<PAGE>
VARIABLE ANNUITY ACCOUNT B
Individual Retirement Planning
Variable Multiple Option Annuity Contracts
June 15, 1995 Supplement to May 1, 1995 Prospectus
Washington
Certain provisions specified in this Prospectus have not been approved by the
State of Washington.
Deferred Sales Charge
Partial withdrawals of 10% or less of the Contract Value without a deferred
sales charge are not permitted under Contracts issued in the State of
Washington.
See the section entitled "Deferred Sales Charge" in the Prospectus.
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY
151 Farmington Avenue, Annuity Operations, Hartford, Connecticut 06156
Telephone: 1-800-531-4547
VARIABLE ANNUITY ACCOUNT B
Prospectus Dated: May 1, 1995
INDIVIDUAL RETIREMENT PLANNING
VARIABLE MULTIPLE OPTION ANNUITY CONTRACTS
The individual installment and single Purchase Payment Contracts ("Contracts")
described in this Prospectus are issued by Aetna Life Insurance and Annuity
Company (the "Company"). The Contracts are designed to provide for retirement
income. Amounts held under the Contracts may be entitled to tax-deferred
treatment under specific sections of the Internal Revenue Code of 1986, as
amended ("Code").
The Contracts allow values to accumulate under a credited interest or variable
option, or combination of these options. They also provide for the payment of
annuity benefits on a fixed or variable basis, or a combination thereof.
The variable funding options currently available through the Separate Account
under the Contract described in this Prospectus are as follows:
.Aetna Variable Fund .Janus Aspen Flexible Income
.Aetna Income Shares Portfolio
.Aetna Variable Encore Fund .Lexington Natural Resources Trust
.Aetna Investment Advisers Fund, Inc. .Neuberger & Berman Growth Portfolio
.Alger American Small Cap Portfolio .Scudder International Portfolio
.Janus Aspen Aggressive Growth .TCI Growth (a Twentieth Century
Portfolio Fund)
The availability of the above Funds is subject to applicable regulatory
authorization. Not all Funds are available in all jurisdictions or under all
Contracts.
The credited interest option available for the accumulation of values is the
Fixed Account. The Fixed Account is offered only in those jurisdictions in
which it is approved. Except as specifically mentioned, this Prospectus
describes only the variable options of the Contracts. Information concerning
the Fixed Account is contained in the Appendix in this Prospectus.
This Prospectus sets forth concisely the information about Variable Annuity
Account B (the "Separate Account") that a prospective investor should know
before investing. Additional information about the Separate Account is
contained in a Statement of Additional Information ("SAI") dated May 1, 1995,
which has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. The Table of Contents for the SAI is found in
this Prospectus. An SAI may be obtained without charge by calling 1-800-531-
4547.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE FUNDS. ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
NO PERSON IS AUTHORIZED BY THE COMPANY TO GIVE INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERS CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
The Company has filed registration statements (the "Registration Statements")
with the SEC under the Securities Act of 1933 relating to the Contracts offered
by this Prospectus. This prospectus has been filed as a part of the
Registration Statements and does not contain all of the information set forth
in the Registration Statement and its exhibits. Reference is hereby made to
such Registration Statements and exhibits for further information relating to
the Company and the Contracts. The Registration Statements and its exhibits may
be inspected and copied at the public reference facilities of the SEC at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
DEFINITIONS................................................................ 3
PROSPECTUS SUMMARY......................................................... 4
FEE TABLE.................................................................. 5
CONDENSED FINANCIAL INFORMATION............................................ 8
PERFORMANCE DATA........................................................... 10
THE COMPANY................................................................ 11
VARIABLE ANNUITY ACCOUNT B................................................. 11
THE FUNDS.................................................................. 11
Fund Investment Adviser................................................. 13
Mixed and Shared Funding................................................ 13
Fund Additions and Limitations.......................................... 14
PURCHASE OF CONTRACT
Purchase................................................................ 14
Net Purchase Payments................................................... 14
Distribution............................................................ 15
DETERMINING CONTRACT VALUE
Accumulation Units...................................................... 15
Net Investment Factor................................................... 15
CONTRACT RIGHTS
Right to Cancel......................................................... 16
Transfers and Allocation Changes........................................ 16
Withdrawals............................................................. 16
Reinstatement Privilege................................................. 17
CHARGES AND DEDUCTIONS
Maintenance Fee......................................................... 17
Mortality and Expense Risk Charges...................................... 18
Administrative Expense Charge........................................... 18
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Fund Expenses........................................................... 18
Allocation and Transfer Fees............................................ 18
Deferred Sales Charge................................................... 18
Premium Tax............................................................. 19
SYSTEMATIC WITHDRAWAL OPTION............................................... 20
ANNUITY PERIOD
Annuity Period Elections................................................ 21
Annuity Options......................................................... 21
DEATH BENEFIT
Accumulation Period..................................................... 22
Annuity Period.......................................................... 23
TAX STATUS
Federal Tax Status of the Company....................................... 23
Tax Status of the Contract.............................................. 24
Use of the Contract..................................................... 24
Tax Status of Amounts Distributed Under the Contract.................... 24
MISCELLANEOUS
Voting Rights........................................................... 25
Modification of the Contract............................................ 25
Contract Holder Inquiries............................................... 26
Telephone Transfers..................................................... 26
Transfer of Ownership; Assignment....................................... 26
Legal Proceedings....................................................... 26
Legal Matters........................................................... 26
STATEMENT OF ADDITIONAL INFORMATION --TABLE OF CONTENTS.................... 27
APPENDIX--FIXED ACCOUNT.................................................... 28
HYPOTHETICAL TABLES........................................................ 29
</TABLE>
2
<PAGE>
DEFINITIONS
As used in this prospectus, the following terms have the meanings shown:
ACCOUNT VALUE: The dollar value of amounts held in an Account as of any
Valuation Period, including the value of the Accumulation Units in the Funds
and any amounts invested in the Fixed Account, plus interest earned on those
amounts, less any maintenance fees due, but excluding amounts used for Annuity
Options.
ACCUMULATION PERIOD: The period during which Purchase Payment(s) credited to an
Account are invested to fund future annuity payments.
ACCUMULATION UNIT: A measure of the value of the Separate Account assets
attributable to each Fund used as a variable funding option.
ANNUITANT: A person whose life is measured for purposes of the duration of
Annuity payments under the Contract.
ANNUITY: A series of payments for life, for a definite period, or a combination
of the two.
ANNUITY PERIOD: The period during which Annuity payments are made.
ANNUITY UNIT: A measure of the value attributable to each Fund selected during
the Annuity Period.
CODE: The Internal Revenue Code of 1986, as amended.
COMPANY: Aetna Life Insurance and Annuity Company.
CONTRACT: The individual installment and single Purchase Payment contracts
offered by this Prospectus.
CONTRACT HOLDER: The individual to whom the Contract is issued, referred to in
this prospectus as "you."
CONTRACT YEAR: The period of 12 months measured from the Contract's Effective
Date or from any anniversary of such Effective Date.
DISTRIBUTOR(S): The registered broker-dealer(s) which have entered into selling
agreements with the Company to offer and sell the Contracts. The Company may
also serve as a Distributor.
EFFECTIVE DATE: The date the Company accepts and approves the Contract
application.
FUNDS: The mutual funds offered as variable funding options for the investment
of assets of the Separate Account under the Contracts.
HOME OFFICE: The Company's principal executive offices located at 151
Farmington Avenue, Hartford, Connecticut 06156.
NET PURCHASE PAYMENT(S): The Purchase Payment(s) less premium taxes, if
applicable.
PURCHASE PAYMENT(S): The gross payment(s) made to the Company under a Contract.
PURCHASE PAYMENT PERIOD: For Installment Purchase Payment Contracts, the period
of time for completion of the agreed upon annual number and amount of Purchase
Payments. For example, if it is determined that the Purchase Payment Period
will consist of 12 payments per year and only 11 payments are made, the
Purchase Payment Period is not completed until the twelfth Purchase Payment is
made. When a particular remittance is intended to include more than one regular
Purchase Payment, the Company will credit the number of Purchase Payments
represented by such remittance in determining the Purchase Payment Period.
However, the number of completed Purchase Payment Periods may never be greater
than the number of full calendar years since the date the Contract is
established.
SEC: Securities and Exchange Commission.
SEPARATE ACCOUNT: Variable Annuity Account B, an account where assets are
segregated from other assets of the Company and which holds shares of the Funds
acquired for the Contracts.
UNDERWRITER: The registered broker-dealer which contracts with other registered
broker-dealers on behalf of the Separate Account to offer and sell the
Contracts. The Company will serve as Underwriter for the Contracts.
VALUATION PERIOD: The period of time from when a Fund determines its net asset
value until the next time it determines its net asset value, usually from 4:15
p.m. Eastern time each day the New York Stock Exchange is open until 4:15 p.m.
the next such business day.
VALUATION RESERVE: A reserve established pursuant to the insurance laws of
Connecticut to measure voting rights during the Annuity Period and the value of
a commutation right available under the "Payments for a Stated Period of Time"
nonlifetime Annuity option when elected on a variable basis under the Contract.
VARIABLE ANNUITY CONTRACT: An Annuity Contract providing for the accumulation
of values and for retirement payments which vary in dollar amount with
investment results.
3
<PAGE>
PROSPECTUS SUMMARY
PURCHASE
The Contracts we describe in this prospectus are designed to provide retirement
benefits to individuals who are either not participating in formal retirement
plans, or are participating in formal retirement plans but wish to personally
supplement their benefits. The Contracts may be purchased by completing the
proper application form and submitting it to the Distributor with the initial
Purchase Payment. "Purchase of Contract" in this prospectus, outlines the
complete process of purchasing a Variable Annuity Contract.
REDEMPTION
You may withdraw all or a portion of the Contract value during the Accumulation
Period by properly completing our disbursement request form. Certain charges
and deductions may be assessed upon withdrawal. See "Charges and Deductions."
DEFERRED SALES CHARGE
The maximum deferred sales charge that could be assessed on a full or partial
withdrawal is 5% of the amount withdrawn. (See "Deferred Sales Charge" and
"Withdrawal Restrictions.")
TAXES
A 10% federal penalty tax may be imposed on the taxable portion of a
distribution paid to you. (See "Tax Status of Amounts Distributed Under the
Contract.") Please refer to page 15 of the prospectus for Neuberger & Berman
Advisers Management Trust (Growth Portfolio) for a discussion of the tax
considerations relating to its reorganization.
CONTRACT CHARGES
Certain other charges are associated with these Contracts such as the
maintenance fee, mortality and expense risk charges, administrative expense
charge, fund expenses, transfer fees and premium taxes. A complete explanation
of these charges is found in "Charges and Deductions."
FREE-LOOK PROVISION
You may cancel the Contract no later than 10 days after receiving it (or as
otherwise allowed by state law) by returning it to us along with a written
notice of cancellation. Unless state law requires otherwise, the amount you
will receive on cancellation under this provision may reflect the investment
performance of the Purchase Payments deposited in the Separate Account while
invested. In certain cases, this may be less than the amount of your Purchase
Payments. See "Contract Rights--Right to Cancel."
4
<PAGE>
FEE TABLE
(Based on year ended December 31, 1994)
THE PURPOSE OF THE FEE TABLE IS TO ASSIST CONTRACT HOLDERS IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT WILL BE BORNE, DIRECTLY OR INDIRECTLY, UNDER
THE CONTRACT. THE INFORMATION LISTED REFLECTS THE CHARGES DUE UNDER THE
CONTRACT, AS WELL AS THE FEES AND EXPENSES DEDUCTED FROM THE FUNDS. ADDITIONAL
INFORMATION REGARDING THE CHARGES AND DEDUCTIONS ASSESSED UNDER THE CONTRACT
CAN BE FOUND UNDER "CHARGES AND DEDUCTIONS" IN THIS PROSPECTUS. CHARGES AND
EXPENSES SHOWN DO NOT TAKE INTO ACCOUNT PREMIUM TAXES THAT MAY BE APPLICABLE.
CONTRACT HOLDER TRANSACTION EXPENSES
DEFERRED SALES CHARGE (as a percentage of amount withdrawn)/(1)/:
<TABLE>
<CAPTION>
INSTALLMENT PURCHASE PAYMENT CONTRACT
(Completed Purchase Payment Periods) DEDUCTION
------------------------------------ ---------
<S> <C>
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or 10 2%
more than 10 0%
</TABLE>
<TABLE>
<CAPTION>
SINGLE PURCHASE PAYMENT CONTRACT
(Completed Contract Years) DEDUCTION
-------------------------- ---------
<S> <C>
Less than 5 5%
5 or more but less
than 6 4%
6 or more but less
than 7 3%
7 or more but less
than 8 2%
8 or more but less
than 9 1%
9 or more 0%
</TABLE>
<TABLE>
<S> <C>
Transfers/(2)/ $ 0.00
</TABLE>
ANNUAL CONTRACT MAINTENANCE FEE/(3)/
- ------------------------------------
<TABLE>
<S> <C>
Installment $20.00
Single Premium $ 0.00
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES
- --------------------------------
(Daily deductions, equal to the percentage shown on an annual basis, made from
amounts allocated to the variable options)
<TABLE>
<S> <C>
Mortality and Expense Risk Fees 1.25%
Administrative Expense Charge(/4/) 0%
-----
Total Separate Account Annual Expenses 1.25%
=====
</TABLE>
/(1)/The total amount deducted for the deferred sales charge will not exceed
8.5% of the Purchase Payments made to the Individual Account. The deferred
sales charge may be referred to in the Contract as "surrender fee." See
"Deferred Sales Charge" for instances in which this charge is not deducted.
/(2)/The Company currently allows an unlimited number of transfers without
charge. However, we reserve the right to assess a transfer fee of $10 for
each transfer in excess of 12 per calendar year. See "Transfers and
Allocation Changes."
/(3)/A maintenance fee, to the extent permitted by state law, is also deducted
upon termination of the Contract.
/(4)/We currently do not impose an Administrative Expense Charge. However, we
reserve the right to deduct a daily charge of not more than 0.25% per year
from the variable portion of contract values.
5
<PAGE>
MUTUAL FUND ANNUAL EXPENSES
- ---------------------------
(Except as noted, the following figures are a percentage of average net assets
and, except where otherwise indicated, are based on figures for the year ended
December 31, 1994)
<TABLE>
<CAPTION>
INVESTMENT OTHER TOTAL
ADVISORY FEES/(1)/ EXPENSES/(2)/ FUND
(AFTER EXPENSE (AFTER EXPENSE ANNUAL
REIMBURSEMENT) REIMBURSEMENT) EXPENSES
------------------ -------------- --------
<S> <C> <C> <C>
Aetna Variable Fund 0.25% 0.05% 0.30%
Aetna Income Shares 0.25% 0.08% 0.33%
Aetna Variable Encore Fund 0.25% 0.07% 0.32%
Aetna Investment Advisers Fund,
Inc. 0.25% 0.07% 0.32%
Alger American Small Cap Portfolio 0.85% 0.11% 0.96%
Janus Aspen Aggressive Growth
Portfolio/(3)/ 0.77% 0.28% 1.05%
Janus Aspen Flexible Income
Portfolio/(3)/ 0.30% 0.70% 1.00%
Lexington Natural Resources
Trust/(4)/ 1.00% 0.55% 1.55%
Neuberger & Berman Growth
Portfolio/(5)/ 0.79% 0.12% 0.91%
Scudder International Portfolio 0.88% 0.20% 1.08%
TCI Growth/(6)/ 1.00% 0.00% 1.00%
</TABLE>
- --------
/(1)/Certain of the unaffiliated Fund managers reimburse the Company for
administrative costs incurred in connection with administering the Funds
as variable funding options under the Contract. These reimbursements are
paid out of the investment advisory fees and are not charged to investors.
/(2)/A Fund's "Other Expenses" include certain operating costs of the Fund. The
expenses are factored into the Fund's net asset value and are not deducted
from the Account Value under the Contract.
/(3)/The expense figures shown are net of certain expense waivers from Janus
Capital Corporation. Without such waivers, the Investment Advisory Fees,
Other Expenses and Total Mutual Fund Annual Expenses for the Portfolios
for the fiscal year ended December 31, 1994 would have been: 1.00%, 0.28%
and 1.28%, respectively, for Janus Aspen Aggressive Growth Portfolio;
1.00%, 0.74% and 1.74%, respectively, for Janus Aspen Balanced Portfolio;
0.65%, 0.70% and 1.35%, respectively, for Janus Aspen Flexible Income
Portfolio; 1.00%, 0.22% and 1.22%, respectively, for Janus Aspen Growth
Portfolio; 0.65%, 0.75% and 1.40%, respectively, for Janus Aspen Short-
Term Bond Portfolio; and 1.00%, 0.49% and 1.49%, respectively, for Janus
Aspen Worldwide Growth Portfolio.
/(4)/These fees as a percentage of assets are higher than those for other
similar funds, although the amounts of the fees are not due to the limited
amount of assets in the Fund.
/(5)/Until May 1, 1995, the Portfolio had a Distribution Plan pursuant to Rule
12b-1 which provided for the reimbursement by Neuberger & Berman
Management of certain distribution expenses, up to a maximum of 0.25% of
an annual basis of the Portfolio's average daily net assets. The "Total
Annual Expenses" shown above would have been increased by 0.02% if the
12b-1 fees for the months of January through April 1995 were taken into
account.
/(6)/The Portfolio's investment adviser pays all expenses of the Portfolio
except brokerage commissions, taxes, interest, fees and expenses of the
non-interested directors (including counsel fees) and extraordinary
expenses.
6
<PAGE>
HYPOTHETICAL ILLUSTRATION (EXAMPLE)
- -----------------------------------
THIS EXAMPLE IS PURELY HYPOTHETICAL. IT SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR EXPECTED RETURN. ACTUAL EXPENSES
AND/OR RETURN MAY BE MORE OR LESS THAN THOSE SHOWN BELOW.
Assuming a 5% annual return on assets, you would have paid the following
expenses on a $1,000 investment/(1)/:
<TABLE>
<CAPTION>
If you make a complete withdrawal If you do not make a complete
of your Contract at the end of the withdrawal of your Contract
applicable time period: or if you annuitize:
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------- -------- -------- --------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund $68 $105 $146 $189 $16 $50 $ 87 $189
Aetna Income Shares $68 $106 $147 $192 $16 $51 $ 88 $192
Aetna Variable Encore
Fund $68 $106 $147 $191 $16 $51 $ 88 $191
Aetna Investment Advis-
ers Fund, Inc. $68 $106 $147 $191 $16 $51 $ 88 $191
Alger American Small Cap
Portfolio $74 $125 $178 $258 $23 $70 $120 $258
Janus Aspen Aggressive
Growth Portfolio $75 $127 $182 $268 $24 $73 $125 $268
Janus Aspen Flexible In-
come Portfolio $75 $126 $180 $262 $23 $72 $122 $262
Lexington Natural Re-
sources Trust $80 $141 $205 $317 $29 $88 $150 $317
Neuberger & Berman
Growth Portfolio $74 $123 $175 $253 $22 $69 $118 $253
Scudder International
Portfolio $75 $128 $183 $271 $24 $74 $126 $271
TCI Growth $75 $126 $180 $262 $23 $72 $122 $262
</TABLE>
- -------
/(1)/The illustration reflects the $20 annual maintenance fee as an annual
charge of 0.039% of assets.
7
<PAGE>
CONDENSED FINANCIAL INFORMATION
(SELECTED DATA FOR ACCUMULATION UNITS OUTSTANDING THROUGHOUT EACH PERIOD)
THE CONDENSED FINANCIAL INFORMATION PRESENTED BELOW FOR EACH OF THE YEARS IN
THE TEN-YEAR PERIOD ENDED DECEMBER 31, 1994, ARE DERIVED FROM THE FINANCIAL
STATEMENTS OF THE SEPARATE ACCOUNT, WHICH FINANCIAL STATEMENTS HAVE BEEN
AUDITED BY KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS. THE FINANCIAL
STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1994 AND THE INDEPENDENT
AUDITORS' REPORT THEREON ARE INCLUDED IN THE STATEMENT OF ADDITIONAL
INFORMATION.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
---- ---- ------- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AETNA VARIABLE FUND
Value at
beginning of
period $10.940 $10.378 $84.249 $67.496 $66.174 $51.900 $45.839 $43.994 $37.445 $27.565
Value at end of
period $10.698 $10.940 $10.378(/2/) $84.249 $67.496 $66.174 $51.900 $45.839 $43.994 $37.445
Increase
(decrease) in
value of
accumulation
unit(/1/) (2.21)% 5.41% (/2/) 24.82% 2.00% 27.50% 13.22% 4.19% 17.49% 35.84%
Number of
accumulation
units
outstanding at
end of period 11,117,383 879,670 3,107 908,777 810,126 831,547 887,039 1,020,744 1,273,920 1,089,637
AETNA INCOME SHARES
Value at
beginning of
period $11.006 $10.160 $37.815 $32.066 $29.752 $26.291 $24.734 $23.888 $21.203 $17.698
Value at end of
period $10.457 $11.006 $10.160(/3/) $37.815 $32.066 $29.752 $26.291 $24.734 $23.888 $21.203
Increase
(decrease) in
value of
accumulation
unit(/1/) (4.99)% 8.33% (/3/) 17.93% 7.78% 13.16% 6.29% 3.54% 12.66% 19.80%
Number of
accumulation
units
outstanding at
end of period 1,988,960 166,913 4,196 427,893 358,454 366,176 383,856 377,078 565,148 533,123
AETNA VARIABLE ENCORE FUND
Value at
beginning of
period $10.223 $10.031 $34.122 $32.431 $30.285 $28.029 $26.401 $25.028 $23.660 $22.084
Value at end of
period $10.509 $10.223 $10.031(/4/) $34.122 $32.431 $30.285 $28.029 $26.401 $25.028 $23.660
Increase
(decrease) in
value of
accumulation
unit(/1/) 2.79% 1.91% (/4/) 5.21% 7.09% 8.05% 6.17% 5.49% 5.78% 7.14%
Number of
accumulation
units
outstanding at
end of period 1,822,449 90,782 2,808 548,425 722,438 653,519 720,726 898,557 881,853 1,170,600
AETNA INVESTMENT ADVISERS FUND, INC.
Value at
beginning of
period $11.164 $10.286 $12.717 $10.882 $10.423 $10.000(/5/)
Value at end of
period $10.971 $11.164 $10.286(/6/) $12.717 $10.882 $10.423
Increase
(decrease) in
value of
accumulation
unit(/1/) (1.73)% 8.54% (/6/) 16.86% 4.40% 4.23%
Number of
accumulation
units
outstanding at
end of period 3,541,703 318,711 6,537 1,324,822 984,798 639,219
ALGER AMERICAN SMALL CAP PORTFOLIO
Value at
beginning of
period $10.307 $10.000(/7/)
Value at end of
period $9.622 $10.307
Increase
(decrease) in
value of
accumulation
unit(/1/) (6.64)% 3.07%
Number of
accumulation
units
outstanding at
end of period 441,809 31,855
JANUS ASPEN AGGRESSIVE GROWTH
PORTFOLIO
Value at
beginning of
period $10.000(/8/)
Value at end of
period $10.319
Increase
(decrease) in
value of
accumulation
unit(/1/) 3.19%
Number of
accumulation
units
outstanding at
end of period 131,702
JANUS ASPEN FLEXIBLE INCOME
PORTFOLIO
Value at
beginning of
period $10.000(/8/)
Value at end of
period $9.886
Increase
(decrease) in
value of
accumulation
unit(/1/) (1.14)%
Number of
accumulation
units
outstanding at
end of period 15,893
</TABLE>
8
<PAGE>
CONDENSED FINANCIAL INFORMATION (CONTINUED)
(SELECTED DATA FOR ACCUMULATION UNITS OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- -------
<S> <C> <C> <C>
LEXINGTON NATURAL RESOURCES TRUST
Value at beginning of
period $9.716 $10.000(/7/)
Value at end of period $9.079 $9.716
Increase (decrease) in
value of accumulation
unit(/1/) (6.56)% (2.84)%
Number of accumulation
units outstanding at
end of period 141,076 27,908
NEUBERGER & BERMAN GROWTH PORTFOLIO
Value at beginning of
period $12.990 $10.123 $10.000(/9/)
Value at end of period $12.199 $12.990 $10.123
Increase (decrease) in
value of accumulation
unit(/1/) (6.09)% 28.32% 1.23%
Number of accumulation
units outstanding at
end of period 228,370 71,556 2,275
SCUDDER INTERNATIONAL PORTFOLIO
Value at beginning of
period $13.654 $10.051 $10.000(/9/)
Value at end of period $13.372 $13.654 $10.051
Increase (decrease) in
value of accumulation
unit(/1/) (2.07)% 35.85% 0.51%
Number of accumulation
units outstanding at
end of period 652,630 144,303 324
TCI GROWTH
Value at beginning of
period $11.159 $10.232 $10.000(/9/)
Value at end of period $10.883 $11.159 $10.232
Increase (decrease) in
value of accumulation
unit(/1/) (2.48)% 9.06% 2.32%
Number of accumulation
units outstanding at
end of period 1,123,366 261,107 4,284
</TABLE>
(/1/)The above figures are calculated by subtracting the beginning Accumulation
Unit value from the ending Accumulation Unit value during a calendar year,
and dividing the result by the beginning Accumulation Unit value. These
figures do not reflect the deferred sales charge or the fixed dollar
annual maintenance fee, if any. Inclusion of these charges would reduce
the investment results shown.
(/2/)The Accumulation Unit value was converted to $10.000 on November 2, 1992
upon the commencement of a new administrative system. Immediately prior to
that date, the Accumulation Unit value of the Fund was $85.546. On the
date of conversion, additional units were issued so that account values
were not changed as a result of the conversion. The percentage change in
the Accumulation Unit value from the beginning of the year to the date of
conversion was 1.54%; the percentage change in the Accumulation Unit value
from the date of conversion to the end of the year was 3.78%.
(/3/)The Accumulation Unit value was converted to $10.000 on November 2, 1992
upon the commencement of a new administrative system. Immediately prior to
that date, the Accumulation Unit value of the Fund was $39.496. On the
date of conversion, additional units were issued so that account values
were not changed as a result of the conversion. The percentage change in
the Accumulation Unit value from the beginning of the year to the date of
conversion was 4.45%; the percentage change in the Accumulation Unit value
from the date of conversion to the end of the year was 1.60%.
(/4/)The Accumulation Unit value was converted to $10.000 on November 2, 1992
upon the commencement of a new administrative system. Immediately prior to
that date, the Accumulation Unit value of the Fund was $34.828. On the
date of conversion, additional units were issued so that account values
were not changed as a result of the conversion. The percentage change in
the Accumulation Unit value from the beginning of the year to the date of
conversion was 2.07%; the percentage change in the Accumulation Unit value
from the date of conversion to the end of the year was 0.31%.
(/5/)The initial Accumulation Unit value was established at $10.000 on June 23,
1989, the date on which the Fund commenced operations.
(/6/)The Accumulation Unit value was converted to $10.000 on November 2, 1992
upon the commencement of a new administrative system. Immediately prior to
that date, the Accumulation Unit value of the Fund was $12.991. On the
date of conversion, additional units were issued so that account values
were not changed as a result of the conversion. The percentage change in
the Accumulation Unit value from the beginning of the year to the date of
conversion was 2.15%; the percentage change in the Accumulation Unit value
from the date of conversion to the end of the year was 2.86%.
(/7/)The initial Accumulation Unit value was established at $10.000 on
September 17, 1993, the date on which the Portfolio became available under
the Contract.
(/8/)The initial Accumulation Unit value was established at $10.000 during
October 1994, when funds were first received in this option.
(/9/)The initial Accumulation Unit value was established at $10.000 on November
2, 1992, the date on which the Fund/Portfolio became available under the
Contract.
9
<PAGE>
PERFORMANCE DATA
From time to time, the Company may advertise different types of historical
performance for the variable funding options of the Separate Account available
under the Contracts described in this Prospectus. The Company may advertise the
"standardized average annual total returns" of the variable funding options,
calculated in a manner prescribed by the SEC, as well as the "non-standardized
return." Both methods are described below. Further information is contained in
the SAI.
"Standardized average annual total returns" are computed according to a formula
in which a hypothetical investment of $1,000 is applied to the variable funding
options under the Contract and then related to the ending redeemable values
over the most recent one, five and ten-year periods (or since inception if less
than 10 years). Standardized returns will reflect the deduction of all
recurring charges during each period (e.g., mortality and expense risk charges,
the annual maintenance fee, the administrative expense charge and any
applicable deferred sales charge).
"Non-standardized return" will be calculated in a similar manner, except that
non-standardized figures will not reflect the deduction of any applicable
deferred sales charge (which would decrease the level of performance shown if
reflected in these calculations). The non-standardized figures may also include
a three-year period.
For Funds that were in existence prior to the date that the Fund became
available under the Contract, the performance data will show the investment
performance that such Fund would have achieved (reduced by the applicable
charges) had it been available under the Contract for the period quoted.
We may distribute sales literature that compares the percentage change in
Accumulation Unit values for any of the Funds to established market indexes
such as the Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average or to percentage changes in unit values for other management investment
companies that have investment objectives similar to the Fund being compared.
We may publish in advertisements and reports to Contract Holders, the ratings
and other information assigned to us by one or more independent rating
organizations such as A.M. Best Company, Duff & Phelps, Standard & Poor's
Corporation and Moody's Investors Service, Inc. The purpose of the ratings is
to reflect the Company's financial strength and/or claims-paying ability. We
may also quote ranking services such as Morningstar's Variable Annuity/Life
Performance Report and Lipper's Variable Insurance Products Performance
Analysis Service (VIPPAS), which rank variable annuity or life subaccounts or
their underlying funds by performance and/or investment objective. From time to
time, we will quote articles from newspapers and magazines or other
publications or reports, including, but not limited to The Wall Street Journal,
Money magazine, USA Today and The VARDS Report.
10
<PAGE>
THE COMPANY
Aetna Life Insurance and Annuity Company (the "Company"), the depositor for
Variable Annuity Account B, is a stock life insurance company organized in 1976
under the insurance laws of the State of Connecticut. As of December 31, 1994,
we managed over $20.4 billion of assets. As of December 31, 1993, we ranked
among the top 2% of all U.S. life insurance companies by size. The Company is a
wholly owned subsidiary of Aetna Life and Casualty Company which, with its
subsidiaries, constitutes one of the nation's largest diversified financial
services organizations. Our Home Office is located at 151 Farmington Avenue,
Hartford, Connecticut 06156.
VARIABLE ANNUITY ACCOUNT B
Variable Annuity Account B is a separate account established by us in 1976
according to the insurance laws of the State of Connecticut. The Separate
Account was formed for the purpose of segregating assets attributable to the
variable portions of Contracts from the other assets of the Company. The
Separate Account is registered as a unit investment trust under the Investment
Company Act of 1940, and meets the definition of "separate account" under
federal securities laws.
Although we own the assets of the Separate Account, the assets equal to the
reserves and other Contract liabilities which depend on the investment
performance of the Separate Account are not chargeable with liabilities arising
out of any other business we may conduct. Income, gains or losses of the
Separate Account are credited to or charged against the assets of the Separate
Account without regard to our other income, gains or losses. However, all
obligations arising under the Contracts are our general corporate obligations.
THE FUNDS
You may select one or more of the Funds for investment of the Purchase
Payments. Except where noted, all of the Funds are diversified as defined in
the Investment Company Act of 1940. The availability of the above Funds is
subject to applicable regulatory authorization. Not all Funds are available in
all jurisdictions or under all Contracts.
. AETNA VARIABLE FUND (sometimes called the "Growth and Income Fund") seeks
to maximize total return through investments in a diversified portfolio
of common stocks and securities convertible into common stock.
. AETNA INCOME SHARES (sometimes called the "Bond Fund") seeks to maximize
total return, consistent with reasonable risk, through investments in a
diversified portfolio consisting primarily of debt securities.
. AETNA VARIABLE ENCORE FUND (sometimes called the "Money Market Fund")
seeks to provide high current return, consistent with preservation of
capital and liquidity, through investment in high-quality money market
instruments. An investment in the Fund is neither insured nor guaranteed
by the U.S. Government.
. AETNA INVESTMENT ADVISERS FUND, INC. (sometimes called the "Managed
Fund") is a managed mutual fund which seeks to maximize investment return
consistent with reasonable safety of principal by investing in one or
more of the following asset classes: stocks, bonds and cash equivalents
based on the Company's judgment of which of those sectors or mix thereof
offers the best investment prospects.
. ALGER AMERICAN FUND--ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
("Alger American Small Cap Portfolio") seeks capital return through
investment in the common stock of smaller companies offering the
potential for significant price gain. It invests at least 85% of its net
assets
11
<PAGE>
in equity securities and at least 65% of its net assets in equity
securities of companies that, at the time of purchase, have "total market
capitalization" -- present market value per share multiplied by the total
number of shares outstanding -- of less than $1 billion. Investing in
smaller companies may present risks not present in investments in larger
companies. See the Fund's prospectus for a discussion of these risks.
. JANUS ASPEN SERIES--AGGRESSIVE GROWTH PORTFOLIO ("Janus Aspen Aggressive
Growth Portfolio") is a nondiversified portfolio that seeks long-term
growth of capital by emphasizing investments in common stocks of
companies with market capitalizations between $1 billion and $5 billion.
. JANUS ASPEN SERIES--FLEXIBLE INCOME PORTFOLIO ("Janus Aspen Flexible
Income Portfolio") seeks to obtain maximum total return, consistent with
preservation of capital from a combination of current income and capital
appreciation. Janus Aspen Flexible Income Portfolio invests in all types
of income-producing securities and may have substantial holdings of debt
securities rated below investment grade ("high yield, high risk
securities") also commonly known as "junk bonds." High yield, high risk
securities involve certain risks. See the Fund's prospectus for a
discussion of these risks.
. LEXINGTON NATURAL RESOURCES TRUST is a non-diversified portfolio that
seeks long-term growth of capital through investment primarily in common
stocks of companies which own or develop natural resources and other
basic commodities or supply goods and services to such companies. Current
income will not be a factor. The fund may invest up to 25% of its total
assets in foreign securities. Foreign investing involves risks that
differ from those involved in domestic investing. See the Fund's
prospectus for a discussion of these risks.
. NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST--GROWTH PORTFOLIO
("Neuberger & Berman Growth Portfolio") seeks capital growth through
investments in common stocks of companies that the investment adviser
believes will have above-average earnings or otherwise provide investors
with above-average potential for capital appreciation.
. SCUDDER VARIABLE LIFE INVESTMENT FUND--INTERNATIONAL PORTFOLIO ("Scudder
International Portfolio") seeks long-term growth of capital primarily
through diversified holdings of marketable foreign equity investments.
Investing in foreign securities may involve a greater degree of risk than
investing in domestic securities. See the Fund's prospectus for a
discussion of the risks involved.
. TCI PORTFOLIOS, INC.--TCI GROWTH (a Twentieth Century Fund) seeks capital
growth by investing in common stocks (including securities convertible
into common stocks) and other securities that meet certain fundamental
and technical standards of selection and, in the opinion of TCI Growth's
management, have better than average potential for appreciation. TCI
Growth tries to stay fully invested in such securities, regardless of the
movement of prices generally. The fund may invest in foreign securities.
Foreign investing involves risks that differ from those involved in
domestic investing. See the Fund's prospectus for a discussion of these
risks.
There is no assurance that the Funds will achieve their investment objectives.
Participants bear the full investment risk of investments in the Funds
selected.
Some of the above funds may use instruments known as derivatives as part of
their investment strategies as described in their respective prospectuses. The
use of certain derivatives such as inverse floaters and principal only debt
instruments may involve higher risk of volatility to a Fund. The use of
leverage in connection with derivatives can also increase risk of losses. See
the prospectus for the Funds for a discussion of the risks associated with an
investment in those funds.
More comprehensive information, including a discussion of potential risks, is
found in the current prospectus for each Fund which is distributed with and
must accompany this Prospectus. Contract
12
<PAGE>
Holders should read the accompanying prospectuses carefully before investing.
Additional prospectuses and the Statements of Additional Information for this
Prospectus and each of the Funds can be obtained from the Company's Home Office
at the address and telephone number listed on the cover of this Prospectus.
FUND INVESTMENT ADVISERS
The following identifies the investment adviser and the subadviser, if any, for
each Fund.
<TABLE>
<CAPTION>
FUND INVESTMENT ADVISER SUBADVISER
---- ------------------ ----------
<S> <C> <C>
Aetna Variable Fund Aetna Life Insurance --
and Annuity Company (ALIAC)
Aetna Income Shares ALIAC --
Aetna Variable Encore ALIAC --
Fund
Aetna Investment ALIAC --
Advisers Fund, Inc.
Alger American Small Cap Fred Alger Management, Inc. --
Portfolio
Janus Aspen Aggressive Janus Capital Corporation --
Growth Portfolio
Janus Aspen Flexible Income Janus Capital Corporation --
Portfolio
Lexington Natural Resources Lexington Management Market Systems Research
Trust Corporation Advisors, Inc.
Neuberger & Berman Growth Neuberger & Berman Neuberger & Berman
Portfolio Management Incorporated
Scudder International Scudder, Stevens & Clark, --
Portfolio Inc.
TCI Growth Investors Research --
Corporation
</TABLE>
MIXED AND SHARED FUNDING
Shares of the Funds are sold to us for funding variable annuities. The Funds
may be sold to other companies for the same purpose. This is referred to as
"shared funding." Shares of the Funds may also be used for funding variable
life insurance policies through variable life insurance separate accounts
sponsored by us or by third parties. This is referred to as "mixed funding."
It is conceivable that, in the future, it may be disadvantageous for variable
annuity separate accounts and variable life separate accounts of the same or of
an unaffiliated insurance company to invest in these Funds simultaneously,
since the interests of the contract holders or policy owners or insurance
companies may differ. Each Fund's Board of Trustees or Directors has agreed to
monitor events in order to identify any material irreconcilable conflicts which
may possibly arise and to determine what action, if any, should be taken in
response thereto. If such a conflict were to occur, one of the separate
accounts might withdraw its investment in a Fund. This might force that Fund to
sell portfolio securities at disadvantageous prices.
13
<PAGE>
FUND ADDITIONS AND LIMITATIONS
We may, from time to time, add additional mutual funds as eligible variable
funding options under the Contracts. In such event, you may be permitted to
select from these other funds, subject to any conditions that may be imposed in
connection with those options. No more than 18 different investment choices may
be made over the life of the Account. See "Transfers and Allocation Changes."
The Company's current policy is to allow only the Aetna Variable Fund, Aetna
Income Shares and Aetna Investment Advisers Fund, Inc. to be used as variable
investment options during the Annuity Period. See "Annuity Period Elections."
PURCHASE OF CONTRACT
PURCHASE
The Contract application form, completed by the prospective Contract Holder, is
forwarded, together with the initial Purchase Payment, if any, to the Company's
Home Office. Upon acceptance, we issue the Contract and forward it to you. The
Company must accept or reject an application within two business days of its
receipt. If the application is incomplete, the Company may hold it and any
accompanying Purchase Payment for five days. Purchase Payments may be held for
longer periods only with the consent of the Contract Holder, pending acceptance
of the application. If the application is accepted, a Contract will be issued
to the Contract Holder. Any Purchase Payment accompanying the application, or
received prior to acceptance of the application, will be invested as of the
date of acceptance. If the application is rejected, the application and any
Purchase Payments will be returned to the Contract Holder. Initial payments
held for longer than the five business days will be deposited in the Aetna
Variable Encore Fund until the forms are completed.
You may cancel the Contract within 10 days after receiving it. See "Right to
Cancel" for more information.
The minimum Purchase Payment for a new single payment deferred Contract is
$5,000. Installment Purchase Payments must be at least $100 per month ($1,200
annually) and may not be less than $25 per payment. The usual maximum issue age
where Annuity payments are not to begin immediately is age 80. For Contracts
where Annuity payments are to begin immediately, the maximum issue age depends
on the Annuity option selected but may not be greater than age 90.
This Contract may be aggregated with other Annuity Contracts purchased by you
from us (and our affiliates) on or after October 21, 1988, for purposes of
determining the taxable portion of payments from this Contract. (See "Tax
Status of Amounts Distributed Under the Contract.")
NET PURCHASE PAYMENTS
Each Purchase Payment is forwarded to us through a Distributor. Each Net
Purchase Payment, to the extent it is to be accumulated on a variable basis, is
placed in Account B and credited to the Contract.
You may elect to have the Net Purchase Payment(s) accumulate (a) on a variable
basis by allocation to one or more of the available Funds; (b) on a fixed basis
under the credited interest option; or (c) in a combination of any of the
available investment options. The Net Purchase Payment(s) must be allocated to
the respective options in increments of whole percentage amounts.
Under an installment Purchase Payment Contract, you may elect to change the
allocation of future Net Purchase Payments to any accumulation option described
above.
14
<PAGE>
DISTRIBUTION
The Company will serve as Underwriter for the securities sold by this
Prospectus. The Company is registered as a broker-dealer with the Securities
and Exchange Commission and is a member of the National Association of
Securities Dealers, Inc. (NASD). As Underwriter, the Company will contract with
one or more registered broker dealers ("Distributors"), including at least one
affiliate of the Company, to offer and sell the Contracts. All persons offering
and selling the Contracts must be registered representatives of the
Distributors and must also be licensed as insurance agents to sell Variable
Annuity Contracts.
Persons offering and selling the Contracts may receive commissions in
connection with the sale of the Contracts. The maximum percentage amount that
the Company will ever pay as commission with respect to any given Purchase
Payment is with respect to those made during the first year of Purchase
Payments under a Contract. That percentage amount will range from 1% to 7 1/2%
of those Purchase Payments. The Company may also pay renewal commissions on
Purchase Payments made after the first year and service fees. The average of
all payments made by the Company is estimated to equal approximately 3% of the
total Purchase Payments made over the life of an average Contract. The Company
may also reimburse the Distributor for certain expenses. The name of the
Distributor and the registered representative responsible for your Contract are
set forth on your application. Commissions and sales related expenses are paid
by the Company and are not deducted from Purchase Payments. See "Charges and
Deductions--Deferred Sales Charge."
DETERMINING CONTRACT VALUE
ACCUMULATION UNITS
A Purchase Payment that is directed to one or more of the Funds is deposited in
the Separate Account and credited to the Account in the form of Accumulation
Units for each Fund selected. The number of Accumulation Units credited is
determined by dividing the applicable portion of the Purchase Payment by that
Contract's Accumulation Unit value of the appropriate Fund. The Accumulation
Unit value used is that next-computed following the date on which a Purchase
Payment is received, unless the application has not been accepted. In that
event, Purchase Payments will be credited at the Accumulation Unit Value next
determined after acceptance of the application. Shares of the Funds are
purchased by the Separate Account at the net asset value next determined by the
Fund following receipt of Purchase Payments by the Separate Account. The value
of Accumulation Units attributable to the Funds will be affected by the
investment performance, expenses and charges of those Funds. Generally, if the
net asset value of the fund increases, so does the Accumulation Unit value;
however, performance of the Separate Account is reduced by charges and
deductions under the contract.
Accumulation Units are valued separately for each Fund. Therefore, if you elect
to have a Purchase Payment invested in a combination of Funds, you will have
Accumulation Units credited from more than one source. The value of your
Account as of the most recent Valuation Period, is determined by adding the
value of any Accumulation Units attributed to the Fund(s) you have selected to
the value of any amounts invested in the Fixed Account.
NET INVESTMENT FACTOR
The value of an Accumulation Unit for any Valuation Period is calculated by
multiplying the Accumulation Unit value for the immediately preceding Valuation
Period by the net investment factor of the appropriate investment option for
the current period.
The net investment factor is calculated separately for each Fund in which
assets of the Separate Account are invested. It is determined by adding
1.0000000 to the net investment rate.
15
<PAGE>
The net investment rate equals (a) the net assets of the Fund held by the
Separate Account at the end of a Valuation Period, minus (b) the net assets of
the Fund held by the Separate Account at the beginning of a Valuation Period,
plus or minus (c) taxes or provision for taxes, if any, attributable to the
operation of the Separate Account, divided by (d) the value of the Fund's
Accumulation and Annuity Units held by the Separate Account at the beginning of
the Valuation Period, minus (e) a daily charge at an annual rate of 1.25% for
the Annuity mortality and expense risks; and a daily administrative expense
charge which will not exceed 0.25% (0% through April 30, 1996) on an annual
basis. The net investment rate may be more or less than zero. See "Charges and
Deductions."
CONTRACT RIGHTS
RIGHT TO CANCEL
You may cancel the Contract no later than 10 days after receiving it (or as
otherwise allowed by state law) by returning it to us along with a written
notice of cancellation. We will produce a refund not later than 7 days after we
receive the Contract and the written notice at the Home Office. Unless the
applicable state law requires a refund of the Purchase Payment(s) only, we will
refund the Purchase Payment(s) plus any increase or minus any decrease in the
value attributable to any Purchase Payment(s) allocated to the variable
option(s).
TRANSFERS AND ALLOCATION CHANGES
During each calendar year, you may change the allocation of future Net Purchase
Payments and/or transfer account values among the funding options available
under the Contract. However, you may not make allocations or transfers to new
funding options if the total number of funding options you have selected would
exceed 18 since the time that you acquired an interest in the Contract. Each
variable funding option and the Fixed Account selected counts as one option,
even if you no longer have amounts allocated to that option.
The Company currently allows an unlimited number of transfers or allocation
changes without charge; however, we reserve the right to charge $10 for each
transfer in excess of 12 during each Contract Year. See "Allocation and
Transfer Fees."
Transfers of not less than $500 may be made among the available Funds or from
any of the Funds to the credited interest option. Any transfer will be based on
the Accumulation Unit value next determined after we receive a valid request at
our Home Office. See the Appendix for information on transfers from the Fixed
Account.
You may change the allocation of future Net Purchase Payments as often as
desired, free of charge.
During the Annuity Period, no transfers of accumulated value are allowed.
WITHDRAWALS
You may withdraw all or a portion of the Contract value during the Accumulation
Period by properly completing a disbursement form and sending it to the Home
Office. Disbursement forms are available from us and our representatives.
Withdrawals may be requested in one of the following three ways:
. Full Withdrawal of the Contract: The amount paid will be the full value
of the Contract minus any applicable deferred sales charge and
maintenance fee due.
. Partial Withdrawal (Percentage): The amount paid will be the percentage
of the Contract value requested minus any applicable deferred sales
charge.
16
<PAGE>
. Partial Withdrawal (Specific Dollar Amount): The amount paid will be the
dollar amount requested. However, the amount withdrawn from the Contract
will equal the dollar amount requested plus any applicable deferred sales
charge.
All amounts paid will be based on account values as of the end of the Valuation
Period in which the request is received in the Home Office. For any partial
withdrawal, unless you request otherwise, the value of the Accumulation Units
cancelled will be withdrawn proportionately from each investment option used
under the Contract.
Payments for withdrawal requests will be made in accordance with SEC
requirements, but not later than seven calendar days after a properly completed
disbursement form is received at our Home Office or within 7 calendar days of
the date the disbursement form may specify. Payments may be delayed for: (a)
any period in which the New York Stock Exchange ("Exchange") is closed (other
than customary weekend and holiday closings) or in which trading on the
Exchange is restricted; (b) any period in which an emergency exists where
disposal of securities held by the Funds is not reasonably practicable or is
not reasonably practicable for the value of the assets of the Funds to be
fairly determined; or (c) such other periods as the SEC may by order permit for
the protection of Contract Holders. The conditions under which restricted
trading or an emergency exists shall be determined by the rules and regulations
of the SEC.
Tax treatment of withdrawals from this Contract may be modified if you own
other Annuity Contracts issued by us (and our affiliates) that were purchased
on or after October 12, 1988. (See "Tax Status of Amounts Distributed Under the
Contract.")
REINSTATEMENT PRIVILEGE
You may elect to reinstate all or a portion of the proceeds received for the
full withdrawal of a Contract within 30 days after such withdrawal.
Accumulation Units will be credited to the Contract for the amount reinstated,
as well as for any applicable maintenance fee and any appropriate portion of
any deferred sales charge imposed at the time of withdrawal. Any maintenance
fee which falls due after the withdrawal and before the reinstatement will be
deducted from the amount reinstated. Reinstated amounts will be reallocated to
the applicable investment options in the same proportion as they were allocated
at the time of withdrawal.
The number of Accumulation Units credited will be based upon the Accumulation
Unit value(s) next computed following receipt at the Home Office of the
reinstatement request along with the amount to be reinstated. The reinstatement
privilege may be used only once.
CHARGES AND DEDUCTIONS
MAINTENANCE FEE
A $20 annual maintenance fee is deducted from installment Purchase Payment
Contracts during the Accumulation Period on the Contract anniversary date (or,
if this is not a business day that the New York Stock Exchange is open, on the
next business day). This fee is to reimburse the Company for some of its
administrative expenses relating to the establishment and maintenance of the
Contract. We deduct this fee from each respective investment option in the same
proportion as the values held under each option have to the total value of the
Contract. A maintenance fee, to the extent permitted by state law, is also
deducted upon termination of the Contract.
17
<PAGE>
MORTALITY AND EXPENSE RISK CHARGES
We make a daily deduction from the Separate Account for mortality and expense
risks (insurance charges). The deduction, made as part of the calculation of
Accumulation and Annuity Unit value(s), is equivalent to 1.25% per year.
The mortality risk charge is to compensate us for the risk we assume when we
promise to continue making payments for the lives of individual Annuitants
according to Annuity rates specified in the Contract at issue. The expense risk
charge is to compensate us for the risk that actual expenses for costs incurred
under the Contract will exceed the maximum costs that can be charged under the
Contract. During 1994, we received $8,918,042 for mortality and expense risks
from Contracts under the Separate Account.
ADMINISTRATIVE EXPENSE CHARGE
We reserve the right, upon 30 days' notice, to deduct a daily charge of not
more than 0.25% per year from the variable portion of Contract values to
reimburse us for some of the expenses incurred by us in administering the
Contract. This charge will be established by us on an annual basis effective
each May 1 and continue until April 30 of the following year. During the
Accumulation Period, the charge may fluctuate annually. However, once an
Annuity option is elected, the charge will be established and will remain
effective during the entire Annuity Period. Through April 30, 1996, we have
established the charge to be zero. Since the administrative charge is a
percentage of the variable portion of Contract values, there may be no
relationship between the amount so deducted and the amount of expenses
attributable to the Contract.
FUND EXPENSES
Each Fund has an investment adviser. An investment advisory fee, based on the
Fund's average net assets, is deducted from the assets of each Fund and paid to
the investment adviser.
Most expenses incurred in the operations of each Fund are borne by that Fund.
Fund advisers may reimburse the Funds that they advise for some or all of these
expenses. For further details on each Fund's expenses, you should read the
accompanying prospectus for each Fund and the Fee Table in this Prospectus.
ALLOCATION AND TRANSFER FEES
Under the Contract, unlimited transfers are currently allowed without charge.
However, we reserve the right to charge $10 for each additional transfer once
12 transfers have been made in a calendar year.
DEFERRED SALES CHARGE
There are no deductions from Purchase Payments for sales commissions or related
expenses. Sales commissions and expenses are advanced by the Company and
recovered out of any deferred sales charges or, if deferred sales charges are
insufficient, out of its profits from investment activities, including the
mortality and expense risk charges under the Contract. For sales commissions
paid in connection with the sale of the Contracts, see "Contract Purchase--
Distribution." Deferred sales charges may be deducted from amounts withdrawn
during the first 9 Contract Years (for Single Purchase Payment Contracts) and
10 Purchase Payment Periods (for Installment Purchase Payment Contracts), as
set forth in the table below. The deferred sales charge will apply to
withdrawals during the Accumulation Period. It will apply during the Annuity
Period if the nonlifetime Annuity Option is elected on a variable basis and the
remaining value is withdrawn before three years of Annuity payments have been
completed. See "Annuity Period--Annuity Options." There are additional
restrictions and deductions on withdrawals. See "Contract Rights--Withdrawals."
18
<PAGE>
The following tables reflect the deferred sales charge deduction as a
percentage of the amount withdrawn:
SINGLE PURCHASE PAYMENT CONTRACTS:
<TABLE>
<CAPTION>
DEFERRED
COMPLETED SALES CHARGE
CONTRACT YEARS DEDUCTION
<S> <C>
Less than 5 5%
5 or more but less than 6 4%
6 or more but less than 7 3%
7 or more but less than 8 2%
8 or more but less than 9 1%
9 or more 0%
</TABLE>
INSTALLMENT PURCHASE PAYMENT
CONTRACTS:
<TABLE>
<CAPTION>
DEFERRED
PURCHASE PAYMENT SALES CHARGE
PERIODS COMPLETED DEDUCTION
<S> <C>
Less than 5 5%
5 or more but less than 7 4%
7 or more but less than 9 3%
9 or 10 2%
More than 10 0%
</TABLE>
The deduction for the deferred sales charge will not exceed 8.5% of the total
Purchase Payments actually made to the Contract.
A deferred sales charge is not deducted from any Contract value which is:
(a) applied to provide Annuity benefits;
(b) withdrawn on or after the tenth anniversary of the effective date of
the Contract;
(c) paid due to your death;
(d) withdrawn due to the election of the Systematic Withdrawal Option;
(e) withdrawn from an installment Purchase Payment Contract providing you
are at least age 59 1/2 and nine Purchase Payment Periods have been
completed; or
(f) paid due to the full withdrawal of a Contract where the Contract value
is less than $2,500 and no withdrawals have been made from that
Contract within the prior 12 months.
Annually, 10% or less of the current Contract value may be withdrawn without a
deferred sales charge. This applies only to the first partial withdrawal in
each calendar year; it does not apply to full Contract withdrawals. The 10%
amount is calculated using the Contract value on the date of withdrawal. This
provision may not be exercised if SWO is elected.
In the instances cited in the above paragraphs, no deferred sales charge is
deducted. However, the withdrawn amount may be subject to the 10% federal
penalty tax. (See "Tax Status of Amounts Distributed Under the Contract.")
Based on our actuarial determination, we do not anticipate that the deferred
sales charge will cover all sales and administrative expenses which we will
incur in connection with the Contract. We do not intend to profit from either
the annual maintenance fee or the administrative expense charge, if imposed. We
do hope to profit from the daily deduction for mortality and expense risks. Any
such profit, as well as any other profit realized by us and held in the general
account (which supports insurance and annuity obligations), would be available
for any proper corporate purpose, including, but not limited to, payment of
sales and distribution expenses.
PREMIUM TAX
Several states and municipalities impose a premium tax on Annuities. Currently
such taxes range up to 4%. Ordinarily, any state premium tax will be deducted
from the amount applied to an Annuity option. However, some states require that
the premium tax be deducted from purchase payments as they are
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<PAGE>
received. In those states, we will pay the tax when assessed and will deduct
the amount of that tax from the Contract value at the time of withdrawal or
death.
Any municipal premium tax assessed at a rate in excess of 1% will be deducted
from the Purchase Payment(s) or from the amount applied to an Annuity option
based upon our determination of when such tax is due. We will absorb any
municipal premium tax which is assessed at 1% or less. We reserve the right,
however, to reflect this added expense in our Annuity purchase rates for
residents of such municipalities.
SYSTEMATIC WITHDRAWAL OPTION
SWO is a withdrawal option that is not considered an Annuity option. The
Company will distribute a portion of the Contract on a monthly, quarterly,
semiannual, or annual basis, as directed by you. No election may be made that
would result in a payment of less than $250. Under SWO, you receive a series of
partial withdrawals from your account based on a payment method you select. It
is designed for those who want a periodic income while retaining investment
flexibility for amounts accumulating under the Contract.
A deferred sales charge is not assessed on the amounts distributed under this
option. Since SWO is not an Annuity option, the Contract remains in the
Accumulation Period, retains all the rights and flexibility described in this
Prospectus, and is subject to all other Contract charges. The value of the
Accumulation Units cancelled will be withdrawn proportionately from the
investment options used under the Contract. We reserve the right to discontinue
the availability of this option and to change the terms for future elections.
At the time of SWO election, the total aggregate value of all Contracts to
which SWO is applied must be $25,000 or more, and you must be at least age 59
1/2.
One of the following distribution methods may be elected:
(a) Specified Payment -- payments of a designated dollar amount. The annual
dollar amount chosen cannot be greater than 10% of the cash value
applied to SWO. The value of the Contract to be used in this
calculation is the value on the December 31st prior to the year for
which the payment is being made.
(b) Specified Period -- payments for a designated time period. The
specified period must be at least 10 years. Each annual distribution is
determined by dividing the Contract value by the number of years
remaining in the elected period. The value of the Contract to be used
in this calculation is the value on the December 31st prior to the year
for which the payment is being made. For payments made more often than
annually, the annual payment result (calculated above) is divided by
the number of payments due each year.
(c) Specified Percentage -- payments of a designated percentage. The
specified percentage chosen cannot be greater than 10% of the amount
applied to SWO. You may change the specified percentage elected every 6
months. Each annual distribution is determined by multiplying the
Contract value by the percentage chosen. The value to be used in this
calculation is the value on the December 31st prior to the year for
which the payment is being made. For payments made more often than
annually, the annual payment result (calculated above) is divided by
the number of payments due each year.
Once SWO is elected, you may revoke this option by submitting a written request
to the Home Office. Any revocation will apply only to the amounts not yet paid.
Once SWO is revoked, it may not be elected again.
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<PAGE>
ANNUITY PERIOD
ANNUITY PERIOD ELECTIONS
You must notify us in writing of the Annuity start date and Annuity option
elected. Until a date and option are elected, the Contract will continue in the
Accumulation Period. The Annuity commencement date will normally be the
retirement date elected by you.
You must give written notice to the Company at least 30 days before Annuity
payments begin, electing or changing (a) the date on which the Annuity payments
are to begin, (b) the Annuity option, (c) whether the payments are to be made
monthly, quarterly, semiannually or annually, and (d) the investment option(s)
used to provide Annuity payments (i.e., a fixed annuity using the general
account, Aetna Variable Fund, Aetna Income Shares, Aetna Investment Advisers
Fund, Inc., or any combination thereof). No other Funds may currently be used
as investment options during the Annuity Period. Once Annuity Payments begin,
the Annuity Option may not be changed, nor may transfers be made among funding
options.
If Annuity payments are to be made on a variable basis, the first and
subsequent payments will vary depending on the assumed net investment rate (3
1/2% per annum, unless a 5% annual rate is elected). Selection of a 5% rate
causes a higher first payment, but Annuity payments will increase thereafter
only to the extent that the net investment rate exceeds 5% on an annualized
basis. Annuity payments would decline if the net investment rate were below 5%.
Use of the 3 1/2% assumed rate causes a lower first payment, but subsequent
payments would increase more rapidly or decline more slowly as changes occur in
the net investment rate.
No election may be made that would result in a first Annuity payment of less
than $20 or total yearly Annuity payments of less than $100. If the value of
the Contract is insufficient to elect an option for the minimum amount
specified, a lump-sum payment must be elected.
When payments start, the age of the Annuitant plus the number of years for
which payments are guaranteed must not exceed 95.
ANNUITY OPTIONS
LIFETIME:
(a) Life Annuity -- an Annuity with payments guaranteed to the date of the
Annuitant's death. This option may be elected with payments guaranteed
for 5, 10, 15 or 20 years. Because it provides a specified minimum
number of Annuity payments, the election of a guaranteed payment period
results in somewhat lower payments.
(b) Life Income Based Upon the Lives of Two Payees -- an Annuity will be
paid during the lives of the Annuitant and a second Annuitant. Payments
will continue until both Annuitants have died. When this option is
chosen, a choice must be made of:
(i) 100% of the payment to continue after the first death;
(ii) 66 2/3% of the payment to continue after the first death;
(iii) 50% of the payment to continue after the first death;
(iv) Payments for a minimum of 120 months, with 100% of the payment to
continue after the first death; or
(v) 100% of the payment to continue at the death of the second
Annuitant and 50% of the payment to continue at the death of the
Annuitant;
Because (iv) provides a specified minimum number of Annuity payments,
the election of the guaranteed payment period results in somewhat lower
payments.
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<PAGE>
Payments under any lifetime Annuity option will be determined without regard to
the sex of the Annuitant(s). Such Annuity payments will be based solely on the
age of the Annuitant(s).
If a lifetime option is elected without a guaranteed minimum payment period, it
is possible that only one Annuity payment will be made if the Annuitant under
(a), or the surviving Annuitant under (b)(i), (ii), (iii) or (v), should die
prior to the due date of the second Annuity payment.
Once lifetime Annuity payments begin, neither you nor the Annuitant can elect
to receive a lump-sum settlement.
NONLIFETIME:
Payments for a Stated Period of Time -- an Annuity with payments to be made
for 3 to 30 years, as selected. If this option is elected on a variable
basis, you may request at any time during the payment period that the
present value of all or any portion of the remaining variable payments be
paid in one sum. However, any lump sum elected before 3 years of payments
have been completed will be treated as a withdrawal during the Accumulation
Period and any applicable deferred sales charge will be assessed. (See
"Deferred Sales Charge.") This option is not available on a variable basis
under a Contract which provides for immediate Annuity benefits.
We make a daily deduction for mortality and expense risks from any Contract
values held on a variable basis (See "Mortality and Expense Risk Charges.")
Therefore, electing the nonlifetime option on a variable basis will result in a
deduction being made even though we assume no mortality risk.
In addition to the Annuity options described, we may make additional methods of
payment available to you and other payees.
DEATH BENEFIT
ACCUMULATION PERIOD
The Contract value is determined using the Accumulation Unit value(s) on the
date a request for payment and proof of death acceptable to us are received at
our Home Office.
The designated beneficiary may elect to have any portion of the death proceeds:
(a) paid in a lump sum;
(b) applied to any of the Annuity Options (In no event may Annuity payments
to a designated beneficiary extend beyond the designated beneficiary's
life expectancy or any period certain greater than the designated
beneficiary's life expectancy.);
(c) remain in the investment options available under the Contract; or
(d) remain on deposit in our general account, earning the then current
interest rate. The designated beneficiary may elect to receive monthly,
quarterly, semiannual or annual interest payments. (The balance on
deposit can be withdrawn at any time or applied to any "Annuity
Options.")
Any lump-sum payment paid during the Accumulation Period will normally be made
within seven calendar days after proof of death acceptable to us and a request
for payment are received at our Home Office.
Until the election of a method of payment, amounts will remain invested as they
were before death, and the beneficiary will assume rights under the Contracts.
The Code requires that distributions begin within a certain time period, as
described below. If no elections are made concerning distribution, no
distributions will be made. Failure to commence distribution within the time
periods described below can result in tax penalties.
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<PAGE>
The death proceeds must either be applied to an Annuity option within one year
of your date of death, or the entire Contract value must be distributed within
five years of your date of death. An exception to this provision applies if the
beneficiary is your surviving spouse, in which case the beneficiary may elect
to be treated as a successor Contract Holder of the Contract. This successor
Contract Holder may exercise all rights to the Contract. Under the Code, no
distributions from the Contract are required until the death of this successor
Contract Holder. In no event may payments to any beneficiary extend beyond the
life of the beneficiary or any period certain greater than the beneficiary's
life expectancy.
If a lump-sum distribution is elected, the beneficiary will receive the value
of the Contract determined as of the Valuation Period in which proof of death
acceptable to us and a request for payment are received at the Home Office. If
an Annuity Option is elected, the value applied to the Annuity Option is
determined in the same manner as a lump-sum distribution; the amount of payout
will depend on the annuity option elected and the investment option(s) used to
provide such payments. See "Annuity Period." If amounts are left in the
variable investment options, the account value will continue to be affected by
the investment performance of the investment option(s) selected. If amounts are
left on deposit in the general account, the principal amount is guaranteed but
interest payments may vary. In general, regardless of the method of payment,
payments received by your beneficiaries after your death are taxed in the same
manner as if you had received those payments. (See "Tax Status.")
ANNUITY PERIOD
If an Annuitant dies after Annuity payments have begun, any death benefit
payable will depend upon the terms of the Contract and the Annuity option
selected.
If lifetime option (a) or (b) was elected without a guaranteed minimum payment
period under the Contract, Annuity payments will cease upon the death of the
Annuitant under a Life Annuity or the death of the surviving Annuitant under
options (b)(i), (ii), (iii) or (v). No further payments will be made.
Under the Contract, if lifetime option (a) or (b) was elected with a guaranteed
minimum payment period and the death of the Annuitant under a Life Annuity or
the surviving Annuitant under option (b)(iv) occurs prior to the end of that
period, we will pay to the designated beneficiary in a lump sum, unless
otherwise requested, the present value of the guaranteed Annuity payments
remaining. Such value will be determined as of the Valuation Period in which
proof of death acceptable to us and a request for payment are received at our
Home Office. The value will be reduced by any payments made after the date of
death.
If the nonlifetime option was elected under the Contract and the Annuitant dies
before all payments are made, the value of any remaining payments may be paid
in a lump sum to the beneficiary and no deferred sales charge will be imposed.
Such value will be determined as of the Valuation Period in which proof of
death acceptable to us and a request for payment are received at our Home
Office.
If you die after Annuity payments begin and there is a death benefit payable
under the Annuity option elected, the remaining values must be distributed at
least as rapidly as under the original method of distribution.
TAX STATUS
FEDERAL TAX STATUS OF THE COMPANY
We are taxed as a life insurance company in accordance with the Code. For
federal income tax purposes, the operations of the Separate Account form a part
of our total operations and are not taxed independently, although operations of
the Separate Account are treated separately for accounting and financial
statement purposes. Under the current provisions of the Code, the investment
income and
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<PAGE>
realized capital gains of the Separate Account (i.e., income and capital gains
distributed to the Separate Account by the Funds) will not be taxable to us to
the extent such amounts are credited to the Contracts. Based on this, no charge
is being made currently to the Separate Account for federal income taxes.
However, we reserve the right to make a deduction for federal income taxes
attributable to the Contracts should such taxes be imposed in the future.
TAX STATUS OF THE CONTRACT
DIVERSIFICATION: Section 817(h) of the Code requires that with respect to the
Contracts, the investments of the Funds be "adequately diversified" in
accordance with Treasury Regulations in order for the Contracts to qualify as
annuity contracts under federal tax law. The Separate Account, through the
Funds, intends to comply with the diversification requirements prescribed by
the Treasury in Reg. Sec. 1.817-5, which affects how the Funds' assets may be
invested. Please see page 15 of the prospectus for Neuberger & Berman Advisers
Management Trust (Growth Portfolio) for a discussion of tax considerations
relating to the Fund's reorganization in connection with this issue.
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includible in the
variable contract owner's gross income. One of the circumstances that has
raised this issue is the number of funding options available under the
Contract. The Company reserves the right to modify the Contract as necessary to
attempt to prevent an Owner from being considered the owner of a pro rata share
of the assets of the Separate Account.
USE OF THE CONTRACT
This Contract is intended to provide retirement benefits to individuals who are
either not participating in formal retirement plans, or are participating in
formal retirement plans but wish to personally supplement their benefits.
TAX STATUS OF AMOUNTS DISTRIBUTED UNDER THE CONTRACT
The following description of the federal income tax status of amounts
distributed under the Contracts is not exhaustive and is not intended to cover
all situations. You should seek advice from your tax adviser as to the
application of federal (and, where applicable, state and local) tax laws to
amounts distributed to you and to your beneficiaries under the Contracts.
Section 72(e)(11) of the Code provides that Annuity Contracts issued by the
same insurer (and its affiliates) to the same Contract Holder during a calendar
year shall be treated as a single Annuity Contract. This means that any amount
distributed under this Contract, or any other Contract subject to this
provision, prior to the Contract's Annuity starting date will be taxable (and
possibly subject to the 10% penalty tax) to the extent of the combined
distributions under all such Contracts. For purposes of this section, immediate
Annuity Contracts and Contracts used to fund qualified pension and profit-
sharing plans under Section 401(a) of the Code, Annuity plans under Sections
403(a) or 403(b) of the Code, and individual retirement annuities and accounts
under Section 408 of the Code are not aggregated.
The Code imposes a 10% penalty tax on the taxable portion of any distribution
unless made when (a) you have attained age 59 1/2, (b) you have become
disabled, (c) you have died, or (d) the distribution amount is annuitized over
the life or life expectancy of you or the joint lives or joint life
expectancies of you and your beneficiary in accordance with terms of the Code.
A distribution from the Contract is also exempt from the penalty tax if
allocable to investments made in a predecessor Contract before August 14, 1982,
and transferred in a tax-free exchange under Section 1035 of the Code to this
Contract.
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Taxes will be withheld from any payments paid to you, unless we are instructed
otherwise by you. We will report to the IRS the taxable portion of all
distributions whether or not income taxes are withheld.
For Contracts established under the Uniform Gift to Minors Act (UGMA), the age
of the minor is used to determine whether the 10% penalty tax is imposed.
ACCUMULATION PERIOD
Generally only the portion of any distribution representing the
investment results is taxable.
ANNUITY PERIOD
When Annuity payments commence under a Contract, a fixed portion is
annually excludable from each year's payments as a tax-free recovery of
the investment in the Contract. The excludable portion applies to
payments received until the investment in the Contract is fully
recovered. Payments received thereafter are fully includable in income.
For the nonlifetime option, the excludable portion is equal to the
Purchase Payment (the investment in the Contract), divided by the
number of years for which Annuity payments will be made. For a single
or joint lifetime option, the excludable portion is equal to the
Purchase Payment (the investment in the Contract), reduced as provided
in the Code to reflect any guaranteed payment period, divided by the
Annuitant's life expectancy. If the Annuity payments received in any
year are less than the excludable portion, the excludable portion may
be redetermined for future years to recoup the loss in exclusions.
MISCELLANEOUS
VOTING RIGHTS
You may direct us in the voting of shares at meetings of shareholders of the
appropriate Fund(s). The number of votes to which you may give direction will
be determined as of the record date.
The number of votes you are entitled to direct with respect to a particular
Fund during the Accumulation Period is equal to the portion of the current
value of the Contract attributable to that Fund divided by the net asset value
of one share of that Fund. During the Annuity Period, the number of votes is
equal to the Valuation Reserve applicable to the portion of the Contract
attributable to that Fund, divided by the net asset value of one share of that
Fund. In determining the number of votes, fractional votes will be recognized.
Where the value of the Contract or Valuation Reserve relates to more than one
Fund, the calculation of votes will be performed separately for each Fund.
You will receive a notice of each meeting of shareholders, together with any
proxy solicitation materials, and a statement of the number of votes
attributable to the Contract. Votes attributable to Contract Holders who do not
direct us will be cast by us in the same proportion as the votes for which we
have received directions.
MODIFICATION OF THE CONTRACT
The Company may modify the Contract when it deems an amendment appropriate,
subject to the limitations described below, by giving written notice to you 30
days before the effective date of the change. The most likely reason for a
change to the Contract would be to ensure compliance with applicable law. The
following Contract provisions are considered material by the Company and cannot
be changed without the approval of appropriate state or federal regulatory
authorities:
(a) transfers among investment options;
(b) notification to the Contract Holder;
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(c) conditions governing payments of surrender values;
(d) terms of Annuity Options;
(e) death benefit payments; and
(f) contract charges
No change will be made to the following contractual provisions:
(a) the Annuity options;
(b) the contractual promise that no deduction will be made from the
Purchase Payment(s) for sales or administrative expenses;
(c) the deferred sales charge;
(d) the mortality and expense risk charges;
(e) the administrative expense charge provision;
(f) the annual maintenance fee; and
(g) the maximum transfer fee.
Once an Annuity has begun, we will not change the terms or the amount of the
Annuity payments, unless a change is deemed necessary to comply with Code
requirements or other laws and regulations affecting the Contract.
CONTRACT HOLDER INQUIRIES
You may direct inquiries to a local representative of the Distributor or may
write directly to us at the address shown on the cover page of this prospectus.
TELEPHONE TRANSFERS
You may elect to make transfers among Funds by telephone. We have enacted
procedures to prevent abuses of transactions via the 800 number. The procedures
include requiring the use of a personal identification number (PIN) in order to
execute transactions. You are responsible for safeguarding your PIN and for
keeping account information confidential. If the Company fails to follow these
procedures, it would be liable for any losses to your Contract resulting from
the failure. To ensure authenticity, we record all calls on the 800 line.
TRANSFER OF OWNERSHIP; ASSIGNMENT
No assignment of the Contract will be binding on us unless and until such
assignment is accepted by us at our Home Office.
LEGAL PROCEEDINGS
The Company knows of no material legal proceedings pending to which the
Separate Account is a party or which would materially affect the Separate
Account.
LEGAL MATTERS
The validity of the securities offered by this Prospectus has been passed upon
by Susan E. Bryant, Esq., Counsel to the Company.
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STATEMENT OF ADDITIONAL INFORMATION -- TABLE OF CONTENTS
The following items are the contents of the Statement of Additional
Information:
<TABLE>
<S> <C>
General Information and History............................................. 2
Variable Annuity Account B.................................................. 2
Offering and Purchase of Contracts.......................................... 3
Performance Data............................................................ 3
General................................................................... 3
Average Annual Total Return Quotations.................................... 4
Annuity Payments............................................................ 6
Dollar-Cost Averaging....................................................... 8
Sales Material.............................................................. 8
Independent Auditors........................................................ 8
Financial Statements of the Separate Account................................ S-1
Financial Statements of the Company......................................... F-1
</TABLE>
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APPENDIX
FIXED ACCOUNT
THE FIXED ACCOUNT IS AN INVESTMENT OPTION AVAILABLE DURING THE ACCUMULATION
PERIOD UNDER THE CONTRACTS. THE FOLLOWING SUMMARIZES MATERIAL INFORMATION
CONCERNING THE FIXED ACCOUNT THAT IS OFFERED AS AN OPTION UNDER THE CONTRACT.
ADDITIONAL INFORMATION MAY BE FOUND IN YOUR CONTRACT. AMOUNTS ALLOCATED TO THE
FIXED ACCOUNT ARE HELD IN THE COMPANY'S GENERAL ACCOUNT THAT SUPPORTS INSURANCE
AND ANNUITY OBLIGATIONS. INTERESTS IN THE FIXED ACCOUNT HAVE NOT BEEN
REGISTERED WITH THE SEC IN RELIANCE ON EXEMPTIONS UNDER THE SECURITIES ACT OF
1933, AS AMENDED. DISCLOSURE IN THIS PROSPECTUS REGARDING THE FIXED ACCOUNT,
HOWEVER, MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF THE
FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND COMPLETENESS OF THE
STATEMENTS. DISCLOSURE IN THIS APPENDIX REGARDING THE FIXED ACCOUNT HAS NOT
BEEN REVIEWED BY THE SEC.
CREDITED INTEREST OPTION -- FIXED ACCOUNT
This option guarantees that amounts allocated to this option will earn the
minimum interest rate specified in the Contract. (This minimum interest rate
cannot be changed by us.) We may credit a higher interest rate from time to
time. The Company's determination of interest rates reflects the investment
income earned on invested assets and the amortization of any capital gains
and/or losses realized on the sale of invested assets. Under this option, we
assume the risk of investment gain or loss by guaranteeing Net Purchase Payment
values and promising a minimum interest rate and Annuity payment.
Amounts applied to the Fixed Account will earn the interest rate in effect when
actually applied to the Fixed Account.
MORTALITY AND EXPENSE RISK CHARGES
The Fixed Account will reflect a compound interest rate credited by us. The
interest rate quoted is an annual effective yield. We make no deductions from
the credited interest rate for mortality and expense risks; these risks are
considered in determining the credited rate.
TRANSFERS AMONG INVESTMENT OPTIONS
Transfers from the Fixed Account to any other available investment option are
allowed in each calendar year during the Accumulation Period. The amount which
may be transferred may vary at our discretion; however, it will never be less
than 10% of the amount held under the Fixed Account.
ANNUITIZATIONS
By notifying us at our Home Office at least 30 days before Annuity payments
begin, you may elect to have amounts which have been accumulating under the
Fixed Account transferred to one of the funds available during the Annuity
Period to provide variable Annuity payments.
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HYPOTHETICAL TABLES
The following tables represent hypothetical values for the periods indicated
that would have resulted under a Contract described in this Prospectus had you
made contributions to the Contract during the periods indicated. Each set of
hypothetical results is based exclusively on the investment performance of a
particular Fund during the periods shown. The Fund performance is based on the
actual net asset values of the various Funds which would be net of advisory
fees and expenses actually charged for those periods. Some of the funds'
advisers have reimbursed the Funds for a portion of those fees. Reimbursement
may not continue in the future. The hypothetical returns also assume deduction
of all charges and expenses under the Contracts which include 1.25% mortality
and expense risk charges and a $20.00 maintenance fee (for installment
contracts) or a $0 maintenance fee (for Single Purchase Payment Contracts)
which is assumed to be deducted on the last day of each Contract Year. The
Accumulation Value is net of all applicable fees and expenses of the Fund and
under the Contract, except the deferred sales charges. The Withdrawal Value is
net of all applicable fees and expenses of the Fund and under the Contract,
including deferred sales charges.
Since the Contracts are designed to fund variable retirement benefits through
long-term investments, "active" Contracts will, on the average, involve a long-
term relationship between the Company and the Contract Holder during both the
Accumulation and Annuity Periods. Accordingly, the Tables are intended to
illustrate the hypothetical values of each Fund since that Fund became
available under the Contract. For those Funds not available under the Contract
as of December 31, 1994, no histories are shown.
Generally, Table 1 for each Fund shows the accumulation value at annual
intervals following contract issuance on the date indicated, and Table 2 shows
the accumulation value at quarterly intervals following contract issuance.
Table 1 assumes that monthly purchase payments of $100 were made during each
Contract Year following contract issuance, and illustrates the accumulation
value of such payment over a period of time, as well as the actual withdrawal
value of your account following the deduction of any applicable deferred sales
charge that would have been assessed had a withdrawal been made during that
period. Table 2 assumes that a single net purchase payment of $100 was made at
contract issuance, and illustrates the accumulation value of that payment at
quarterly intervals thereafter.
For those Funds available during annuity payout (e.g., Aetna Variable Fund,
Aetna Income Shares and Aetna Investment Advisers Fund, Inc.), Table 3
illustrates the value of hypothetical monthly variable annuity payments at
quarterly intervals following the commencement of annuity payments on the date
indicated. Table 3 assumes an initial annuity payment of $100. For those funds
not available as funding options during the Annuity Period, no annuity payout
information is provided.
PLEASE NOTE THAT AMOUNTS WITHDRAWN BEFORE YOU REACH AGE 59 1/2 MAY BE SUBJECT
TO A 10% FEDERAL PENALTY TAX. (SEE THE SECTION ENTITLED "TAX STATUS" IN THIS
PROSPECTUS.)
PLEASE ALSO NOTE THAT WHILE THESE HYPOTHETICAL CHARTS REFLECT ACTUAL HISTORICAL
PERFORMANCE, THEY ARE NOT INDICATIVE OF FUTURE RESULTS. A PROGRAM OF THE TYPE
ILLUSTRATED IN THE TABLES DOES NOT ASSURE A PROFIT OR PROTECT AGAINST
DEPRECIATION IN DECLINING MARKETS.
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AETNA VARIABLE FUND
HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $1,000.00 $0.00 $1,358.43 $67.92 $1,290.51
- ----------------------------------------------------------------------------
December 1986 1,000.00 0.00 1,596.01 79.80 1,516.21
- ----------------------------------------------------------------------------
December 1987 1,000.00 0.00 1,662.93 83.15 1,579.78
- ----------------------------------------------------------------------------
December 1988 1,000.00 0.00 1,882.79 85.00 1,797.79
- ----------------------------------------------------------------------------
December 1989 1,000.00 0.00 2,400.62 85.00 2,315.62
- ----------------------------------------------------------------------------
December 1990 1,000.00 0.00 2,448.58 73.46 2,375.12
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 3,056.35 61.13 2,995.22
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 3,220.82 32.21 3,188.61
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 3,395.07 0.00 3,395.07
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 3,319.96 0.00 3,319.96
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $1,200.00 $ 20.00 $ 1,396.39 $ 69.82 $ 1,326.57
- ----------------------------------------------------------------------------
December 1986 2,400.00 40.00 2,881.29 144.06 2,737.23
- ----------------------------------------------------------------------------
December 1987 3,600.00 60.00 4,075.73 203.79 3,871.94
- ----------------------------------------------------------------------------
December 1988 4,800.00 80.00 5,853.18 292.66 5,560.52
- ----------------------------------------------------------------------------
December 1989 6,000.00 100.00 8,787.58 351.50 8,436.08
- ----------------------------------------------------------------------------
December 1990 7,200.00 120.00 10,186.22 407.45 9,778.77
- ----------------------------------------------------------------------------
December 1991 8,400.00 140.00 14,042.74 421.28 13,621.46
- ----------------------------------------------------------------------------
December 1992 9,600.00 160.00 16,040.06 481.20 15,558.86
- ----------------------------------------------------------------------------
December 1993 10,800.00 180.00 18,134.79 362.70 17,772.09
- ----------------------------------------------------------------------------
December 1994 12,000.00 200.00 18,902.29 0.00 18,902.29
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
30
<PAGE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1985 $107.70 September 1988 $185.24 March 1992 $298.41
- --------------------------------------------------------------------------------------
June 1985 122.36 December 1988 188.28 June 1992 300.24
- --------------------------------------------------------------------------------------
September 1985 118.33 March 1989 200.97 September 1992 310.40
- --------------------------------------------------------------------------------------
December 1985 135.84 June 1989 214.79 December 1992 322.08
- --------------------------------------------------------------------------------------
March 1986 152.04 September 1989 232.93 March 1993 327.78
- --------------------------------------------------------------------------------------
June 1986 160.36 December 1989 240.06 June 1993 324.94
- --------------------------------------------------------------------------------------
September 1986 150.93 March 1990 234.62 September 1993 331.40
- --------------------------------------------------------------------------------------
December 1986 159.60 June 1990 251.87 December 1993 339.51
- --------------------------------------------------------------------------------------
March 1987 188.09 September 1990 226.32 March 1994 328.34
- --------------------------------------------------------------------------------------
June 1987 193.23 December 1990 244.86 June 1994 326.11
- --------------------------------------------------------------------------------------
September 1987 202.97 March 1991 274.34 September 1994 333.03
- --------------------------------------------------------------------------------------
December 1987 166.29 June 1991 270.90 December 1994 332.00
- --------------------------------------------------------------------------------------
March 1988 176.46 September 1991 281.16
- --------------------------------------------------------------------------------------
June 1988 184.48 December 1991 305.63
</TABLE>
TABLE 4 - ANNUITY PERIOD
VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY
VARIABLE ANNUITY PAYMENTS
(Assumes Initial Annuity Payment of $100 beginning on December 31, 1984)
<TABLE>
<CAPTION>
PAYMENT PAYMENT PAYMENT
MONTH FOR MONTH(/2/) MONTH FOR MONTH(/2/) MONTH FOR MONTH(/2/)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March
1985 $106.77 September 1988 $162.82 March 1992 $232.54
- ---------------------------------------------------------------------------------------
June 1985 120.27 December 1988 164.07 June 1992 231.96
- ---------------------------------------------------------------------------------------
September
1985 115.32 March 1989 173.64 September 1992 237.76
- ---------------------------------------------------------------------------------------
December
1985 131.25 June 1989 183.99 December 1992 244.59
- ---------------------------------------------------------------------------------------
March
1986 145.64 September 1989 197.82 March 1993 246.79
- ---------------------------------------------------------------------------------------
June 1986 152.30 December 1989 202.13 June 1993 242.55
- ---------------------------------------------------------------------------------------
September
1986 142.11 March 1990 195.85 September 1993 245.26
- ---------------------------------------------------------------------------------------
December
1986 148.99 June 1990 208.45 December 1993 249.11
- ---------------------------------------------------------------------------------------
March
1987 174.08 September 1990 185.70 March 1994 238.85
- ---------------------------------------------------------------------------------------
June 1987 177.30 December 1990 199.19 June 1994 235.20
- ---------------------------------------------------------------------------------------
September
1987 184.65 March 1991 221.27 September 1994 238.13
- ---------------------------------------------------------------------------------------
December
1987 149.99 June 1991 216.62 December 1994 235.36
- ---------------------------------------------------------------------------------------
March
1988 157.80 September 1991 222.89
- ---------------------------------------------------------------------------------------
June 1988 163.55 December 1991 240.23
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The amounts above assume deductions of all fees and expenses of the Funds
and under the Contracts during the Annuity Period. The Payments are based
on the standard assumed net investment rate of 3 1/2% per annum. See the
narrative preceding these Tables.
31
<PAGE>
AETNA INCOME SHARES
HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $1,000.00 $0.00 $1,198.02 $59.90 $1,138.12
- ----------------------------------------------------------------------------
December 1986 1,000.00 0.00 1,349.74 67.49 1,282.25
- ----------------------------------------------------------------------------
December 1987 1,000.00 0.00 1,397.54 69.88 1,327.66
- ----------------------------------------------------------------------------
December 1988 1,000.00 0.00 1,485.49 74.27 1,411.22
- ----------------------------------------------------------------------------
December 1989 1,000.00 0.00 1,681.07 67.24 1,613.83
- ----------------------------------------------------------------------------
December 1990 1,000.00 0.00 1,811.81 54.35 1,757.46
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 2,136.66 42.73 2,093.93
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 2,267.37 22.67 2,244.70
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 2,456.08 0.00 2,456.08
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 2,333.68 0.00 2,333.68
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $ 1,200.00 $ 20.00 $ 1,321.93 $ 66.10 $ 1,255.83
- ----------------------------------------------------------------------------
December 1986 2,400.00 40.00 2,739.57 136.98 2,602.59
- ----------------------------------------------------------------------------
December 1987 3,600.00 60.00 4,053.84 202.69 3,851.15
- ----------------------------------------------------------------------------
December 1988 4,800.00 80.00 5,509.84 275.49 5,234.35
- ----------------------------------------------------------------------------
December 1989 6,000.00 100.00 7,494.37 299.77 7,194.60
- ----------------------------------------------------------------------------
December 1990 7,200.00 120.00 9,330.47 373.22 8,957.25
- ----------------------------------------------------------------------------
December 1991 8,400.00 140.00 12,319.79 369.59 11,950.20
- ----------------------------------------------------------------------------
December 1992 9,600.00 160.00 14,302.88 429.09 13,873.79
- ----------------------------------------------------------------------------
December 1993 10,800.00 180.00 16,716.26 334.33 16,381.93
- ----------------------------------------------------------------------------
December 1994 12,000.00 200.00 17,045.90 0.00 17,045.90
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
32
<PAGE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1985 $102.00 September 1988 $149.51 March 1992 $211.69
- --------------------------------------------------------------------------------------
June 1985 109.70 December 1988 148.55 June 1992 218.58
- --------------------------------------------------------------------------------------
September 1985 111.93 March 1989 150.90 September 1992 225.52
- --------------------------------------------------------------------------------------
December 1985 119.80 June 1989 160.89 December 1992 226.74
- --------------------------------------------------------------------------------------
March 1986 127.12 September 1989 163.52 March 1993 233.14
- --------------------------------------------------------------------------------------
June 1986 128.31 December 1989 168.11 June 1993 238.72
- --------------------------------------------------------------------------------------
September 1986 130.90 March 1990 167.04 September 1993 244.09
- --------------------------------------------------------------------------------------
December 1986 134.97 June 1990 172.38 December 1993 245.61
- --------------------------------------------------------------------------------------
March 1987 137.81 September 1990 173.67 March 1994 236.73
- --------------------------------------------------------------------------------------
June 1987 134.83 December 1990 181.18 June 1994 231.61
- --------------------------------------------------------------------------------------
September 1987 133.35 March 1991 186.78 September 1994 233.72
- --------------------------------------------------------------------------------------
December 1987 139.75 June 1991 190.33 December 1994 233.37
- --------------------------------------------------------------------------------------
March 1988 144.52 September 1991 201.65
- --------------------------------------------------------------------------------------
June 1988 146.95 December 1991 213.67
</TABLE>
TABLE 4 - ANNUITY PERIOD
VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY
VARIABLE ANNUITY PAYMENTS
(Assumes Initial Annuity Payment of $100 beginning on December 31, 1984)
<TABLE>
<CAPTION>
PAYMENT PAYMENT PAYMENT
MONTH FOR MONTH(/2/) MONTH FOR MONTH(/2/) MONTH FOR MONTH(/2/)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March
1985 $101.13 September 1988 $131.42 March 1992 $164.96
- ---------------------------------------------------------------------------------------
June 1985 107.83 December 1988 129.45 June 1992 168.87
- ---------------------------------------------------------------------------------------
September
1985 109.08 March 1989 130.37 September 1992 172.74
- ---------------------------------------------------------------------------------------
December
1985 115.75 June 1989 137.82 December 1992 172.19
- ---------------------------------------------------------------------------------------
March
1986 121.77 September 1989 138.87 March 1993 175.53
- ---------------------------------------------------------------------------------------
June 1986 121.85 December 1989 141.54 June 1993 178.20
- ---------------------------------------------------------------------------------------
September
1986 123.25 March 1990 139.44 September 1993 180.64
- ---------------------------------------------------------------------------------------
December
1986 126.00 June 1990 142.66 December 1993 180.21
- ---------------------------------------------------------------------------------------
March
1987 127.54 September 1990 142.50 March 1994 172.21
- ---------------------------------------------------------------------------------------
June 1987 123.72 December 1990 147.39 June 1994 167.04
- ---------------------------------------------------------------------------------------
September
1987 121.31 March 1991 150.65 September 1994 167.12
- ---------------------------------------------------------------------------------------
December
1987 126.05 June 1991 152.20 December 1994 165.44
- ---------------------------------------------------------------------------------------
March
1988 129.23 September 1991 159.87
- ---------------------------------------------------------------------------------------
June 1988 130.28 December 1991 167.94
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The amounts above assume deductions of all fees and expenses of the Funds
and under the Contracts during the Annuity Period. The Payments are based
on the standard assumed net investment rate of 3 1/2% per annum. See the
narrative preceding these Tables.
33
<PAGE>
AETNA VARIABLE ENCORE FUND
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $1,000.00 $0.00 $1,071.36 $53.57 $1,017.79
- ----------------------------------------------------------------------------
December 1986 1,000.00 0.00 1,133.29 56.66 1,076.63
- ----------------------------------------------------------------------------
December 1987 1,000.00 0.00 1,195.47 59.77 1,135.70
- ----------------------------------------------------------------------------
December 1988 1,000.00 0.00 1,269.22 63.46 1,205.76
- ----------------------------------------------------------------------------
December 1989 1,000.00 0.00 1,371.37 54.85 1,316.52
- ----------------------------------------------------------------------------
December 1990 1,000.00 0.00 1,468.53 44.06 1,424.47
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 1,545.11 30.90 1,514.21
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 1,581.98 15.82 1,566.16
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 1,612.28 0.00 1,612.28
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 1,657.41 0.00 1,657.41
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1985 $ 1,200.00 $ 20.00 $ 1,225.55 $ 61.28 $ 1,164.27
- ----------------------------------------------------------------------------
December 1986 2,400.00 40.00 2,510.83 125.54 2,385.29
- ----------------------------------------------------------------------------
December 1987 3,600.00 60.00 3,865.70 193.29 3,672.41
- ----------------------------------------------------------------------------
December 1988 4,800.00 80.00 5,325.44 266.27 5,059.17
- ----------------------------------------------------------------------------
December 1989 6,000.00 100.00 6,984.71 279.39 6,705.32
- ----------------------------------------------------------------------------
December 1990 7,200.00 120.00 8,705.01 348.20 8,356.81
- ----------------------------------------------------------------------------
December 1991 8,400.00 140.00 10,371.09 311.13 10,059.96
- ----------------------------------------------------------------------------
December 1992 9,600.00 160.00 11,812.73 354.38 11,458.35
- ----------------------------------------------------------------------------
December 1993 10,800.00 180.00 13,231.11 264.62 12,966.49
- ----------------------------------------------------------------------------
December 1994 12,000.00 200.00 14,802.35 0.00 14,802.35
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
34
<PAGE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1985 $101.71 September 1988 $124.83 March 1992 $155.57
- --------------------------------------------------------------------------------------
June 1985 103.61 December 1988 126.92 June 1992 156.63
- --------------------------------------------------------------------------------------
September 1985 105.31 March 1989 129.42 September 1992 157.53
- --------------------------------------------------------------------------------------
December 1985 107.14 June 1989 132.14 December 1992 158.20
- --------------------------------------------------------------------------------------
March 1986 108.89 September 1989 134.67 March 1993 158.99
- --------------------------------------------------------------------------------------
June 1986 110.59 December 1989 137.14 June 1993 159.73
- --------------------------------------------------------------------------------------
September 1986 112.04 March 1990 139.46 September 1993 160.53
- --------------------------------------------------------------------------------------
December 1986 113.33 June 1990 141.92 December 1993 161.23
- --------------------------------------------------------------------------------------
March 1987 114.70 September 1990 144.33 March 1994 161.91
- --------------------------------------------------------------------------------------
June 1987 116.17 December 1990 146.85 June 1994 162.92
- --------------------------------------------------------------------------------------
September 1987 117.72 March 1991 148.93 September 1994 164.16
- --------------------------------------------------------------------------------------
December 1987 119.55 June 1991 150.80 December 1994 165.74
- --------------------------------------------------------------------------------------
March 1988 121.28 September 1991 152.73
- --------------------------------------------------------------------------------------
June 1988 122.91 December 1991 154.51
</TABLE>
AETNA INVESTMENT ADVISERS FUND, INC.
HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,000.00 $0.00 $1,044.09 $52.20 $ 991.89
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 1,220.17 61.01 1,159.16
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 1,282.11 64.11 1,218.00
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 1,391.53 69.58 1,321.95
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 1,369.21 54.77 1,314.44
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
35
<PAGE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,200.00 $ 20.00 $1,223.06 $ 61.15 $1,161.91
- ----------------------------------------------------------------------------
December 1991 2,400.00 40.00 2,722.93 136.15 2,586.78
- ----------------------------------------------------------------------------
December 1992 3,600.00 60.00 4,081.90 204.10 3,877.80
- ----------------------------------------------------------------------------
December 1993 4,800.00 80.00 5,671.96 283.60 5,388.36
- ----------------------------------------------------------------------------
December 1994 6,000.00 100.00 6,756.43 270.26 6,486.17
</TABLE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1990 $100.51 December 1991 $122.02 September 1993 $135.89
- --------------------------------------------------------------------------------------
June 1990 104.01 March 1992 121.57 December 1993 139.15
- --------------------------------------------------------------------------------------
September 1990 98.47 June 1992 124.33 March 1994 135.08
- --------------------------------------------------------------------------------------
December 1990 104.41 September 1992 126.09 June 1994 133.50
- --------------------------------------------------------------------------------------
March 1991 110.46 December 1992 128.21 September 1994 137.29
- --------------------------------------------------------------------------------------
June 1991 110.49 March 1993 131.19 December 1994 136.92
- --------------------------------------------------------------------------------------
September 1991 115.28 June 1993 132.22
</TABLE>
TABLE 4 - ANNUITY PERIOD
VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY
VARIABLE ANNUITY PAYMENTS
(Assumes Initial Annuity Payment of $100 beginning on December 31, 1990)
<TABLE>
<CAPTION>
PAYMENT PAYMENT PAYMENT
MONTH FOR MONTH(/3/) MONTH FOR MONTH(/3/) MONTH FOR MONTH(/3/)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March
1991 $104.89 September 1992 $113.71 March 1994 $115.69
- ---------------------------------------------------------------------------------------
June 1991 104.02 December 1992 114.63 June 1994 113.36
- ---------------------------------------------------------------------------------------
September
1991 107.60 March 1993 116.29 September 1994 115.58
- ---------------------------------------------------------------------------------------
December
1991 112.91 June 1993 116.20 December 1994 114.28
- ---------------------------------------------------------------------------------------
March
1992 111.54 September 1993 118.40
- ---------------------------------------------------------------------------------------
June 1992 113.09 December 1993 120.21
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the Fund
and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
(/3/)The amounts above assume deductions of all fees and expenses of the Funds
and under the Contracts during the Annuity Period. The Payments are based
on the standard assumed net investment rate of 3 1/2% per annum. See the
narrative preceding these Tables.
36
<PAGE>
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1988
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1989 $1,000.00 $0.00 $1,624.37 $81.22 $1,543.15
- ----------------------------------------------------------------------------
December 1990 1,000.00 0.00 1,743.46 85.00 1,658.46
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 2,712.83 85.00 2,627.83
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 2,774.06 85.00 2,689.06
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 3,094.59 85.00 3,009.59
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 2,889.12 85.00 2,804.12
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1988
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1989 $1,200.00 $ 20.00 $ 1,436.08 $ 71.80 $1,364.28
- ----------------------------------------------------------------------------
December 1990 2,400.00 40.00 2,808.86 140.44 2,668.42
- ----------------------------------------------------------------------------
December 1991 3,600.00 60.00 5,885.79 294.29 5,591.50
- ----------------------------------------------------------------------------
December 1992 4,800.00 80.00 7,372.18 368.61 7,003.57
- ----------------------------------------------------------------------------
December 1993 6,000.00 100.00 9,564.27 382.57 9,181.70
- ----------------------------------------------------------------------------
December 1994 7,200.00 120.00 10,136.29 405.45 9,730.84
</TABLE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1988
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1989 $121.70 March 1991 $218.56 March 1993 $253.23
- --------------------------------------------------------------------------------------
June 1989 135.80 June 1991 205.53 June 1993 270.26
- --------------------------------------------------------------------------------------
September 1989 167.68 September 1991 230.08 September 1993 304.19
- --------------------------------------------------------------------------------------
December 1989 162.44 December 1991 271.28 December 1993 309.46
- --------------------------------------------------------------------------------------
March 1990 164.48 March 1992 244.58 March 1994 277.26
- --------------------------------------------------------------------------------------
June 1990 188.05 June 1992 217.20 June 1994 258.58
- --------------------------------------------------------------------------------------
September 1990 148.59 September 1992 233.48 September 1994 281.43
- --------------------------------------------------------------------------------------
December 1990 174.35 December 1992 277.41 December 1994 288.91
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
37
<PAGE>
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1994 $1,000.00 $0.00 $1,149.09 $57.45 $1,091.64
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1994 $1,200.00 $20.00 $1,346.34 $67.32 $1,279.02
</TABLE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
---------------------------------------------------
<S> <C> <C> <C>
March 1994 $95.38 September 1994 $109.21
---------------------------------------------------
June 1994 93.78 December 1994 114.91
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
38
<PAGE>
JANUS ASPEN FLEXIBLE INCOME PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1994 $1,000.00 $0.00 $978.83 $48.94 $929.89
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1994 $1,200.00 $20.00 $1,161.24 $58.06 $1,103.18
</TABLE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
-------------------------------------------------------
<S> <C> <C> <C>
March 1994 $99.40 September 1994 $98.99
-------------------------------------------------------
June 1994 98.60 December 1994 97.88
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
39
<PAGE>
LEXINGTON NATURAL RESOURCES TRUST
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,000.00 $0.00 $839.77 $41.99 $797.78
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 788.21 39.41 748.80
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 803.51 40.18 763.33
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 874.94 43.75 831.19
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 817.61 32.70 784.91
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1990 $1,200.00 $ 20.00 $1,079.80 $ 53.99 $1,025.81
- ----------------------------------------------------------------------------
December 1991 2,400.00 40.00 2,202.09 110.10 2,091.99
- ----------------------------------------------------------------------------
December 1992 3,600.00 60.00 3,437.25 171.86 3,265.39
- ----------------------------------------------------------------------------
December 1993 4,800.00 80.00 4,916.48 245.82 4,670.66
- ----------------------------------------------------------------------------
December 1994 6,000.00 100.00 5,710.87 228.43 5,482.44
</TABLE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1990 $94.55 December 1991 $78.82 September 1993 $91.21
- --------------------------------------------------------------------------------------
June 1990 85.87 March 1992 78.05 December 1993 87.49
- --------------------------------------------------------------------------------------
September 1990 94.91 June 1992 77.73 March 1994 85.43
- --------------------------------------------------------------------------------------
December 1990 83.98 September 1992 80.95 June 1994 83.15
- --------------------------------------------------------------------------------------
March 1991 77.84 December 1992 80.35 September 1994 88.28
- --------------------------------------------------------------------------------------
June 1991 81.45 March 1993 89.06 December 1994 81.76
- --------------------------------------------------------------------------------------
September 1991 76.72 June 1993 90.36
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
40
<PAGE>
NEUBERGER & BERMAN GROWTH PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1985
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1986 $1,000.00 $0.00 $1,135.09 $56.75 $1,078.34
- ----------------------------------------------------------------------------
December 1987 1,000.00 0.00 1,065.98 53.30 1,012.68
- ----------------------------------------------------------------------------
December 1988 1,000.00 0.00 1,326.09 66.30 1,259.79
- ----------------------------------------------------------------------------
December 1989 1,000.00 0.00 1,719.43 85.00 1,634.43
- ----------------------------------------------------------------------------
December 1990 1,000.00 0.00 1,559.24 62.37 1,496.87
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 1,996.84 59.91 1,936.93
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 2,145.27 42.91 2,102.36
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 2,752.90 27.53 2,725.37
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 2,585.27 0.00 2,585.27
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1985
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1986 $ 1,200.00 $ 20.00 $ 1,182.44 $ 59.12 $ 1,123.32
- ----------------------------------------------------------------------------
December 1987 2,400.00 40.00 2,089.17 104.46 1,984.71
- ----------------------------------------------------------------------------
December 1988 3,600.00 60.00 3,887.42 194.37 3,693.05
- ----------------------------------------------------------------------------
December 1989 4,800.00 80.00 6,333.08 316.65 6,016.43
- ----------------------------------------------------------------------------
December 1990 6,000.00 100.00 6,895.07 275.80 6,619.27
- ----------------------------------------------------------------------------
December 1991 7,200.00 120.00 10,155.85 406.23 9,749.62
- ----------------------------------------------------------------------------
December 1992 8,400.00 140.00 12,184.02 365.52 11,818.50
- ----------------------------------------------------------------------------
December 1993 9,600.00 160.00 16,889.79 506.69 16,383.10
- ----------------------------------------------------------------------------
December 1994 10,800.00 180.00 17,010.83 340.22 16,670.61
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
41
<PAGE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1985
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1986 $117.52 March 1989 $144.66 March 1992 $196.43
- --------------------------------------------------------------------------------------
June 1986 120.84 June 1989 159.49 June 1992 192.09
- --------------------------------------------------------------------------------------
September 1986 109.37 September 1989 178.13 September 1992 198.85
- --------------------------------------------------------------------------------------
December 1986 113.51 December 1989 171.94 December 1992 214.53
- --------------------------------------------------------------------------------------
March 1987 135.03 March 1990 163.27 March 1993 261.88
- --------------------------------------------------------------------------------------
June 1987 138.75 June 1990 173.51 June 1993 262.11
- --------------------------------------------------------------------------------------
September 1987 143.88 September 1990 145.25 September 1993 279.12
- --------------------------------------------------------------------------------------
December 1987 106.60 December 1990 155.92 December 1993 275.29
- --------------------------------------------------------------------------------------
March 1988 120.81 March 1991 178.87 March 1994 263.54
- --------------------------------------------------------------------------------------
June 1988 126.61 June 1991 176.05 June 1994 246.57
- --------------------------------------------------------------------------------------
September 1988 127.35 September 1991 185.94 September 1994 263.29
- --------------------------------------------------------------------------------------
December 1988 132.61 December 1991 199.68 December 1994 258.53
</TABLE>
SCUDDER INTERNATIONAL PORTFOLIO
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1988 $1,000.00 $0.00 $1,152.80 $57.64 $1,095.16
- ----------------------------------------------------------------------------
December 1989 1,000.00 0.00 1,568.68 78.43 1,490.25
- ----------------------------------------------------------------------------
December 1990 1,000.00 0.00 1,430.66 71.53 1,359.13
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 1,574.62 78.73 1,495.89
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 1,507.11 60.28 1,446.83
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 2,047.43 61.42 1,986.01
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 2,005.12 40.10 1,965.02
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
42
<PAGE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1988 $1,200.00 $ 20.00 $ 1,272.70 $ 63.64 $ 1,209.06
- ----------------------------------------------------------------------------
December 1989 2,400.00 40.00 3,132.67 156.63 2,976.04
- ----------------------------------------------------------------------------
December 1990 3,600.00 60.00 3,942.42 197.12 3,745.30
- ----------------------------------------------------------------------------
December 1991 4,800.00 80.00 5,559.92 278.00 5,281.92
- ----------------------------------------------------------------------------
December 1992 6,000.00 100.00 6,464.67 258.59 6,206.08
- ----------------------------------------------------------------------------
December 1993 7,200.00 120.00 10,195.69 407.83 9,787.86
- ----------------------------------------------------------------------------
December 1994 8,400.00 140.00 11,121.39 333.64 10,787.75
</TABLE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1988 $108.22 September 1990 $137.61 March 1993 $164.70
- --------------------------------------------------------------------------------------
June 1988 110.15 December 1990 143.07 June 1993 171.03
- --------------------------------------------------------------------------------------
September 1988 104.91 March 1991 154.45 September 1993 189.69
- --------------------------------------------------------------------------------------
December 1988 115.28 June 1991 148.17 December 1993 204.74
- --------------------------------------------------------------------------------------
March 1989 125.78 September 1991 156.84 March 1994 202.95
- --------------------------------------------------------------------------------------
June 1989 130.06 December 1991 157.46 June 1994 204.98
- --------------------------------------------------------------------------------------
September 1989 147.69 March 1992 150.63 September 1994 209.23
- --------------------------------------------------------------------------------------
December 1989 156.87 June 1992 159.33 December 1994 200.51
- --------------------------------------------------------------------------------------
March 1990 158.34 September 1992 156.40
- --------------------------------------------------------------------------------------
June 1990 166.92 December 1992 150.71
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
43
<PAGE>
TCI GROWTH
HYPOTHETICAL PERIODIC ACCUMULATION VALUES
TABLE 1 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assuming Single $1,000 Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1988 $1,000.00 $0.00 $ 965.07 $48.25 $ 916.82
- ----------------------------------------------------------------------------
December 1989 1,000.00 0.00 1,226.47 61.32 1,165.15
- ----------------------------------------------------------------------------
December 1990 1,000.00 0.00 1,196.30 59.82 1,136.48
- ----------------------------------------------------------------------------
December 1991 1,000.00 0.00 1,675.98 83.80 1,592.18
- ----------------------------------------------------------------------------
December 1992 1,000.00 0.00 1,635.98 65.44 1,570.54
- ----------------------------------------------------------------------------
December 1993 1,000.00 0.00 1,784.26 53.53 1,730.73
- ----------------------------------------------------------------------------
December 1994 1,000.00 0.00 1,740.10 34.80 1,705.30
</TABLE>
TABLE 2 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assuming $100 Monthly Purchase Payments made during each Contract Year)
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE
VALUE AT END PURCHASE MAINTENANCE ACCUMULATION DEFERRED WITHDRAWAL
OF MONTH PAYMENTS FEES VALUE(/1/) SALES CHARGE VALUE(/2/)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 1988 $1,200.00 $ 20.00 $ 1,201.10 $ 60.06 $ 1,141.04
- ----------------------------------------------------------------------------
December 1989 2,400.00 40.00 2,814.55 140.73 2,673.82
- ----------------------------------------------------------------------------
December 1990 3,600.00 60.00 3,913.50 195.68 3,717.82
- ----------------------------------------------------------------------------
December 1991 4,800.00 80.00 6,876.43 343.82 6,532.61
- ----------------------------------------------------------------------------
December 1992 6,000.00 100.00 7,939.26 317.57 7,621.69
- ----------------------------------------------------------------------------
December 1993 7,200.00 120.00 9,896.48 395.86 9,500.62
- ----------------------------------------------------------------------------
December 1994 8,400.00 140.00 10,824.13 324.72 10,499.41
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
(/2/)The Withdrawal Value is net of all applicable fees and expenses of the
Fund and under the Contract, including the deferred sales charge. See the
narrative preceding these Tables.
44
<PAGE>
TABLE 3 - ACCUMULATION PERIOD
HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS
FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987
(Assumes Single $100 Net Purchase Payment made at Contract Issuance)
<TABLE>
<CAPTION>
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION
OF MONTH VALUE(/1/) OF MONTH VALUE(/1/) OF MONTH VALUE(/1/)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 1988 $ 91.40 September 1990 $113.00 March 1993 $167.24
- --------------------------------------------------------------------------------------
June 1988 100.13 December 1990 119.63 June 1993 170.86
- --------------------------------------------------------------------------------------
September 1988 94.39 March 1991 145.88 September 1993 179.52
- --------------------------------------------------------------------------------------
December 1988 96.51 June 1991 136.27 December 1993 178.43
- --------------------------------------------------------------------------------------
March 1989 104.63 September 1991 151.98 March 1994 173.77
- --------------------------------------------------------------------------------------
June 1989 110.48 December 1991 167.60 June 1994 164.65
- --------------------------------------------------------------------------------------
September 1989 124.71 March 1992 159.19 September 1994 172.28
- --------------------------------------------------------------------------------------
December 1989 122.65 June 1992 148.65 December 1994 174.01
- --------------------------------------------------------------------------------------
March 1990 123.51 September 1992 152.80
- --------------------------------------------------------------------------------------
June 1990 134.26 December 1992 163.60
</TABLE>
(/1/)The Accumulation Value is net of all applicable fees and expenses of the
Fund and under the Contract, except the deferred sales charge. See the
narrative preceding these Tables.
45
<PAGE>
INDIVIDUAL NONQUALIFIED DEFERRED ANNUITY
[LOGO OF AETNA
APPEARS HERE]
75998-1 (5/95)
