 18,009 118,009
17 1,000 27,132 5,088 5,088 105,089 10,038 10,038 110,039 19,940 19,940 119,941
18 1,000 29,539 5,000 5,000 105,001 10,480 10,480 110,480 21,995 21,995 121,996
19 1,000 32,066 4,839 4,839 104,840 10,862 10,862 110,862 24,177 24,177 124,178
20 1,000 34,719 4,597 4,597 104,598 11,173 11,173 111,173 26,488 26,488 126,488
@ 65 1,000 69,761 -- -- -- 7,719 7,719 107,720 57,991 57,991 157,991
</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%.
60
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING CURRENT CHARGES
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 1,050 766 766 100,767 816 816 100,816 865 865 100,866
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 16,113 16,113 116,113 46,962 46,962 146,963 153,525 153,525 298,535
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
35.
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%.
61
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING GUARANTEED CHARGES
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 1,050 574 574 100,574 617 617 100,617 659 659 100,617
2 1,000 2,153 1,126 1,126 101,126 1,247 1,247 101,247 1,373 1,373 101,247
3 1,000 3,310 1,655 1,655 101,655 1,890 1,890 101,890 2,145 2,145 101,890
4 1,000 4,526 2,159 2,159 102,159 2,543 2,543 102,543 2,978 2,978 102,543
5 1,000 5,802 2,635 2,635 102,636 3,204 3,204 103,205 3,875 3,875 103,205
6 1,000 7,142 3,083 3,083 103,084 3,872 3,872 103,873 4,841 4,841 103,873
7 1,000 8,549 3,501 3,501 103,501 4,545 4,545 104,545 5,880 5,880 104,545
8 1,000 10,027 3,946 3,946 103,947 5,283 5,283 105,284 7,065 7,065 105,284
9 1,000 11,578 4,362 4,362 104,363 6,030 6,030 106,030 8,346 8,346 106,030
10 1,000 13,207 4,747 4,747 104,747 6,782 6,782 106,783 9,730 9,730 106,783
11 1,000 14,917 5,101 5,101 105,101 7,541 7,541 107,542 11,228 11,228 107,542
12 1,000 16,713 5,424 5,424 105,425 8,307 8,307 108,307 12,850 12,850 108,307
13 1,000 18,599 5,717 5,717 105,717 9,077 9,077 109,078 14,608 14,608 109,078
14 1,000 20,579 5,976 5,976 105,977 9,851 9,851 109,851 16,513 16,513 109,851
15 1,000 22,657 6,201 6,201 106,202 10,625 10,625 110,625 18,576 18,576 110,625
16 1,000 24,840 6,389 6,389 106,389 11,397 11,397 111,397 20,811 20,811 111,397
17 1,000 27,132 6,539 6,539 106,539 12,164 12,164 112,164 23,233 23,233 112,164
18 1,000 29,539 6,647 6,647 106,647 12,922 12,922 112,923 25,856 25,856 112,923
19 1,000 32,066 6,708 6,708 106,709 13,666 13,666 113,666 28,694 28,694 113,666
20 1,000 34,719 6,723 6,723 106,724 14,392 14,392 114,393 31,768 31,768 114,393
@ 65 1,000 69,761 4,048 4,048 104,048 20,079 20,079 120,079 81,475 81,475 181,476
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
35.
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%.
62
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING CURRENT CHARGES
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 1,050 738 738 101,000 787 787 101,000 836 836 101,000
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 3,876 3,876 104,000
5 1,000 5,802 3,536 3,536 105,000 4,254 4,254 105,000 5,096 5,096 105,000
6 1,000 7,142 4,193 4,193 106,000 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 7,905 7,905 107,000
8 1,000 10,027 5,513 5,513 108,000 7,270 7,270 108,000 9,594 9,594 108,000
9 1,000 11,578 6,172 6,172 109,000 8,389 8,389 109,000 11,446 11,446 109,000
10 1,000 13,207 6,803 6,803 110,000 9,542 9,542 110,000 13,476 13,476 110,000
11 1,000 14,917 7,463 7,463 111,000 10,795 10,795 111,000 15,779 15,779 111,000
12 1,000 16,713 8,097 8,097 112,000 12,090 12,090 112,000 18,314 18,314 112,000
13 1,000 18,599 8,703 8,703 113,000 13,427 13,427 113,000 21,105 21,105 113,000
14 1,000 20,579 9,279 9,279 114,000 14,807 14,807 114,000 24,179 24,179 114,000
15 1,000 22,657 9,823 9,823 115,000 16,230 16,230 115,000 27,566 27,566 115,000
16 1,000 24,840 10,335 10,335 116,000 17,698 17,698 116,000 31,301 31,301 116,000
17 1,000 27,132 10,813 10,813 117,000 19,211 19,211 117,000 35,421 35,421 117,000
18 1,000 29,539 11,252 11,252 118,000 20,769 20,769 118,000 39,969 39,969 118,000
19 1,000 32,066 11,652 11,652 119,000 22,371 22,371 119,000 44,990 44,990 119,000
20 1,000 34,719 12,008 12,008 120,000 24,018 24,018 120,000 50,540 50,540 120,000
@ 65 1,000 69,761 12,045 12,045 130,000 42,618 42,618 130,000 148,021 148,021 253,665
</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%.
63
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING GUARANTEED CHARGES
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 1,050 528 528 101,000 569 569 101,000 610 610 101,000
2 1,000 2,153 1,031 1,031 102,000 1,147 1,147 102,000 1,267 1,267 102,000
3 1,000 3,310 1,508 1,508 103,000 1,730 1,730 103,000 1,972 1,972 103,000
4 1,000 4,526 1,957 1,957 104,000 2,318 2,318 104,000 2,727 2,727 104,000
5 1,000 5,802 2,374 2,374 105,000 2,906 2,906 105,000 3,535 3,535 105,000
6 1,000 7,142 2,759 2,759 106,000 3,494 3,494 106,000 4,399 4,399 106,000
7 1,000 8,549 3,106 3,106 107,000 4,075 4,075 107,000 5,320 5,320 107,000
8 1,000 10,027 3,476 3,476 108,000 4,712 4,712 108,000 6,370 6,370 108,000
9 1,000 11,578 3,805 3,805 109,000 5,342 5,342 109,000 7,492 7,492 109,000
10 1,000 13,207 4,091 4,091 110,000 5,961 5,961 110,000 8,692 8,692 110,000
11 1,000 14,917 4,331 4,331 111,000 6,566 6,566 111,000 9,976 9,976 111,000
12 1,000 16,713 4,523 4,523 112,000 7,153 7,153 112,000 11,350 11,350 112,000
13 1,000 18,599 4,665 4,665 113,000 7,720 7,720 113,000 12,821 12,821 113,000
14 1,000 20,579 4,755 4,755 114,000 8,261 8,261 114,000 14,398 14,398 114,000
15 1,000 22,657 4,786 4,786 115,000 8,771 8,771 115,000 16,088 16,088 115,000
16 1,000 24,840 4,756 4,756 116,000 9,244 9,244 116,000 17,899 17,899 116,000
17 1,000 27,132 4,654 4,654 117,000 9,667 9,667 117,000 19,837 19,837 117,000
18 1,000 29,539 4,472 4,472 118,000 10,031 10,031 118,000 21,910 21,910 118,000
19 1,000 32,066 4,199 4,199 119,000 10,321 10,321 119,000 24,123 24,123 119,000
20 1,000 34,719 3,822 3,822 120,000 10,521 10,521 120,000 26,485 26,485 120,000
@ 65 1,000 69,761 -- -- -- 3,532 3,532 130,000 62,189 62,189 130,000
</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%.
64
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING CURRENT CHARGES
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 1,050 766 766 101,000 816 816 101,000 865 865 101,000
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 2,961 2,961 104,000 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 5,259 5,259 105,000
6 1,000 7,142 4,330 4,330 106,000 5,369 5,369 106,000 6,636 6,636 106,000
7 1,000 8,549 4,982 4,982 107,000 6,375 6,375 107,000 8,145 8,145 107,000
8 1,000 10,027 5,681 5,681 108,000 7,488 7,488 108,000 9,878 9,878 108,000
9 1,000 11,578 6,358 6,358 109,000 8,638 8,638 109,000 11,780 11,780 109,000
10 1,000 13,207 7,011 7,011 110,000 9,828 9,828 110,000 13,870 13,870 110,000
11 1,000 14,917 7,694 7,694 111,000 11,119 11,119 111,000 16,241 16,241 111,000
12 1,000 16,713 8,357 8,357 112,000 12,462 12,462 112,000 18,857 18,857 112,000
13 1,000 18,599 9,001 9,001 113,000 13,857 13,857 113,000 21,746 21,746 113,000
14 1,000 20,579 9,625 9,625 114,000 15,309 15,309 114,000 24,937 24,937 114,000
15 1,000 22,657 10,228 10,228 115,000 16,818 16,818 115,000 28,463 28,463 115,000
16 1,000 24,840 10,810 10,810 116,000 18,386 18,386 116,000 32,360 32,360 116,000
17 1,000 27,132 11,368 11,368 117,000 20,015 20,015 117,000 36,669 36,669 117,000
18 1,000 29,539 11,903 11,903 118,000 21,708 21,708 118,000 41,433 41,433 118,000
19 1,000 32,066 12,410 12,410 119,000 23,464 23,464 119,000 46,700 46,700 124,236
20 1,000 34,719 12,890 12,890 120,000 25,286 25,286 120,000 52,509 52,509 135,658
@ 65 1,000 69,761 15,614 15,614 130,000 47,565 47,565 130,000 154,826 154,826 301,066
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
32.
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%.
65
<PAGE>
<TABLE>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX CORPORATE EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING GUARANTEED CHARGES
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 1,050 573 573 101,000 616 616 101,000 659 659 101,000
2 1,000 2,153 1,124 1,124 102,000 1,245 1,245 102,000 1,372 1,372 102,000
3 1,000 3,310 1,651 1,651 103,000 1,886 1,886 103,000 2,142 2,142 103,000
4 1,000 4,526 2,152 2,152 104,000 2,536 2,536 104,000 2,972 2,972 104,000
5 1,000 5,802 2,624 2,624 105,000 3,194 3,194 105,000 3,866 3,866 105,000
6 1,000 7,142 3,065 3,065 106,000 3,856 3,856 106,000 4,828 4,828 106,000
7 1,000 8,549 3,474 3,474 107,000 4,522 4,522 107,000 5,863 5,863 107,000
8 1,000 10,027 3,910 3,910 108,000 5,252 5,252 108,000 7,043 7,043 108,000
9 1,000 11,578 4,313 4,313 109,000 5,987 5,987 109,000 8,318 8,318 109,000
10 1,000 13,207 4,682 4,682 110,000 6,728 6,728 110,000 9,698 9,698 110,000
11 1,000 14,917 5,017 5,017 111,000 7,472 7,472 111,000 11,191 11,191 111,000
12 1,000 16,713 5,318 5,318 112,000 8,220 8,220 112,000 12,811 12,811 112,000
13 1,000 18,599 5,584 5,584 113,000 8,971 8,971 113,000 14,570 14,570 113,000
14 1,000 20,579 5,813 5,813 114,000 9,721 9,721 114,000 16,480 16,480 114,000
15 1,000 22,657 6,001 6,001 115,000 10,469 10,469 115,000 18,554 18,554 115,000
16 1,000 24,840 6,146 6,146 116,000 11,211 11,211 116,000 20,808 20,808 116,000
17 1,000 27,132 6,246 6,246 117,000 11,943 11,943 117,000 23,260 23,260 117,000
18 1,000 29,539 6,296 6,296 118,000 12,662 12,662 118,000 25,927 25,927 118,000
19 1,000 32,066 6,290 6,290 119,000 13,360 13,360 119,000 28,828 28,828 119,000
20 1,000 34,719 6,226 6,226 120,000 14,035 14,035 120,000 31,990 31,990 120,000
@ 65 1,000 69,761 1,753 1,753 130,000 18,579 18,579 130,000 85,541 85,541 166,337
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
32.
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%.
66
<PAGE>
[VERSION C]
PHOENIX EXECUTIVE
BENEFIT VUL
EVELOPED FOR CLARK BARDES
VARIABLE UNIVERSAL LIFE
INSURANCE POLICY
Issued by
PHOENIX LIFE AND
ANNUITY COMPANY
FOR POLICYHOLDER SERVICE, PLEASE CONTACT US AT:
[envelope] ANDESA TPA, INC.
1605 N CEDAR CREST BLVD, SUITE 502
ALLENTOWN, PA 18104
[telephone] 610/439-5256
PROSPECTUS 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 Rebalancing....................................... 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...................................................... 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.................................................. 21
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............................................ 22
Option 2--Left to earn interest............................... 22
Option 3--Payment for a specific period....................... 22
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................................................. 23
Policy Benefits................................................... 23
Death Benefit Proceeds........................................ 23
Full Surrender................................................ 23
Partial Surrender............................................. 23
Loans......................................................... 23
Business-Owned Policies........................................... 23
Modified Endowment Contracts...................................... 24
General....................................................... 24
Reduction in Benefits During the First 7 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......................................... 25
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 .............................................................. 27
LEGAL PROCEEDINGS .................................................... 27
LEGAL MATTERS ........................................................ 27
REGISTRATION STATEMENT ............................................... 27
YEAR 2000 ISSUE....................................................... 27
FINANCIAL STATEMENTS ................................................. 27
APPENDIX A GLOSSARY OF SPECIAL TERMS.................................. 49
APPENDIX B PERFORMANCE HISTORY........................................ 50
APPENDIX C ILLUSTRATIONS.............................................. 54
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 DAY 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 his or her 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
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 3 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 in the following 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: 5.0% of premiums Policy years 1 - 7: 5.0% of premiums.
PREMIUMS up to the target premium and 0% on Policy year 8+: 2.0% of all premiums.
amounts in excess of the target
premium.
Policy year 8+: 0% of all premiums.
------------------------- --------------------------------------- ---------------------------------------
STATE PREMIUM TAX 0.75% to 4.0% of each premium up to This charge will always equal the
the target premium depending on your applicable state rate.
state's applicable rate.
------------------------- --------------------------------------- ---------------------------------------
DEFERRED ACQUISITION 1.5% of each premium up to the target This charge will always equal the
COST TAX CHARGE 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 issue insurance is shown on your policy's
age, policy duration, gender and schedule pages.
underwriting class.
- ----------------------- ------------------------- --------------------------------------- ------------------------------------
MORTALITY AND EXPENSE 0.40% annually in policy years 1-10 0.90% annually in all policy years
RISK FEE 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,
FEE 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 16th 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 16th
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 of the sales
charge to you as part of the cash surrender value if you surrender your policy
within the first 3 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 the following charges from your
policy value:
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 select 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 of
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 day. 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 taxes 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:
Phoenix Research Enhanced Index .82%
Phoenix-Aberdeen International .98%
Phoenix-Aberdeen New Asia 2.50%
Phoenix-Duff & Phelps Real Estate Securities 1.01%
Phoenix-Engemann Nifty Fifty 2.58%
Phoenix-Goodwin Balanced .68%
Phoenix-Goodwin Growth .69%
Phoenix-Goodwin Money Market .55%
Phoenix-Goodwin Multi-Sector Fixed Income .64%
Phoenix-Goodwin Strategic Allocation .68%
Phoenix-Goodwin Strategic Theme .99%
Phoenix-Hollister Value Equity 2.46%
Phoenix-Oakhurst Growth and Income 1.46%
Phoenix-Schafer Mid-Cap Value 2.77%
Phoenix-Seneca Mid-Cap Growth 2.81%
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:
[bullet] the number of insureds,
[bullet] the total premium expected to be paid,
[bullet] the total assets under management for the policyowner,
[bullet] the nature of the relationship among individual insureds,
[bullet] the purpose for which the policies are being purchased,
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,
PLAC 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
- --------------------------------------------------------------------------------
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 high total return. The Phoenix Research Enhanced Index Series invests
in a broadly diversified portfolio of equity securities of large and medium
capitalization companies within market sectors reflected in the S&P 500. It
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 a high total return consistent with reasonable risk. The
Phoenix-Aberdeen International 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 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
long-term capital appreciation. The Phoenix-Aberdeen New Asia 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 capital appreciation and income with approximately
equal emphasis. Under normal circumstances, the Phoenix-Duff & Phelps Real
Estate Securities Series 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 long-term capital appreciation. The Phoenix-Engemann Nifty Fifty Series
invests in approximately 50 different securities which offer the best potential
for long-term growth of capital. At least 75% of the Series' assets are invested
in common stocks of high quality growth companies. The remaining portion is
invested in common stocks of small corporations with rapidly growing earnings
per share or common stocks believed to be undervalued.
11
<PAGE>
PHOENIX-GOODWIN BALANCED SERIES: The investment objective of the Series is
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
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 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 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 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 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 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 long-term capital appreciation, with current income as the
secondary investment objective. The Phoenix-Schafer Mid-Cap Value Series invests
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 capital appreciation primarily through investments in equity securities of
companies that have the potential for above average market appreciation. The
Phoenix-Seneca Mid-Cap Growth 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
stock market 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 current income. The Federated Fund for U.S. Government
Securities II invests 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 high current income. The Federated High Income Bond Fund II invests 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.
12
<PAGE>
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 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, including emerging market countries.
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.
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 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
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 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 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. 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 may be
sold to other separate accounts of Phoenix or its affiliates. Shares of certain
Funds may also be sold to the separate accounts of other insurance companies.
It is possible that in the future there may be no advantage for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither PLAC nor the Funds'
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 remedy such material conflicts at our expense, 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").
13
<PAGE>
The investment advisor to the Phoenix-Aberdeen New Asia Series is
Phoenix-Aberdeen International Advisors 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 no longer be 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 from 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 any excess interest as determined by us
based on expected investment yield information.
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
regarding accuracy and completeness of statements made in this prospectus.
We reserve the right to limit total deposits to the Guaranteed Interest
Account, including transfers, to no more than $250,000 during any one-week
period per policy.
14
<PAGE>
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 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 to one or more of the Subaccounts over a
consecutive 4-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 may
be made at any time. Transfers from the Guaranteed Interest Account are subject
to the rules discussed above and in "Transfer of Policy Value" and "Systematic
Transfer for Dollar Cost Averaging."
PREMIUMS
- --------------------------------------------------------------------------------
MINIMUM PREMIUMS
The minimum premium is determined by case size as follows:
[bullet] 5 or more lives: $100,000 annually for the first 5 policy years
[bullet] Fewer than 5 lives: $250,000 annually for the first 5 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 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 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 will
then 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 say 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. At the
expiration of the Free Look Period, the policy value of the Money Market
Subaccount is allocated among the Subaccounts 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.
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 7 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
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issue the policy. If we decline to issue the policy, we will refund the same
amount to you as would have been 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 there currently is no charge for transfers, in the future we may
charge a fee of $10 for each transfer after the first 2 transfers in a policy
year (12 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 to one or more of the Subaccounts over a
consecutive 4-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 deteriorate 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:
[bullet] $25 monthly,
[bullet] $75 quarterly,
[bullet] $150 semiannually, or
[bullet] $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").
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 this 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 REBALANCING
Automated asset rebalancing 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 rebalancing program ("asset rebalancing"). Then, we
will make transfers at least quarterly to and from the Subaccounts and the
Guaranteed Interest Account to readjust your account value to your specified
percentage. Asset rebalancing allows you to maintain a specific fund allocation.
Quarterly rebalancing
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is based on your policy year. We will rebalance your account value only on a
monthly calculation day.
The effective date of the first asset rebalancing will be the first monthly
calculation day after we receive your request at Andesa TPA, Inc. If we receive
your request before the end of the Free Look Period, your first rebalancing will
occur at the end of the Free Look Period.
You may not participate in both the Dollar Cost Averaging Program and the
asset rebalancing at the same time.
DETERMINATION OF SUBACCOUNT VALUES
We establish the unit value of each Subaccount 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 6 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 any capital gain distribution, if
applicable) 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 amount is determined using
1 of 2 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 select a face amount of insurance coverage and the
death benefit option. We offer 3 death benefit options:
[diamond] Option 1 -- The death benefit is the greater of:
(a) the policy's face amount on the date of death or
(b) 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.
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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:
[bullet] add back in any charges taken against the account value for the
period beyond the date of death;
[bullet] deduct any policy debt outstanding on the date of death; and
[bullet] 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.
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 "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 3 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] Full surrender in policy year 2: 66.67%
[diamond] Full 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. See "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. See "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
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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 will generally pay the amount surrendered
within 7 days after we receive the written request for the surrender. Under
certain circumstances, the surrender payment may be postponed. See "Additional
Policy 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 65th birthday is
2.25%. The rates in effect before the Insured reaches age 65 are:
[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 65th birthday is 4.25%. The rates
in effect before the Insured reaches age 65 are:
[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 nonloaned
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 equal to
the loan is held in the Guaranteed Interest Account. The Subaccount's investment
performance does not affect 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
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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 3 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 3 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 3 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 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. Future charges against the
policy will be based on the life of the substitute Insured. There is
no charge for this rider.
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 6 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
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[diamond] whenever an emergency exists, per the SEC, as a result of which
[bullet] disposal of securities is not reasonably practicable or
[bullet] it is not reasonably practicable to determine the value of
the VUL Account's net assets.
Transfers may also 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 2 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 2 years from the policy date.
CHANGE OF OWNER OR BENEFICIARY
The beneficiary, as named in the policy application or as 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 nonparticipating 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 7 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.
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OPTION 1--LUMP SUM.
Payment is paid in one lump sum.
OPTION 2--LEFT TO EARN INTEREST.
A payment of interest is paid 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] 10 years;
[diamond] 20 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
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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. This discussion 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 this discussion 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 ("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.
22
<PAGE>
PLAC'S TAX STATUS
We are taxed as a life insurance company under the Internal Revenue Code of
1986, as amended ("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 is made 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
"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 tax consequences. 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.
23
<PAGE>
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 7 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 7 YEARS
If there is a reduction in death benefits during the first 7 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 7
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 2 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 7 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 7 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 7 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
24
<PAGE>
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),
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 Treasury
securities. 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.
25
<PAGE>
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 and President
and President
Richard H. Booth, Executive Vice President
Director and Executive
Vice President
Philip R. McLoughlin, Executive Vice President and
Director, Executive Chief Investment Officer
Vice President and CIO
David W. Searfoss, Executive Vice President and
Director, 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
Vice President
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. They 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.
26
<PAGE>
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 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 2 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
throughout 1999. Additionally Phoenix has obtained Year 2000 assurances from
business partners.
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 Phoenix Life and Annuity Company are
available for the periods ended June 30, 1999 and December 31, 1998.
27
<PAGE>
PHOENIX LIFE AND
ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF
PM HOLDINGS, INC.)
CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1999
28
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
Balance Sheets at June 30, 1999 and December 31, 1998 (unaudited) ............30
Statement of Income, Comprehensive Income and Equity for the Six
Months Ended June 30, 1999 and 1998 (unaudited)..............................31
Statement of Cash Flows for the Six Months Ended June 30, 1999
and 1998 (unaudited).........................................................32
Notes to Condensed Financial Statements (unaudited)...........................33
29
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
BALANCE SHEET(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Available-for-sale debt securities, at fair value $ 9,163 $ 9,781
Short-term investments 1,975 1,754
-------- --------
Total investments 11,138 11,535
Cash and cash equivalents 64 99
Accrued investment income 185 169
Due and uncollected premium 331
Receivable from parent Phoenix Home Life 1,060
Deferred income tax asset 84
Goodwill 653 701
Other assets 5 13
-------- --------
Total assets $ 13,520 $ 12,517
======== ========
LIABILITIES
Reserves for future policy benefits $ 1,071
Income taxes payable 117
Deferred income tax liability $ 151
Other liabilities 2
-------- --------
Total liabilities 1,188 153
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 1,238 867
Accumulated other comprehensive (loss) income (70) 333
-------- --------
Total equity 12,332 12,364
-------- --------
Total liabilities and equity $ 13,520 $ 12,517
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
30
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
STATEMENT OF INCOME, COMPREHENSIVE INCOME AND EQUITY (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1999 1998
(IN THOUSANDS)
REVENUES
<S> <C> <C>
Premiums $ 636
Consideration received on reinsurance assumed 915
Net investment income 344 $ 339
-------- --------
Total revenues 1,895 339
-------- --------
BENEFITS, LOSSES AND EXPENSES
Policy benefits and payments 1,138
Commissions and reinsurance allowances 93
Amortization of goodwill 48 48
Other operating expenses 46
-------- --------
Total expenses 1,325 48
-------- --------
INCOME BEFORE INCOME TAXES 570 291
Income taxes 199 102
-------- --------
NET INCOME 371 189
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX
Unrealized (losses) gains on securities arising during period (403) 85
-------- --------
Total other comprehensive (loss) income (403) 85
-------- --------
COMPREHENSIVE (LOSS) INCOME (32) 274
EQUITY, BEGINNING OF PERIOD 2,364 11,809
-------- --------
EQUITY, END OF PERIOD $ 12,332 $ 12,083
======== ========
</TABLE>
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 CASH FLOWS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1999 1998
(IN THOUSANDS)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 371 $ 189
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY OPERATIONS
Goodwill amortization 48 48
Deferred income taxes (19) (4)
Increase in accrued investment income (16) (39)
Increase in due and uncollected premium (331)
Increase in receivable from parent (1,060)
Increase in policy liabilities and accruals 1,071
Other, net 122 3
------- -------
Net cash provided by operating activities $ 186 $ 197
------- -------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of available-for-sale debt securities (2,098)
Change in short-term investments, net (221) 1,874
------- -------
Net cash used for investing activities (221) (224)
------- -------
CASH FLOW FROM FINANCING ACTIVITIES
Capital contribution from parent ------- -------
Net cash provided by financing activities ------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (35) (27)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 99 48
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 64 $ 21
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 89 $ 106
------- -------
</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.)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
BASIS OF PRESENTATION
The condensed unaudited financial statements include the accounts of Phoenix
Life and Annuity Company (PLAC). These condensed unaudited financial statements
have been prepared in accordance with generally accepted accounting principles
(GAAP). The information furnished includes all adjustments and accruals
consisting only of normal, recurring accrual adjustments which are, in the
opinion of management, necessary for a fair presentation of results for the
interim periods.
The results of operations for any interim period are not necessarily indicative
of results for the full year. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with GAAP have
been condensed or omitted. Certain reclassifications have been made to prior
year amounts to conform with the current year presentation. The June 30, 1999
Condensed Financial Statements (Unaudited) should be read in conjunction with
the accompanying December 31, 1998 Financial Statements.
REINSURANCE
Effective January 1, 1999 PLAC entered into an Indemnity Reinsurance Agreement
with its indirect parent Phoenix Home Life Insurance Company (Phoenix). Under
the Agreement, PLAC assumed from Phoenix 100 percent of its net retained risk
for a block of yearly renewable rate term policies and incurred an initial
reinsurance allowance of $50 thousand that was recorded as an expense in 1999.
These policies constitute a closed block in a run-off stage and, as of June 30,
1999, reserves for future policy benefits totaled $1.1 million.
SUBSEQUENT EVENTS
In July, 1999, PLAC introduced a survivorship universal life policy and recorded
initial sales of this product during the third quarter of 1999.
33
<PAGE>
PHOENIX LIFE AND
ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
FINANCIAL STATEMENTS DECEMBER 31, 1998
34
<PAGE>
PHOENIX LIFE AND ANNUITY COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF PM HOLDINGS, INC.)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
Report of Independent Accountants............................................36
Balance Sheet................................................................37
Statement of Income, Comprehensive Income and Equity.........................38
Statement of Cash Flows......................................................39
Notes to Financial Statements.............................................40-47
35
<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
36
<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.
37
<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.
38
<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.
39
<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.
40
<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>
41
<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>
42
<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>
43
<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>
44
<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.
45
<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>
46
<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.
47
<PAGE>
PHOENIX LIFE AND ANNUITY
VARIABLE UNIVERSAL LIFE ACCOUNT
There have been no deposits made to Phoenix Life and Annuity Variable Universal
Life Account as of the date of this prospectus; therefore, no financial
statements are available for the VUL Account.
48
<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): Phoenix Life and Annuity Variable Universal Life
Account, a separate account of the company.
49
<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.
50
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED DECEMBER 31, 1998(1,2)
===================================================================================================================================
SERIES INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Phoenix Research Enhanced Index Series..................... 7/14/97 30.31% N/A N/A 24.15%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series...................... 5/1/90 26.68% 12.26% N/A 10.05%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series........................... 9/17/96 -5.45% N/A N/A -18.34%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series........ 5/1/95 -22.19% N/A N/A 10.90%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series........................ 3/2/98 N/A N/A N/A 25.25%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Balanced Series............................ 5/1/92 17.70% 12.19% N/A 11.69%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series.............................. 12/31/82 27.93% 17.59% 19.36% 18.70%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series........................ 10/8/82 4.06% 3.98% 4.54% 5.58%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series........... 12/31/82 -5.57% 5.88% 8.39% 9.39%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation Series................ 9/17/84 19.19% 12.07% 13.23% 13.10%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series..................... 1/29/96 43.12% N/A N/A 22.73%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Hollister Value Equity Series...................... 3/2/98 N/A N/A N/A 9.73%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series.................. 3/2/98 N/A N/A N/A 19.35%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Schafer Mid-Cap Value Series....................... 3/2/98 N/A N/A N/A -12.31%
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series....................... 3/2/98 N/A N/A N/A 20.61%
- -----------------------------------------------------------------------------------------------------------------------------------
EAFE[registered trademark] Equity Index
Fund....................................................... 8/22/97 20.47% N/A N/A 8.71%
- -----------------------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government Securities II........... 3/28/94 6.61% N/A N/A 5.66%
- -----------------------------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II......................... 3/1/94 1.69% N/A N/A 8.51%
- -----------------------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund -- Class 2(3)............... 11/2/98 N/A N/A N/A 2.41%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund -- Class 2(3).............. 11/28/88 5.07% 10.42% 11.02% 11.10%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund -- Class 2(3)............ 9/27/96 -21.95% N/A N/A -23.30%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(3)................. 5/11/92 8.04% 10.29% N/A 12.69%
- -----------------------------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(3)......................... 11/3/88 -0.01% 9.94% 11.09% 10.95%
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger Foreign Forty....................................... 2/1/99 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap............................. 5/1/95 14.90% N/A N/A 20.39%
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger Twenty.............................................. 2/1/99 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap...................................... 5/1/95 7.30% N/A N/A 25.81%
===================================================================================================================================
</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 $5 monthly administrative fee, investment management fees
and the mortality and expense risk charges.
(2) Performance data quoted represents the investment return of the appropriate
Series adjusted for the Phoenix Executive Benefit VUL charges had the
Subaccount started on the inception date of the appropriate Series.
(3) Standardized performance for Class 2 shares reflects a "blend" figure,
combining: (a) for periods prior to Class 2's inception on May 1, 1997
(November 16, 1998), for Mutual Shares Investments Fund), historical
results of Class 1 shares; and (b) for periods after May 1, 1997
(November 16, 1998), Class 2's results reflecting and additional 12b-1
fee expense which also affects all future performance. Maximum annual
plan expenses are 0.25%.
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.
51
<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.
52
<PAGE>
<TABLE>
<CAPTION>
ANNUAL TOTAL RETURN(1,2)
===============================================================================================
SERIES 1983 1984 1985 1986 1987 1988 1989
===============================================================================================
<S> <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
- -----------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series N/A N/A N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series 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
- -----------------------------------------------------------------------------------------------
Phoenix-Engemann Nifty Fifty Series 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
- -----------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series 32.89% 10.67% 34.92% 20.47% 6.93% 3.92% 36.19%
- -----------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series 8.37% 10.23% 8.03% 6.51% 6.51% 7.45% 9.20%
- -----------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed
Income Series 6.00% 11.35% 20.51% 19.29% 1.08% 10.49% 8.24%
- -----------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation
Series N/A N/A 27.34% 15.69% 12.56% 2.34% 19.90%
- -----------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series 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
- -----------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series 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
- -----------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series 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
- -----------------------------------------------------------------------------------------------
Federated Fund for U.S. Government
Securities II 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
- -----------------------------------------------------------------------------------------------
Mutual Shares Investments Fund --
Class 2(3) N/A N/A N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund --
Class 2(3) N/A N/A N/A N/A N/A N/A 13.03%
- -----------------------------------------------------------------------------------------------
Templeton Developing Markets Fund --
Class 2(3) N/A N/A N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------
Templeton International Fund --
Class 2(3) N/A N/A N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(3) N/A N/A N/A N/A N/A N/A 14.39%
- -----------------------------------------------------------------------------------------------
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 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------
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 N/A N/A N/A N/A
===============================================================================================
</TABLE>
<TABLE>
<CAPTION>
ANNUAL TOTAL RETURN(1,2) (continued)
====================================================================================================================
SERIES 1990 1991 1992 1993 1994 1995 1996 1997 1998
====================================================================================================================
<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 31.69%
- --------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series N/A 19.74% -12.83% 38.46% 0.06% 9.59% 18.66% 12.05% 27.94%
- --------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen New Asia Series N/A N/A N/A N/A N/A N/A N/A -32.41% -4.45%
- --------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate
Securities Series N/A N/A N/A N/A N/A N/A 33.13% 22.07% -21.20%
- --------------------------------------------------------------------------------------------------------------------
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 9.63% 8.61% -2.84% 23.35% 10.57% 17.94% 19.02%
- --------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Growth Series 4.05% 42.75% 10.30% 19.71% 1.46% 30.89% 12.59% 21.06% 30.02%
- --------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series 8.22% 5.98% 3.58% 2.88% 3.84% 5.70% 5.03% 5.19% 5.10%
- --------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed
Income Series 5.22% 19.59% 10.08% 15.92% -5.49% 23.54% 12.43% 11.09% -4.15%
- --------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Allocation
Series 5.77% 29.32% 10.66% 11.01% -1.41% 18.20% 9.06% 20.74% 20.80%
- --------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Strategic Theme Series N/A N/A N/A N/A N/A N/A N/A 17.17% 44.72%
- --------------------------------------------------------------------------------------------------------------------
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 21.60%
- --------------------------------------------------------------------------------------------------------------------
Federated Fund for U.S. Government
Securities II N/A N/A N/A N/A N/A 8.77% 4.20% 8.58% 7.66%
- --------------------------------------------------------------------------------------------------------------------
Federated High Income Bond Fund II N/A N/A N/A N/A N/A 20.38% 14.31% 13.83% 2.70%
- --------------------------------------------------------------------------------------------------------------------
Mutual Shares Investments Fund --
Class 2(3) N/A N/A N/A N/A N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------
Templeton Asset Allocation Fund --
Class 2(3) -8.21% 27.44% 7.83% 25.87% -3.23% 22.26% 18.59% 15.27% 6.10%
- --------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund --
Class 2(3) N/A N/A N/A N/A N/A N/A N/A -29.39% -21.04%
- --------------------------------------------------------------------------------------------------------------------
Templeton International Fund -- Class 2(3) N/A N/A N/A 46.47% -2.86% 15.05% 23.30% 13.51% 9.08%
- --------------------------------------------------------------------------------------------------------------------
Templeton Stock Fund -- Class 2(3) -11.28% 27.23% 6.87% 33.74% -2.47% 24.96% 22.15% 11.60% 0.98%
- --------------------------------------------------------------------------------------------------------------------
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 32.04% -1.46% 16.34%
- --------------------------------------------------------------------------------------------------------------------
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 46.63% 29.43% 8.69%
====================================================================================================================
</TABLE>
(1) Performance data quoted represents the investment return of the
appropriate Series adjusted for the Phoenix Executive Benefit VUL charges
had the Subaccount started on the inception date of the appropriate Series.
(2) Rates are net of investment management fees for the Phoenix Executive
Benefit VUL Subaccounts. The actual inception date of Phoenix Executive
Benefit VUL was October 29, 1999.
(3) Standardized performance for Class 2 shares reflects a "blend" figure,
combining: (a) for periods prior to Class 2's inception on May 1, 1997
(November 16, 1998), for Mutual Shares Investments Fund), historical
results of Class 1 shares; and (b) for periods after May 1, 1997 (November
16, 1998), Class 2's results reflecting and additional 12b-1 fee expense
which also affects all future performance. Maximum annual plan expenses
are 0.25%.
THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE.
53
<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. A sales charge of 5.0% of premiums up to the target premium and 0% on
amounts in excess of the target premium in policy years 1-7 and 0% of
all premiums in policy years 8+.
2. 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.).
3. An average premium tax charge of 2.25%.
4. A federal tax charge of 1.5%.
5. 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 under the Policy" table.
6. 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 under the Policy"
table.
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. They 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 "Annual Fund Expenses" table.
Taking into account 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.
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.
54
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING CURRENT CHARGES
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 46,671 46,671 106,606
20 1,000 34,719 12,597 12,597 100,000 25,033 25,033 100,000 52,445 52,445 116,446
@ 65 1,000 69,761 14,271 14,271 100,000 46,470 46,470 100,000 153,047 153,047 262,278
</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%.
55
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING GUARANTEED CHARGES
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 1,050 569 619 100,000 613 663 100,000 657 707 100,000
2 1,000 2,153 1,116 1,149 100,000 1,239 1,272 100,000 1,367 1,400 100,000
3 1,000 3,310 1,638 1,655 100,000 1,875 1,892 100,000 2,134 2,150 100,000
4 1,000 4,526 2,134 2,134 100,000 2,521 2,521 100,000 2,961 2,961 100,000
5 1,000 5,802 2,601 2,601 100,000 3,175 3,175 100,000 3,852 3,852 100,000
6 1,000 7,142 3,040 3,040 100,000 3,834 3,834 100,000 4,811 4,811 100,000
7 1,000 8,549 3,445 3,445 100,000 4,495 4,495 100,000 5,843 5,843 100,000
8 1,000 10,027 3,848 3,848 100,000 5,191 5,191 100,000 6,988 6,988 100,000
9 1,000 11,578 4,215 4,215 100,000 5,888 5,888 100,000 8,222 8,222 100,000
10 1,000 13,207 4,546 4,546 100,000 6,585 6,585 100,000 9,555 9,555 100,000
11 1,000 14,917 4,839 4,839 100,000 7,279 7,279 100,000 10,993 10,993 100,000
12 1,000 16,713 5,092 5,092 100,000 7,970 7,970 100,000 12,547 12,547 100,000
13 1,000 18,599 5,305 5,305 100,000 8,656 8,656 100,000 14,229 14,229 100,000
14 1,000 20,579 5,475 5,475 100,000 9,333 9,333 100,000 16,052 16,052 100,000
15 1,000 22,657 5,600 5,600 100,000 9,999 9,999 100,000 18,027 18,027 100,000
16 1,000 24,840 5,676 5,676 100,000 10,651 10,651 100,000 20,172 20,172 100,000
17 1,000 27,132 5,696 5,696 100,000 11,280 11,280 100,000 22,497 22,497 100,000
18 1,000 29,539 5,654 5,654 100,000 11,879 11,879 100,000 25,021 25,021 100,000
19 1,000 32,066 5,542 5,542 100,000 12,441 12,441 100,000 27,762 27,762 100,000
20 1,000 34,719 5,352 5,352 100,000 12,954 12,954 100,000 30,739 30,739 100,000
@ 65 1,000 69,761 -- -- -- 13,261 13,261 100,000 80,284 80,284 137,584
</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%.
56
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING CURRENT CHARGES
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 37,822 37,822 106,770
18 1,000 29,539 12,287 12,287 100,000 22,396 22,396 100,000 42,728 42,728 117,079
19 1,000 32,066 12,833 12,833 100,000 24,230 24,230 100,000 48,134 48,134 128,050
20 1,000 34,719 13,356 13,356 100,000 26,140 26,140 100,000 54,090 54,090 139,743
@ 65 1,000 69,761 17,049 17,049 100,000 50,268 50,268 100,000 159,003 159,003 309,188
</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%.
57
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
ASSUMING GUARANTEED CHARGES
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 1,050 614 664 100,000 659 709 100,000 705 755 100,000
2 1,000 2,153 1,207 1,241 100,000 1,336 1,369 100,000 1,470 1,503 100,000
3 1,000 3,310 1,777 1,794 100,000 2,028 2,044 100,000 2,300 2,317 100,000
4 1,000 4,526 2,323 2,323 100,000 2,734 2,734 100,000 3,199 3,199 100,000
5 1,000 5,802 2,843 2,843 100,000 3,453 3,453 100,000 4,172 4,172 100,000
6 1,000 7,142 3,334 3,334 100,000 4,183 4,183 100,000 5,225 5,225 100,000
7 1,000 8,549 3,797 3,797 100,000 4,923 4,923 100,000 6,364 6,364 100,000
8 1,000 10,027 4,260 4,260 100,000 5,705 5,705 100,000 7,631 7,631 100,000
9 1,000 11,578 4,694 4,694 100,000 6,499 6,499 100,000 9,008 9,008 100,000
10 1,000 13,207 5,100 5,100 100,000 7,306 7,306 100,000 10,505 10,505 100,000
11 1,000 14,917 5,478 5,478 100,000 8,127 8,127 100,000 12,135 12,135 100,000
12 1,000 16,713 5,827 5,827 100,000 8,961 8,961 100,000 13,913 13,913 100,000
13 1,000 18,599 6,147 6,147 100,000 9,809 9,809 100,000 15,853 15,853 100,000
14 1,000 20,579 6,437 6,437 100,000 10,670 10,670 100,000 17,972 17,972 100,000
15 1,000 22,657 6,695 6,695 100,000 11,542 11,542 100,000 20,287 20,287 100,000
16 1,000 24,840 6,919 6,919 100,000 12,425 12,425 100,000 22,819 22,819 100,000
17 1,000 27,132 7,108 7,108 100,000 13,316 13,316 100,000 25,590 25,590 100,000
18 1,000 29,539 7,258 7,258 100,000 14,215 14,215 100,000 28,624 28,624 100,000
19 1,000 32,066 7,365 7,365 100,000 15,116 15,116 100,000 31,948 31,948 100,000
20 1,000 34,719 7,429 7,429 100,000 16,019 16,019 100,000 35,595 35,595 100,000
@ 65 1,000 69,761 5,352 5,352 100,000 25,073 25,073 100,000 95,884 95,884 186,451
</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%.
58
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING CURRENT CHARGES
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 1,050 759 809 100,759 809 859 100,809 859 909 100,859
2 1,000 2,153 1,504 1,537 101,504 1,651 1,684 101,652 1,805 1,838 101,805
3 1,000 3,310 2,234 2,251 102,234 2,528 2,544 102,528 2,846 2,863 102,846
4 1,000 4,526 2,949 2,949 102,949 3,439 3,439 103,439 3,991 3,991 103,992
5 1,000 5,802 3,647 3,647 103,647 4,385 4,385 104,386 5,251 5,251 105,251
6 1,000 7,142 4,328 4,328 104,328 5,367 5,367 105,367 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 7,487 107,487 9,879 9,879 109,879
9 1,000 11,578 6,346 6,346 106,346 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 9,801 109,801 13,841 13,841 113,842
11 1,000 14,917 7,649 7,649 107,649 11,066 11,066 111,067 16,178 16,178 116,178
12 1,000 16,713 8,286 8,286 108,287 12,374 12,374 112,374 18,747 18,747 118,747
13 1,000 18,599 8,897 8,897 108,897 13,724 13,724 113,724 21,571 21,571 121,571
14 1,000 20,579 9,480 9,480 109,480 15,117 15,117 115,118 24,676 24,676 124,676
15 1,000 22,657 10,033 10,033 110,033 16,553 16,553 116,553 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 31,846 131,846
17 1,000 27,132 11,046 11,046 111,046 19,556 19,556 119,557 35,977 35,977 135,977
18 1,000 29,539 11,502 11,502 111,502 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 24,382 124,382 51,017 51,017 151,018
@ 65 1,000 69,761 13,118 13,118 113,118 42,531 42,531 142,532 147,388 147,388 252,580
</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%.
59
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING GUARANTEED CHARGES
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 1,050 568 618 100,568 611 661 100,612 655 705 100,655
2 1,000 2,153 1,111 1,145 101,112 1,234 1,267 101,234 1,362 1,395 101,362
3 1,000 3,310 1,629 1,646 101,630 1,865 1,882 101,866 2,122 2,139 102,123
4 1,000 4,526 2,119 2,119 102,120 2,504 2,504 102,505 2,940 2,940 102,941
5 1,000 5,802 2,580 2,580 102,580 3,147 3,147 103,148 3,818 3,818 103,818
6 1,000 7,142 3,008 3,008 103,009 3,793 3,793 103,794 4,759 4,759 104,759
7 1,000 8,549 3,402 3,402 103,403 4,438 4,438 104,438 5,765 5,765 105,766
8 1,000 10,027 3,791 3,791 103,792 5,112 5,112 105,112 6,877 6,877 106,877
9 1,000 11,578 4,142 4,142 104,143 5,782 5,782 105,782 8,067 8,067 108,068
10 1,000 13,207 4,455 4,455 104,455 6,446 6,446 106,446 9,343 9,343 109,344
11 1,000 14,917 4,726 4,726 104,727 7,100 7,100 107,101 10,709 10,709 110,709
12 1,000 16,713 4,956 4,956 104,956 7,744 7,744 107,744 12,172 12,172 112,172
13 1,000 18,599 5,141 5,141 105,142 8,372 8,372 108,372 13,739 13,739 113,740
14 1,000 20,579 5,281 5,281 105,282 8,983 8,983 108,983 15,419 15,419 115,420
15 1,000 22,657 5,373 5,373 105,373 9,571 9,571 109,571 17,218 17,218 117,218
16 1,000 24,840 5,412 5,412 105,413 10,131 10,131 110,132 19,143 19,143 119,144
17 1,000 27,132 5,393 5,393 105,394 10,654 10,654 110,654 21,200 21,200 121,200
18 1,000 29,539 5,309 5,309 105,309 11,130 11,130 111,131 23,392 23,392 123,392
19 1,000 32,066 5,152 5,152 105,153 11,550 11,550 111,550 25,725 25,725 125,725
20 1,000 34,719 4,914 4,914 104,914 11,899 11,899 111,899 28,201 28,201 128,201
@ 65 1,000 69,761 -- -- -- 8,925 8,925 108,926 62,611 62,611 162,612
</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%.
60
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING CURRENT CHARGES
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 1,050 787 837 100,787 838 888 100,838 889 939 100,889
2 1,000 2,153 1,558 1,591 101,558 1,709 1,742 101,709 1,866 1,899 101,866
3 1,000 3,310 2,311 2,328 102,312 2,613 2,629 102,613 2,939 2,956 102,940
4 1,000 4,526 3,048 3,048 103,048 3,551 3,551 103,552 4,119 4,119 104,119
5 1,000 5,802 3,766 3,766 103,766 4,524 4,524 104,525 5,414 5,414 105,414
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 5,141 105,141 6,574 6,574 106,574 8,395 8,395 108,396
8 1,000 10,027 5,846 5,846 105,846 7,704 7,704 107,705 10,162 10,162 110,163
9 1,000 11,578 6,530 6,530 106,530 8,874 8,874 108,874 12,103 12,103 112,104
10 1,000 13,207 7,192 7,192 107,192 10,085 10,085 110,085 14,237 14,237 114,237
11 1,000 14,917 7,876 7,876 107,877 11,388 11,388 111,389 16,641 16,641 116,642
12 1,000 16,713 8,541 8,541 108,542 12,743 12,743 112,743 19,293 19,293 119,293
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 9,816 109,816 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 17,136 117,136 29,003 29,003 129,004
16 1,000 24,840 11,012 11,012 111,012 18,715 18,715 118,716 32,931 32,931 132,932
17 1,000 27,132 11,578 11,578 111,578 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 22,057 122,057 42,048 42,048 142,048
19 1,000 32,066 12,641 12,641 112,641 23,820 23,820 123,821 47,324 47,324 147,324
20 1,000 34,719 13,134 13,134 113,134 25,647 25,647 125,648 53,145 53,145 153,145
@ 65 1,000 69,761 16,242 16,242 116,242 47,596 47,596 147,596 156,326 156,326 303,982
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
35.
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%.
61
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
ASSUMING GUARANTEED CHARGES
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 1,050 613 663 100,614 658 708 100,659 703 753 100,704
2 1,000 2,153 1,204 1,237 101,204 1,332 1,365 101,332 1,466 1,499 101,466
3 1,000 3,310 1,770 1,787 101,771 2,019 2,036 102,020 2,290 2,307 102,291
4 1,000 4,526 2,311 2,311 102,312 2,720 2,720 102,720 3,182 3,182 103,182
5 1,000 5,802 2,824 2,824 102,825 3,430 3,430 103,430 4,144 4,144 104,144
6 1,000 7,142 3,308 3,308 103,308 4,149 4,149 104,149 5,180 5,180 105,181
7 1,000 8,549 3,760 3,760 103,761 4,874 4,874 104,874 6,298 6,298 106,298
8 1,000 10,027 4,211 4,211 104,211 5,636 5,636 105,637 7,536 7,536 107,536
9 1,000 11,578 4,631 4,631 104,632 6,407 6,407 106,408 8,874 8,874 108,875
10 1,000 13,207 5,021 5,021 105,022 7,186 7,186 107,187 10,323 10,323 110,323
11 1,000 14,917 5,380 5,380 105,380 7,972 7,972 107,972 11,890 11,890 111,891
12 1,000 16,713 5,708 5,708 105,708 8,765 8,765 108,765 13,590 13,590 113,590
13 1,000 18,599 6,005 6,005 106,005 9,565 9,565 109,565 15,433 15,433 115,433
14 1,000 20,579 6,268 6,268 106,269 10,368 10,368 110,369 17,431 17,431 117,431
15 1,000 22,657 6,497 6,497 106,498 11,174 11,174 111,174 19,597 19,597 119,598
16 1,000 24,840 6,689 6,689 106,690 11,978 11,978 111,979 21,946 21,946 121,946
17 1,000 27,132 6,843 6,843 106,844 12,779 12,779 112,780 24,492 24,492 124,492
18 1,000 29,539 6,955 6,955 106,956 13,573 13,573 113,574 27,252 27,252 127,252
19 1,000 32,066 7,021 7,021 107,021 14,354 14,354 114,354 30,240 30,240 130,241
20 1,000 34,719 7,040 7,040 107,040 15,118 15,118 115,119 33,480 33,480 133,480
@ 65 1,000 69,761 4,400 4,400 104,400 21,285 21,285 121,286 86,093 86,093 186,094
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
35.
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%.
62
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING CURRENT CHARGES
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 2,845 2,862 103,000
4 1,000 4,526 2,947 2,947 104,000 3,437 3,437 104,000 3,990 3,990 104,000
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 4,982 4,982 107,000 6,380 6,380 107,000 8,156 8,156 107,000
8 1,000 10,027 5,670 5,670 108,000 7,482 7,482 108,000 9,881 9,881 108,000
9 1,000 11,578 6,333 6,333 109,000 8,621 8,621 109,000 11,775 11,775 109,000
10 1,000 13,207 6,968 6,968 110,000 9,794 9,794 110,000 13,854 13,854 110,000
11 1,000 14,917 7,627 7,627 111,000 11,059 11,059 111,000 16,198 16,198 111,000
12 1,000 16,713 8,259 8,259 112,000 12,367 12,367 112,000 18,779 18,779 112,000
13 1,000 18,599 8,863 8,863 113,000 13,717 13,717 113,000 21,621 21,621 113,000
14 1,000 20,579 9,437 9,437 114,000 15,112 15,112 114,000 24,751 24,751 114,000
15 1,000 22,657 9,980 9,980 115,000 16,550 16,550 115,000 28,201 28,201 115,000
16 1,000 24,840 10,491 10,491 116,000 18,034 18,034 116,000 32,006 32,006 116,000
17 1,000 27,132 10,966 10,966 117,000 19,564 19,564 117,000 36,204 36,204 117,000
18 1,000 29,539 11,405 11,405 118,000 21,139 21,139 118,000 40,837 40,837 118,000
19 1,000 32,066 11,803 11,803 119,000 22,760 22,760 119,000 45,956 45,956 119,000
20 1,000 34,719 12,158 12,158 120,000 24,428 24,428 120,000 51,613 51,613 120,000
@ 65 1,000 69,761 12,186 12,186 130,000 43,312 43,312 130,000 150,846 150,846 258,507
</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%.
63
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
MALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING GUARANTEED CHARGES
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 1,050 567 617 101,000 611 661 101,000 654 704 101,000
2 1,000 2,153 1,109 1,143 102,000 1,232 1,265 102,000 1,360 1,393 102,000
3 1,000 3,310 1,624 1,641 103,000 1,861 1,878 103,000 2,118 2,135 103,000
4 1,000 4,526 2,110 2,110 104,000 2,496 2,496 104,000 2,933 2,933 104,000
5 1,000 5,802 2,565 2,565 105,000 3,134 3,134 105,000 3,806 3,806 105,000
6 1,000 7,142 2,985 2,985 106,000 3,773 3,773 106,000 4,742 4,742 106,000
7 1,000 8,549 3,369 3,369 107,000 4,408 4,408 107,000 5,742 5,742 107,000
8 1,000 10,027 3,744 3,744 108,000 5,071 5,071 108,000 6,847 6,847 108,000
9 1,000 11,578 4,079 4,079 109,000 5,727 5,727 109,000 8,030 8,030 109,000
10 1,000 13,207 4,371 4,371 110,000 6,374 6,374 110,000 9,298 9,298 110,000
11 1,000 14,917 4,616 4,616 111,000 7,008 7,008 111,000 10,656 10,656 111,000
12 1,000 16,713 4,815 4,815 112,000 7,626 7,626 112,000 12,113 12,113 112,000
13 1,000 18,599 4,963 4,963 113,000 8,224 8,224 113,000 13,677 13,677 113,000
14 1,000 20,579 5,058 5,058 114,000 8,800 8,800 114,000 15,356 15,356 114,000
15 1,000 22,657 5,096 5,096 115,000 9,346 9,346 115,000 17,159 17,159 115,000
16 1,000 24,840 5,071 5,071 116,000 9,856 9,856 116,000 19,096 19,096 116,000
17 1,000 27,132 4,976 4,976 117,000 10,320 10,320 117,000 21,175 21,175 117,000
18 1,000 29,539 4,800 4,800 118,000 10,726 10,726 118,000 23,404 23,404 118,000
19 1,000 32,066 4,533 4,533 119,000 11,061 11,061 119,000 25,792 25,792 119,000
20 1,000 34,719 4,163 4,163 120,000 11,309 11,309 120,000 28,350 28,350 120,000
@ 65 1,000 69,761 -- -- -- 5,047 5,047 130,000 68,061 68,061 130,000
</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%.
64
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 1 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING CURRENT CHARGES
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 1,050 787 837 101,000 838 888 101,000 888 938 101,000
2 1,000 2,153 1,557 1,591 102,000 1,708 1,742 102,000 1,865 1,899 102,000
3 1,000 3,310 2,311 2,327 103,000 2,612 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 4,118 4,118 104,000
5 1,000 5,802 3,763 3,763 105,000 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 7,701 7,701 108,000 10,166 10,166 108,000
9 1,000 11,578 6,519 6,519 109,000 8,870 8,870 109,000 12,111 12,111 109,000
10 1,000 13,207 7,178 7,178 110,000 10,081 10,081 110,000 14,250 14,250 110,000
11 1,000 14,917 7,859 7,859 111,000 11,385 11,385 111,000 16,662 16,662 111,000
12 1,000 16,713 8,520 8,520 112,000 12,740 12,740 112,000 19,324 19,324 112,000
13 1,000 18,599 9,162 9,162 113,000 14,149 14,149 113,000 22,264 22,264 113,000
14 1,000 20,579 9,784 9,784 114,000 15,614 15,614 114,000 25,512 25,512 114,000
15 1,000 22,657 10,386 10,386 115,000 17,139 17,139 115,000 29,101 29,101 115,000
16 1,000 24,840 10,966 10,966 116,000 18,722 18,722 116,000 33,067 33,067 116,000
17 1,000 27,132 11,523 11,523 117,000 20,368 20,368 117,000 37,453 37,453 117,000
18 1,000 29,539 12,056 12,056 118,000 22,078 22,078 118,000 42,303 42,303 118,000
19 1,000 32,066 12,562 12,562 119,000 23,853 23,853 119,000 47,663 47,663 126,798
20 1,000 34,719 13,039 13,039 120,000 25,694 25,694 120,000 53,570 53,570 138,402
@ 65 1,000 69,761 15,751 15,751 130,000 48,240 48,240 130,000 157,633 157,633 306,524
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
32.
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%.
65
<PAGE>
<TABLE>
<CAPTION>
PHOENIX LIFE AND ANNUITY COMPANY PAGE 2 OF 2
FACE AMOUNT: $100,000
FEMALE 35 ADVANTAGE--GUARANTEED ISSUE INITIAL ANNUAL PREMIUM:$1,000
PHOENIX EXECUTIVE BENEFIT VUL--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 3
ASSUMING GUARANTEED CHARGES
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 1,050 613 663 101,000 658 708 101,000 703 753 101,000
2 1,000 2,153 1,202 1,236 102,000 1,330 1,364 102,000 1,464 1,498 102,000
3 1,000 3,310 1,767 1,784 103,000 2,016 2,033 103,000 2,288 2,304 103,000
4 1,000 4,526 2,305 2,305 104,000 2,714 2,714 104,000 3,177 3,177 104,000
5 1,000 5,802 2,814 2,814 105,000 3,421 3,421 105,000 4,136 4,136 105,000
6 1,000 7,142 3,291 3,291 106,000 4,135 4,135 106,000 5,170 5,170 106,000
7 1,000 8,549 3,736 3,736 107,000 4,854 4,854 107,000 6,284 6,284 107,000
8 1,000 10,027 4,177 4,177 108,000 5,609 5,609 108,000 7,519 7,519 108,000
9 1,000 11,578 4,586 4,586 109,000 6,371 6,371 109,000 8,854 8,854 109,000
10 1,000 13,207 4,961 4,961 110,000 7,138 7,138 110,000 10,301 10,301 110,000
11 1,000 14,917 5,302 5,302 111,000 7,911 7,911 111,000 11,868 11,868 111,000
12 1,000 16,713 5,608 5,608 112,000 8,689 8,689 112,000 13,570 13,570 112,000
13 1,000 18,599 5,880 5,880 113,000 9,472 9,472 113,000 15,419 15,419 113,000
14 1,000 20,579 6,114 6,114 114,000 10,255 10,255 114,000 17,429 17,429 114,000
15 1,000 22,657 6,308 6,308 115,000 11,038 11,038 115,000 19,614 19,614 115,000
16 1,000 24,840 6,458 6,458 116,000 11,816 11,816 116,000 21,991 21,991 116,000
17 1,000 27,132 6,564 6,564 117,000 12,587 12,587 117,000 24,579 24,579 117,000
18 1,000 29,539 6,620 6,620 118,000 13,346 13,346 118,000 27,397 27,397 118,000
19 1,000 32,066 6,619 6,619 119,000 14,087 14,087 119,000 30,467 30,467 119,000
20 1,000 34,719 6,561 6,561 120,000 14,806 14,806 120,000 33,815 33,815 120,000
@ 65 1,000 69,761 2,154 2,154 130,000 19,976 19,976 130,000 90,423 90,423 175,832
</TABLE>
Based on 0% interest rate and guaranteed charges, the Policy will lapse in year
32.
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%.
66
<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, not amended.
The Prospectus describing Phoenix Life and Annuity Company's Phoenix
Corporate Edge, consisting of 66 pages.
The Prospectus describing Phoenix Life and Annuity Company's Phoenix
Executive Benefit VUL, consisting of 66 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:
(a) Edwin L. Kerr, Esq., filed via Edgar herewith.
(b) PricewaterhouseCoopers LLP, filed via Edgar herewith.
II-1
<PAGE>
(c) Paul M. Fischer, FSA, CLU, ChFC, filed via Edgar herewith.
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, together with Variable Policy
Exchange Option Rider VR34 and Flexible Term Insurance Rider
VR36 of Depositor, filed via Edgar herewith.
(c) Flexible Premium Variable Universal Life Insurance Policy
Form V608 of Depositor, filed via Edgar herewith.
(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) (a) 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.
(b) Forms of application for Phoenix Corporate Edge and Phoenix
Executive Benefit VUL filed via Edgar herewith.
(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 herewith.
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, filed via Edgar herewith.
7. Consent of Edwin L. Kerr, Esq., filed via Edgar herewith.
8. Consent of Paul M. Fischer, FSA, CLU, ChFC, filed via Edgar herewith.
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 29th day of October, 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 29th day of October, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Director, Executive Vice President
- ----------------------------------------
*Richard H. Booth
Director
- ----------------------------------------
Carl T. Chadburn
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,
- ---------------------------------------- Chief Investment Officer
*Philip R. McLoughlin
Director, Executive Vice President, Chief
- ---------------------------------------- Financial Officer
*David W. Searfoss
Director, Senior Vice President
- ----------------------------------------
*Simon Y. Tan
Director, Executive Vice President
- ----------------------------------------
*Dona D. Young
</TABLE>
By: /s/ Dona D. Young
---------------------------------------------
* Dona D. Young as Attorney-in-Fact pursuant to Powers of Attorney, copies of
which were previously filed.
EXHIBIT 1.A.5(b)
Flexible Premium Variable Universal Life Insurance Policy Form V606,
Exchange Option Rider VR34 and Flexible Term Insurance Rider VR36
<PAGE>
[logo] PHOENIX
- --------------------------------------------------------------------------------
INSURED: John Doe 35 - Male :ISSUE AGE AND SEX
POLICY NUMBER: 2 000 000 November 1, 2000 :POLICY DATE
FACE AMOUNT: $100,000.00
Dear Policyowner:
We agree to pay the benefits of this policy in accordance with its provisions.
It is important to Us that You are satisfied with Your policy and that it meets
Your insurance goals. For service or information on this policy, contact the
agent who sold the policy, any of Our agency offices, or at the following
address:
Phoenix VUL COLI Unit
c/o Andesa TPA, Inc.
1605 N. Cedar Crest Boulevard, Suite 502
Allentown, PA 18104-2351
Telephone (610) 439-5256
RIGHT TO CANCEL. You have the right to cancel this policy within a limited time
after the policy is delivered to You. The policy may be cancelled by returning
the policy to Us at the above address before the later of:
1. 10 days after the policy is delivered to You; or
2. 10 days after a Notice of Right to Cancel is delivered to You; or
3. 45 days after Part 1 of the application is signed;
for a refund of:
1. the Policy Value less debt, if any; plus
2. any monthly deductions, partial surrender fees and other charges made under
the policy.
The Policy Value and debt will be determined as of the nearest Valuation Date
coincident with or following the date We receive the returned policy at the
above address.
Signed for Phoenix Life and Annuity Company at its Home Office in Hartford,
Connecticut.
Sincerely yours,
PHOENIX LIFE AND ANNUITY COMPANY
/s/John H. Beers /s/Robert W. Fiondella
Secretary Chief Executive Officer
Registrar
CORPORATE FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
THE DEATH BENEFIT AND OTHER VALUES PROVIDED UNDER THIS POLICY ARE BASED ON THE
RATES OF INTEREST CREDITED ON ANY AMOUNTS ALLOCATED TO THE GUARANTEED INTEREST
ACCOUNT AND THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS WITHIN OUR SEPARATE
ACCOUNT TO WHICH YOUR PREMIUMS ARE ALLOCATED. THUS, THE DEATH BENEFIT AND OTHER
VALUES MAY INCREASE OR DECREASE IN AMOUNT OR DURATION. SEE PART 7 FOR A
DESCRIPTION OF HOW THE DEATH BENEFIT IS DETERMINED.
NOT ELIGIBLE FOR ANNUAL DIVIDENDS
V606
<PAGE>
SCHEDULE PAGE
BASIC INFORMATION
INSURED: [John Doe] [35 - MALE] :ISSUE AGE AND SEX
POLICY NUMBER: [2 000 000] [November 1, 2000] :POLICY DATE
FACE AMOUNT: [$100,000.00]
OWNER AS STATED IN THE APPLICATION UNLESS LATER CHANGED.
DEATH BENEFIT OPTION: Death Benefit Option [1] or as later changed as provided
herein.
BENEFICIARY AS STATED IN THE APPLICATION UNLESS LATER CHANGED.
INTERNAL REVENUE CODE LIFE INSURANCE QUALIFICATION TEST: Guideline Premium/Cash
Value Corridor Test
PREMIUMS
--------
ISSUE PREMIUM: [$15,000.00]
SUBSEQUENT PLANNED ANNUAL PREMIUM: [$15,000.00]
SUBACCOUNT ALLOCATION SCHEDULE ON THE POLICY DATE
-------------------------------------------------
SUBACCOUNT PREMIUMS DEDUCTIONS*
---------- -------- -----------
Money Market [100%] Proportionate
* See Part 1 for definition of Proportionate. Subaccounts marked "NONE" will be
charged with a portion of the monthly deduction only if the Subaccounts marked
"PROPORTIONATE" are not sufficient to make the full monthly deduction.
V606 PAGE 1 OF 5
<PAGE>
SCHEDULE PAGE (CONTINUED)
INSURED: [JOHN DOE] POLICY NUMBER: [2 000 000]
SUBACCOUNT FEES
---------------
MAXIMUM DAILY TAX FEE: [0] or such greater amount as may be assessed as
a result of a change in tax laws.
POLICY EXPENSE CHARGES
----------------------
MAXIMUM MONTHLY MORTALITY AND
EXPENSE RISK FEE: 0.00075 (Based on Annual Rate of 0.90%)
PREMIUM TAX CHARGE: x.xx% of premiums (based on actual state tax)
FEDERAL TAX CHARGE: [1.50%] of premiums
MAXIMUM SALES LOAD: 5.00% of premiums (Policy Years 1 to 7)
2.00% of premiums (Policy Years 8+)
MAXIMUM TRANSFER CHARGE: $ 0 - First two transfers per Policy Year.
$10 - Subsequent transfers per Policy Year.
MAXIMUM PARTIAL SURRENDER FEE: Lesser of $25.00 or 2% of partial surrender
amount paid.
MAXIMUM MONTHLY POLICY
ADMINISTRATION CHARGE: $10
OTHER RATES
-----------
GUARANTEED INTEREST ACCOUNT:
----------------------------
UNLOANED PORTION: Minimum Rate 3.00%
LOANED PORTION: [2.00%]
MAXIMUM LOAN INTEREST RATE: [2.75%] for the first 10 Policy Years or until
age 65, whichever is sooner;
[2.50%] thereafter, until the end of the 15th
Policy Year or until age 65, whichever
is sooner;
[2.25%] thereafter
V606 PAGE 2 OF 5
<PAGE>
SCHEDULE PAGE (CONTINUED)
INSURED: [JOHN DOE] POLICY NUMBER: [2 000 000]
TABLE OF CORRIDOR FACTORS
This policy complies with section 7702 of the Internal Revenue Code under the
[Guideline Premium/Cash Value Corridor Test], which requires the death benefit
is greater than or equal to the product of the Cash Value and the Applicable
Percentages from the following table.
Attained Age of Applicable Attained Age of Applicable
Insured Percentage Insured Percentage
------------------------------------------------------------------------------
30-40 250% 70 115%
41 243% 71 113%
42 236% 72 111%
43 229% 73 109%
44 222% 74 107%
45 215% 75 105%
46 209% 76 105%
47 203% 77 105%
48 197% 78 105%
49 191% 79 105%
50 185% 80 105%
51 178% 81 105%
52 171% 82 105%
53 164% 83 105%
54 157% 84 105%
55 150% 85 105%
56 146% 86 105%
57 142% 87 105%
58 138% 88 105%
59 134% 89 105%
60 130% 90 105%
61 128% 91 104%
62 126% 92 103%
63 124% 93 102%
64 122% 94 101%
65 120% 95 101%
66 119% 96 101%
67 118% 97 101%
68 117% 98 101%
69 116% 99 101%
100 100%
V606 PAGE 3 OF 5
<PAGE>
SCHEDULE PAGE (CONTINUED)
INSURED: [JOHN DOE] POLICY NUMBER: [2 000 000]
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
<TABLE>
<CAPTION>
Monthly Monthly Monthly
Attained Age Rate Attained Age Rate Attained Age Rate
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
35 .1758 57 1.0408 79 7.5875
36 .1867 58 1.1325 80 8.2367
37 .2000 59 1.2308 81 8.9567
38 .2150 60 1.3400 82 9.7708
39 .2325 61 1.4617 83 10.6883
40 .2517 62 1.5992 84 11.6875
41 .2742 63 1.7550 85 12.7458
42 .2967 64 1.9283 86 13.8408
43 .3225 65 2.1183 87 14.9625
44 .3492 66 2.3208 88 16.1058
45 .3792 67 2.5367 89 17.2742
46 .4100 68 2.7658 90 18.4808
47 .4433 69 3.0142 91 19.7483
48 .4783 70 3.2925 92 21.1208
49 .5175 71 3.6083 93 22.6758
50 .5592 72 3.9708 94 24.6583
51 .6083 73 4.3867 95 27.4967
52 .6633 74 4.8492 96 32.0458
53 .7258 75 5.3492 97 40.0167
54 .7967 76 5.8775 98 54.8317
55 .8725 77 6.4267 99 83.3333
56 .9550 78 6.9917
</TABLE>
BASIS OF COMPUTATION:
MORTALITY: Commissioner's 1980 Male Standard Ordinary Mortality Table,
Aggregate as to Tobacco, Age Nearest Birthday.
v606 PAGE 4 OF 5
<PAGE>
SCHEDULE PAGE (CONTINUED)
INSURED: [JOHN DOE] POLICY NUMBER: [2 000 000]
TABLE OF FACE AMOUNTS OF INSURANCE
----------------------------------
ISSUE DATE FACE AMOUNT RISK CLASSIFICATION
- ---------- ----------- -------------------
[November 1, 1999] [$178,000.00] [Male Advantage]
RIDERS AND RIDER BENEFITS
-------------------------
<TABLE>
<CAPTION>
PAYABLE MONTHLY
RIDER DESCRIPTION RIDER DATE AMOUNT PREMIUM TO CHARGE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VR34 - Exchange of Insured May 1, 2000 $0.00 $0.00 $0.00
VR36 - Policy Term Rider May 1, 2000 $100,000 $0.00 $3.88
</TABLE>
v606 PAGE 5 OF 5
<PAGE>
TABLE OF CONTENTS
Part Page
- --------------------------------------------------------------
Schedule Pages
Table of Contents
1. Definitions...............................................1
2. About the Policy..........................................2
Effective Date of Insurance............................2
Entire Contract........................................2
Non-Participating......................................2
Contestability.........................................2
Suicide................................................3
Misstatement of Age or Sex.............................3
Assignments............................................3
Annual Reports.........................................4
Transaction Rules......................................4
3. Rights of Owner...........................................4
Who Is the Owner.......................................4
What Are the Rights of the Owner.......................4
How to Change the Owner................................5
4. Premiums..................................................5
Premium Payments.......................................5
Premium Deductions.....................................5
Net Premium Allocation
to Subaccounts.......................................6
Premium Flexibility....................................6
Total Premium Limit....................................6
Grace Period and Lapse.................................7
Policy Value...........................................7
Monthly Deduction......................................8
5. The Accounts..............................................9
Guaranteed Interest Account............................9
Separate Account......................................10
Additional Subaccounts................................11
Substitution of Subaccounts...........................11
Voting Rights.........................................11
Share of Separate Account
Subaccount Values...................................11
Unit Value............................................11
Net Investment Factor.................................12
6. Lifetime Benefits........................................12
Transfers.............................................12
Loans.................................................13
Loan Interest.........................................14
Cash Surrender Value..................................14
Full Surrender........................................14
Partial Surrender.....................................15
Additional Insurance Option...........................15
7. Death Benefits...........................................17
Death Benefit Option 1................................17
Death Benefit Option 2................................17
Death Benefit Option 3................................17
Minimum Death Benefit.................................17
Death Benefit Following
Insured's Age 100...................................17
How to Change the Death
Benefit Options.....................................18
Request for an Increase in
Face Amounts........................................18
Right to Cancel Face
Amount Increases....................................18
Request for a Decrease in
Face Amount.........................................19
Death Proceeds........................................19
Interest on Death Proceeds............................19
The Beneficiary.......................................19
How to Change the Beneficiary.........................20
8. Payment Options..........................................20
Who May Elect Payment Options.........................20
How to Elect a Payment Option.........................20
Payment Options.......................................21
(1) Payment in one sum...............................21
(2) Left to earn interest ...........................21
(3) Payments for a specified period..................21
(4) Life annuity with specified
period certain...................................21
(5) Life annuity.....................................22
(6) Payments of a specified amount...................22
(7) Joint survivorship annuity
with a 10-year period certain....................22
Additional Interest..................................23
9. Tables of Payment Option Amounts......................23-24
v606
<PAGE>
PART 1: DEFINITIONS
ATTAINED AGE Age of the insured on the birthday
nearest the most recent Policy
Anniversary.
DEBT Unpaid loans against this policy plus
accrued interest.
GENDER The terms "he," "his" and "him" are
applicable without regard to sex. Where
proper, "she," "hers" or "her" may be
substituted.
IN FORCE The policy has not terminated.
IN WRITING (WRITTEN In a written form satisfactory to Us and
REQUEST) filed at Phoenix VUL COLI Unit at the
address shown on the cover page of this
policy.
MONTHLY CALCULATION The first Monthly Calculation Day of a
DAY policy is the same day as its Policy Date
as shown on the Schedule Page. Subsequent
Monthly Calculation Days are the same day
for 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.
PAYMENT DATE The Valuation Date on which a premium
payment or loan repayment is received at
Our VUL unless it is received after the
close of the New York Stock Exchange in
which case it will be the next Valuation
Date.
POLICY ANNIVERSARY The anniversary of the Policy Date.
POLICY DATE The Policy Date as shown on the Schedule
Page. It is the date from which Policy
Years and Policy Anniversaries are
measured.
POLICY MONTH The period from one Monthly Calculation
Day up to, but not including, the next
Monthly Calculation Day.
POLICY VALUE The Policy Value as defined in Part 4.
POLICY YEAR The first Policy Year is the one-year
period from the Policy Date to, but not
including, the first Policy Anniversary.
Each succeeding Policy Year is the
one-year period from the period from the
Policy Anniversary to, but not including,
the next Policy Anniversary.
PROPORTIONATE Amounts are allocated to Subaccounts on a
proportionate basis such that the ratios
of this policy's Subaccount values to
each other are the same before and after
the allocation.
SEPARATE ACCOUNT PLAC Variable Universal Life Account.
SUBACCOUNTS The Guaranteed Interest Account
(exclusive of the loaned portion of such
account) and the accounts within Our
Separate Account to which non-loaned
assets under the policy are allocated as
described in Part 5.
v606 1
<PAGE>
UNIT A standard of measurement, as described
in Part 4, used to determine the share of
this policy in the value of each
Subaccount of the Separate Account.
VALUATION DATE Every day the New York Stock Exchange is
open for trading.
VALUATION PERIOD The period in days from the end of one
Valuation Date through the next Valuation
Date.
VUL Our VUL COLI Unit at P.O. Box 22012,
Albany, NY, 12201-2012.
WE (OUR, US) Phoenix Life and Annuity Company (PLAC).
YOU (YOUR) The owner of this policy.
PART 2: ABOUT THE POLICY
EFFECTIVE DATE OF This policy will begin In Force on the
INSURANCE Policy Date, provided the issue premium
is paid while the insured is alive.
ENTIRE CONTRACT This policy and the written application
of the policyholder, a copy of which is
attached to and made a part of the
policy, are the entire contract between
You and Us. Any change in the provisions
of the contract, to be in effect, must be
signed by one of Our executive officers
and countersigned by Our registrar or one
of Our executive officers. This policy is
issued by Us at Our Home Office in
Hartford, Connecticut. Any benefits
payable under this policy are payable at
Our VUL.
NON-PARTICIPATING This is a non-participating policy which
does not pay any dividends. Your policy
will not share in Our profits or surplus
earnings.
CONTESTABILITY We rely on all statements made by or for
the insured in the written application.
These statements are considered to be
representations and not warranties. We
can contest the validity of this policy
and any coverage under it for any
material misrepresentation of fact. To do
so, however, the misrepresentation must
be contained in an application and the
application must be attached to this
policy when issued or made a part of this
policy when a change is made.
We cannot contest the validity of the
original face amount of this policy after
it has been In Force during the insured's
lifetime for two years from its Policy
Date. If We contest the policy, it will
be based on the application for this
policy.
We cannot contest the validity of any
increase in face amount after the policy
has been In Force during the insured's
lifetime for two years from the issue
date of the increase. Any such contest
will be based on the supplemental
application for the increase.
V606 2
<PAGE>
If We contest the validity of all or a
portion of the face amount provided under
this policy, the amount We pay with
respect to such portion of the face
amount will be limited to the higher of a
return of any paid premium required by Us
for the contested Face Amount, or the sum
of any monthly deductions made under this
policy for the contested face amount.
SUICIDE If within two years from the Policy Date
the insured dies by suicide, while sane
or insane, and while this policy is In
Force, the amount of death benefit will
be limited to the Policy Value adjusted
as follows:
a. We will add any monthly deductions
made under this policy;
b. We will subtract any Debt owed Us
under this policy.
If within two years from the issue date
of an increase in face amount the insured
dies by suicide, while sane or insane,
and while the policy is In Force, the
death benefit for that increase will be
limited to a pro rata portion of the
Policy Value corresponding to such
increase adjusted as follows:
a. We will add the sum of the monthly
deductions corresponding to such
increase;
b. We will subtract any Debt owed Us
under this policy.
MISSTATEMENT OF If the age or sex of the insured has been
AGE OR SEX misstated, any benefits payable under
this policy will be adjusted to reflect
the correct age and sex as follows:
a. For adjustments made prior to the
insured's death, no change will be
made to the then current cost of
insurance rates, but subsequent cost
of insurance rates will be adjusted
to such rates that would apply had
this policy been issued based on the
correct age and sex.
b. For adjustments made at the time of
the insured's death, the death
benefit payable will be adjusted to
reflect the amount of coverage that
would have been supported by the most
recent monthly deduction based on the
then current cost of insurance rates
for the correct age and sex.
ASSIGNMENTS Except as otherwise provided herein, any
or all of the rights in this policy may
be assigned. We will not be considered to
have notice of any assignment until We
receive the original or copy of the
assignment In Writing. We are not
responsible for the validity of any
assignment.
V606 3
<PAGE>
ANNUAL REPORTS Each year We will send You a report for
this policy showing:
a. the then current Policy Value, cash
surrender value, death benefit and
face amount;
b. the premiums paid, and deductions and
partial surrenders made since the
last report;
c. any outstanding Debt;
d. an accounting of the change in Policy
Value since the last report; and
e. such additional information as
required by applicable law or
regulation.
TRANSACTION RULES Requests for transactions involving
Subaccounts will usually be processed
within 7 days after We receive the
Written Request. However, We may, at Our
discretion, postpone the payment of any
death benefit in excess of the initial
face amount, any policy loans, partial
withdrawals, surrenders or transfers:
a. For up to six months from the date of
request, for any transactions
dependent upon the value of the
Guaranteed Interest Account; or
b. Otherwise, for any period during
which the New York Stock Exchange is
closed for trading (except for normal
holiday closing) or when the
Securities and Exchange Commission
has determined that a state of
emergency exists which may make
processing such transactions
impractical.
PART 3: RIGHTS OF OWNER
WHO IS THE OWNER The Owner has all the rights under this
policy and is named in the application
unless later changed and endorsed on this
policy.
WHAT ARE THE RIGHTS You control this policy during the
OF THE OWNER insured's lifetime but not until this
policy begins In Force. Unless You and We
agree otherwise, You may exercise all
rights provided under this policy without
the consent of anyone else. These rights
include the right to:
a. Receive any amounts payable under
this policy during the insured's
lifetime.
b. Change the owner or the interest of
any owner.
c. Change the planned premium amount and
frequency. See Part 4.
V606 4
<PAGE>
d. Change the Subaccount allocation
schedule for premium payments and
monthly deductions. See Part 4.
e. Transfer amounts between and among
Subaccounts. See Part 6.
f. Obtain policy loans. See Part 6.
g. Obtain a partial surrender. See Part
6.
h. Surrender this policy for its cash
surrender value. See Part 6.
i. Select a payment option for any cash
surrender value that becomes payable.
See Part 6.
j. Request changes in the insurance
amount. See Part 7.
k. Change the beneficiary of the death
benefit. See Part 7.
l. Assign, release or surrender any
interest in the policy.
m. Change the death benefit option. See
Part 7.
You may exercise these rights only while
the insured is alive. Exercise of any of
these rights will, to the extent thereof,
assign, release or surrender the interest
of the insured and all other
beneficiaries and owners under this
policy.
HOW TO CHANGE You may change the owner by Written
THE OWNER Request.
PART 4: PREMIUMS
PREMIUM PAYMENTS The issue premium as shown on the
Schedule Page is due on the Policy Date.
The insured must be alive when the issue
premium is paid. Premiums other than the
Issue Premium may be paid at any time
while this policy is In Force subject to
the limits described below. All premiums
are payable at Our VUL, except that the
issue premium may be paid to an
authorized agent of Ours for forwarding
to Us. No benefit associated with any
premium shall be provided until it is
actually received by Us at Our VUL.
PREMIUM DEDUCTIONS A premium tax may be required based on
the laws of the state of issue. The
premium tax rate, if any, as of the
Policy Date, is shown on the Schedule
Page. This rate may change for subsequent
premium payments in accordance with
applicable state law.
A federal tax charge as stated on the
Schedule Page will also be deducted from
any premiums received by Us at Our VUL.
In addition, a sales load expressed as a
percent of premium will be deducted from
any premiums received by Us at Our VUL.
The maximum sales load is shown on the
Schedule Page. If the issue premium is
received by Us
V606 5
<PAGE>
at Our VUL after the Policy Date, then it
will also be reduced by the amount
necessary to cover any past unpaid
monthly deductions described below. In
addition, payments received by Us during
a grace period will also be reduced by
the amount needed to cover any monthly
deductions during the grace period.
If you fully surrender your policy within
the first three policy years, We will
refund to You a portion of the sales load
as part of the cash surrender value.
NET PREMIUM ALLOCATION The premiums, net of any premium and
TO SUBACCOUNTS federal tax charges, will be applied on
the Payment Date to the various
Subaccounts based on the premium
allocation schedule elected in the
application for this policy or as later
changed by You. You may change the
allocation schedule for premium payments
by Written Request. Allocations to each
Subaccount must be expressed in whole
percentages unless We agree otherwise.
The number of units credited to each
Subaccount of the Separate Account will
be determined by dividing the net premium
applied to that Subaccount by the unit
value of that Subaccount on the Payment
Date. The number of units credited to
each Subaccount is carried to four
decimal places.
PREMIUM FLEXIBILITY Subject to the total premium limit
described in the next section and except
for the issue premium, You may change the
amount and frequency of premium payments
while this policy is In Force during the
lifetime of the insured as follows:
a. You may increase or decrease the
planned premium amount or payment
frequency at any time by Written
Request. We reserve the right to
limit increases to such maximums as
We may establish from time to time.
b. Additional premium payments may be
made at any time up to the Policy
Anniversary nearest the Insured's
100th birthday. However, We reserve
the right to require satisfactory
evidence of insurability before
accepting any additional premium
payment which results in any increase
in the net amount at risk.
c. Each premium payment made must at
least equal $100 or, if during a
grace period, the amount needed to
prevent lapse of this policy. We
reserve the right to reduce this
limit.
TOTAL PREMIUM LIMIT We will refund any portion of any premium
payment which is determined to be in
excess of the premium limit established
by law to qualify your Policy as a
contract for life insurance.
V606 6
<PAGE>
The total premium limit is applied to the
sum of all premiums received by Us for
this policy to date, reduced by the sum
of all partial surrender amounts paid by
Us to date. If the total premium limit is
exceeded, We will pay You the excess,
with interest at an annual rate of not
less than 3%, not later than 60 days
after the end of the Policy Year in which
the limit was exceeded. The Policy Value
will be adjusted to reflect such refund.
The amount to be taken from the
Subaccount will be allocated in the same
manner as provided for monthly deductions
unless You request another allocation in
writing.
The total premium limit may be exceeded
if additional premium is needed to
prevent lapse under the grace period and
lapse provision. The total premium limit
may change due to:
a. a partial surrender or a decrease in
face amount;
b. addition, cancellation or change of a
rider; or
c. a change in federal tax laws or
regulations.
We reserve the right to not accept any
premium payment which would increase the
Death Benefit by more than it would
increase the Policy Value.
If the total premium limit changes, We
will send You a Revised Schedule Page
reflecting the change. However, We
reserve the right to require that this
policy be returned to Us so that We may
endorse the change.
GRACE PERIOD AND LAPSE If, on any Monthly Calculation Day, the
required monthly deduction exceeds the
Policy Value during the first three
Policy Years, or the cash surrender value
after the third Policy Year, a grace
period of 61 days will be allowed for the
payment of an amount equal to three times
the required monthly deduction. This
policy will continue In Force during any
such grace period. We will mail a written
notice to You and any assigns at the post
office addresses last known to Us as to
the amount of premium required. If such
premium is not paid to Us by the end of
the grace period this policy will lapse
without value, but not before 30 days
have elapsed since We mailed Our written
notice to You. The "date of lapse" will
be the Monthly Calculation Day on which
the deduction was to be made, and any
insurance and rider benefits provided
under this policy will terminate as of
that date.
POLICY VALUE The Policy Value is the sum of this
policy's share in the value of each
Subaccount of the Separate Account and
the value of this policy's Guaranteed
Interest Account. See Part 5 for an
explanation as to how this policy's share
in the value of each Subaccount of the
Separate Account is determined and for a
description of the Guaranteed Interest
Account.
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MONTHLY DEDUCTION A deduction is made each Policy Month
from the Policy Value (excluding the
value of the loaned portion of the
Guaranteed Interest Account) to pay:
a. the cost of insurance provided under
this policy;
b. any flat extra mortality charges;
c. the cost of any rider benefits
provided;
d. an administrative charge. The
administrative charge may vary but in
no event will it exceed the maximum
administrative charge amount shown on
the Schedule Page. We will send You a
written notice of any change at least
30 days in advance of such change;
and
e. a mortality and expense risk charge.
The mortality and expense risk charge
may vary but in no event will it
exceed the maximum mortality and
expense risk charge amount shown on
the Schedule Page. In general, the
mortality and expense risk charge is
based on Our current rate for
policies in this same class of
business, and on the level of
commission determined by You and your
agent.
Deductions are made on each Monthly
Calculation Day. If the Monthly
Calculation Day is not a Valuation Date,
the monthly deduction for that Policy
Month will be made on the next Valuation
Date.
You may request in the application for
this policy that monthly deductions not
be taken from certain specified
Subaccounts. Such a request may later be
changed by notifying Us In Writing, but
only with respect to future monthly
deductions. Monthly deductions will be
taken from this policy's share of the
remaining Subaccounts exclusive of the
loaned portion of the Guaranteed Interest
Account, on a proportionate basis. In the
event this policy's share in the value of
such Subaccounts is not sufficient to
permit the withdrawal of the full monthly
deduction, the remainder will be taken on
a proportionate basis from this policy's
share of each of the other Subaccounts
exclusive of the loaned portion of the
Guaranteed Interest Account. The number
of units deducted from each Subaccount of
the Separate Account will be determined
by dividing the portion of the monthly
deduction allocated to each such
Subaccount by the unit value of that
Subaccount on the Monthly Calculation
Day.
V606 8
<PAGE>
Each monthly deduction will pay the cost
of insurance from the Monthly Calculation
Day on which the deduction is made up to,
but not including, the next Monthly
Calculation Day. The cost of insurance is
equal to the cost of insurance rate for
the current Policy Month divided by 1,000
and then multiplied by the result of:
a. the death benefit on the Monthly
Calculation Day; minus
b. the Policy Value on the Monthly
Calculation Day.
The cost of insurance rate for the
current Policy Month is based on the
insured's attained age and risk
classification. The rate used in
computing the cost of insurance is
obtained from the Table of Guaranteed
Maximum Cost of Insurance Rates on the
Schedule Page for the risk
classification(s) shown, or such lower
rate as We may declare. Any change We
make in the declared cost of insurance
rates will be uniform by class and based
on Our future mortality, expense and
lapse expectations. The declared cost of
insurance rates for an insured will not
be affected by a change in the insured's
health or occupation.
PART 5: THE ACCOUNTS
Assets under this policy may be allocated
either to the Guaranteed Interest Account
or to any of the Subaccounts of the
Separate Account. Any allocation You make
must be at least 1%; You may not choose a
fractional percent. The sum of the Fund
allocation factors must equal 100%.
GUARANTEED INTEREST The Guaranteed Interest Account is not
ACCOUNT part of the Separate Account. It is part
of Our General Account. We reserve the
right to limit cumulative premiums,
including transfers, to the unloaned
portion of the Guaranteed Interest
Account during any one-week period to no
more than $250,000. We will credit
interest daily on the amounts allocated
under this policy to the Guaranteed
Interest Account. The loaned portion of
the Guaranteed Interest Account will be
credited interest at an effective annual
fixed rate as shown on the Schedule Page.
We will credit interest on the unloaned
portion of the Guaranteed Interest
Account at such rates We shall determine
but in no event will the effective annual
rate of interest on such portion be less
than the minimum interest rate shown on
the Schedule Page.
On the last working day of each calendar
week, We will set the interest rate that
will apply to any net premium or
transferred amounts made to the unloaned
portion of the Guaranteed Interest
Account during the following calendar
week. That rate will remain in effect for
such premiums, for an initial guarantee
period of one full year. Upon expiry of
the initial one-year guarantee period,
and each subsequent one-year guarantee
period thereafter, the rate applicable
for any premiums in the unloaned portion
of the Guaranteed Interest Account whose
guarantee period has just ended shall be
the same
V606 9
<PAGE>
rate that applies to new premiums to such
Subaccount at the time the guarantee
period expires. Such rate shall likewise
remain in effect for such premiums for a
subsequent guarantee period of one full
year.
All transfers, partial surrenders
and deductions from the unloaned portion
of the Guaranteed Interest Account will
be assessed on a Last-In, First-Out basis
based on the date the deposit was
initially made to the unloaned portion of
such Subaccount. At the end of each
Policy Year and at the time of any Debt
repayment, interest credited to the
loaned portion of the Guaranteed Interest
Account will be transferred to the
unloaned portion of the Guaranteed
Interest Account. We reserve the right to
add other Guaranteed Interest Accounts,
subject where required, to approval by
the insurance supervisory official of the
state where this policy is delivered.
SEPARATE ACCOUNT The Separate Account has been established
by Us as a Separate Account pursuant to
Connecticut law and is registered as a
unit investment trust under the
Investment Company Act of 1940 (1940
Act). Income and realized and unrealized
gains and losses from assets in the
Separate Account are credited to or
charged against it without regard to Our
other income, gains or losses. We own the
Separate Account assets and they are kept
separate from the Assets of Our General
Account. Separate Account assets will be
valued on each Valuation Date. The
portion of the Separate Account equal to
reserves and liabilities for policies
supported by the Separate Account will
not be charged with any liabilities
arising out of Our other business. We
reserve the right to use assets of the
Separate Account in excess of these
reserves and liabilities for any
purposes.
The Separate Account has several
Subaccounts available under this policy.
We use the assets of the Separate Account
to buy shares of the Fund identified
according to Your allocation
instructions. The Fund is registered
under the 1940 Act as an open-end,
diversified management investment
company. The Fund has separate Portfolios
that correspond to the Subaccounts of the
Separate Account. Assets of each such
Subaccount are invested in shares of the
corresponding Fund Portfolio.
A Portfolio of the Fund might make a
material change in its investment policy.
If that occurs, You will be notified of
the change. In addition, no change will
be made in the investment policy of any
of the Subaccounts of the Separate
Account without approval of the
appropriate insurance supervisory
official of Our domiciliary state of
Connecticut. The approval process is on
file with the insurance supervisory
official of the state where the policy is
delivered.
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ADDITIONAL SUBACCOUNTS We have the right to add Subaccounts of
the Separate Account subject to approval
by the Securities and Exchange Commission
and, where required, other regulatory
authority.
SUBSTITUTION OF If the shares of the Funds of this
SUBACCOUNTS contract should no longer be available
for investment by the Separate Account or
if in Our judgment further investment in
such Funds becomes inappropriate for use
with this policy, We reserve the right to
substitute Units of another Subaccount
for Units already purchased or to be
purchased in the future by premium
payments under this policy. Any such
change will be subject to approval by the
Securities Exchange Commission and, where
required, by the insurance supervisory
official of the state where this policy
is issued.
VOTING RIGHTS Although We are the legal owner of the
Fund shares, We will vote the shares at
regular and special meetings of the
shareholders of the Fund in accordance
with instructions received from You and
the other owners of the policies. Any
shares held by Us will be voted in the
same proportion as voted by You and the
other owners of the policies. However, We
reserve the right to vote the shares of
the Fund without direction from You if
there is a change in the law which would
permit this to be done.
SHARE OF SEPARATE The share of this policy in the value of
ACCOUNT SUBACCOUNT each Subaccount of the Separate Account
VALUES on a Valuation Date is the unit value of
that Subaccount on that date multiplied
by the number of this policy's units in
that Subaccount after all transactions
for the Valuation Period ending on that
day have been processed. For any day
which does not fall on a Valuation Date,
the share of this policy in the value of
each Subaccount of the Separate Account
is determined using the number of units
on that day after all transactions for
that day have been processed and the unit
values on the next Valuation Date.
UNIT VALUE The unit value of each Subaccount of the
Separate Account was set by Us on the
first Valuation Date of each such
Subaccount. The unit value of a
Subaccount of the Separate Account 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 of the Separate Account on a
day other than a Valuation Date is the
unit value on the next Valuation Date.
Unit values are carried to 6 decimal
places. The unit value of each Subaccount
of the Separate Account on a Valuation
Date is determined at the end of that
day.
V606 11
<PAGE>
NET INVESTMENT FACTOR The Net Investment Factor for each
Subaccount of the Separate Account 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 equal to item (d) below
subtracted from the result of dividing
the sum of items (a) and (b) by item (c)
as defined below.
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 of all
transactions during the Valuation
Period ending on that date.
d. The daily charges, if any, for taxes
and reserves for taxes on investment
income, and realized and unrealized
capital gains as shown on the
Schedule Page, multiplied by the
number of days in the current
Valuation Period.
PART 6: LIFETIME BENEFITS
TRANSFERS You may transfer all or a portion of the
Policy Value among one or more of the
Subaccounts of the Separate Account and
the unloaned portion of the Guaranteed
Interest Account. We reserve the right to
limit the number of transfers You may
make, however, You can make up to six
transfers per contract year from
Subaccounts of the Separate Account and
only one transfer per contract year from
the unloaned portion of the Guaranteed
Interest Account unless the Systematic
Transfer Program is elected. Under that
program, funds may be transferred
automatically among the Subaccounts on a
monthly, quarterly, semiannual or annual
basis. Unless We agree otherwise, the
minimum initial and subsequent transfer
amounts are $25 monthly, $75 quarterly,
$150 semiannually or $300 annually.
Except as otherwise provided under the
Systematic Transfer Program, the amount
that may be transferred from the
Guaranteed Interest Account at any one
time cannot exceed the higher of $1,000
or 25% of the value of the Guaranteed
Interest Account.
V606 12
<PAGE>
Transfers may be made by Written Request.
The maximum transfer charge is shown on
the Schedule Page. There is no transfer
charge for the Systematic Transfer
Program. Any such charge will be deducted
from the Subaccounts from which the
amounts are to be transferred in the same
proportion as the amounts to be
transferred bear to the total amount
transferred. The value of each Subaccount
will be determined on the Valuation Date
that coincides with the date of transfer.
LOANS While this policy is In Force, a loan may
be obtained against this policy in any
amount up to the available loan value. To
obtain a loan, this policy must be
properly assigned to Us as security. We
need no other collateral. We reserve the
right not to allow loans of less than
$500 unless the loans are to pay premiums
on another policy issued by Us.
The loan value is 90% of the Policy
Value. The "available loan value" is the
loan value on the current day less any
outstanding Debt.
The amount of the loan will be added to
the loaned portion of the Guaranteed
Interest Account and subtracted from this
policy's share of the Subaccounts based
on the allocation You request at the time
of the loan. The total reduction will
equal the amount added to the loaned
portion of the Guaranteed Interest
Account. Unless We agree otherwise,
allocations to each Subaccount must be
expressed in whole percentages. If no
allocation request is made, the amount
subtracted from the share of each
Subaccount will be determined in the same
manner as provided for monthly
deductions.
Debt may be repaid at any time during the
lifetime of the insured while this policy
is In Force. Such repayment, in excess of
any outstanding accrued loan interest,
will be applied to reduce the loaned
portion of the Guaranteed Interest
Account and will be transferred to the
unloaned portion of the Guaranteed
Interest Account to the extent that
loaned amounts taken from such account
have not previously been repaid.
Otherwise, such balance will be
transferred among the Subaccounts You
request upon repayment and, if no
allocation request is made, We will use
Your most recent premium allocation
schedule on file with Us. Any Debt
repayment received by Us during a grace
period as described in Part 4 will be
reduced to cover any overdue monthly
deductions and only the balance applied
to reduce the Debt. Such balance will
also be applied as described to reduce
the loaned portion of the Guaranteed
Interest Account.
V606 13
<PAGE>
While there is any outstanding Debt
against this policy, any payments
received by Us for this policy will be
applied directly to reduce the Debt
unless specified as a premium payment.
Until the Debt is fully repaid,
additional Debt repayments may be made at
any time during the lifetime of the
insured while this policy is In Force.
Failure to repay a policy loan or to pay
loan interest will not terminate this
policy except as otherwise provided under
the Grace Period and Lapse in Part 4 when
the policy does not have sufficient
remaining value to pay the monthly
deductions, in which event, that grace
period provision will apply.
LOAN INTEREST Loans will bear interest at an effective
annual rate equal to the loan interest
rate shown on the Schedule Page and will
be compounded daily. Interest will accrue
on a daily basis from the date of the
loan and is included as part of the Debt
under this policy. Loan interest will be
due on each Policy Anniversary. If not
paid when due, the outstanding accrued
interest on that date will be charged as
a loan against this policy. Interest less
than the maximum guaranteed may be
charged.
CASH SURRENDER VALUE If you fully surrender your policy in the
first policy year, We will reimburse 100%
of the sales load collected for that
policy year. If You fully surrender your
policy in the second policy year, We will
reimburse 66% of the sales load collected
in the first policy year. If You fully
surrender your policy in the third policy
year, We will reimburse 33% of the sales
load collected in the first policy year.
A loan will have a permanent effect on
any death benefit and Cash Surrender
Value of this policy. The Cash Surrender
Value is the policy value as defined in
Part 4 less any outstanding policy debt;
plus the refund of sales load if
applicable. There is no surrender charge.
If You fully surrender your policy within
the first three policy years, We will
refund a portion of the sales load, as
part of the cash surrender value.
FULL SURRENDER You may fully surrender this policy for
its cash surrender value by Written
Request and returning this policy to Us
along with a written release and
surrender of all claims under this policy
signed by You and any assigns. You may do
this at any time during the lifetime of
the insured while this policy is In
Force. The written surrender must be in a
form satisfactory to Us and must include
such tax withholding information as We
may reasonably require. The surrender
will be effective on the "date of
surrender" which is the later of the
dates on which We receive the returned
policy and the written surrender. Upon
full surrender, all insurance and any
rider benefits provided under this policy
will terminate. You may direct that We
apply the surrender proceeds under any of
the Payment Options described in Part 8.
V606 14
<PAGE>
PARTIAL SURRENDER You may obtain a partial surrender of
this policy by requesting that a part of
this policy's cash surrender value be
paid to You. You may do this at any time
during the lifetime of the insured while
this policy is In Force with a Written
Request signed by You and any assigns. We
reserve the right to require that this
policy first be returned to Us before
payment is made. A partial surrender will
be effective on the date We receive the
Written Request or, if required, the date
We receive this policy if later. You may
direct that We apply the surrender
proceeds under any of the Payment Options
described in Part 8.
A partial surrender will be denied if the
resultant cash surrender value would be
less than or equal to zero. We reserve
the right not to allow partial surrenders
if the resulting death benefit would be
less than $50,000 or if the amount of the
partial surrender is less than $500. We
further reserve the right to require that
the entire balance of a Subaccount be
surrendered and withdrawn if the share of
this policy in the value of that
Subaccount would, immediately after a
partial surrender, be less than $500.
Upon a partial surrender, the Policy
Value will be reduced by the sum of the
following:
a. The partial surrender amount paid.
This amount comes from a reduction in
this policy's share in the value of
each Subaccount based on the
allocation You request at the time of
the partial surrender. If no
allocation request is made, the
assessment to each Subaccount will be
made in the same manner as provided
for monthly deductions.
b. We reserve the right to charge a
partial surrender fee. This fee, if
any, will be the lessor of $25 or 2%
of the partial surrender amount paid.
The assessment to each Subaccount
will be made in the same manner as
provided for the partial surrender
amount paid.
The cash surrender value will be reduced
by the partial surrender amount paid plus
the partial surrender fee. The face
amount of this policy will be reduced by
the same amount as the Policy Value is
reduced as described above. We will send
You a Revised Schedule Page reflecting
this change.
ADDITIONAL INSURANCE While this policy is In Force and subject
OPTION to the terms of this provision, including
Our receipt of evidence satisfactory to
Us of the insured's then insurability,
You have the option to purchase
additional insurance on the same insured
under the same plan of insurance as this
policy. The new policy will be based on
the same guaranteed rates and charges as
are in effect for this plan on the Policy
Date of this policy as adjusted for the
insured's new attained age and change, if
any, in risk classification. The new
policy will only include
V606 15
<PAGE>
such rider benefits as We may agree based
on Our rules and practices in effect on
the Policy Date of the new policy. The
amount of insurance under the new policy,
when added to all other insurance with
Our company on the life of the insured,
cannot exceed Our total insurance amount
limitations in effect on the Policy Date
of the new policy.
To elect this option, You must file a
written application In Writing. It must
be signed by You and the insured. We must
also receive:
a. Evidence that You have a satisfactory
insurable interest in the life of the
insured.
b. Evidence, satisfactory to Us, that
the insured is then insurable under
Our established practice in the
selection of risks for this plan of
insurance, including the new amount
applied for and rider benefits
requested. Selection of risks
includes health and non-health
factors.
c. Payment, while the insured is alive,
of the full issue premium for the new
policy. The payment must equal or
exceed Our minimum issue premium
requirements in effect for this plan
on the Policy Date of the new policy.
Any exclusions applicable to the new
policy will be determined in accordance
with Our rules and practices in effect on
the Policy Date of the new policy. The
new policy will not be subject to any
assignments or liens against this policy.
The owner and the beneficiary under the
new policy shall be as requested in the
application for the new policy. Any
subsequent changes will be governed by
the printed provisions of the new policy.
The new policy will begin in effect as of
the later of:
a. Our approval of the application for
the new policy;
b. payment of the full issue premium due
on the new policy.
The Policy Date of the new policy will be
as shown on the Schedule Pages of the new
policy based on Our rules and practices
then in effect. The time periods for the
suicide and contestability provisions in
the new policy will be measured from the
Policy Date of the new policy.
V606 16
<PAGE>
PART 7: DEATH BENEFITS
While the policy is In Force, You have
the right to elect one of the death
benefit options as described below. The
death benefit option shall be as elected
in the original application unless later
changed as provided below. If no option
is elected, Death Benefit Option 1 shall
apply.
DEATH BENEFIT OPTION 1 Under this option, during all Policy
Years until the Policy Anniversary which
follows the insured's 100th birthday, the
death benefit is equal to the greater of
(a) or (b) as defined below:
a. the policy's face amount on the date
of death;
b. the minimum death benefit on the date
of death as defined below.
DEATH BENEFIT OPTION 2 Under this option, during all Policy
Years until the Policy Anniversary which
follows the insured's 100th birthday, the
death benefit is equal to the greater of
(a) or (b) as defined below:
a. the policy's face amount on the date
of death plus the Policy Value;
b. the minimum death benefit on the date
of death as defined below.
DEATH BENEFIT OPTION 3 Under this option, during all Policy
Years until the Policy Anniversary which
follows the insured's 100th birthday, the
death benefit is equal to the greater of
(a) or (b) as defined below:
a. the policy's face amount on the date
of death plus the greater of:
i. all premium payments made to the
date of death less any partial
surrenders made to the date of
death; or
ii. zero.
b. the minimum death benefit on the date
of death as defined below.
MINIMUM DEATH BENEFIT The minimum death benefit is the Policy
Value on the date of death of the
insured, multiplied by the applicable
percentage from the Table of Corridor
Factors shown on the Schedule Page.
DEATH BENEFIT FOLLOWING After the Policy Anniversary which
INSURED'S AGE 100 follows the insured's 100th birthday, the
death benefit will equal the Policy
Value.
V606 17
<PAGE>
HOW TO CHANGE THE You may not make a change from or to
DEATH BENEFIT OPTION Option 3. While this policy is In Force,
You may make a Written Request to change
the Death Benefit Option from Option 1 to
Option 2, or from Option 2 to Option 1.
No evidence of insurability is required.
If the request is to change from Option 1
to Option 2, the face amount will be
decreased by the Policy Value and if the
request is to change from Option 2 to
Option 1, the face amount will be
increased by the Policy Value. Any such
change will be in effect on the Monthly
Calculation Day coincident with or next
following the day We approve the request.
REQUEST FOR AN INCREASE Anytime that this policy is In Force, You
IN FACE AMOUNT may make a Written Request to increase
its face amount. Unless We agree
otherwise, the minimum of such face
amount increase is $25,000, and the
increase will be effective on the first
Policy Anniversary on or following the
date that We approve the request. Such
date will be shown as the issue date for
such increase on the Revised Schedule
Pages We send You reflecting the change.
We reserve the right to limit increases
in face amount. All requests to increase
the face amount must be applied for on a
supplemental application and will be
subject to evidence of the insured's
insurability satisfactory to Us. The
insured must be alive on the issue date,
and You must also pay to Us in advance
such issue premium for the increase as We
may require according to Our published
rules then in effect. If no issue premium
is required, the increase will not take
effect unless the cash surrender value on
the issue date at least equals the
monthly deduction for the total combined
face amount. The Issue Expense Charge for
Face Amount increases is as stated on the
Schedule Page.
We will send You Revised Schedule Pages
reflecting the change. We reserve the
right to further require that the policy
be returned to Us so that We may
incorporate the change.
RIGHT TO CANCEL FACE You have the right to cancel any increase
AMOUNT INCREASES in the face amount provided by Us under
this policy by Written Request and
returning the policy to Us within a
limited time as stated below.
To cancel, You must return the policy,
including the Revised Schedule Pages,
before the latest of:
1. 10 days after the new Revised
Schedule Page showing such
increase in the face amount is
delivered to You; or
V606 18
<PAGE>
2. 10 days after a Notice of Right
to Cancel is delivered to You; or
3. 45 days after Part 1 of the
supplementary application for
such increased face amount is
signed.
Upon any such cancellation, We will
refund the higher of any paid premium
required by Us for the increase or the
sum of any monthly deductions and any
other fees and charges made under this
policy for the increase in face amount.
REQUEST FOR A DECREASE You may request a decrease in face amount
IN FACE AMOUNT at any time after the first Policy Year.
Unless We agree otherwise, the decrease
requested must at least equal $10,000 and
the face amount remaining after the
decrease must at least equal $25,000. All
requests to decrease the face amount must
be in writing and will be effective on
the first Monthly Calculation Day
following the date We approve the
request. We reserve the right to require
that this policy first be returned to Us
before the decrease is made. We will send
You a Revised Schedule Page reflecting
the change.
DEATH PROCEEDS Upon receipt In Writing of due proof that
the insured died while this policy is In
Force, We will pay the death proceeds of
this policy. The death proceeds equal the
death benefit on the date of death, with
the following adjustments:
a. We will deduct any Debt outstanding
against this policy.
b. We will deduct any monthly deductions
to and including the Policy Month of
death not already made.
c. We will add any premiums received by
Us after the Monthly Calculation Day
just prior to the date of death and
on or before the date of death.
INTEREST ON DEATH We will pay interest on any death
PROCEEDS proceeds from the date of the insured's
death to the date of payment. The amount
of interest will be the same as would be
paid were the death proceeds left for
that period of time to earn interest
under Payment Option 2.
THE BENEFICIARY Unless another payment option is elected
as described in Part 8, any death
proceeds that become payable will be paid
in equal shares to such beneficiaries
living at the death of the insured as
stated in the application for this policy
or as later changed. Payments will be
made successively in the following order:
a. Primary beneficiaries.
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<PAGE>
b. Contingent beneficiaries, if any,
provided beneficiary is living at the
death of the insured.
c. You or Your executor or
administrator, provided no primary or
contingent beneficiary is living at
the death of the insured.
Unless otherwise stated, the relationship
of a beneficiary is the relationship to
the insured.
HOW TO CHANGE THE You may change the beneficiary under this
BENEFICIARY policy by Written Request. When We
receive it, the change will relate back
and take effect as of the date it was
signed. However, the change will be
subject to any payments made or actions
taken by Us before We received the
Written Request.
PART 8: PAYMENT OPTIONS
WHO MAY ELECT The death benefit of this policy will be
PAYMENT OPTIONS paid in one sum unless otherwise
provided. As an alternative to payment in
one sum as provided under Option 1, any
surrender or death benefit that becomes
payable under an account may be applied
under one or more of the alternative
income payment options as described in
this part or such other payment options
as may then be currently available for
the policy.
Our consent is required for the election
of an income payment option by a
fiduciary or any entity other than a
natural person. Our consent is also
required for elections by any assigns or
an owner other than the insured if the
owner has been changed. You may designate
or change one or more beneficiaries who
will be the payee or payees under the
option elected. You may only do this
during the lifetime of the insured. For
death proceeds, if no election is in
effect when the death benefit becomes
payable, the beneficiary may elect a
payment option.
Unless We agree otherwise, all payments
under any option chosen will be made to
the designated payee or to his executor
or administrator. We may require proof of
age of any payee or payees on whose life
payments depend as well as proof of the
continued survival of any such payee(s).
HOW TO ELECT A The election of an income payment option
PAYMENT OPTION must be by Written Request. Payments may
be made on an annual, semiannual,
quarterly or monthly basis provided that
each installment will at least equal $25.
We also require that at least $1,000 be
applied under any income option chosen.
V606 20
<PAGE>
PAYMENT OPTIONS This section provides a brief description
of the various payment options that are
available. In Part 9 You will find tables
illustrating the guaranteed installment
amount provided by several of the options
described in this section. The amount
shown for Options 4, 5 and 7 are the
minimum monthly payments for each $1,000
applied. The actual payments will be
based on the monthly payment rates We are
using when the first payment is due. They
will not be less than shown in the
tables.
Option 1 - Payment in one sum
Option 2 - Left to earn interest
We pay interest during the
payee's lifetime on the amount
left with Us under this option
as a principal sum. We
guarantee that at least one of
the versions of this option
will provide interest at a
rate of at least 3% per year.
Option 3 - Payments for a specific period
Equal income 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 Option 3 Table
shows the guaranteed amount of
each installment for monthly
and annual payment
frequencies. The table assumes
an interest rate of 3% per
year on the unpaid balance.
The actual interest rate is
guaranteed not to be less than
this minimum rate.
Option 4 - Life annuity with specified
period certain
Equal installments are paid
until the later of:
(A) The death of the payee.
(B) 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 may be chosen are as
follows:
(A) Ten years
(B) Twenty years
V606 21
<PAGE>
(C) 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
deem the longer period certain
as having been elected. The
life annuity provided under
this option is calculated
using an interest rate of
3-3/8%, except that any life
annuity providing a period
certain of twenty years or
more is calculated using an
interest rate of 3-1/4%.
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 this
option is calculated using an
interest rate of 3-1/2%.
Option 6 - Payments of 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
principal sum remaining at a
rate guaranteed to at least
equal 3% per year. This
interest will be credited at
the end of each year. If the
amount of interest credited at
the end of a 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
income installments are paid
until the latest of:
(A) The end of the 10-year
period certain.
(B) The death of the insured.
V606 22
<PAGE>
(C) The death of the other
named annuitant.
The other annuitant must
be named at the time this
option is elected and
cannot later be changed.
That annuitant must have
an adjusted age as defined
in Part 9 of at least 40.
The joint survivorship
annuity provided under
this option is calculated
by using an interest rate
of 3-3/8%.
We may offer other payment options or
alternative versions of the options
listed in the above section.
ADDITIONAL INTEREST In addition to:
a. the interest of 3% per year
guaranteed on the principal sum
remaining with Us under Options 2 or
6; and
b. the interest of 3% per year included
in the installments payable under
Option 3.
We will pay or credit at the end of each
year such additional interest as We may
declare.
PART 9: TABLES OF PAYMENT
OPTION AMOUNTS
The installment amounts shown in the
tables that follow are shown for each
$1,000 applied. Amounts for payment
frequencies, periods or ages not shown
will be furnished upon request. Under
Options 4 and 5, the installment amount
for younger ages than shown will be the
same as for the first age shown and for
older ages than shown it will be the same
amount as for the last age shown.
The term "age" as used in the tables
refers to the adjusted age. Under Options
4 and 5, the adjusted age is defined as
follows:
a. For Surrender Values, the age of the
payee on the payee's birthday nearest
to the Policy Anniversary nearest the
date of surrender.
b. For death proceeds, the age of the
payee on the payee's birthday nearest
the effective date of the Payment
Option elected.
Under Option 7, the adjusted age is the
age on the birthday nearest to the Policy
Anniversary nearest the date of
surrender.
V606 23
<PAGE>
OPTION 3 - PAYMENTS FOR A SPECIFIED PERIOD
<TABLE>
- ------------------------------------------------------------------------------------------
<CAPTION>
Number of Years 5 6 7 8 9 10 11 12 13
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Installments $211.99 179.22 155.80 138.31 124.69 113.82 104.93 97.54 91.29
Mo. Installments $17.91 15.14 13.16 11.68 10.53 9.61 8.86 8.24 7.71
- ------------------------------------------------------------------------------------------
</TABLE>
OPTION 3 - PAYMENTS FOR A SPECIFIED PERIOD (CONTINUED)
<TABLE>
- ----------------------------------------------------------------------------------
<CAPTION>
Number of Years 14 15 16 17 18 19 20 25 30
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Installments 85.95 81.33 77.29 73.74 70.59 67.78 65.26 55.76 49.53
Mo. Installments 7.26 6.87 6.53 6.23 5.96 5.73 5.51 4.71
- ----------------------------------------------------------------------------------
</TABLE>
*OPTION 4 - LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Installment 10 Years Certain 20 Years Certain Installment 10 Years Certain 20 Years Certain
Age Refund Age Refund
of ---------------------------------------------------- of -----------------------------------------------------
Payee Male Female Male Female Male Female Payee Male Female Male Female Male Female
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 $3.08 $3.03 $3.08 $2.99 $3.00 $2.94 50 $4.36 $4.12 $4.50 $4.10 $4.28 $3.99
15 3.14 3.09 3.15 3.04 3.07 3.00 55 4.76 4.47 4.95 4.47 4.61 4.31
20 3.22 3.16 3.24 3.11 3.15 3.07 60 5.28 4.93 5.54 4.96 4.97 4.67
25 3.33 3.24 3.34 3.20 3.25 3.15 65 5.97 5.54 6.30 5.63 5.29 5.06
30 3.45 3.35 3.47 3.30 3.38 3.25 70 6.91 6.39 7.24 6.50 5.43 5.31
35 3.61 3.48 3.64 3.43 3.55 3.38 75 8.21 7.57 8.26 7.56 5.44 5.40
40 3.80 3.64 3.86 3.60 3.74 3.54 80 10.04 9.26 9.12 8.60 5.46 5.46
45 4.05 3.85 4.14 3.82 3.99 3.74 85 12.61 11.68 9.60 9.31 5.46 5.46
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*OPTION 5 - LIFE ANNUITY
---------------------------------------------------------
Age Age
of of
Payee Male Female Payee Male Female
---------------------------------------------------------
10 3.17 3.12 50 4.62 4.28
15 3.24 3.18 55 5.12 4.68
20 3.32 3.25 60 5.79 5.24
25 3.42 3.34 65 6.75 6.04
30 3.56 3.44 70 8.15 7.22
35 3.73 3.58 75 10.26 9.03
40 3.95 3.75 80 13.54 11.88
45 4.24 3.98 85 18.72 16.54
---------------------------------------------------------
*OPTION 7 - JOINT SURVIVORSHIP ANNUITY WITH 10-YEAR PERIOD CERTAIN
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Age Age of Insured Age Age of Insured Age Age of Insured Age Age of Insured
of ------------------ of ------------------ of ------------------ of -------------------
Other Other Other Other
Annuitant Male Annuitant Male Annuitant Female Annuitant Female
------------------ ------------------ ------------------ -------------------
F 55 60 65 F 55 60 65 M 55 60 65 M 55 60 65
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.62 3.64 3.65 60 4.43 4.64 4.82 40 3.72 3.77 3.80 60 4.34 4.64 4.93
45 3.80 3.83 3.86 65 4.61 4.93 5.23 45 3.89 3.97 4.03 65 4.44 4.82 5.23
50 4.00 4.07 4.12 70 4.75 5.18 5.63 50 4.06 4.19 4.31 70 4.50 4.95 5.48
55 4.22 4.34 4.44 75 4.86 5.36 5.96 55 4.22 4.43 4.61 75 4.54 5.03 5.65
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Minimum monthly income for each $1,000 applied.
V606 24
<PAGE>
CORPORATE FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
THE DEATH BENEFIT AND OTHER VALUES PROVIDED UNDER THIS POLICY ARE BASED ON THE
RATES OF INTEREST CREDITED ON ANY AMOUNTS ALLOCATED TO THE GUARANTEED INTEREST
ACCOUNT AND THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS WITHIN OUR SEPARATE
ACCOUNT TO WHICH YOUR PREMIUMS ARE ALLOCATED. THUS, THE DEATH BENEFIT AND OTHER
VALUES MAY INCREASE OR DECREASE IN AMOUNT OR DURATION. SEE PART 7 FOR A
DESCRIPTION OF HOW THE DEATH BENEFIT IS DETERMINED.
NOT ELIGIBLE FOR ANNUAL DIVIDENDS
V606
<PAGE>
VARIABLE POLICY EXCHANGE OPTION RIDER
THIS RIDER IS A PART OF THE POLICY TO
WHICH IT IS ATTACHED IF IT IS LISTED ON
THE SCHEDULE PAGES OF THE POLICY OR IN AN
ENDORSEMENT AFTER THAT PAGE. EXCEPT AS
STATED IN THIS RIDER, IT IS SUBJECT TO
ALL OF THE PROVISIONS CONTAINED IN THE
POLICY.
THE EXCHANGE OPTION While this rider is in effect and subject
to its terms, You have the option to
exchange Your policy (the "exchange
policy") for a new policy on the life of
a substitute Insured.
HOW TO EXERCISE THE OPTION To exercise this option, You must file an
exchange application In Writing. It must
be signed by You. We must also receive:
a. Evidence that You have a satisfactory
insurable interest in the life of the
substitute Insured.
b. Evidence that the substitute Insured
is insurable under Our established
practice in the selection of risks
for the amount and plan applied for.
Selection of risks includes health
and non-health factors.
c. The release of any lien against or
assignment against Your policy. You
may instead submit written approval
by the lienholder or assigns of the
exchange of the policies with such
other documents as We may require.
d. Payment of any amounts due to Us for
the exchange as described in the
Exchange Adjustments.
Unless otherwise provided in the exchange
application, the owner and beneficiary of
the new policies will be the same as
under the original policy. Any subsequent
changes will be governed by the printed
provisions of the new policy.
The Date of Exchange will be the same day
of the month as the exchange policy's
anniversary which occurs on or after the
later of:
a. Our approval of the exchange
application;
b. Payment of any Exchange Adjustments
that are required of You.
The exchange policy will be in force only
to and including the day prior to the
Date of Exchange. It will thereafter be
deemed terminated and canceled.
The new policy will begin in effect on
the Date of Exchange.
THE NEW POLICY The date of issue of the new policy will
be the later of:
VR34 1
<PAGE>
a. The same date as the date of issue of
the exchange policy;
b. The first anniversary of the exchange
policy which follows the substitute
Insured's date of birth.
The age at issue shown in the new policy
will be the substitute Insured's age on
his or her birthday nearest the date of
issue of the new policy.
The new policy on the life of the
substitute Insured will be written on any
plan of variable life insurance issued by
Us at the time of the exchange. The new
policy will be written using a policy
form in use by Us on the date of issue
and will be subject to Our published
issue rules (e.g., age and amount limits)
for the plan chosen which were in effect
on the date of issue. The premium
classification and any exclusions
applicable to the new policy will be
determined in accordance with Our rules
and practices in effect on the date of
issue.
The face amount of the new policy will be
chosen by the owner. At Our sole
discretion, We may reduce the chosen face
amount to an amount not less than the
face amount of the original policy.
We will not permit the face amount of the
new policy to exceed an amount which,
when added to the amount at risk on the
life of the substitute Insured under all
other life insurance in force with Us on
the Date of Exchange, exceeds Our maximum
cumulative limits for the substitute
Insured.
The policy value for the original policy
will be transferred to the new policy.
Any such policy value that cannot so be
applied will be used to reduce any loan
against the policy, and the residual
amount will be returned to You in cash.
To the extent that the loan value of the
new policy is sufficient security, the
new policy will be subject to any loans
against the exchange policy. The loan
rate under the new policy will be the
rate used by Us in the jurisdiction in
which the new policy is issued on the
Date of Exchange.
The time periods for the suicide and
contestability provision in the new
policy will be measured from the Date of
Exchange.
Additional rider benefits may be included
in the new policy provided We consent.
The new policy will conform to all of the
requirements of the jurisdiction in which
it is issued regardless of any terms of
this rider providing to the contrary.
EXCHANGE ADJUSTMENTS The exchange is subject to the following
adjustments:
VR34 2
<PAGE>
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 cash surrender
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.
RIDER CHARGES There are no monthly charges for this
rider.
TERMINATION OF THIS RIDER This rider will terminate on the earliest
of:
a. Termination of the exchange policy by
surrender, lapse or death of the
substitue Insured; or
b. Exercise of the exchange option under
this rider.
Phoenix Life and Annuity Company
/s/ John H. Beers
Secretary
VR34 3
<PAGE>
FLEXIBLE TERM INSURANCE RIDER
THIS RIDER IS A PART OF THE POLICY TO
WHICH IT IS ATTACHED IF IT IS LISTED
UNDER THE RIDER SCHEDULE ON THE SCHEDULE
PAGES OF THE POLICY. EXCEPT AS STATED IN
THIS RIDER, IT IS SUBJECT TO ALL OF THE
PROVISIONS OF THE POLICY. THIS RIDER HAS
NO CONTRACT VALUE ASSOCIATED WITH IT.
POLICY NUMBER [2 000 000]
INSURED [John Doe]
INITIAL RIDER DEATH BENEFIT [$100,000]
INITIAL TARGET STATED AMOUNT [$278,000]
INSURANCE INCREASE [0]
INSURANCE INCREASE
EXPIRY DATE [NA]
RIDER DATE OF ISSUE [October 1, 1999]
DEFINITIONS Rider Anniversary--The Anniversary of the
Rider Date of Issue.
Target Stated Amount--The Target Stated
Amount is equal to the Initial Target
Stated Amount plus any Insurance
Increases, less any Insurance Decreases.
The Initial Target Stated Amount and
Insurance Increases are chosen by the
owner at the time of application.
Policy Insurance Amount--The insurance
amount provided by the underlying base
insurance policy. The Policy Insurance
Amount is the policy's minimum death
benefit as described in Part 7 of the
policy.
Rider Insurance Amount--The Target Stated
Amount less the Policy Insurance Amount.
RIDER DEATH BENEFIT Upon receipt In Writing of due proof that
the Insured died while this rider is in
effect, We will pay the Rider Death
Benefit to the beneficiary of the policy.
The Rider Death Benefit is equal to the
greater of (a) or (b) where:
a. equals the Target Stated Amount minus
the Policy Insurance Amount; and
b. equals zero.
SUICIDE EXCLUSION If within two years from the Rider Date
of Issue (or two years from any
reinstatement, if applicable) and
provided this rider is then in effect the
Insured dies by suicide, whether sane or
insane, the amount We pay under this
rider will be limited to the cost of
insurance charges paid for this rider.
VR36 1
<PAGE>
CONTESTABILITY We cannot contest the validity of this
rider after it has been in effect during
the Insured's lifetime for two years from
the Rider Date of Issue (or two years
from any reinstatement, if applicable).
INSURANCE INCREASES Subject to the limitations stated below,
AND DECREASES if the Insurance Increase as shown above
is not 0, the Target Stated Amount will
increase or decrease as shown in the
schedule attached to this rider. The
scheduled Insurance Increase or Decrease
will occur on each Rider Anniversary that
this rider is in effect.
INSURANCE INCREASE The Insurance Increases will be subject
LIMITATIONS to the following limitations:
[bullet] Insurance Increases will not
occur after the Increase Expiry
Date;
[bullet] The total of all Insurance
Increases cannot exceed the
policy's initial face amount
plus the Initial Rider Insurance
Amount or, if less, $5,000,000.
[bullet] Insurance Increases will no
longer be provided following the
first of any of the following to
occur:
1. a partial surrender of cash
surrender value;
2. a requested policy face
amount decrease;
3. a requested decrease in the
Target Stated Amount.
PARTIAL SURRENDERS OF CASH While this rider is in effect, the
SURRENDER VALUE AND FACE provisions entitled "Partial Surrender"
AMOUNT DECREASES in Part 6 of the policy and "Request for
a Decrease in Face Amount" in Part 7 of
the policy shall be amended to provide
that requests for a partial surrender of
cash surrender value or requested face
amount decreases under the policy will
first reduce the Target Stated Amount.
The Policy Value and the Target Stated
Amount will each be reduced for a partial
surrender of cash surrender value by the
amount of the partial surrender plus the
partial surrender fee. This fee is
described on the policy's Schedule Pages.
To the extent such partial surrenders of
cash surrender value or requested face
amount decreases reduce the Total Rider
Insurance Amount to zero, any additional
partial surrender of cash surrender value
or requested face amount decrease will
reduce the policy face amount and Policy
Value in accordance with the regular
non-amended terms of such provisions.
After such partial surrender of cash
surrender value, no Insurance Increases
will thereafter be provided.
VR36 2
<PAGE>
CHANGE IN TARGET You may, by Written Request, increase or
STATED AMOUNT decrease Your Target Stated Amount. If
you request a decrease in the Target
Stated Amount, no Insurance Increases
will thereafter be provided.
MONTHLY CHARGE The Monthly Charge for this rider is
equal to the monthly cost of insurance
rate for the Insured multiplied by the
Rider Death Benefit. The Monthly Charge
for each month of the first year that
this rider is in effect is shown on the
policy's Schedule Pages. The Monthly
Charge for the rider is deducted from the
Policy Value as part of the monthly
deduction for the policy.
The monthly cost of insurance rate is
based on the Insured's age nearest
birthday on the Rider Date of Issue, risk
class, sex and duration from such Rider
Date of Issue. The rate used in computing
the cost of insurance is obtained from
the Table of Guaranteed Maximum Cost of
Insurance Rates as shown on the Policy
Schedule Page, or such lower rate as We
may declare. Any new schedule of rates
will be determined by Us based on factors
which will be uniform by class without
regard to changes in the health of the
Insured after the Rider Date of Issue,
and based on Our future mortality,
expense, lapse and investment
expectations.
TERMINATION OF THIS RIDER This rider and all insurance under it
will terminate on the earliest of the
following dates:
1. the Insured's Age 100;
2. the date of surrender or lapse of
the policy;
3. the date of payment of the Rider
Death Benefit;
4. the first Monthly Calculation Day
following Our receipt of a
Written Request to cancel this
rider.
Phoenix Life and Annuity Company
/s/ John H. Beers
Secretary
VR36 3
EXHIBIT 1.A.5(c)
Flexible Premium Variable Universal Life Insurance Policy Form V608
<PAGE>
[logo] PHOENIX
- --------------------------------------------------------------------------------
INSURED: John Doe 35 - Male :ISSUE AGE AND SEX
POLICY NUMBER: 2 000 000 November 1, 2000 :POLICY DATE
FACE AMOUNT: $100,000.00
Dear Policyowner:
We agree to pay the benefits of this policy in accordance with its provisions.
It is important to Us that You are satisfied with Your policy and that it meets
Your insurance goals. For service or information on this policy, contact the
agent who sold the policy, any of Our agency offices, or at the following
address:
Phoenix VUL COLI Unit
c/o Andesa TPA, Inc.
1605 N. Cedar Crest Boulevard, Suite 502
Allentown, PA 18104-2351
Telephone (610) 439-5256
RIGHT TO CANCEL. You have the right to cancel this policy within a limited time
after the policy is delivered to You. The policy may be cancelled by returning
the policy to Us at the above address before the later of:
1. 10 days after the policy is delivered to You; or
2. 10 days after a Notice of Right to Cancel is delivered to You; or
3. 45 days after Part 1 of the application is signed;
for a refund of:
1. the Policy Value less debt, if any; plus
2. any monthly deductions, partial surrender fees and other charges made under
the policy.
The Policy Value and debt will be determined as of the nearest Valuation Date
coincident with or following the date We receive the returned policy at the
above address.
Signed for Phoenix Life and Annuity Company at its Home Office in Hartford,
Connecticut.
Sincerely yours,
PHOENIX LIFE AND ANNUITY COMPANY
/s/John H. Beers /s/Robert W. Fiondella
Secretary Chief Executive Officer
Registrar
CORPORATE FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
THE DEATH BENEFIT AND OTHER VALUES PROVIDED UNDER THIS POLICY ARE BASED ON THE
RATES OF INTEREST CREDITED ON ANY AMOUNTS ALLOCATED TO THE GUARANTEED INTEREST
ACCOUNT AND THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS WITHIN OUR SEPARATE
ACCOUNT TO WHICH YOUR PREMIUMS ARE ALLOCATED. THUS, THE DEATH BENEFIT AND OTHER
VALUES MAY INCREASE OR DECREASE IN AMOUNT OR DURATION. SEE PART 7 FOR A
DESCRIPTION OF HOW THE DEATH BENEFIT IS DETERMINED.
NOT ELIGIBLE FOR ANNUAL DIVIDENDS
V608
<PAGE>
SCHEDULE PAGE
BASIC INFORMATION
INSURED: [John Doe] [35 - MALE] :ISSUE AGE AND SEX
POLICY NUMBER: [2 000 000] [November 1, 2000] :POLICY DATE
FACE AMOUNT: [$100,000.00]
OWNER AS STATED IN THE APPLICATION UNLESS LATER CHANGED.
DEATH BENEFIT OPTION: Death Benefit Option [1] or as later changed as provided
herein.
BENEFICIARY AS STATED IN THE APPLICATION UNLESS LATER CHANGED.
INTERNAL REVENUE CODE LIFE INSURANCE QUALIFICATION TEST: Guideline Premium/Cash
Value Corridor Test
PREMIUMS
--------
ISSUE PREMIUM: [$15,000.00]
SUBSEQUENT PLANNED ANNUAL PREMIUM: [$15,000.00]
SUBACCOUNT ALLOCATION SCHEDULE ON THE POLICY DATE
-------------------------------------------------
SUBACCOUNT PREMIUMS DEDUCTIONS*
---------- -------- -----------
Money Market [100%] Proportionate
* See Part 1 for definition of Proportionate. Subaccounts marked "NONE" will be
charged with a portion of the monthly deduction only if the Subaccounts marked
"PROPORTIONATE" are not sufficient to make the full monthly deduction.
V608 PAGE 1 OF 5
<PAGE>
SCHEDULE PAGE (CONTINUED)
INSURED: [JOHN DOE] POLICY NUMBER: [2 000 000]
SUBACCOUNT FEES
---------------
MAXIMUM DAILY TAX FEE: [0] or such greater amount as may be assessed as
a result of a change in tax laws.
POLICY EXPENSE CHARGES
----------------------
MAXIMUM MONTHLY MORTALITY AND
EXPENSE RISK FEE: 0.00075 (Based on Annual Rate of 0.90%)
PREMIUM TAX CHARGE: x.xx% of premiums (based on actual state tax)
FEDERAL TAX CHARGE: [1.50%] of premiums
MAXIMUM SALES LOAD: 9.00% of premiums (Policy Years 1 to 7)
3.00% of premiums (Policy Years 8+)
MAXIMUM TRANSFER CHARGE: $ 0 - First two transfers per Policy Year.
$10 - Subsequent transfers per Policy Year.
MAXIMUM PARTIAL SURRENDER FEE: Lesser of $25.00 or 2% of partial surrender
amount paid.
MAXIMUM MONTHLY POLICY
ADMINISTRATION CHARGE: $10
OTHER RATES
-----------
GUARANTEED INTEREST ACCOUNT:
----------------------------
UNLOANED PORTION: Minimum Rate 3.00%
LOANED PORTION: [2.00%]
MAXIMUM LOAN INTEREST RATE: [2.75%] for the first 10 Policy Years or until
age 65, whichever is sooner;
[2.50%] thereafter, until the end of the 15th
Policy Year or until age 65, whichever
is sooner;
[2.25%] thereafter
V608 PAGE 2 OF 5
<PAGE>
SCHEDULE PAGE (CONTINUED)
INSURED: [JOHN DOE] POLICY NUMBER: [2 000 000]
TABLE OF CORRIDOR FACTORS
This policy complies with section 7702 of the Internal Revenue Code under the
[Guideline Premium/Cash Value Corridor Test], which requires the death benefit
is greater than or equal to the product of the Cash Value and the Applicable
Percentages from the following table.
Attained Age of Applicable Attained Age of Applicable
Insured Percentage Insured Percentage
------------------------------------------------------------------------------
30-40 250% 70 115%
41 243% 71 113%
42 236% 72 111%
43 229% 73 109%
44 222% 74 107%
45 215% 75 105%
46 209% 76 105%
47 203% 77 105%
48 197% 78 105%
49 191% 79 105%
50 185% 80 105%
51 178% 81 105%
52 171% 82 105%
53 164% 83 105%
54 157% 84 105%
55 150% 85 105%
56 146% 86 105%
57 142% 87 105%
58 138% 88 105%
59 134% 89 105%
60 130% 90 105%
61 128% 91 104%
62 126% 92 103%
63 124% 93 102%
64 122% 94 101%
65 120% 95 101%
66 119% 96 101%
67 118% 97 101%
68 117% 98 101%
69 116% 99 101%
100 100%
V608 PAGE 3 OF 5
<PAGE>
SCHEDULE PAGE (CONTINUED)
INSURED: [JOHN DOE] POLICY NUMBER: [2 000 000]
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
<TABLE>
<CAPTION>
Monthly Monthly Monthly
Attained Age Rate Attained Age Rate Attained Age Rate
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
35 .1758 57 1.0408 79 7.5875
36 .1867 58 1.1325 80 8.2367
37 .2000 59 1.2308 81 8.9567
38 .2150 60 1.3400 82 9.7708
39 .2325 61 1.4617 83 10.6883
40 .2517 62 1.5992 84 11.6875
41 .2742 63 1.7550 85 12.7458
42 .2967 64 1.9283 86 13.8408
43 .3225 65 2.1183 87 14.9625
44 .3492 66 2.3208 88 16.1058
45 .3792 67 2.5367 89 17.2742
46 .4100 68 2.7658 90 18.4808
47 .4433 69 3.0142 91 19.7483
48 .4783 70 3.2925 92 21.1208
49 .5175 71 3.6083 93 22.6758
50 .5592 72 3.9708 94 24.6583
51 .6083 73 4.3867 95 27.4967
52 .6633 74 4.8492 96 32.0458
53 .7258 75 5.3492 97 40.0167
54 .7967 76 5.8775 98 54.8317
55 .8725 77 6.4267 99 83.3333
56 .9550 78 6.9917
</TABLE>
BASIS OF COMPUTATION:
MORTALITY: Commissioner's 1980 Male Standard Ordinary Mortality Table,
Aggregate as to Tobacco, Age Nearest Birthday.
v608 PAGE 4 OF 5
<PAGE>
SCHEDULE PAGE (CONTINUED)
INSURED: [JOHN DOE] POLICY NUMBER: [2 000 000]
TABLE OF FACE AMOUNTS OF INSURANCE
----------------------------------
ISSUE DATE FACE AMOUNT RISK CLASSIFICATION
- ---------- ----------- -------------------
[November 1, 1999] [$178,000.00] [Male Advantage]
RIDERS AND RIDER BENEFITS
-------------------------
<TABLE>
<CAPTION>
PAYABLE MONTHLY
RIDER DESCRIPTION RIDER DATE AMOUNT PREMIUM TO CHARGE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VR34 - Exchange of Insured May 1, 2000 $0.00 $0.00 $0.00
VR36 - Policy Term Rider May 1, 2000 $100,000 $0.00 $3.88
</TABLE>
v608 PAGE 5 OF 5
<PAGE>
TABLE OF CONTENTS
PART PAGE
- --------------------------------------------------------------
Table of Contents
1. Definitions...............................................1
2. About the Policy..........................................2
Effective Date of Insurance............................2
Entire Contract........................................2
Non-Participating......................................2
Contestability.........................................2
Suicide................................................3
Misstatement of Age or Sex.............................3
Assignments............................................3
Annual Reports.........................................4
Transaction Rules......................................4
3. Rights of Owner...........................................4
Who Is the Owner.......................................4
What Are the Rights of the Owner.......................4
How to Change the Owner................................5
4. Premiums..................................................5
Premium Payments.......................................5
Premium Deductions.....................................5
Net Premium Allocation
to Subaccounts.......................................6
Premium Flexibility....................................6
Total Premium Limit....................................6
Grace Period and Lapse.................................7
Policy Value...........................................7
Monthly Deduction......................................8
5. The Accounts..............................................9
Guaranteed Interest Account............................9
Separate Account......................................10
Additional Subaccounts................................11
Substitution of Subaccounts...........................11
Voting Rights.........................................11
Share of Separate Account
Subaccount Values...................................11
Unit Value............................................11
Net Investment Factor.................................12
6. Lifetime Benefits........................................12
Transfers.............................................12
Loans.................................................13
Loan Interest.........................................14
Cash Surrender Value..................................14
Full Surrender........................................14
Partial Surrender.....................................15
Additional Insurance Option...........................15
7. Death Benefits...........................................17
Death Benefit Option 1................................17
Death Benefit Option 2................................17
Death Benefit Option 3................................17
Minimum Death Benefit.................................17
Death Benefit Following
Insured's Age 100...................................17
How to Change the Death
Benefit Options.....................................18
Request for an Increase in
Face Amounts........................................18
Right to Cancel Face
Amount Increases....................................18
Request for a Decrease in
Face Amount.........................................19
Death Proceeds........................................19
Interest on Death Proceeds............................19
The Beneficiary.......................................19
How to Change the Beneficiary.........................20
8. Payment Options..........................................20
Who May Elect Payment Options.........................20
How to Elect a Payment Option.........................20
Payment Options.......................................21
(1) Payment in one sum...............................21
(2) Left to earn interest ...........................21
(3) Payments for a specified period..................21
(4) Life annuity with specified
period certain...................................21
(5) Life annuity.....................................22
(6) Payments of a specified amount...................22
(7) Joint survivorship annuity
with a 10-year period certain....................22
Additional Interest..................................23
9. Tables of Payment Option Amounts......................23-24
V608
<PAGE>
PART 1: DEFINITIONS
ATTAINED AGE Age of the insured on the birthday
nearest the most recent Policy
Anniversary.
DEBT Unpaid loans against this policy plus
accrued interest.
GENDER The terms "he," "his" and "him" are
applicable without regard to sex. Where
proper, "she," "hers" or "her" may be
substituted.
IN FORCE The policy has not terminated.
IN WRITING (WRITTEN In a written form satisfactory to Us and
REQUEST) filed at Phoenix VUL COLI Unit at the
address shown on the cover page of this
policy.
MONTHLY CALCULATION The first Monthly Calculation Day of a
DAY policy is the same day as its Policy Date
as shown on the Schedule Page. Subsequent
Monthly Calculation Days are the same day
for 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.
PAYMENT DATE The Valuation Date on which a premium
payment or loan repayment is received at
Our VUL unless it is received after the
close of the New York Stock Exchange in
which case it will be the next Valuation
Date.
POLICY ANNIVERSARY The anniversary of the Policy Date.
POLICY DATE The Policy Date as shown on the Schedule
Page. It is the date from which Policy
Years and Policy Anniversaries are
measured.
POLICY MONTH The period from one Monthly Calculation
Day up to, but not including, the next
Monthly Calculation Day.
POLICY VALUE The Policy Value as defined in Part 4.
POLICY YEAR The first Policy Year is the one-year
period from the Policy Date to, but not
including, the first Policy Anniversary.
Each succeeding Policy Year is the
one-year period from the period from the
Policy Anniversary to, but not including,
the next Policy Anniversary.
PROPORTIONATE Amounts are allocated to Subaccounts on a
proportionate basis such that the ratios
of this policy's Subaccount values to
each other are the same before and after
the allocation.
SEPARATE ACCOUNT PLAC Variable Universal Life Account.
SUBACCOUNTS The Guaranteed Interest Account
(exclusive of the loaned portion of such
account) and the accounts within Our
Separate Account to which non-loaned
assets under the policy are allocated as
described in Part 5.
v608 1
<PAGE>
UNIT A standard of measurement, as described
in Part 4, used to determine the share of
this policy in the value of each
Subaccount of the Separate Account.
VALUATION DATE Every day the New York Stock Exchange is
open for trading.
VALUATION PERIOD The period in days from the end of one
Valuation Date through the next Valuation
Date.
VUL Our VUL COLI Unit at P.O. Box 22012,
Albany, NY, 12201-2012.
WE (OUR, US) Phoenix Life and Annuity Company (PLAC).
YOU (YOUR) The owner of this policy.
PART 2: ABOUT THE POLICY
EFFECTIVE DATE OF This policy will begin In Force on the
INSURANCE Policy Date, provided the issue premium
is paid while the insured is alive.
ENTIRE CONTRACT This policy and the written application
of the policyholder, a copy of which is
attached to and made a part of the
policy, are the entire contract between
You and Us. Any change in the provisions
of the contract, to be in effect, must be
signed by one of Our executive officers
and countersigned by Our registrar or one
of Our executive officers. This policy is
issued by Us at Our Home Office in
Hartford, Connecticut. Any benefits
payable under this policy are payable at
Our VUL.
NON-PARTICIPATING This is a non-participating policy which
does not pay any dividends. Your policy
will not share in Our profits or surplus
earnings.
CONTESTABILITY We rely on all statements made by or for
the insured in the written application.
These statements are considered to be
representations and not warranties. We
can contest the validity of this policy
and any coverage under it for any
material misrepresentation of fact. To do
so, however, the misrepresentation must
be contained in an application and the
application must be attached to this
policy when issued or made a part of this
policy when a change is made.
We cannot contest the validity of the
original face amount of this policy after
it has been In Force during the insured's
lifetime for two years from its Policy
Date. If We contest the policy, it will
be based on the application for this
policy.
We cannot contest the validity of any
increase in face amount after the policy
has been In Force during the insured's
lifetime for two years from the issue
date of the increase. Any such contest
will be based on the supplemental
application for the increase.
V608 2
<PAGE>
If We contest the validity of all or a
portion of the face amount provided under
this policy, the amount We pay with
respect to such portion of the face
amount will be limited to the higher of a
return of any paid premium required by Us
for the contested Face Amount, or the sum
of any monthly deductions made under this
policy for the contested face amount.
SUICIDE If within two years from the Policy Date
the insured dies by suicide, while sane
or insane, and while this policy is In
Force, the amount of death benefit will
be limited to the Policy Value adjusted
as follows:
a. We will add any monthly deductions
made under this policy;
b. We will subtract any Debt owed Us
under this policy.
If within two years from the issue date
of an increase in face amount the insured
dies by suicide, while sane or insane,
and while the policy is In Force, the
death benefit for that increase will be
limited to a pro rata portion of the
Policy Value corresponding to such
increase adjusted as follows:
a. We will add the sum of the monthly
deductions corresponding to such
increase;
b. We will subtract any Debt owed Us
under this policy.
MISSTATEMENT OF If the age or sex of the insured has been
AGE OR SEX misstated, any benefits payable under
this policy will be adjusted to reflect
the correct age and sex as follows:
a. For adjustments made prior to the
insured's death, no change will be
made to the then current cost of
insurance rates, but subsequent
cost of insurance rates will be
adjusted to such rates that would
apply had this policy been issued
based on the correct age and sex.
b. For adjustments made at the time of
the insured's death, the death
benefit payable will be adjusted to
reflect the amount of coverage that
would have been supported by the
most recent monthly deduction based
on the then current cost of
insurance rates for the correct age
and sex.
ASSIGNMENTS Except as otherwise provided
herein, any or all of the rights in
this policy may be assigned. We
will not be considered to have
notice of any assignment until We
receive the original or copy of the
assignment In Writing. We are not
responsible for the validity of any
assignment.
V608 3
<PAGE>
ANNUAL REPORTS Each year We will send You a report for
this policy showing:
a. the then current Policy Value, cash
surrender value, death benefit and
face amount;
b. the premiums paid, and deductions
and partial surrenders made since
the last report;
c. any outstanding Debt;
d. an accounting of the change in
Policy Value since the last report;
and
e. such additional information as
required by applicable law or
regulation.
TRANSACTION RULES Requests for transactions involving
Subaccounts will usually be processed
within 7 days after We receive the
Written Request. However, We may, at Our
discretion, postpone the payment of any
death benefit in excess of the initial
face amount, any policy loans, partial
withdrawals, surrenders or transfers:
a. For up to six months from the date
of request, for any transactions
dependent upon the value of the
Guaranteed Interest Account; or
b. Otherwise, for any period during
which the New York Stock Exchange
is closed for trading (except for
normal holiday closing) or when the
Securities and Exchange Commission
has determined that a state of
emergency exists which may make
processing such transactions
impractical.
PART 3: RIGHTS OF OWNER
WHO IS THE OWNER The Owner has all the rights under this
policy and is named in the application
unless later changed and endorsed on this
policy.
WHAT ARE THE RIGHTS You control this policy during the
OF THE OWNER insured's lifetime but not until this
policy begins In Force. Unless You and We
agree otherwise, You may exercise all
rights provided under this policy without
the consent of anyone else. These rights
include the right to:
a. Receive any amounts payable under
this policy during the insured's
lifetime.
b. Change the owner or the interest of
any owner.
c. Change the planned premium amount
and frequency. See Part 4.
V608 4
<PAGE>
d. Change the Subaccount allocation
schedule for premium payments and
monthly deductions. See Part 4.
e. Transfer amounts between and among
Subaccounts. See Part 6.
f. Obtain policy loans. See Part 6.
g. Obtain a partial surrender. See
Part 6.
h. Surrender this policy for its cash
surrender value. See Part 6.
i. Select a payment option for any
cash surrender value that becomes
payable. See Part 6.
j. Request changes in the insurance
amount. See Part 7.
k. Change the beneficiary of the death
benefit. See Part 7.
l. Assign, release or surrender any
interest in the policy.
m. Change the death benefit option.
See Part 7.
You may exercise these rights only while
the insured is alive. Exercise of any of
these rights will, to the extent thereof,
assign, release or surrender the interest
of the insured and all other
beneficiaries and owners under this
policy.
HOW TO CHANGE You may change the owner by Written
THE OWNER Request.
PART 4: PREMIUMS
PREMIUM PAYMENTS The issue premium as shown on the
Schedule Page is due on the Policy Date.
The insured must be alive when the issue
premium is paid. Premiums other than the
Issue Premium may be paid at any time
while this policy is In Force subject to
the limits described below. All premiums
are payable at Our VUL, except that the
issue premium may be paid to an
authorized agent of Ours for forwarding
to Us. No benefit associated with any
premium shall be provided until it is
actually received by Us at Our VUL.
PREMIUM DEDUCTIONS A premium tax may be required based on
the laws of the state of issue. The
premium tax rate, if any, as of the
Policy Date, is shown on the Schedule
Page. This rate may change for subsequent
premium payments in accordance with
applicable state law.
A federal tax charge as stated on the
Schedule Page will also be deducted from
any premiums received by Us at Our VUL.
In addition, a sales load expressed as a
percent of premium will be deducted from
any premiums received by Us at Our VUL.
The maximum sales load is shown on the
Schedule Page. If the issue premium is
received by Us
V608 5
<PAGE>
at Our VUL after the Policy Date, then it
will also be reduced by the amount
necessary to cover any past unpaid
monthly deductions described below. In
addition, payments received by Us during
a grace period will also be reduced by
the amount needed to cover any monthly
deductions during the grace period.
NET PREMIUM ALLOCATION The premiums, net of any premium and
TO SUBACCOUNTS federal tax charges, will be applied on
the Payment Date to the various
Subaccounts based on the premium
allocation schedule elected in the
application for this policy or as later
changed by You. You may change the
allocation schedule for premium payments
by Written Request. Allocations to each
Subaccount must be expressed in whole
percentages unless We agree otherwise.
The number of units credited to each
Subaccount of the Separate Account will
be determined by dividing the net premium
applied to that Subaccount by the unit
value of that Subaccount on the Payment
Date. The number of units credited to
each Subaccount is carried to four
decimal places.
PREMIUM FLEXIBILITY Subject to the total premium limit
described in the next section and
except for the issue premium, You may
change the amount and frequency of
premium payments while this policy is In
Force during the lifetime of the insured
as follows:
a. You may increase or decrease the
planned premium amount or payment
frequency at any time by Written
Request. We reserve the right to
limit increases to such maximums as
We may establish from time to time.
b. Additional premium payments may be
made at any time up to the Policy
Anniversary nearest the Insured's
100th birthday. However, We reserve
the right to require satisfactory
evidence of insurability before
accepting any additional premium
payment which results in any
increase in the net amount at risk.
c. Each premium payment made must at
least equal $100 or, if during a
grace period, the amount needed to
prevent lapse of this policy. We
reserve the right to reduce this
limit.
TOTAL PREMIUM LIMIT We will refund any portion of any premium
payment which is determined to be in
excess of the premium limit established
by law to qualify your Policy as a
contract for life insurance.
V608 6
<PAGE>
The total premium limit is applied to the
sum of all premiums received by Us for
this policy to date, reduced by the sum
of all partial surrender amounts paid by
Us to date. If the total premium limit is
exceeded, We will pay You the excess,
with interest at an annual rate of not
less than 3%, not later than 60 days
after the end of the Policy Year in which
the limit was exceeded. The Policy Value
will be adjusted to reflect such refund.
The amount to be taken from the
Subaccount will be allocated in the same
manner as provided for monthly deductions
unless You request another allocation in
writing.
The total premium limit may be exceeded
if additional premium is needed to
prevent lapse under the grace period and
lapse provision. The total premium limit
may change due to:
a. a partial surrender or a decrease
in face amount;
b. addition, cancellation or change of
a rider; or
c. a change in federal tax laws
or regulations.
We reserve the right to not accept any
premium payment which would increase the
Death Benefit by more than it would
increase the Policy Value.
If the total premium limit changes, We
will send You a Revised Schedule Page
reflecting the change. However, We
reserve the right to require that this
policy be returned to Us so that We may
endorse the change.
GRACE PERIOD AND LAPSE If, on any Monthly Calculation Day, the
required monthly deduction exceeds the
Policy Value during the first three
Policy Years, or the cash surrender value
after the third Policy Year, a grace
period of 61 days will be allowed for the
payment of an amount equal to three times
the required monthly deduction. This
policy will continue In Force during any
such grace period. We will mail a written
notice to You and any assigns at the post
office addresses last known to Us as to
the amount of premium required. If such
premium is not paid to Us by the end of
the grace period this policy will lapse
without value, but not before 30 days
have elapsed since We mailed Our written
notice to You. The "date of lapse" will
be the Monthly Calculation Day on which
the deduction was to be made, and any
insurance and rider benefits provided
under this policy will terminate as of
that date.
POLICY VALUE The Policy Value is the sum of this
policy's share in the value of each
Subaccount of the Separate Account and
the value of this policy's Guaranteed
Interest Account. See Part 5 for an
explanation as to how this policy's share
in the value of each Subaccount of the
Separate Account is determined and for a
description of the Guaranteed Interest
Account.
V608 7
<PAGE>
MONTHLY DEDUCTION A deduction is made each Policy Month
from the Policy Value (excluding the
value of the loaned portion of the
Guaranteed Interest Account) to pay:
a. the cost of insurance provided
under this policy;
b. any flat extra mortality charges;
c. the cost of any rider benefits
provided;
d. an administrative charge. The
administrative charge may vary but
in no event will it exceed the
maximum administrative charge
amount shown on the Schedule Page.
We will send You a written notice
of any change at least 30 days in
advance of such change; and
e. a mortality and expense risk
charge. The mortality and expense
risk charge may vary but in no
event will it exceed the maximum
mortality and expense risk charge
amount shown on the Schedule Page.
In general, the mortality and
expense risk charge is based on Our
current rate for policies in this
same class of business, and on the
level of commission determined by
You and your agent.
Deductions are made on each Monthly
Calculation Day. If the Monthly
Calculation Day is not a Valuation Date,
the monthly deduction for that Policy
Month will be made on the next Valuation
Date.
You may request in the application for
this policy that monthly deductions not
be taken from certain specified
Subaccounts. Such a request may later be
changed by notifying Us In Writing, but
only with respect to future monthly
deductions. Monthly deductions will be
taken from this policy's share of the
remaining Subaccounts exclusive of the
loaned portion of the Guaranteed Interest
Account, on a proportionate basis. In the
event this policy's share in the value of
such Subaccounts is not sufficient to
permit the withdrawal of the full monthly
deduction, the remainder will be taken on
a proportionate basis from this policy's
share of each of the other Subaccounts
exclusive of the loaned portion of the
Guaranteed Interest Account. The number
of units deducted from each Subaccount of
the Separate Account will be determined
by dividing the portion of the monthly
deduction allocated to each such
Subaccount by the unit value of that
Subaccount on the Monthly Calculation
Day.
V608 8
<PAGE>
Each monthly deduction will pay the cost
of insurance from the Monthly Calculation
Day on which the deduction is made up to,
but not including, the next Monthly
Calculation Day. The cost of insurance is
equal to the cost of insurance rate for
the current Policy Month divided by 1,000
and then multiplied by the result of:
a. the death benefit on the Monthly
Calculation Day; minus
b. the Policy Value on the Monthly
Calculation Day.
The cost of insurance rate for the
current Policy Month is based on the
insured's attained age and risk
classification. The rate used in
computing the cost of insurance is
obtained from the Table of Guaranteed
Maximum Cost of Insurance Rates on the
Schedule Page for the risk
classification(s) shown, or such lower
rate as We may declare. Any change We
make in the declared cost of insurance
rates will be uniform by class and based
on Our future mortality, expense and
lapse expectations. The declared cost of
insurance rates for an insured will not
be affected by a change in the insured's
health or occupation.
PART 5: THE ACCOUNTS
Assets under this policy may be allocated
either to the Guaranteed Interest Account
or to any of the Subaccounts of the
Separate Account. Any allocation You make
must be at least 1%; You may not choose a
fractional percent. The sum of the Fund
allocation factors must equal 100%.
GUARANTEED INTEREST The Guaranteed Interest Account is not
ACCOUNT part of the Separate Account. It is part
of Our General Account. We reserve the
right to limit cumulative premiums,
including transfers, to the unloaned
portion of the Guaranteed Interest
Account during any one-week period to no
more than $250,000. We will credit
interest daily on the amounts allocated
under this policy to the Guaranteed
Interest Account. The loaned portion of
the Guaranteed Interest Account will be
credited interest at an effective annual
fixed rate as shown on the Schedule Page.
We will credit interest on the unloaned
portion of the Guaranteed Interest
Account at such rates We shall determine
but in no event will the effective annual
rate of interest on such portion be less
than the minimum interest rate shown on
the Schedule Page.
On the last working day of each calendar
week, We will set the interest rate that
will apply to any net premium or
transferred amounts made to the unloaned
portion of the Guaranteed Interest
Account during the following calendar
week. That rate will remain in effect for
such premiums, for an initial guarantee
period of one full year. Upon expiry of
the initial one-year guarantee period,
and each subsequent one-year guarantee
period thereafter, the rate applicable
for any premiums in the unloaned portion
of the Guaranteed Interest Account whose
guarantee period has just ended shall be
the same
V608 9
<PAGE>
rate that applies to new premiums to such
Subaccount at the time the guarantee
period expires. Such rate shall likewise
remain in effect for such premiums for a
subsequent guarantee period of one full
year.
All transfers, partial surrenders and
deductions from the unloaned portion of
the Guaranteed Interest Account will be
assessed on a Last-In, First-Out basis
based on the date the deposit was
initially made to the unloaned portion of
such Subaccount. At the end of each
Policy Year and at the time of any Debt
repayment, interest credited to the
loaned portion of the Guaranteed Interest
Account will be transferred to the
unloaned portion of the Guaranteed
Interest Account. We reserve the right to
add other Guaranteed Interest Accounts,
subject where required, to approval by
the insurance supervisory official of the
state where this policy is delivered.
SEPARATE ACCOUNT The Separate Account has been established
by Us as a Separate Account pursuant to
Connecticut law and is registered as a
unit investment trust under the
Investment Company Act of 1940 (1940
Act). Income and realized and unrealized
gains and losses from assets in the
Separate Account are credited to or
charged against it without regard to Our
other income, gains or losses. We own the
Separate Account assets and they are kept
separate from the Assets of Our General
Account. Separate Account assets will be
valued on each Valuation Date. The
portion of the Separate Account equal to
reserves and liabilities for policies
supported by the Separate Account will
not be charged with any liabilities
arising out of Our other business. We
reserve the right to use assets of the
Separate Account in excess of these
reserves and liabilities for any
purposes.
The Separate Account has several
Subaccounts available under this policy.
We use the assets of the Separate Account
to buy shares of the Fund identified
according to Your allocation
instructions. The Fund is registered
under the 1940 Act as an open-end,
diversified management investment
company. The Fund has separate Portfolios
that correspond to the Subaccounts of the
Separate Account. Assets of each such
Subaccount are invested in shares of the
corresponding Fund Portfolio.
A Portfolio of the Fund might make a
material change in its investment policy.
If that occurs, You will be notified of
the change. In addition, no change will
be made in the investment policy of any
of the Subaccounts of the Separate
Account without approval of the
appropriate insurance supervisory
official of Our domiciliary state of
Connecticut. The approval process is on
file with the insurance supervisory
official of the state where the policy is
delivered.
V608 10
<PAGE>
ADDITIONAL SUBACCOUNTS We have the right to add Subaccounts of
the Separate Account subject to approval
by the Securities and Exchange Commission
and, where required, other regulatory
authority.
SUBSTITUTION OF If the shares of the Funds of this
SUBACCOUNTS contract should no longer be available
for investment by the Separate Account or
if in Our judgment further investment in
such Funds becomes inappropriate for use
with this policy, We reserve the right to
substitute Units of another Subaccount
for Units already purchased or to be
purchased in the future by premium
payments under this policy. Any such
change will be subject to approval by the
Securities Exchange Commission and, where
required, by the insurance supervisory
official of the state where this policy
is issued.
VOTING RIGHTS Although We are the legal owner of the
Fund shares, We will vote the shares at
regular and special meetings of the
shareholders of the Fund in accordance
with instructions received from You and
the other owners of the policies. Any
shares held by Us will be voted in the
same proportion as voted by You and the
other owners of the policies. However, We
reserve the right to vote the shares of
the Fund without direction from You if
there is a change in the law which would
permit this to be done.
SHARE OF SEPARATE The share of this policy in the value of
ACCOUNT SUBACCOUNT each Subaccount of the Separate Account
VALUES on a Valuation Date is the unit value of
that Subaccount on that date multiplied
by the number of this policy's units in
that Subaccount after all transactions
for the Valuation Period ending on that
day have been processed. For any day
which does not fall on a Valuation Date,
the share of this policy in the value of
each Subaccount of the Separate Account
is determined using the number of units
on that day after all transactions for
that day have been processed and the unit
values on the next Valuation Date.
UNIT VALUE The unit value of each Subaccount of the
Separate Account was set by Us on the
first Valuation Date of each such
Subaccount. The unit value of a
Subaccount of the Separate Account 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 of the Separate Account on a
day other than a Valuation Date is the
unit value on the next Valuation Date.
Unit values are carried to 6 decimal
places. The unit value of each Subaccount
of the Separate Account on a Valuation
Date is determined at the end of that
day.
V608 11
<PAGE>
NET INVESTMENT FACTOR The Net Investment Factor for each
Subaccount of the Separate Account 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 equal to item (d) below
subtracted from the result of dividing
the sum of items (a) and (b) by item (c)
as defined below.
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
of all transactions during the
Valuation Period ending on that
date.
d. The daily charges, if any, for
taxes and reserves for taxes on
investment income, and realized and
unrealized capital gains as shown
on the Schedule Page, multiplied by
the number of days in the current
Valuation Period.
PART 6: LIFETIME BENEFITS
TRANSFERS You may transfer all or a portion of the
Policy Value among one or more of the
Subaccounts of the Separate Account and
the unloaned portion of the Guaranteed
Interest Account. We reserve the right to
limit the number of transfers You may
make, however, You can make up to six
transfers per contract year from
Subaccounts of the Separate Account and
only one transfer per contract year from
the unloaned portion of the Guaranteed
Interest Account unless the Systematic
Transfer Program is elected. Under that
program, funds may be transferred
automatically among the Subaccounts on a
monthly, quarterly, semiannual or annual
basis. Unless We agree otherwise, the
minimum initial and subsequent transfer
amounts are $25 monthly, $75 quarterly,
$150 semiannually or $300 annually.
Except as otherwise provided under the
Systematic Transfer Program, the amount
that may be transferred from the
Guaranteed Interest Account at any one
time cannot exceed the higher of $1,000
or 25% of the value of the Guaranteed
Interest Account.
V608 12
<PAGE>
Transfers may be made by Written Request.
The maximum transfer charge is shown on
the Schedule Page. There is no transfer
charge for the Systematic Transfer
Program. Any such charge will be deducted
from the Subaccounts from which the
amounts are to be transferred in the same
proportion as the amounts to be
transferred bear to the total amount
transferred. The value of each Subaccount
will be determined on the Valuation Date
that coincides with the date of transfer.
LOANS While this policy is In Force, a loan
may be obtained against this policy in
any amount up to the available loan
value. To obtain a loan, this policy must
be properly assigned to Us as security.
We need no other collateral. We reserve
the right not to allow loans of less than
$500 unless the loans are to pay premiums
on another policy issued by Us.
The loan value is 90% of the Policy
Value. The "available loan value" is the
loan value on the current day less any
outstanding Debt.
The amount of the loan will be added to
the loaned portion of the Guaranteed
Interest Account and subtracted from this
policy's share of the Subaccounts based
on the allocation You request at the time
of the loan. The total reduction will
equal the amount added to the loaned
portion of the Guaranteed Interest
Account. Unless We agree otherwise,
allocations to each Subaccount must be
expressed in whole percentages. If no
allocation request is made, the amount
subtracted from the share of each
Subaccount will be determined in the same
manner as provided for monthly
deductions.
Debt may be repaid at any time during the
lifetime of the insured while this policy
is In Force. Such repayment, in excess of
any outstanding accrued loan interest,
will be applied to reduce the loaned
portion of the Guaranteed Interest
Account and will be transferred to the
unloaned portion of the Guaranteed
Interest Account to the extent that
loaned amounts taken from such account
have not previously been repaid.
Otherwise, such balance will be
transferred among the Subaccounts You
request upon repayment and, if no
allocation request is made, We will use
Your most recent premium allocation
schedule on file with Us. Any Debt
repayment received by Us during a grace
period as described in Part 4 will be
reduced to cover any overdue monthly
deductions and only the balance applied
to reduce the Debt. Such balance will
also be applied as described to reduce
the loaned portion of the Guaranteed
Interest Account.
V608 13
<PAGE>
While there is any outstanding Debt
against this policy, any payments
received by Us for this policy will be
applied directly to reduce the Debt
unless specified as a premium payment.
Until the Debt is fully repaid,
additional Debt repayments may be made at
any time during the lifetime of the
insured while this policy is In Force.
Failure to repay a policy loan or to pay
loan interest will not terminate this
policy except as otherwise provided under
the Grace Period and Lapse in Part 4 when
the policy does not have sufficient
remaining value to pay the monthly
deductions, in which event, that grace
period provision will apply.
LOAN INTEREST Loans will bear interest at an effective
annual rate equal to the loan interest
rate shown on the Schedule Page and will
be compounded daily. Interest will accrue
on a daily basis from the date of the
loan and is included as part of the Debt
under this policy. Loan interest will be
due on each Policy Anniversary. If not
paid when due, the outstanding accrued
interest on that date will be charged as
a loan against this policy. Interest less
than the maximum guaranteed may be
charged.
CASH SURRENDER VALUE A loan will have a permanent effect on
any death benefit and Cash Surrender
Value of this policy. The Cash Surrender
Value is the policy value as defined in
Part 4 less any outstanding policy debt;
plus the refund of sales load if
applicable. There is no surrender charge.
FULL SURRENDER You may fully surrender this policy for
its cash surrender value by Written
Request and returning this policy to Us
along with a written release and
surrender of all claims under this policy
signed by You and any assigns. You may do
this at any time during the lifetime of
the insured while this policy is In
Force. The written surrender must be in a
form satisfactory to Us and must include
such tax withholding information as We
may reasonably require. The surrender
will be effective on the "date of
surrender" which is the later of the
dates on which We receive the returned
policy and the written surrender. Upon
full surrender, all insurance and any
rider benefits provided under this policy
will terminate. You may direct that We
apply the surrender proceeds under any of
the Payment Options described in Part 8.
V608 14
<PAGE>
PARTIAL SURRENDER You may obtain a partial surrender of
this policy by requesting that a part of
this policy's cash surrender value be
paid to You. You may do this at any time
during the lifetime of the insured while
this policy is In Force with a Written
Request signed by You and any assigns. We
reserve the right to require that this
policy first be returned to Us before
payment is made. A partial surrender will
be effective on the date We receive the
Written Request or, if required, the date
We receive this policy if later. You may
direct that We apply the surrender
proceeds under any of the Payment Options
described in Part 8.
A partial surrender will be denied if the
resultant cash surrender value would be
less than or equal to zero. We reserve
the right not to allow partial surrenders
if the resulting death benefit would be
less than $50,000 or if the amount of the
partial surrender is less than $500. We
further reserve the right to require that
the entire balance of a Subaccount be
surrendered and withdrawn if the share of
this policy in the value of that
Subaccount would, immediately after a
partial surrender, be less than $500.
Upon a partial surrender, the Policy
Value will be reduced by the sum of the
following:
a. The partial surrender amount paid.
This amount comes from a reduction
in this policy's share in the value
of each Subaccount based on the
allocation You request at the time
of the partial surrender. If no
allocation request is made, the
assessment to each Subaccount will
be made in the same manner as
provided for monthly deductions.
b. We reserve the right to charge a
partial surrender fee. This fee, if
any, will be the lessor of $25 or
2% of the partial surrender amount
paid. The assessment to each
Subaccount will be made in the same
manner as provided for the partial
surrender amount paid.
The cash surrender value will be reduced
by the partial surrender amount paid plus
the partial surrender fee. The face
amount of this policy will be reduced by
the same amount as the Policy Value is
reduced as described above. We will send
You a Revised Schedule Page reflecting
this change.
ADDITIONAL INSURANCE While this policy is In Force and subject
OPTION to the terms of this provision, including
Our receipt of evidence satisfactory to
Us of the insured's then insurability,
You have the option to purchase
additional insurance on the same insured
under the same plan of insurance as this
policy. The new policy will be based on
the same guaranteed rates and charges as
are in effect for this plan on the Policy
Date of this policy as adjusted for the
insured's new attained age and change, if
any, in risk classification. The new
policy will only include
V608 15
<PAGE>
such rider benefits as We may agree based
on Our rules and practices in effect on
the Policy Date of the new policy. The
amount of insurance under the new policy,
when added to all other insurance with
Our company on the life of the insured,
cannot exceed Our total insurance amount
limitations in effect on the Policy Date
of the new policy.
To elect this option, You must file a
written application In Writing. It must
be signed by You and the insured. We must
also receive:
a. Evidence that You have a
satisfactory insurable interest in
the life of the insured.
b. Evidence, satisfactory to Us, that
the insured is then insurable under
Our established practice in the
selection of risks for this plan of
insurance, including the new amount
applied for and rider benefits
requested. Selection of risks
includes health and non-health
factors.
c. Payment, while the insured is
alive, of the full issue premium
for the new policy. The payment
must equal or exceed Our minimum
issue premium requirements in
effect for this plan on the Policy
Date of the new policy.
Any exclusions applicable to the new
policy will be determined in accordance
with Our rules and practices in effect on
the Policy Date of the new policy. The
new policy will not be subject to any
assignments or liens against this policy.
The owner and the beneficiary under the
new policy shall be as requested in the
application for the new policy. Any
subsequent changes will be governed by
the printed provisions of the new policy.
The new policy will begin in effect as of
the later of:
a. Our approval of the application for
the new policy;
b. payment of the full issue premium
due on the new policy.
The Policy Date of the new policy will be
as shown on the Schedule Pages of the new
policy based on Our rules and practices
then in effect. The time periods for the
suicide and contestability provisions in
the new policy will be measured from the
Policy Date of the new policy.
V608 16
<PAGE>
PART 7: DEATH BENEFITS
While the policy is In Force, You have
the right to elect one of the death
benefit options as described below. The
death benefit option shall be as elected
in the original application unless later
changed as provided below. If no option
is elected, Death Benefit Option 1 shall
apply.
DEATH BENEFIT OPTION 1 Under this option, during all Policy
Years until the Policy Anniversary which
follows the insured's 100th birthday, the
death benefit is equal to the greater of
(a) or (b) as defined below:
a. the policy's face amount on the
date of death;
b. the minimum death benefit on the
date of death as defined below.
DEATH BENEFIT OPTION 2 Under this option, during all Policy
Years until the Policy Anniversary which
follows the insured's 100th birthday, the
death benefit is equal to the greater of
(a) or (b) as defined below:
a. the policy's face amount on the
date of death plus the Policy
Value;
b. the minimum death benefit on the
date of death as defined below.
DEATH BENEFIT OPTION 3 Under this option, during all Policy
Years until the Policy Anniversary which
follows the insured's 100th birthday, the
death benefit is equal to the greater of
(a) or (b) as defined below:
a. the policy's face amount on the
date of death plus the greater of:
i. all premium payments made to
the date of death less any
partial surrenders made to the
date of death; or
ii. zero.
b. the minimum death benefit on the
date of death as defined below.
MINIMUM DEATH BENEFIT The minimum death benefit is the Policy
Value on the date of death of the
insured, multiplied by the applicable
percentage from the Table of Corridor
Factors shown on the Schedule Page.
DEATH BENEFIT FOLLOWING After the Policy Anniversary which
INSURED'S AGE 100 follows the insured's 100th birthday, the
death benefit will equal the Policy
Value.
V608 17
<PAGE>
HOW TO CHANGE THE You may not make a change from or to
DEATH BENEFIT OPTION Option 3. While this policy is In Force,
You may make a Written Request to change
the Death Benefit Option from Option 1 to
Option 2, or from Option 2 to Option 1.
No evidence of insurability is required.
If the request is to change from Option 1
to Option 2, the face amount will be
decreased by the Policy Value and if the
request is to change from Option 2 to
Option 1, the face amount will be
increased by the Policy Value. Any such
change will be in effect on the Monthly
Calculation Day coincident with or next
following the day We approve the request.
REQUEST FOR AN INCREASE Anytime that this policy is In Force, You
IN FACE AMOUNT may make a Written Request to increase
its face amount. Unless We agree
otherwise, the minimum of such face
amount increase is $25,000, and the
increase will be effective on the first
Policy Anniversary on or following the
date that We approve the request. Such
date will be shown as the issue date for
such increase on the Revised Schedule
Pages We send You reflecting the change.
We reserve the right to limit increases
in face amount. All requests to increase
the face amount must be applied for on a
supplemental application and will be
subject to evidence of the insured's
insurability satisfactory to Us. The
insured must be alive on the issue date,
and You must also pay to Us in advance
such issue premium for the increase as We
may require according to Our published
rules then in effect. If no issue premium
is required, the increase will not take
effect unless the cash surrender value on
the issue date at least equals the
monthly deduction for the total combined
face amount. The Issue Expense Charge for
Face Amount increases is as stated on the
Schedule Page.
We will send You Revised Schedule Pages
reflecting the change. We reserve the
right to further require that the policy
be returned to Us so that We may
incorporate the change.
RIGHT TO CANCEL FACE You have the right to cancel any increase
AMOUNT INCREASES in the face amount provided by Us under
this policy by Written Request and
returning the policy to Us within a
limited time as stated below. To cancel,
You must return the policy, including the
Revised Schedule Pages, before the latest
of:
1. 10 days after the new Revised
Schedule Page showing such
increase in the face amount is
delivered to You; or
V608 18
<PAGE>
2. 10 days after a Notice of Right
to Cancel is delivered to You;
or
3. 45 days after Part 1 of the
supplementary application for
such increased face amount is
signed.
Upon any such cancellation, We will
refund the higher of any paid premium
required by Us for the increase or the
sum of any monthly deductions and any
other fees and charges made under this
policy for the increase in face amount.
REQUEST FOR A DECREASE You may request a decrease in face amount
IN FACE AMOUNT at any time after the first Policy Year.
Unless We agree otherwise, the decrease
requested must at least equal $10,000 and
the face amount remaining after the
decrease must at least equal $25,000. All
requests to decrease the face amount must
be in writing and will be effective on
the first Monthly Calculation Day
following the date We approve the
request. We reserve the right to require
that this policy first be returned to Us
before the decrease is made. We will send
You a Revised Schedule Page reflecting
the change.
DEATH PROCEEDS Upon receipt In Writing of due proof that
the insured died while this policy is In
Force, We will pay the death proceeds of
this policy. The death proceeds equal the
death benefit on the date of death, with
the following adjustments:
a. We will deduct any Debt outstanding
against this policy.
b. We will deduct any monthly
deductions to and including the
Policy Month of death not already
made.
c. We will add any premiums received
by Us after the Monthly Calculation
Day just prior to the date of death
and on or before the date of death.
INTEREST ON DEATH We will pay interest on any death
PROCEEDS proceeds from the date of the insured's
death to the date of payment. The amount
of interest will be the same as would be
paid were the death proceeds left for
that period of time to earn interest
under Payment Option 2.
THE BENEFICIARY Unless another payment option is elected
as described in Part 8, any death
proceeds that become payable will be paid
in equal shares to such beneficiaries
living at the death of the insured as
stated in the application for this policy
or as later changed. Payments will be
made successively in the following order:
a. Primary beneficiaries.
V608 19
<PAGE>
b. Contingent beneficiaries, if any,
provided beneficiary is living at
the death of the insured.
c. You or Your executor or
administrator, provided no primary
or contingent beneficiary is living
at the death of the insured.
Unless otherwise stated, the relationship
of a beneficiary is the relationship to
the insured.
HOW TO CHANGE THE You may change the beneficiary under this
BENEFICIARY policy by Written Request. When We
receive it, the change will relate back
and take effect as of the date it was
signed. However, the change will be
subject to any payments made or actions
taken by Us before We received the
Written Request.
PART 8: PAYMENT OPTIONS
WHO MAY ELECT The death benefit of this policy will be
PAYMENT OPTIONS paid in one sum unless otherwise
provided. As an alternative to payment in
one sum as provided under Option 1, any
surrender or death benefit that becomes
payable under an account may be applied
under one or more of the alternative
income payment options as described in
this part or such other payment options
as may then be currently available for
the policy.
Our consent is required for the election
of an income payment option by a
fiduciary or any entity other than a
natural person. Our consent is also
required for elections by any assigns or
an owner other than the insured if the
owner has been changed. You may designate
or change one or more beneficiaries who
will be the payee or payees under the
option elected. You may only do this
during the lifetime of the insured. For
death proceeds, if no election is in
effect when the death benefit becomes
payable, the beneficiary may elect a
payment option.
Unless We agree otherwise, all payments
under any option chosen will be made to
the designated payee or to his executor
or administrator. We may require proof of
age of any payee or payees on whose life
payments depend as well as proof of the
continued survival of any such payee(s).
HOW TO ELECT A The election of an income payment option
PAYMENT OPTION must be by Written Request. Payments may
be made on an annual, semiannual,
quarterly or monthly basis provided that
each installment will at least equal $25.
We also require that at least $1,000 be
applied under any income option chosen.
V608 20
<PAGE>
PAYMENT OPTIONS This section provides a brief
description of the various payment
options that are available. In Part 9 You
will find tables illustrating the
guaranteed installment amount provided by
several of the options described in this
section. The amount shown for Options 4,
5 and 7 are the minimum monthly payments
for each $1,000 applied. The actual
payments will be based on the monthly
payment rates We are using when the first
payment is due. They will not be less
than shown in the tables.
Option 1 - Payment in one sum
Option 2 - Left to earn interest
We pay interest during the
payee's lifetime on the amount
left with Us under this option
as a principal sum. We
guarantee that at least one of
the versions of this option
will provide interest at a
rate of at least 3% per year.
Option 3 - Payments for a specific period
Equal income 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 Option 3 Table
shows the guaranteed amount of
each installment for monthly
and annual payment
frequencies. The table assumes
an interest rate of 3% per
year on the unpaid balance.
The actual interest rate is
guaranteed not to be less than
this minimum rate.
Option 4 - Life annuity with specified
period certain
Equal installments are paid
until the later of:
(A) The death of the payee.
(B) 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 may be chosen are as
follows:
A) Ten years
B) Twenty years
V608 21
<PAGE>
C) 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 deem the longer
period certain as having
been elected. The life
annuity provided under this
option is calculated using an
interest rate of 3-3/8%,
except that any life annuity
providing a period certain of
twenty years or more is
calculated using an interest
rate of 3-1/4%.
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 this
option is calculated using an
interest rate of 3-1/2%.
Option 6 - Payments of 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
principal sum remaining at a
rate guaranteed to at least
equal 3% per year. This
interest will be credited at
the end of each year. If the
amount of interest credited at
the end of a 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
income installments are paid
until the latest of:
(A) The end of the 10-year
period certain.
(B) The death of the
insured.
V608 22
<PAGE>
(C) The death of the other
named annuitant.
The other annuitant must
be named at the time this
option is elected and
cannot later be changed.
That annuitant must have
an adjusted age as defined
in Part 9 of at least 40.
The joint survivorship
annuity provided under
this option is calculated
by using an interest rate
of 3-3/8%.
We may offer other payment options or
alternative versions of the options
listed in the above section.
ADDITIONAL INTEREST In addition to:
a. the interest of 3% per year guaranteed
on the principal sum remaining with Us
under Options 2 or 6; and
b. the interest of 3% per year included
in the installments payable under
Option 3.
We will pay or credit at the end of each
year such additional interest as We may
declare.
PART 9: TABLES OF PAYMENT
OPTION AMOUNTS
The installment amounts shown in the
tables that follow are shown for each
$1,000 applied. Amounts for payment
frequencies, periods or ages not shown
will be furnished upon request. Under
Options 4 and 5, the installment amount
for younger ages than shown will be the
same as for the first age shown and for
older ages than shown it will be the same
amount as for the last age shown.
The term "age" as used in the tables
refers to the adjusted age. Under Options
4 and 5, the adjusted age is defined as
follows:
a. For Surrender Values, the age of the
payee on the payee's birthday nearest
to the Policy Anniversary nearest the
date of surrender.
b. For death proceeds, the age of the
payee on the payee's birthday nearest
the effective date of the Payment
Option elected.
Under Option 7, the adjusted age is the
age on the birthday nearest to the Policy
Anniversary nearest the date of
surrender.
V608 23
<PAGE>
OPTION 3 - PAYMENTS FOR A SPECIFIED PERIOD
<TABLE>
- ------------------------------------------------------------------------------------------
<CAPTION>
Number of Years 5 6 7 8 9 10 11 12 13
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Installments $211.99 179.22 155.80 138.31 124.69 113.82 104.93 97.54 91.29
Mo. Installments $17.91 15.14 13.16 11.68 10.53 9.61 8.86 8.24 7.71
- ------------------------------------------------------------------------------------------
</TABLE>
OPTION 3 - PAYMENTS FOR A SPECIFIED PERIOD (CONTINUED)
<TABLE>
- ----------------------------------------------------------------------------------
<CAPTION>
Number of Years 14 15 16 17 18 19 20 25 30
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Installments 85.95 81.33 77.29 73.74 70.59 67.78 65.26 55.76 49.53
Mo. Installments 7.26 6.87 6.53 6.23 5.96 5.73 5.51 4.71
- ----------------------------------------------------------------------------------
</TABLE>
*OPTION 4 - LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Installment 10 Years Certain 20 Years Certain Installment 10 Years Certain 20 Years Certain
Age Refund Age Refund
of ---------------------------------------------------- of -----------------------------------------------------
Payee Male Female Male Female Male Female Payee Male Female Male Female Male Female
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 $3.08 $3.03 $3.08 $2.99 $3.00 $2.94 50 $4.36 $4.12 $4.50 $4.10 $4.28 $3.99
15 3.14 3.09 3.15 3.04 3.07 3.00 55 4.76 4.47 4.95 4.47 4.61 4.31
20 3.22 3.16 3.24 3.11 3.15 3.07 60 5.28 4.93 5.54 4.96 4.97 4.67
25 3.33 3.24 3.34 3.20 3.25 3.15 65 5.97 5.54 6.30 5.63 5.29 5.06
30 3.45 3.35 3.47 3.30 3.38 3.25 70 6.91 6.39 7.24 6.50 5.43 5.31
35 3.61 3.48 3.64 3.43 3.55 3.38 75 8.21 7.57 8.26 7.56 5.44 5.40
40 3.80 3.64 3.86 3.60 3.74 3.54 80 10.04 9.26 9.12 8.60 5.46 5.46
45 4.05 3.85 4.14 3.82 3.99 3.74 85 12.61 11.68 9.60 9.31 5.46 5.46
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*OPTION 5 - LIFE ANNUITY
---------------------------------------------------------
Age Age
of of
Payee Male Female Payee Male Female
---------------------------------------------------------
10 3.17 3.12 50 4.62 4.28
15 3.24 3.18 55 5.12 4.68
20 3.32 3.25 60 5.79 5.24
25 3.42 3.34 65 6.75 6.04
30 3.56 3.44 70 8.15 7.22
35 3.73 3.58 75 10.26 9.03
40 3.95 3.75 80 13.54 11.88
45 4.24 3.98 85 18.72 16.54
---------------------------------------------------------
*OPTION 7 - JOINT SURVIVORSHIP ANNUITY WITH 10-YEAR PERIOD CERTAIN
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Age Age of Insured Age Age of Insured Age Age of Insured Age Age of Insured
of ------------------ of ------------------ of ------------------ of -------------------
Other Other Other Other
Annuitant Male Annuitant Male Annuitant Female Annuitant Female
------------------ ------------------ ------------------ -------------------
F 55 60 65 F 55 60 65 M 55 60 65 M 55 60 65
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.62 3.64 3.65 60 4.43 4.64 4.82 40 3.72 3.77 3.80 60 4.34 4.64 4.93
45 3.80 3.83 3.86 65 4.61 4.93 5.23 45 3.89 3.97 4.03 65 4.44 4.82 5.23
50 4.00 4.07 4.12 70 4.75 5.18 5.63 50 4.06 4.19 4.31 70 4.50 4.95 5.48
55 4.22 4.34 4.44 75 4.86 5.36 5.96 55 4.22 4.43 4.61 75 4.54 5.03 5.65
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Minimum monthly income for each $1,000 applied.
V608 24
<PAGE>
CORPORATE FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
THE DEATH BENEFIT AND OTHER VALUES PROVIDED UNDER THIS POLICY ARE BASED ON THE
RATES OF INTEREST CREDITED ON ANY AMOUNTS ALLOCATED TO THE GUARANTEED INTEREST
ACCOUNT AND THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS WITHIN OUR SEPARATE
ACCOUNT TO WHICH YOUR PREMIUMS ARE ALLOCATED. THUS, THE DEATH BENEFIT AND
OTHER VALUES MAY INCREASE OR DECREASE IN AMOUNT OR DURATION. SEE PART 7 FOR A
DESCRIPTION OF HOW THE DEATH BENEFIT IS DETERMINED.
NOT ELIGIBLE FOR ANNUAL DIVIDENDS
V608
EXHIBIT 1.A.10(b)
Forms of application for Phoenix Corporate Edge and
Phoenix Executive Benefit VUL
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[logo]PHOENIX 100 Bright Meadow Boulevard LIFE INSURANCE APPLICATION
PO Box 1900 FOR COMPANY USE ONLY
Enfield CT 06083-1900 List Bill Number:______________
Master App. No.:_______________
Company is defined as: [ ] Phoenix Home Life Mutual Insurance Company
[ ] PHL Variable Insurance Company
[ ] Phoenix Life and Annuity Company
PLEASE NOTE: If application is taken in state where selected insurer has not been admitted to do business, it is void and will be
rejected.
====================================================================================================================================
SECTION I - PROPOSED INSURED - questions below pertain to the Proposed Insured unless otherwise indicated.
- ------------------------------------------------------------------------------------------------------------------------------------
Print Name as it is to appear on policy (First, Middle, Last) Sex Birthdate Birthplace (State or Country)
[ ]Male [ ] Female (Month, Day, Year)
- ------------------------------------------------------------------------------------------------------------------------------------
Current Occupation Length of Employment United States Citizen Social Security Number
[ ] Yes [ ] No
- ------------------------------------------------------------------------------------------------------------------------------------
Home Address (Include Street, Apt. Number, City, State, and ZIP Code)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] YES [ ] NO 1. Are you ACTIVELY-AT-WORK*?
*ACTIVELY-AT-WORK is defined as: Performing all normal duties of the position on a full-time basis for not less
than 30 hours per week and not absent from work due to accident, illness or other condition for more than four
consecutive days within the last 90 days prior to first becoming eligible to participate in the life insurance
program being applied for. Phoenix reserves the right to request recertification of the above information for
deaths occurring within two years of the application date or any increase thereafter and to contest any claim
during that period.
- ------------------------------------------------------------------------------------------------------------------------------------
Have you smoked cigarettes in the past 12 months? With this policy, do you plan to replace (in whole or in
part, now or in the future) any existing insurance or
[ ] Yes [ ] No annuity in force? [ ] Yes [ ] No
====================================================================================================================================
SECTION II - OWNERSHIP
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. Business Entity named in Master Application is owner
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] B. Proposed Insured
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] C. Other Owner Relationship to Proposed Insured
- ------------------------------------------------------------------------------------------------------------------------------------
Name Tax ID Number
- ------------------------------------------------------------------------------------------------------------------------------------
Address
====================================================================================================================================
SECTION III - BENEFICIARY DESIGNATION(S)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. Business Entity named in Master Application is beneficiary
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] B. Other beneficiary (Complete details below) [ ] Check if subject to split dollar agreement
- ------------------------------------------------------------------------------------------------------------------------------------
Primary Beneficiary Relationship to Proposed Insured Date of Birth Tax ID Number
- ------------------------------------------------------------------------------------------------------------------------------------
Contingent Beneficiary Relationship to Proposed Insured Date of Birth Tax ID Number
====================================================================================================================================
SECTION IV - COVERAGE APPLIED FOR
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. As specified in Master Application
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] B. Specified as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
Plan of Insurance Basic Policy Amount Rider
$ [ ] Flexible Term Insurance Rider-Initial Face Amount_______
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Test (GPT if none specified): [ ] Cash Value Accumulation Test [ ] Guideline Premium Test
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit Option (Option 1 if none checked):
[ ] Option 1 - Level [ ] Option 2 - Increasing [ ] Option 3 - Specified Face + Accumulated Premiums Net of Distributions
====================================================================================================================================
FOR VARIABLE LIFE ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
DO YOU UNDERSTAND THAT IF YOU HAVE PURCHASED A VARIABLE LIFE POLICY, THE DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER CERTAIN
CONDITIONS AND THAT THE DEATH BENEFIT AND CASH VALUES UNDER ANY VARIABLE POLICY MY INCREASE OR DECREASE IN AMOUNT OR DURATION BASED
ON THE INVESTMENT EXPERIENCE OF THE UNDERLYING SUB-ACCOUNTS? [ ] YES [ ] NO
If you are purchasing a Variable Life Policy, do you believe it is suitable to meet your financial objectives? [ ] Yes [ ] No
IF I HAVE PURCHASED A VARIABLE LIFE POLICY, I CONFIRM THAT I HAVE RECEIVED THE PROSPECTUS FOR THAT POLICY AND ITS UNDERLYING FUNDS.
====================================================================================================================================
ADDITIONAL COMMENTS
====================================================================================================================================
OL2824 8-99
</TABLE>
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Any person who, with intent to defraud or knowing that he/she is facilitating a fraud against an insurer, submits an application or
files a claim containing a false or deceptive statement may be guilty of insurance fraud as determined by a court of competent
jurisdiction. This application should be carefully reviewed by the undersigned to verify that any and all information given to the
producer taking this application has been fully and correctly entered.
AUTHORIZATION TO OBTAIN INFORMATION
I hereby authorize any licensed physician, medical practitioner, hospital, clinic or other medical or medically-related facility,
insurance company, the Medical Information Bureau (MIB) or other organization, institution or person, having any records or
knowledge of me or my health, to give to Phoenix Home Life Mutual Insurance Company and its subsidiaries or reinsurers, any such
information. If insurance on any minor child is applied for, this authorization extends to records and knowledge of that child
and that child's health. To facilitate rapid submission of such information, I authorize all said sources, except MIB, to give
such records or knowledge to any agency employed by the company to collect and transmit such information.
The information requested by Phoenix Home Life Mutual Insurance Company and its subsidiaries or reinsurers, may include information
regarding diagnosis and treatment of physical or mental conditions, including consultations occurring after the date this
authorization is signed. Medical information will be used only for the purpose of risk evaluation, determining eligibility for
benefits under any policies issued, and for insurance statistical studies. If a medical record contains information relating to
alcohol or drug abuse or mental health care, adequate information is to be released to serve these purposes.
I acknowledge that I have received a copy of the Notice of Information Practices, including information about Investigative
Consumer Reports and the Medical Information Bureau and the Underwriting Process.
This authorization shall continue to be valid for thirty months from the date it is signed unless otherwise required by law. A
photocopy of this signed authorization shall be as valid as the original. It may be revoked in writing to the company at any time
until the insurance coverage has been placed in force. I understand I may or an individual authorized to act on my behalf may
receive a copy of this authorization on request.
I also authorize the preparation of an investigative consumer report. [ ] I do [ ] I do not (check one only) require that I be
interviewed in connection with any investigative consumer report that may be prepared.
I have reviewed this application, and I hereby verify that all information given here is true and complete to the best of my
knowledge and belief, and has been fully correctly recorded.
I understand that as long as I am employed by the employer identified in the Master Application, the Company is authorized to
increase the Face Amount of the policy from time to time in accordance with my employer's instructions. Each increase shall be
subject to the underwriting limitations and requirements which the Company has in effect on the date the increase is requested
including, but not limited to, my being Actively-At-Work at the time of each change.
I certify that (a) the Social Security or Tax Identification Number shown above is correct, and (b) that I am not subject to
back-up withholding.
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Insured Signature Witness State Signed In Date
X
- ------------------------------------------------------------------------------------------------------------------------------------
Owner (If other than the Proposed Insured or Business
Entity specified on Master Application) Witness State Signed In Date
X
- ------------------------------------------------------------------------------------------------------------------------------------
The Producer hereby certifies he/she has truly and accurately recorded on the application the information supplied by the Proposed
Insured; and that he/she is qualified and authorized to discuss the contract herein applied for.
WILL THE PROPOSED INSURED REPLACE (IN WHOLE OR IN PART) ANY EXISTING INSURANCE OR ANNUITY IN FORCE WITH THE POLICY APPLIED FOR?
[ ] YES [ ] NO
WILL THE PROPOSED INSURED UTILIZE VALUES FROM ANOTHER INSURANCE POLICY (THROUGH LOANS, SURRENDERS OR OTHERWISE) TO PAY FOR THE
INITIAL OR SUBSEQUENT PREMIUM(S) FOR THE POLICY APPLIED FOR? [ ] YES [ ] NO
- ------------------------------------------------------------------------------------------------------------------------------------
Lic. Agt./Reg.'s Signature Date Lic. Agt./Reg.'s Rep. ID No.
X
- ------------------------------------------------------------------------------------------------------------------------------------
Broker/Dealer Name and Address Broker/Dealer No.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[logo]PHOENIX 100 Bright Meadow Boulevard MASTER APPLICATION
PO Box 1900 FOR COMPANY USE ONLY
Enfield CT 06083-1900 Case Number:___________________
Master App. No.:_______________
Company is defined as: [ ] Phoenix Home Life Mutual Insurance Company
[ ] PHL Variable Insurance Company
[ ] Phoenix Life and Annuity Company
====================================================================================================================================
SECTION I - BUSINESS ENTITY
- ------------------------------------------------------------------------------------------------------------------------------------
Business Entity Name Tax ID
- ------------------------------------------------------------------------------------------------------------------------------------
Address (Includes Street, City, State and ZIP Code)
====================================================================================================================================
SECTION II - OWNERSHIP (Choose one and complete one of the following)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. Business Entity is Owner of all policies covered by this Master Application
[ ] B. Other Owner as indicated on Insured's Application
====================================================================================================================================
SECTION III - ADDITIONAL PREMIUM NOTICE (In addition to Business Entity)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. Proposed Insureds or other Owner as specified on Insured's Application
[ ] B. Other (Name and Address)_____________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
====================================================================================================================================
SECTION IV - BENEFICIARY (Choose one of the following)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. Business Entity [ ] Check if subject to Split Dollar Agreement
[ ] B. Beneficiary Specified on Insured's Application
====================================================================================================================================
SECTION V - COVERAGE APPLIED FOR (Choose one and complete one of the following)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. As designated on Insured's Application
[ ] B. Specified as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
Plan of Insurance Basic Policy Amount Rider
$ [ ] Flexible Term Insurance Rider-Initial Face Amount_______
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Test (GPT if none specified): [ ] Cash Value Accumulation Test [ ] Guideline Premium Test
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit Option (Option 1 if none checked):
[ ] Option 1 - Level [ ] Option 2 - Increasing [ ] Option 3 - Specified Face + Accumulated Premiums Net of Distributions
====================================================================================================================================
SECTION VI - POLICY INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
With this policy, do you plan to replace (in whole or in part, now or in the future) and existing insurance or annuity in force?
[ ] Yes [ ] No
- ------------------------------------------------------------------------------------------------------------------------------------
Payment Mode (Choose one) [ ] Annual [ ] Semi-annual [ ] Quarterly [ ] Monthly
====================================================================================================================================
FOR VARIABLE LIFE ONLY (Complete only if Business Entity owned only)
- ------------------------------------------------------------------------------------------------------------------------------------
DO YOU UNDERSTAND THAT IF YOU HAVE PURCHASED A VARIABLE LIFE POLICY, THE DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER CERTAIN
CONDITIONS AND THAT THE DEATH BENEFIT AND CASH VALUES UNDER ANY VARIABLE POLICY MY INCREASE OR DECREASE IN AMOUNT OR DURATION BASED
ON THE INVESTMENT EXPERIENCE OF THE UNDERLYING SUB-ACCOUNTS? [ ] YES [ ] NO
If you are purchasing a Variable Life Policy, do you believe it is suitable to meet your financial objectives? [ ] Yes [ ] No
IF I HAVE PURCHASED A VARIABLE LIFE POLICY, I CONFIRM THAT I HAVE RECEIVED THE PROSPECTUS FOR THAT POLICY AND ITS UNDERLYING FUNDS.
====================================================================================================================================
ADDITIONAL COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
OL2826 8-99
</TABLE>
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Any person who, with intent to defraud or knowing that he/she is facilitating a fraud against an insurer, submits an application or
files a claim containing a false or deceptive statement may be guilty of insurance fraud as determined by a court of competent
jurisdiction. This application should be carefully reviewed by the undersigned to verify that any and all information given to the
producer taking this application has been fully and correctly entered.
STATEMENT OF BUSINESS ENTITY
The undersigned on behalf of the Business Entity affirms as follows:
I have reviewed the information contained on the life insurance applications of the insured(s) and certify that the information
contained therein is true and complete to the best of knowledge.
I have reviewed this application, and I hereby verify that all information given here is true and complete to the best of my
knowledge and belief, and has been fully correctly recorded.
I (We) agree that this Master Application, the insured's Life Insurance Application shall form a part of any policy issued, and
further agree that no insurance shall take affect unless and until the policy has been delivered to and accepted by me (us) and the
initial premium has been paid during the life time, and prior to any change in the health, of the Proposed Insured(s).
I certify that the tax identification numbers provided are correct.
In case of discrepancy between this master application and the insured's application, the insured's application shall be
controlling.
- ------------------------------------------------------------------------------------------------------------------------------------
Business Entity Representation (Owner/Corporate Officer/Partner/Trustee) State Signed In Witness Date
X
- ------------------------------------------------------------------------------------------------------------------------------------
The Producer hereby certifies that he/she has truly and accurately recorded on the application the information supplied by the
Owner(s); and that he/she is qualified and authorized to discuss the contract herein applied for.
WILL THE PROPOSED INSURED REPLACE (IN WHOLE OR IN PART) ANY EXISTING INSURANCE OR ANNUITY IN FORCE WITH THE POLICY APPLIED FOR?
[ ] YES [ ] NO
WILL THE PROPOSED INSURED UTILIZE VALUES FROM ANOTHER INSURANCE POLICY (THROUGH LOANS, SURRENDERS OR OTHERWISE) TO PAY FOR THE
INITIAL OR SUBSEQUENT PREMIUM(S) FOR THE POLICY APPLIED FOR? [ ] YES [ ] NO
- ------------------------------------------------------------------------------------------------------------------------------------
Lic. Agt./Reg.'s Signature Date Lic. Agt./Reg.'s Rep. ID No.
X
- ------------------------------------------------------------------------------------------------------------------------------------
Broker/Dealer Name and Address Broker/Dealer No.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[logo]PHOENIX 100 Bright Meadow Boulevard SIMPLIFIED LIFE INSURANCE APPLICATION
PO Box 1900 FOR COMPANY USE ONLY
Enfield CT 06083-1900 List Bill Number:______________
Master App. No.:_______________
Company is defined as: [ ] Phoenix Home Life Mutual Insurance Company
[ ] PHL Variable Insurance Company
[ ] Phoenix Life and Annuity Company
PLEASE NOTE: If application is taken in state where selected insurer has not been admitted to do business, it is void and will be
rejected.
====================================================================================================================================
SECTION I - PROPOSED INSURED
- ------------------------------------------------------------------------------------------------------------------------------------
Print Name as it is to appear on policy (First, Middle, Last) Sex Birthdate (Month, Day, Year)
[ ]Male [ ] Female
- ------------------------------------------------------------------------------------------------------------------------------------
Birthplace (State or Country) United States Citizen Social Security Number
[ ] Yes [ ] No
- ------------------------------------------------------------------------------------------------------------------------------------
Driver's License No. (Include State) Marital Status
[ ] Single [ ] Married [ ] Widowed [ ] Divorced [ ] Separated
- ------------------------------------------------------------------------------------------------------------------------------------
Home Address (Include Street, Apt. Number, City, State, ZIP Code, and Country) Home Telephone Number
( )
- ------------------------------------------------------------------------------------------------------------------------------------
Give Prior Address if at address less than 2 years (Include Street, Apt. Number, City, State, ZIP Code, and Country)
- ------------------------------------------------------------------------------------------------------------------------------------
Current Occupation and Duties Business Entity Length of Employment
- ------------------------------------------------------------------------------------------------------------------------------------
Business Entity Address (Include Street, Apt. Number, City, State, ZIP Code, and Country) Bus. Phone No. (Include Ext.)
( ) X
- ------------------------------------------------------------------------------------------------------------------------------------
Email Address
====================================================================================================================================
SECTION II - OWNERSHIP
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. Business Entity named in Master Application is owner
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] B. Proposed Insured
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] C. Other Owner Relationship to Proposed Insured
- ------------------------------------------------------------------------------------------------------------------------------------
Name Tax ID Number
- ------------------------------------------------------------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------------------------------------------------------------
Send premium and lapse notices to: (in addition to owner)
[ ] Proposed Insured: [ ] Home Address [ ] Business Entity Address
[ ] Secondary Address_______________________________________________________________________________________________________________
====================================================================================================================================
SECTION III - BENEFICIARY DESIGNATION(S)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. Business Entity named in Master Application is beneficiary
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] B. Other beneficiary (Complete details below) [ ] Check if subject to split dollar agreement
- ------------------------------------------------------------------------------------------------------------------------------------
Primary Beneficiary Relationship to Proposed Insured Date of Birth Tax ID Number
- ------------------------------------------------------------------------------------------------------------------------------------
Contingent Beneficiary Relationship to Proposed Insured Date of Birth Tax ID Number
====================================================================================================================================
SECTION IV - COVERAGE APPLIED FOR
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] A. As specified in Master Application
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] B. Specified as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
Plan of Insurance Basic Policy Amount Rider
$ [ ] Flexible Term Insurance Rider-Initial Face Amount_______
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Test (GPT if none specified): [ ] Cash Value Accumulation Test [ ] Guideline Premium Test
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit Option (Option 1 if none checked):
[ ] Option 1 - Level [ ] Option 2 - Increasing [ ] Option 3 - Specified Face + Accumulated Premiums Net of Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
First Year Anticipated BILLED Premium (Excluding 1035 Exchange, Lump Sum Funds, etc. Subsequent Planned Annual Premium
- ------------------------------------------------------------------------------------------------------------------------------------
OL2827 Page 1 8-99
</TABLE>
<PAGE>
<TABLE>
<S> <C>
====================================================================================================================================
FOR VARIABLE LIFE ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
DO YOU UNDERSTAND THAT IF YOU HAVE PURCHASED A VARIABLE LIFE POLICY, THE DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER CERTAIN
CONDITIONS AND THAT THE DEATH BENEFIT AND CASH VALUES UNDER ANY VARIABLE POLICY MY INCREASE OR DECREASE IN AMOUNT OR DURATION BASED
ON THE INVESTMENT EXPERIENCE OF THE UNDERLYING SUB-ACCOUNTS? [ ] YES [ ] NO
If you are purchasing a Variable Life Policy, do you believe it is suitable to meet your financial objectives? [ ] Yes [ ] No
IF I HAVE PURCHASED A VARIABLE LIFE POLICY, I CONFIRM THAT I HAVE RECEIVED THE PROSPECTUS FOR THAT POLICY AND ITS UNDERLYING FUNDS.
====================================================================================================================================
SECTION V - MODE OF PREMIUM PAYMENT
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] Annual [ ] Quarterly [ ] Semi-Annual
[ ] Monthly (Variable Life Insurance only) [ ] PCS (Phoenix Check-O-Matic Service)
Minimum Monthly Check for Each Service - $25.00 for TRADITIONAL $25.00 for VARIABLE
Multiple Billing Option - Give # or Details ________________________________________________________________________________________
[ ] List Bill [ ] EICS [ ] Salary Allotment [ ] Pension [ ] Money Purchase Pension [ ] Other _____________________________
IF ELECTING PCS, COMPLETE THE FOLLOWING:
Existing Policy Number or PCS File Number___________________________________________________________________________________________
AUTHORIZATION AGREEMENT FOR PREAUTHORIZED PAYMENTS
I (we) hereby authorize the Company (Note: Company is defined as indicated on page 1 of application) to initiate debit entries to
my (our) checking account and the depository named below.
INFORMATION FOR NEW ACCOUNT
Attach a void check to furnish encoding details.
If the depositor's name is not imprinted on the check, fill it in here exactly as it appears in the bank records.
Attach Void Check Here
Signature of depositor (if different from owner)____________________________________________________________________________________
====================================================================================================================================
SECTION VI - MEDICAL HISTORY OF PROPOSED INSURED - (DOES NOT NEED TO BE COMPLETED IF EXAM HAS BEEN ORDERED)
- ------------------------------------------------------------------------------------------------------------------------------------
Height Weight Has your weight decreased by 10 or more pounds in the past 2 years? If "yes," how
much?___________ lbs. [ ] Yes [ ] No
- ------------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(s) of Personal Physician(s) or Health Care Facility(s). [ ] None
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Date and Reason for Last Consultation:
- ------------------------------------------------------------------------------------------------------------------------------------
To the best of your knowledge have you:
YES NO
[ ] [ ] 1. In the last five years been examined or treated by a physician or medical practitioner or been examined or treated at
a hospital or other medical facility?
[ ] [ ] 2. In the last 10 years had or been treated for high blood pressure, chest pain, heart disease, stroke, lung disorder,
cancer, diabetes, kidney disease or mental or nervous disorder?
[ ] [ ] 3. In the last 10 years received counseling or treatment for alcohol or other drug use?
[ ] [ ] 4. Ever been diagnosed by a medical professional for Acquired Immune Deficiency Syndrome?
- ------------------------------------------------------------------------------------------------------------------------------------
OL2827 Page 2 8-99
</TABLE>
<PAGE>
<TABLE>
<S> <C>
====================================================================================================================================
SECTION VII - ADDITIONAL INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
To the best of your knowledge have you:
YES NO
[ ] [ ] 1. Have you used tobacco or nicotine products in any form in the last 15 years? If "Yes", PLEASE CIRCLE the product(s)
used: cigarettes, cigars, pipes, snuff, smokeless or chewing tobacco, nicotine patch or gum.
Check one: [ ] Use currently [ ] Date quit_____________________________________
[ ] [ ] 2. Have you ever applied for life, accident, or health insurance and been postponed, or been offered a policy differing
in plan, amount or premium rate from that applied for? (If "Yes", give date, company and reason).
[ ] [ ] 3. Have you participated in the past 3 years or plan to engage in any hazardous activity such as motor vehicle,
motorcycle or motorboat racing, parachute jumping, skin or scuba diving or other underwater activity, hang gliding or
other hazardous avocation? (If "Yes", complete Avocation questionnaire, form OL1064).
[ ] [ ] 4. Have you flown during the past three years as a pilot, student pilot or crew member? (If "Yes", complete Aviation
Questionnaire, form FN7).
[ ] [ ] 5. Have you in the past three years been the driver of a motor vehicle involved in an accident, or charged with a
moving violation of any motor vehicle law, or had your driver's license suspended or revoked?
[ ] [ ] 6. With this policy, do you plan to replace (in whole or in part, now or in the future) any existing insurance or
annuity in force?
[ ] [ ] 7. Do you plan to borrow or otherwise use values from an existing insurance policy or annuity to pay any initial or
subsequent premium(s) for this policy?
- ------------------------------------------------------------------------------------------------------------------------------------
Give full details for all "Yes" answers above.
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Proposed Insured Question Number Details
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
SECTION VIII - EXISTING LIFE INSURANCE
- ------------------------------------------------------------------------------------------------------------------------------------
Describe all coverage in force. Include individual and group. If none, write none.
- ------------------------------------------------------------------------------------------------------------------------------------
Company Year Issued Plan Amount Personal/Business
$
- ------------------------------------------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
Total Life Insurance in force (if none, indicate) $__________ Total Accidental Death Benefit in force (if none, indicate)$__________
====================================================================================================================================
INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Earned Income Independent Income Net Worth
- ------------------------------------------------------------------------------------------------------------------------------------
ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, POLICY VALUES AND CASH SURRENDER VALUES ARE AVAILABLE ON REQUEST.
- ------------------------------------------------------------------------------------------------------------------------------------
FOR HOME OFFICE OR ADMINISTRATIVE OFFICE USE ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
OL2827 Page 3 8-99
</TABLE>
<PAGE>
<TABLE>
<S> <C>
====================================================================================================================================
Any person who, with intent to defraud or knowing that he/she is facilitating a fraud against an insurer, submits an application or
files a claim containing a false or deceptive statement may be guilty of insurance fraud as determined by a court of competent
jurisdiction.
====================================================================================================================================
AUTHORIZATION TO OBTAIN INFORMATION
I hereby authorize any licensed physician, medical practitioner, hospital, clinic or other medical or medically-related facility,
insurance company, the Medical Information Bureau (MIB) or other organization, institution or person, having any records or
knowledge of me or my health, to give to Phoenix Home Life Mutual Insurance Company and its subsidiaries or reinsurers, any such
information. If insurance on any minor child is applied for, this authorization extends to records and knowledge of that child and
that child's health. To facilitate rapid submission of such information, I authorize all said sources, except MIB, to give such
records or knowledge of any agency employed by the company to collect and transmit such information.
The information requested by Phoenix Home Life Mutual Insurance Company and its subsidiaries or reinsurers, may include information
regarding diagnosis and treatment of physical or mental conditions, including consultations occurring after the date this
authorization is signed. Medical information will be used only for the purpose of risk evaluation, determining eligibility for
benefits under any policies issued, and for insurance statistical studies. If a medical record contains information relating to
alcohol or drug abuse or mental health care, adequate information is to be released to serve these purposes.
I acknowledge that I have received a copy of the Notice of Information Practices, including information about Investigative
Consumer Reports and the Medical Information Bureau and the Underwriting Process.
I also authorize the preparation of an investigative consumer report. [ ] I do [ ] I do not (check one only) require that I be
interviewed in connection with any investigative consumer report that may be prepared.
This authorization shall continue to be valid for thirty months from the date it is signed unless otherwise required by law. A
photocopy of this signed authorization shall be as valid as the original. I understand I may or an individual authorized to act on
my behalf may receive a copy of this authorization on request.
I have reviewed this application, and I hereby verify that all information given here and in Part II of this application is true and
complete to the best of my knowledge and belief, and has been fully correctly recorded.
I understand that as long as I am employed by the employer identified in the Master Application, the Company is authorized to
increase the Face Amount of the policy from time to time in accordance with my employer's instructions. Each increase shall be
subject to the underwriting limitations and requirements which the Company has in effect on the date the increase is requested
including, but not limited to, my being Actively-At-Work at the time of each change.
I certify that (a) the Social Security or Tax Identification Number shown above is correct, and (b) that I am not subject to
back-up withholding.
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Insured State Signed In Witness Date
X
- ------------------------------------------------------------------------------------------------------------------------------------
Owner (if other than Proposed Insured) State Signed In Witness Date
X
- ------------------------------------------------------------------------------------------------------------------------------------
The Producer hereby certifies he/she has truly and accurately recorded on the application the information supplied by the Proposed
Insured; and that he/she is qualified and authorized to discuss the contract herein applied for.
WILL THE PROPOSED INSURED REPLACE (IN WHOLE OR IN PART) ANY EXISTING INSURANCE OR ANNUITY IN FORCE WITH THE POLICY APPLIED FOR?
[ ] YES [ ] NO
WILL THE PROPOSED INSURED UTILIZE VALUES FROM ANOTHER INSURANCE POLICY (THROUGH LOANS, SURRENDERS OR OTHERWISE) TO PAY FOR THE
INITIAL OR SUBSEQUENT PREMIUM(S) FOR THE POLICY APPLIED FOR? [ ] YES [ ] NO
- ------------------------------------------------------------------------------------------------------------------------------------
Lic. Agt./Reg. Rep.'s Signature Date Lic. Agt./Reg. Rep.'s ID No.
X
- ------------------------------------------------------------------------------------------------------------------------------------
Broker/Dealer Name and Address Broker/Dealer No.
- ------------------------------------------------------------------------------------------------------------------------------------
OL2827 Page 4 8-99
</TABLE>
EXHIBIT 2
Opinion of Edwin L. Kerr, Esq.
<PAGE>
October 29, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Phoenix Life and Annuity Variable Universal Life Account
Phoenix Life and Annuity Company
Post-Effective Amendment No. 4 to Form S-6
Registration Nos. 333-12989 and 811-7835
Dear Sirs:
As Counsel to the depositor, I have participated in the development of
and am familiar with the variable life insurance policies, Phoenix Corporate
Edge and Phoenix Executive Benefit VUL ("Policies"), which are the subject of
the above-captioned Registration Statement on Form S-6.
In connection with this opinion, I have reviewed the Policies, the
Registration Statement, the Charter and By-Laws of the company, relevant
proceedings of the Board of Directors, and the provisions of New York insurance
law relevant to the issuance of the Policies.
Based upon this review, I am of the opinion that the Policies, when
issued, will be validly issued, and will constitute a legal and binding
obligation of Phoenix Life and Annuity Company.
I further consent to the use of this opinion as an exhibit to the
above-captioned Registration Statement and to my being named as an expert under
"Experts" therein.
Very truly yours,
/s/ Edwin L. Kerr
--------------------------------
Edwin L. Kerr, Counsel
Phoenix Life and Annuity Company
EXHIBIT 6
Consent of Independent Accountants
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in the Propsectus constituting part of this Post-
Effective Amendment No. 4 to the Registration Statement on Form S-6 of the
Phoenix Life and Annuity Variable Universal Life Account of our report dated
February 11, 1999 relating to the financial statements of Phoenix Life and
Annuity Company, which appears in such Prospectus.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
October 29, 1999
EXHIBIT 7
Consent of Edwin L. Kerr, Esq.
<PAGE>
To Whom It May Concern:
I hereby consent to the reference to my name under the caption "Legal
Matters" in the Prospectus contained in Post-Effective Amendment No. 4 to the
Registration Statement on Form S-6 (File No. 333-12989) filed by Phoenix Life
and Annuity Variable Universal Life Account with the Securities and Exchange
Commission under the Securities Act of 1933.
Very truly yours,
Dated: October 29, 1999 /s/ Edwin L. Kerr
-----------------------------------
Edwin L. Kerr, Counsel
Phoenix Life and Annuity Company
EXHIBIT 8
Consent of Paul M. Fischer, FSA, CLU, ChFC
<PAGE>
October 29, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
This opinion is furnished in connection with the registration of
flexible premium variable universal life insurance policies ("Policies") under
the Securities Act of 1933. The prospectuses included in the Registration
Statement on Form S-6 (SEC File No. 333-12989) describe the Policies. The forms
of Policies were prepared under my direction, and I am familiar with the
Registration Statement and Exhibits thereto.
In my opinion, the illustrations of death benefits and cash values
included in the sections entitled "Illustrations of Death Benefits, Policy
Values ("Account Values"), and Cash Surrender Values" in Appendix C of the
prospectuses, based on the assumptions stated in the illustrations, are
consistent with the provisions of the respective forms of the Policies.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Paul M. Fischer
Paul M. Fischer, FSA, CLU, ChFC
Vice President
