AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 27, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COMPANION LIFE SEPARATE ACCOUNT B
(EXACT NAME OF TRUST)
COMPANION LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
401 Theodore Fremd Avenue, Rye, New York 10580-1493
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
NAME AND ADDRESS OF
AGENT FOR SERVICE:
Kenneth W. Reitz, Esquire
Mutual of Omaha Companies
Mutual of Omaha Plaza, 3-Law
Omaha, Nebraska 68175-1008
Telephone: (402) 351-5087
Fax: (402) 351-5906
Approximate date of proposed public offering:
As soon as practicable after effectiveness of the Registration Statement
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
(TITLE, AMOUNT, AND PROPOSED MAXIMUM OFFERING PRICE OF SECURITIES
BEING REGISTERED)
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant declares that an indefinite amount of securities are being registered
under the Securities Act of 1933. The Securities Act registration fee of $500 is
being paid with this initial filing.
-------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
<PAGE>
COMPANION LIFE SEPARATE ACCOUNT B
Registration Statement on Form S-6
Cross-Reference Sheet
FORM N-8B-2
ITEM NO. CAPTION IN PROSPECTUS
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1 Cover Page
2 Cover Page
3 Inapplicable
4 Distribution of the Policies
5 About Us
6 The Variable Account
9 Inapplicable
10(a) Policy Application and Issuance
10(b) Distributions
10(c),(d),(e) Distributions; Lapse and Grace Period; Reinstatement
10(f),(g),(h) Voting Rights; Other Policy Owner Tax Matters
10(i) Other Policy Provisions
11 The Variable Account
12 The Variable Account; Distribution of the Policies
13 Charges and Fees; Tax Matters; Tax Treatment of Loans and
Other Distributions; Distribution of the Policies;
Appendix A
14 Premium Payments
15 Premium Payments
16 The Variable Account
17 Captions referenced under Items 10(c),(d),(e)and(i)above
18 The Variable Account
19 Reports to You; Voting Rights; Distribution of the
Policies
20 Captions referenced under Items 6 and 10(g) above
21 Policy Loans
22 Inapplicable
23 Distribution of the Policies
24 Other Policy Provisions
25 About Us
26 Distribution of the Policies
27 About Us
28 Management
29 About Us
30 Inapplicable
31 Inapplicable
32 Inapplicable
33 Inapplicable
34 Inapplicable
35 About Us
36 Inapplicable
37 Inapplicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Inapplicable
41(a) Distribution of the Policies
42 Inapplicable
43 Inapplicable
44(a) The Variable Account; Premium Payments
44(b) Charges and Fees; Distribution of the Policies
44(c) Mortality and Expense Risk Charge
45 Inapplicable
46 The Variable Account; Captions referenced under
Items 10(c), (d) and (e) above
47 Inapplicable
48 About Us
49 Inapplicable
50 The Variable Account
51 Cover Page, Definitions(Beneficiary), Summary,The Policy,
Payment of Proceeds, Payment Options, Tax Matter,
52 Distribution of the Policies
53 Other Policy Owner Tax Matters
54 Tax Matters
55 Inapplicable
59 Inapplicable
Financial Statements
<PAGE>
[GRAPHIC OMITTED] PROSPECTUS: Dated _____________, 1997
COMPANION
OF NEW YORK
A MUTUAL OF OMAHA COMPANY
ULTRALIFE
Individual Modified Single Premium
Variable Universal Life Insurance Policy
This prospectus describes ULTRALIFE, an individual modified single premium
variable universal life insurance policy ("Policy") offered by Companion Life
Insurance Company ("we, us, our, Companion") to applicants age 90 and under.
The Policy provides for the payment of a Death Benefit upon the death of the
Insured, and for a Cash Surrender Value that can be obtained by surrendering the
Policy. The Policy is a variable policy because the Death Benefit may, and the
Accumulation Value will, vary up or down to reflect the investment experience of
amounts allocated to COMPANION LIFE SEPARATE ACCOUNT B (the "Variable Account").
The Policy Owner ("you, your") bears the investment risk for all amounts so
allocated; there is no guaranteed minimum Accumulation Value. The Policy
continues in effect while the Accumulation Value is sufficient to pay the
Monthly Deduction Amount or until the end of the Death Benefit guarantee period
(assuming no Policy loans are taken), whichever is later.
The minimum initial premium is $20,000. Additional payments may be made
after the first Policy Year, subject to certain restrictions
You may, within limits, allocate premiums (net of any charges) to one or more of
the eighteen eligible investments, which are the seventeen Subaccounts of the
Variable Account and the Fixed Account. Assets of each Subaccount of the
Variable Account are invested in a corresponding mutual fund Portfolio. The
Portfolios are described in separate prospectuses that accompany this
Prospectus. The Policy's available investment options are:
ALGER AMERICAN GROWTH PORTFOLIO
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
FEDERATED PRIME MONEY FUND II ("MONEY MARKET") PORTFOLIO
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II PORTFOLIO
FIDELITY VIP II ASSET MANAGER: GROWTH PORTFOLIO
FIDELITY VIP EQUITY-INCOME PORTFOLIO
FIDELITY CONTRAFUND PORTFOLIO
MFS EMERGING GROWTH PORTFOLIO
MFS HIGH INCOME FUND PORTFOLIO
MFS RESEARCH PORTFOLIO
MFS WORLD GOVERNMENT PORTFOLIO
SCUDDER INTERNATIONAL PORTFOLIO
T. ROWE PRICE EQUITY INCOME PORTFOLIO
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
T. ROWE PRICE LIMITED-TERM BOND PORTFOLIO
T. ROWE PRICE NEW AMERICA GROWTH PORTFOLIO
T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO
UNITED OF OMAHA FIXED ACCOUNT
Partial withdrawals and Policy loans may be taken from time to time, subject to
certain restrictions. In almost all cases, the Policy will be a modified
endowment contract for federal income tax purposes. ANY POLICY LOAN, PARTIAL
WITHDRAWAL OR SURRENDER MAY RESULT IN ADVERSE TAX CONSEQUENCES AND/OR PENALTIES.
IT MAY NOT BE ADVANTAGEOUS TO REPLACE EXISTING LIFE INSURANCE WITH THE POLICY
DESCRIBED IN THIS PROSPECTUS.
AN INTEREST IN THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, NOR IS THE POLICY FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR EACH
PORTFOLIO. ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
COMPANION LIFE INSURANCE COMPANY, P. O. Box 3664, Omaha, Nebraska
68103-0664 (800) 494-0067
<PAGE>
TABLE OF CONTENTS
PAGE
DEFINITIONS
SUMMARY
BASIC FEATURES OF YOUR POLICY
COMPARISON TO OTHER POLICIES AND OTHER INVESTMENTS
POLICY FLOW CHART
ABOUT US
ALLOCATION OF PREMIUMS
THE VARIABLE ACCOUNT
THE FIXED ACCOUNT
TRANSFERS
DOLLAR COST AVERAGING
ASSET ALLOCATION PROGRAM
THE POLICY
POLICY APPLICATION AND ISSUANCE
PREMIUM PAYMENTS
LAPSE AND GRACE PERIOD
REINSTATEMENT
MATURITY DATE
DISTRIBUTIONS
POLICY LOANS
SURRENDER
PARTIAL WITHDRAWALS
DEATH BENEFIT
GUARANTEED DEATH BENEFIT
PAYMENT OF PROCEEDS
PAYMENT OPTIONS
CHARGES AND FEES
CHARGES DEDUCTED FROM THE POLICY
DEDUCTIONS FROM INITIAL PREMIUM; MONTHLY DEDUCTIONS; CHARGES DEDUCTED
ON SURRENDER OR PARTIAL WITHDRAWAL
MORE INFORMATION ABOUT THE ABOVE CHARGES
SURRENDER CHARGE; TAX EXPENSE CHARGE; COST OF INSURANCE CHARGE; TRANSFER
CHARGES
SERIES FUND CHARGES
OTHER POLICY PROVISIONS
NOTICE TO US; ENTIRE CONTRACT; RIGHT TO EXAMINE; DELAY OF PAYMENTS; CHANGE OF
OWNERSHIP AND ASSIGNMENT; BENEFICIARY; BENEFICIARY CHANGE; MISSTATEMENT OF
AGE OR SEX; SUICIDE; INCONTESTABILITY; COVERAGE BEYOND MATURITY;
REINSTATEMENT; NONPARTICIPATING
TAX MATTERS
MANAGEMENT
OTHER INFORMATION
REPORTS TO YOU; VOTING RIGHTS;
DISTRIBUTION OF THE POLICIES; STATE REGULATION;
LEGAL MATTERS; INDEPENDENT AUDITORS; REGISTRATION STATEMENT
ILLUSTRATIONS
DEATH BENEFIT, CASH SURRENDER VALUE AND ACCUMULATED PREMIUMS
FINANCIAL STATEMENTS
THIS PROSPECTUS IS NOT AN OFFERING ANYWHERE WHERE SUCH AN OFFERING CANNOT BE
LAWFULLY MADE. NO ONE IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE
REPRESENTATIONS ABOUT THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF THEY DO, YOU SHOULD NOT RELY UPON SUCH REPRESENTATIONS.
<PAGE>
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DEFINITIONS
ACCUMULATION UNITS means an accounting unit of measure used to calculate the
Accumulation Value of the Separate Account.
ACCUMULATION VALUE means the dollar value as of any Valuation Date of all
amounts accumulated under the Policy.
ALLOCATION DATE means the first business day following the completion of the
RIGHT TO EXAMINE THIS POLICY period or our approval of an additional premium
payment.
BENEFICIARY refers to the person(s) or entity you name to receive the Death
Benefit of the Policy.
CASH SURRENDER VALUE means the Accumulation Value at the end of the applicable
Valuation Date, less any outstanding Policy loans and unpaid loan interest, and
less any applicable Surrender Charge.
FIXED ACCOUNT means the account which consists of general account assets of
Companion Life Insurance Company.
INSURED refers to the individual named on the application whose life is the
basis for the death benefit protection provided by the Policy.
LOAN ACCOUNT means an account established for any amounts transferred from the
Fixed Account and Subaccounts as a result of loans. The Loan Account is credited
with interest and is not based on the investment experience of the Variable
Account.
MONTHLY DEDUCTION DATE means the date of issue and the same date each month
thereafter.
MONTHLY DEDUCTION means the amount deducted from the Policy's Accumulation Value
on each Monthly Deduction Date.
PAYEE refers to the person who receives payments under the Policy.
POLICY means the modified single premium variable life insurance contract issued
to you pursuant to our acceptance of your application for it.
POLICY OWNER refers to you, the person that applied for the Policy.
POLICY YEAR/MONTH/ANNIVERSARY means respective anniversary dates from the Date
of Issue.
PORTFOLIO means a Series Fund's separate investment series that is available
under the Policy.
PREMIUM means an amount paid to us as consideration for the benefits provided by
the Policy.
PROCEEDS means the Death Benefit, Cash Surrender Value, or Proceeds payable upon
the Maturity Date.
SERIES FUNDS means those open-ended management companies in which the Variable
Account invests, which are listed in the ALLOCATION OF PREMIUMS section of this
Prospectus.
SPECIFIED AMOUNT means the amount of insurance selected, as shown on the
Policy's Data page.
SUBACCOUNT means that portion of the Variable Account which invests in shares of
mutual funds or any other investment portfolios that we determine to be suitable
for the Policy's purposes.
VALUATION DATE means each day that the New York Stock Exchange is open for
trading.
VARIABLE ACCOUNT means Companion Life Separate Account B, a separate account
maintained by us in which a portion of our assets has been allocated for the
Policy and certain other policies.
WE, US,OUR, COMPANION refers to Companion Life Insurance Company, Rye, New York.
YOU, YOUR refers to the Policy Owner.
- --------------------------------------------------------------------------------
SUMMARY
BASIC FEATURES OF YOUR POLICY
The individual modified single premium variable life insurance Policy
offered by this prospectus is designed to provide lifetime insurance coverage
for the Insured named in the Policy. It is not offered primarily as an
investment. This is a brief description of the basic features of the Policy.
Policy features are explained in more detail throughout the prospectus.
o RIGHT TO EXAMINE. You have the right to return the Policy within 10 days
after you receive it or 45 days after you signed the application, whichever
is later. We will return to you the premiums paid. (SEE "OTHER POLICY
PROVISIONS: RIGHT TO EXAMINE.")
o PREMIUM PAYMENTS. You must pay an initial premium at least equal to our
minimum single premium requirements. After the first Policy Year, you may
make additional payments, subject to certain restrictions and limitations.
(SEE "THE POLICY: PREMIUM PAYMENTS.")
o INVESTMENT OF PREMIUMS. Your initial premium and any additional payments
will be held in the Money Market Subaccount until the Allocation Date. On
the Allocation Date, your initial premium is invested according to your
instructions in one or more of the Subaccounts of the Variable Account
corresponding to mutual fund portfolios or the Fixed Account. Allocations
must be in whole percentages. (SEE "ALLOCATION OF PREMIUMS.")
o TRANSFERS. Once we mail the confirmation for the initial premium payment,
and after the Right to Examine period, you may transfer portions of the
Policy's Accumulation Value without charge among the Subaccounts and Fixed
Account up to twelve times each Policy Year. Subsequent transfers may have
charges. (SEE "ALLOCATION OF PREMIUMS: TRANSFERS.")
o FLUCTUATING ACCUMULATION VALUE. The Accumulation Value of the Policy will
vary daily based on, among other things, the net investment experience of
the Subaccounts to which amounts have been allocated. The Accumulation
Value is not guaranteed. You bear the investment risk with respect to the
Accumulation Value that is invested in the Subaccounts, and we bear the
investment risk with respect to the Accumulation Value that is invested in
the Fixed Account.
o DEATH BENEFIT. The Policy's Death Benefit equals the greater of (a) the
initial Specified Amount plus any later increase and less any later
decrease, less any loans and unpaid loan interest; or (b) the Policy's
Accumulation Value on the date of death multiplied by a corridor percentage
for the Insured's attained age, less any loans and unpaid loan interest.
(SEE "THE POLICY: DEATH BENEFIT.")
o DEATH BENEFIT GUARANTEE PERIOD. If no Policy loans are taken, coverage is
guaranteed until the 5th policy anniversary or until the Policy anniversary
next following the Insured's 75th birthday, whichever is earlier. (SEE "THE
POLICY: DEATH BENEFIT.")
o POLICY LOANS AND PARTIAL WITHDRAWALS. After the first Policy Year, a loan
privilege is available under the Policy. After the first Policy Year,
partial withdrawals also are allowed; the greater of earnings or 15% of the
Accumulation Value may be withdrawn each Policy year free of Surrender
Charges. Other partial withdrawals may be subject to a Surrender Charge.
(SEE "DISTRIBUTIONS: POLICY LOANS, AND SURRENDER AND PARTIAL WITHDRAWALS.")
o SURRENDERS. The Policy permits full surrender for the Cash Surrender Value.
The maximum Surrender Charge is 9.50%. As to each premium payment, the
Surrender Charge ends after the ninth Policy Year after the premium payment
was made. The Surrender Charge may be waived upon the occurrence of certain
events. (SEE "CHARGES AND FEES.")
o FEDERAL INCOME TAX CONSEQUENCES. Death benefits paid to the Beneficiary
under a life insurance policy generally are not subject to Federal income
tax. Under current law, undistributed increases in cash value of a life
insurance contract generally are not taxable. In almost all situations, the
Policies are expected to be treated as modified endowment contracts.
Pre-death distributions (including partial withdrawals and loans) from a
modified endowment contract are included in income on an income first
basis, and a 10% penalty tax may be imposed on income distributed before
the Policy Owner attains age 59 1/2. (SEE "TAX MATTERS.")
COMPARISON TO OTHER POLICIES AND OTHER INVESTMENTS
In many respects the Policy is similar to fixed-benefit life insurance. Like
fixed-benefit life insurance, the Policy offers a death benefit and provides a
cash value, loan privileges and surrender values. The Policy is different from
fixed-benefit life insurance in that the death benefit will in most cases, and
the cash value ("Accumulation Value") will always, vary to reflect the
investment experience of the selected Subaccounts of the Variable Account.
The Policy is designed to provide insurance protection. Although the
underlying mutual fund portfolios to which Accumulation Value may be allocated
invest in securities similar to those in which mutual funds available directly
to the public invest, in many ways the Policy differs from mutual fund
investments. The main differences are:
o The Policy provides a death benefit based on our assumption of an
actuarially calculated risk.
o If the Cash Surrender Value is not sufficient to pay a Monthly Deduction
Amount, the Policy will lapse with no value unless a payment is made,
subject to the Guaranteed Death Benefit. (SEE "THE POLICY: GUARANTEED DEATH
BENEFIT.") If the Policy lapses when Policy loans are outstanding, adverse
tax consequences may result. (SEE "TAX MATTERS: TAX TREATMENT OF LOANS AND
OTHER DISTRIBUTIONS.")
o In addition to sales charges, insurance-related charges not associated with
mutual fund investments are deducted from values of the Policy. These
charges include various insurance, risk, and expense charges. (SEE "CHARGES
AND FEES.")
o Companion Life, not the Policy Owner, owns the mutual fund shares. (SEE
"OTHER INFORMATION: VOTING RIGHTS.")
o Federal income tax liability on any earnings on the mutual fund investment
is deferred until you receive a distribution from the Policy. Transfers
from one underlying fund portfolio to another are accomplished without tax
liability under current law. (SEE "TAX MATTERS: LIFE INSURANCE
QUALIFICATION.")
o Dividends and capital gains distributed by the underlying mutual funds are
automatically reinvested.
o Premature withdrawals are subject to a 10% federal tax penalty. Also,
Policy earnings that would be treated as capital gains in a mutual fund are
treated as ordinary income, although taxation is deferred until earnings
are distributed from the Policy. (SEE "TAX MATTERS: TAX TREATMENT OF LOANS
AND OTHER DISTRIBUTIONS.")
HOW THE POLICY OPERATES
The following chart shows how the Policy operates. For more information,
refer to specific sections of this prospectus.
POLICY PREMIUM FLOW CHART
-------------------------------
PREMIUM PAYMENTS
o Minimum initial premium required is $20,000.
o Additional payments may be paid after the first
Policy Year, within limits. (SEE "PREMIUM PAYMENTS.")
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DEDUCTIONS FROM PREMIUMS BEFORE ALLOCATION
o None
------------------------------------------------------------------------
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INVESTMENT OF PREMIUMS
* You direct the allocation of initial premiums and any additional payments
among 17 Subaccounts of the Variable Account and the Fixed Account. The
Subaccounts invest in corresponding mutual fund. For information about
premium allocation options, rules and limits, SEE "ALLOCATION OF PREMIUMS."
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS
o Monthly Deduction on the Monthly Deduction Date from Accumulation Value
(annual rate calculated as a percentage of Accumulation Value) for:
o 0.50% to 0.70% for preferred rate class and 0.84% to 1.30% for
standard rate class for cost of insurance (depending on the rate
class of the Insured)
o 1.53% expense charge during Policy years 1 through 10; 1.14% after
Policy Year 10.
o $10 transfer fee (first 12 transfers per Policy free).
o Investment advisory fees and fund expenses are deducted from the
assets of each Fund.
(SEE "CHARGES AND FEES.")
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ACCUMULATION VALUE
o Accumulation Value is equal to the initial premium and any additional
premiums, as adjusted each day the New York Stock Exchange is open to
reflect Subaccounts' investment experience, charges deducted and other
Policy transactions (such as transfers and partial surrenders).
o Accumulation Value may vary from day to day. There is no minimum guaranteed
Accumulation Value. The Policy may lapse, even if there is no Policy loan.
(SEE "THE POLICY: LAPSE AND GRACE PERIOD," AND "DISTRIBUTIONS: POLICY
LOANS.")
o Accumulation Value can be transferred among the Subaccounts and the Fixed
Account. SEE "ALLOCATION OF PREMIUM" for rules and limits. Policy loans
reduce the amount available for allocations and transfers.
o Dollar cost averaging and asset rebalancing programs are available. (SEE
"ALLOCATION OF PREMIUM.")
o Accumulation Value is the starting point for calculating certain values
under a Policy, such as the Cash Surrender Value and the Death Benefit.
-------------------------------------------------------------------------------
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<TABLE>
<CAPTION>
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ACCUMULATION VALUE BENEFITS DEATH BENEFITS
<S> <C> <C>
o After the first Policy year, loans may o Received income tax free to
be taken for amounts up to 90% of Cash Beneficiary. (SEE "TAX MATTERS: LIFE
Surrender Value at a net interest rate INSURANCE QUALIFICATION.")
charge of 1.5%. Preferred loans are
currently available (with a net interest o Available as lump sum or under a
rate charge of 0%). SEE "DISTRIBUTIONS: variety of payment options.
POLICY LOANS" for rules and limits.
o Greater of:
o The Policy may be surrendered in full at
any time for its Cash Surrender Value, o initial Specified Amount plus any
or part of the Accumulation Value may be later increase and less any later
withdrawn. After the first Policy year, decrease; or
up to 15% of the Accumulation Value as
of the first withdrawal that Policy Year o Policy's Accumulation Value on the
may be withdrawn each Policy year date of the Insured's death
without charge. (SEE "DISTRIBUTIONS; multiplied by a corridor percentage
SURRENDER AND PARTIAL WITHDRAWALS.") A for the Insured's attained age.
nine year declining surrender charge of
up to 9.5% of each premium paid will PROCEEDS PAID WOULD BE REDUCED BY ANY
apply to a full surrender and all other POLICY LOAN BALANCE AND UNPAID LOAN
partial withdrawals. (SEE "CHARGES AND INTEREST. (SEE "DISTRIBUTIONS: DEATH
FEES: SURRENDER CHARGE.") Federal taxes BENEFIT.")
and tax penalties may also apply. (SEE
"TAX MATTERS: TAX TREATMENT OF LOANS AND
OTHER DISTRIBUTIONS.")
o Fixed and variable payment options are
available. (SEE "DISTRIBUTIONS: PAYMENT
OPTIONS.")
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</TABLE>
For more detailed information about the Policy, please read the rest of this
prospectus.
- --------------------------------------------------------------------------------
ABOUT US
We are Companion Life Insurance Company, a stock life insurance company
organized under the laws of the State of New York in 1949. Companion Life is a
wholly owned subsidiary of United of Omaha Life Insurance Company, which is
itself a wholly owned subsidiary of Mutual of Omaha Insurance Company. We are
principally engaged in the business of issuing life insurance policies and
annuity contracts in the State of New York. As of December 31, 1996, Companion
had assets of over $345 million.
We may from time to time publish (in advertisements, sales literature and
reports to Owners) the ratings and other information assigned to us by one or
more independent rating organizations such as A.M. Best Company, Moody's,
Standard & Poor's, and Duff & Phelps. The purpose of the ratings is to reflect
our financial strength and/or claims-paying ability, and the ratings should not
be considered as bearing on the investment performance of assets held in the
Variable Account. Each year the A.M. Best Company reviews the financial status
of thousands of insurers, culminating in the assignment of Best's Ratings. These
ratings reflect A.M. Best Company's current opinion of the relative financial
strength and operating performance of an insurance company in comparison to the
norms of the life/health insurance industry. In addition, our claims-paying
ability, as measured by Moody's Insurance Credit Report, Standard and Poor's
Insurance Ratings Services, or Duff & Phelps may be referred to in such
advertisements, sales literature, or reports. These ratings are opinions
regarding an operating insurance company's financial capacity to meet the
obligations of its insurance and annuity policies in accordance with their
terms. Such ratings do not reflect the investment performance of the Variable
Account or the degree of risk associated with an investment in the Variable
Account.
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ALLOCATION OF PREMIUMS
You may allocate all or a part of your Policy premium to one of the
seventeen Series Fund Portfolios currently available through the Variable
Account, to the Fixed Account, or to a combination of these. Allocations must be
in whole percentages and total 100%. The investment results of each Portfolio,
whose investment objectives are described below, are likely to differ
significantly. You should consider carefully, and on a continuing basis, which
Portfolio or combination of Portfolios and the Fixed Account is best suited to
your long-term investment objectives.
THE VARIABLE ACCOUNT
The Variable Account established for the purpose of providing variable
options to fund the Policy is Companion Life Separate Account B. Amounts
allocated to the Variable Account are invested exclusively in shares of a
Portfolio of one of the Series Funds. Each Series Fund is an open-end management
investment company whose shares are purchased by the Variable Account to fund
the benefits provided by the Policy. The Series Fund Portfolios currently
available under the Variable Account, including their investment objectives and
their investment advisers, are described briefly in this Prospectus. Complete
descriptions of each Portfolio's investment objectives and restrictions and
other material information relating to an investment in the Portfolio are
contained in the prospectuses for each of the Series Funds which accompany this
Prospectus. ....Companion Life Separate Account B was established pursuant to an
August 27, 1996 resolution of our Board of Directors. Under New York Insurance
Law, the income, gains or losses, realized or unrealized, from assets allocated
to the Variable Account are credited to or charged against the Variable Account,
without regard to other income, gains, or losses of Companion Life Insurance
Company. These assets are held by us for our variable life insurance policies.
Any and all distributions made by the Series Funds with respect to the shares
held by the Variable Account will be reinvested in additional shares at net
asset value. The assets maintained in the Variable Account will not be charged
with any liabilities arising out of any other business conducted by us. We are,
however, responsible for meeting the obligations of the Policy to you. ....No
stock certificates are issued to the Variable Account for shares of the Series
Funds held in the Variable Account. We own the Series Funds shares for the
Variable Account. ....The Variable Account is registered with the Securities and
Exchange Commission ("SEC") as a unit investment trust under the Investment
Company Act of 1940 and meets the definition of separate account under federal
securities laws. However, the SEC does not supervise the management or the
investment practices or policies of the Variable Account. We do not guarantee
the Variable Account's investment performance.
VARIABLE ACCOUNT PORTFOLIOS
ALGER AMERICAN FUND - ALGER AMERICAN GROWTH PORTFOLIO -- seeks long-term
capital appreciation by investing in a diversified portfolio of equity
securities. Except during temporary defensive periods, the Portfolio invests
at least 65% of its total assets in equity securities of companies that, at
the time of purchase of the securities, have total market capitalization
within the range of companies included in the S&P MidCap 400 Index (designed
to track the performance of medium capitalization companies). (1)
ALGER AMERICAN FUND - ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO --
seeks long-term capital appreciation. Except during temporary defensive
periods, the Portfolio invests at least 65% of its total assets in equity
securities of companies that, at the time of purchase of the securities,
have total market capitalization within the range of companies included in
the Russell 2000 Growth Index (designed to track the performance of small
capitalization companies). The securities in such companies may have limited
marketability and may be subject to more abrupt or erratic market movements
than securities of larger, more established companies or the market averages
in general.(1) (*)
INSURANCE MANAGEMENT SERIES - FEDERATED PRIME MONEY FUND II PORTFOLIO --
invests in money market instruments maturing in thirteen months or less to
achieve current income consistent with stability of principal and liquidity.
The Portfolio attempts to maintain a stable net asset value of $1.00 per
share, but there can be no assurance the Portfolio will be able to do so.
(2)
INSURANCE MANAGEMENT SERIES - FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES
II PORTFOLIO -- seeks current income by investing in a diversified
portfolio limited to U.S. government securities. (2)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - FIDELITY VIP II ASSET
MANAGER: GROWTH PORTFOLIO -- seeks to obtain high total return with reduced
risk over the long-term by allocating its assets among stocks, bonds, and
short-term fixed-income instruments. Although the Portfolio seeks to reduce
its overall risk by diversifying among different types of investments, the
fund aggressively invests in a wide variety of security types, including
stocks and bonds issued in developing countries and derivative transactions.
The Portfolio spreads investment risk by limiting its holdings in any one
company or industry.(3, 4) (*)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND - FIDELITY VIP EQUITY-INCOME
PORTFOLIO -- seeks reasonable income by investing mainly in income-producing
equity securities. In selecting investments, the Portfolio also considers
the potential for capital appreciation. The Portfolio seeks to achieve a
return that surpasses that of the S&P 500. The Portfolio does not expect to
invest in debt securities of companies that do not have proven earnings or
credit.(3)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - FIDELITY CONTRAFUND
PORTFOLIO -- seeks to increase the value of the Portfolio over the long term
by investing in securities of companies that are undervalued or
out-of-favor. This strategy can lead to investments in domestic or foreign
companies, many of which may not be well known. The stocks of small
companies often involve more risk than those of larger companies. The
Portfolio may use various investment techniques to hedge the Portfolio's
risk, but there is no guarantee that these strategies will work as
intended.(3) (*)
MFS VARIABLE INSURANCE TRUST - MFS EMERGING GROWTH PORTFOLIO -- seeks to
provide long-term growth of capital through investing primarily in common
stocks of emerging growth companies, which involves greater risk than is
customarily associated with investments in more established companies. The
Portfolio may invest to a limited extent in lower rated fixed income
securities or comparable unrated securities.(5) (*)
MFS VARIABLE INSURANCE TRUST - MFS HIGH INCOME PORTFOLIO -- seeks high
current income by investing primarily in a diversified portfolio of fixed
income securities, some of which may involve equity features. The Portfolio
may invest in lower rated fixed income securities or comparable unrated
securities.(5) (*)
MFS VARIABLE INSURANCE TRUST - MFS RESEARCH PORTFOLIO -- seeks to provide
long-term growth of capital and future income by investing a substantial
proportion of its assets in the common stocks or securities convertible into
common stocks of companies believed to possess better than average prospects
for long-term growth. No more than 5% of the Portfolio's convertible
securities, if any, will consist of securities in lower rated categories or
securities believed to be of similar quality to lower rated securities. The
Portfolio may invest to a limited extent in lower rated fixed income
securities or comparable unrated securities.(5) (*)
MFS VARIABLE INSURANCE TRUST - MFS WORLD GOVERNMENT PORTFOLIO -- seeks
preservation and growth of capital, together with moderate current income by
investing its assets in an internationally diversified portfolio consisting
primarily of debt securities and, to a lesser extent, equity securities. The
Portfolio investments are expected to consist primarily of securities which
are of relatively high quality and minimal credit risk. However, an error of
judgment in selecting a currency or an interest rate environment could
result in a loss of capital, and a held security whose quality deteriorates
significantly will be sold only if the Portfolio investment adviser believes
it is advantageous to do so. (5)
SCUDDER VARIABLE LIFE INVESTMENT FUND - SCUDDER INTERNATIONAL PORTFOLIO --
seeks long-term growth of capital primarily through diversified holdings of
marketable foreign equity investments. The Portfolio invests in companies,
wherever organized, which do business primarily outside the United States.
The Portfolio intends to diversify investments among several countries, and
does not intend to concentrate investments in any particular industry. (6)
T. ROWE PRICE EQUITY SERIES, INC. - T. ROWE PRICE EQUITY INCOME PORTFOLIO
-- Seeks to provide substantial dividend income and also capital
appreciation by investing primarily in dividend-paying common stocks of
established companies.(8)
T. ROWE PRICE INTERNATIONAL SERIES, INC. - T. ROWE PRICE INTERNATIONAL
STOCK PORTFOLIO -- seeks a total return on its assets from long-term
growth of capital and income, by investing substantially all of its
assets in common stocks of established non-U.S. companies. (7)
T. ROWE PRICE FIXED INCOME SERIES, INC. - T. ROWE PRICE LIMITED-TERM BOND
PORTFOLIO -- seeks a high level of income consistent with modest price
fluctuation by investing primarily in investment grade debt
securities. (8)
T. ROWE PRICE EQUITY SERIES, INC. - T. ROWE PRICE NEW AMERICA GROWTH
PORTFOLIO -- seeks long-term growth of capital through investments
primarily in common stocks of U.S. growth companies which operate in
service industries believed to be above-average performers in their
fields. Total return will consist primarily of capital appreciation or
depreciation. (8)
T. ROWE PRICE EQUITY SERIES, INC. - T. ROWE PRICE PERSONAL STRATEGY
BALANCED PORTFOLIO -- seeks the highest total return over time
consistent with an emphasis on both capital appreciation and income.
There are no limitations on market capitalization or types of stock
the Portfolio can hold. While bond holdings are primarily investment
grade, the Portfolio can also invest in more volatile below-investment
grade bonds.(8) (*)
INVESTMENT ADVISERS AND SUBADVISERS OF THE SERIES FUNDS:
(1) Fred Alger Management, Inc.
(2) Federated Advisors.
(3) Fidelity Management & Research Company.
(4) Fidelity Investment Management and Research (U.K.) Inc., and Fidelity
Management and Research Far East Inc., regarding research and
investment recommendations with respect to companies based outside the
United States.
(5) Massachusetts Financial Services Company.
(6) Scudder, Stevens & Clark, Inc.
(7) Rowe Price-Fleming International, Inc., a joint venture between
T. Rowe Price Associates, Inc. and Robert Fleming Holdings Limited.
(8) T. Rowe Price Associates, Inc.
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(*) THESE PORTFOLIOS' INVESTMENT STRATEGIES MAY PROVIDE THE OPPORTUNITY FOR
HIGHER THAN AVERAGE RETURNS BY INVESTING IN SECURITIES WITH HIGHER THAN
AVERAGE RISK, SUCH AS LOWER AND UNRATED DEBT AND COMPARABLE EQUITY
INSTRUMENTS. PLEASE CONSULT EACH PORTFOLIO'S SERIES FUND PROSPECTUS
ACCOMPANYING THIS PROSPECTUS FOR MORE INFORMATION ABOUT THE RISK ASSOCIATED
WITH SUCH INVESTMENTS.
THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVE.
MORE DETAILED INFORMATION, INCLUDING A DESCRIPTION OF EACH PORTFOLIO'S
INVESTMENT OBJECTIVE AND POLICIES AND A DESCRIPTION OF RISKS INVOLVED IN
INVESTING IN EACH OF THE PORTFOLIOS AND OF EACH PORTFOLIO'S FEES AND EXPENSES,
IS CONTAINED IN THE PROSPECTUSES FOR THE SERIES FUNDS, CURRENT COPIES OF WHICH
ACCOMPANY THIS PROSPECTUS. INFORMATION CONTAINED IN THE SERIES FUNDS'
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING IN A PORTFOLIO OF THE
VARIABLE ACCOUNT.
An investment in the Variable Account, or in any Portfolio, including the
Money Market Portfolio, is not insured or guaranteed by the U.S. Government, and
there is no assurance that the Money Market Portfolio will be able to maintain a
stable net asset value per share.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
We do not control the Series Funds and cannot and do not guarantee that any
of the Portfolios will always be available for Premium allocations or
Accumulation Value transfers. We retain the right, subject to any applicable
law, to make certain changes in the Variable Account and its investments. We
reserve the right to eliminate the shares of any Portfolio held by a Subaccount
and to substitute shares of another Portfolio of a Series Fund, or of another
registered open-end management investment company for the shares of any
Portfolio, if the shares of the Portfolio are no longer available for investment
or if, in our judgment, investment in any Portfolio would be inappropriate in
view of the purposes of the Variable Account. To the extent required by the 1940
Act, substitutions of shares attributable to your interest in a Subaccount will
not be made without prior notice to you and the prior approval of the SEC. If
required, approval of or change of any investment policy will be filed with the
Insurance Department of any State in which the Policy is sold.
New Subaccounts may be established, or existing Subaccounts eliminated,
when, in our sole discretion, marketing, tax, investment or other conditions
warrant such a change. If a Subaccount is eliminated, we will notify you and
request a reallocation of the amounts invested in the eliminated Subaccount. If
you do not reallocate these amounts, we will reinvest them in the Subaccount
that invests in the Money Market Portfolio (or in a similar portfolio of money
market instruments).
In the event of any such substitution or change, we may make changes in the
Policy as may be necessary or appropriate to reflect such substitution or
change. Furthermore, the Variable Account may be (i) operated as a management
company under the 1940 Act or any other form permitted by law, (ii) deregistered
under the 1940 Act in the event such registration is no longer required or (iii)
combined with one or more other separate accounts. To the extent permitted by
applicable law, we also may transfer the assets of the Variable Account
associated with the Policies to another account or accounts.
THE FIXED ACCOUNT
This Prospectus is intended to serve as a disclosure document only for the
Policy and the Variable Account. For complete details regarding the Fixed
Account, see the Policy itself.
PREMIUM ALLOCATED AND AMOUNTS TRANSFERRED TO THE FIXED ACCOUNT BECOME PART
OF THE GENERAL ACCOUNT ASSETS OF COMPANION LIFE INSURANCE COMPANY. INTERESTS IN
THE GENERAL ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "1933 ACT"), NOR IS THE GENERAL ACCOUNT REGISTERED AS AN INVESTMENT COMPANY
UNDER THE 1940 ACT. ACCORDINGLY, NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS
THEREIN IS GENERALLY SUBJECT TO THE PROVISIONS OF THE 1933 OR 1940 ACTS, AND WE
HAVE BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS
NOT REVIEWED THE DISCLOSURES IN THIS PROSPECTUS WHICH RELATE TO THE FIXED
ACCOUNT.
The Fixed Account includes all our assets except those segregated in the
Variable Account or in any other separate investment account. You may allocate
Premium to the Fixed Account or transfer amounts from the Variable Account to
the Fixed Account. Instead of you bearing the investment risk, as is the case
for Accumulation Value in the Variable Account, we bear the full investment risk
for all Accumulation Value in the Fixed Account. We have sole discretion to
invest the assets of our general account, including the Fixed Account, subject
to applicable law.
We guarantee to credit interest to amounts in the Fixed Account at an
effective rate of at least 4.5% per year. (After the expense charge is applied,
the net effective rate is 2.97% for Policy years 1-10, and 3.36% for Policy
years 11 and subsequent. We may, IN OUR SOLE DISCRETION, credit amounts in the
Fixed Account with interest at a current interest rate in excess of 4.5%. ONE
TRANSFER OUT OF THE FIXED ACCOUNT IS ALLOWED EACH POLICY YEAR. (This limit does
not apply under the Dollar Cost Averaging or Asset Allocation programs).
Moreover, the maximum amount that can be transferred out of the Fixed Account
during any Policy Year is 10% of Fixed Account value on the date of the
transfer. No charge is imposed on such transfers. We reserve the right to modify
transfer privileges at any time. (SEE "ALLOCATION OF PREMIUM: TRANSFERS.")
Partial withdrawals from the Fixed Account are limited to a pro rata amount
(with withdrawals from the Variable Account). Withdrawals and transfers from the
Fixed Account may be delayed for up to six months, and withdrawals may be
subject to a Surrender Charge. (SEE "CHARGES AND FEES: SURRENDER CHARGES.") For
purposes of crediting interest, the oldest payment or transfer into the Fixed
Account, plus interest allocable to that payment or transfer, is considered to
be withdrawn or transferred out first; the next oldest payment plus interest is
considered to be transferred out next, and so on (this is a "first-in,
first-out" procedure).
We guarantee that, upon Death or the Policy Maturity Date, the amount in
your Fixed Account will be not be less than the amount of Premium allocated or
Accumulation Value transferred to the Fixed Account, plus interest at an
effective rate of 4.5% per year, plus any excess interest credited to amounts in
the Fixed Account, less any applicable premium or other taxes allocable to the
Fixed Account, less any Expense Charge allocable to the Fixed Account and less
any amounts deducted from the Fixed Account in connection with partial
withdrawals (including any Surrender Charges) or transfers to the Variable
Account or to the Loan Account.
WE HAVE COMPLETE AND SOLE DISCRETION TO DETERMINE THE CURRENT INTEREST RATES
OF THE FIXED ACCOUNT. WE CANNOT PREDICT OR GUARANTEE THE LEVEL OF FUTURE CURRENT
INTEREST RATES OF THE FIXED ACCOUNT, EXCEPT TO GUARANTEE THAT FUTURE CURRENT
INTEREST RATES WILL NOT BE BELOW AN EFFECTIVE RATE OF 4.5% PER YEAR COMPOUNDED
ANNUALLY. YOU BEAR THE RISK THAT CURRENT INTEREST RATES OF THE FIXED ACCOUNT
WILL NOT EXCEED AN EFFECTIVE RATE OF 4.5% PER YEAR.
TRANSFERS
Subject to the limitations and restrictions described below, transfers out
of a Subaccount of the Variable Account may be made any time after the Right to
Examine period and prior to death or the Policy Maturity Date, by sending
written notice, signed by you, to us. We reserve the right, at any time and
without notice to any party, to modify the transfer privileges under the Policy.
Transfers are effective on the date we receive your request.
After the Right to Examine period, you can transfer Accumulation Value from
one Subaccount of the Variable Account to another, or from the Variable Account
to the Fixed Account or from the Fixed Account to any Subaccount of the Variable
Account within certain limits. The minimum amount which may be transferred is
the lesser of $500 or the entire Subaccount Value. If the Subaccount Value
remaining after a transfer is less than $500, we will include that amount as
part of the transfer. Transfers out of a Subaccount currently may be made as
often as you wish, subject to the minimum amount specified above (we reserve the
right to otherwise limit or restrict transfers in the future or to eliminate the
transfer privilege). We reserve the right to restrict transfers from the
Variable Account to the Fixed Account of amounts previously transferred from the
Fixed Account for up to six months.
A transfer fee of $10 may be imposed for any transfer in excess of 12 per
Policy Year. The transfer fee is deducted from the amount transferred.
Transfers from the Fixed Account currently may be made once each Policy
Year. Transfers from the Fixed Account do not count toward the 12 free transfer
limit described above, and no transfer charge will be imposed on transfers from
the Fixed Account. Moreover, the maximum amount that can be transferred out of
the Fixed Account during any Policy Year is 10% of the Fixed Account Value on
the date of the transfer.
The Policy is designed as a long-term investment to provide death benefit
protection, and may also be used as a part of your retirement or other financial
planning. The Policy is not intended for active trading or "market timing."
Excessive transfers could harm other Policy Owners by having a detrimental
effect on portfolio management (which could occur, for example, if it caused
excessive commission expense or caused the manager to keep higher cash reserves
than otherwise). Therefore, we reserve the right to limit the number of
transfers from the Subaccounts of the Variable Account and the Fixed Account if:
(a) we believe that excessive trading by the Policy Owner or a specific transfer
request would have a detrimental effect on Accumulation Value or the share
prices of the Portfolios; or (b) we are informed by one or more of the Series
Funds that the purchase or redemption of shares is to be restricted because of
excessive trading or a transfer or group of transfers is deemed to have a
detrimental effect on share prices of one or more Portfolios or the Variable
Account.
Where permitted by law, we may accept your authorization of third party
reallocation on your behalf, subject to our rules. We may suspend or cancel such
acceptance at any time. For example, third party reallocation by "market timers"
could be suspended if they cause harm to other Policy Owners. We will notify you
of any such suspension or cancellation. We may restrict the availability of
Subaccounts and the Fixed Account for Transfers during any period in which you
authorize such third party to act on your behalf. We will give you prior
notification of any such restrictions. However, we will not enforce such
restrictions if we are provided with satisfactory evidence that: (a) such third
party has been appointed by a court of competent jurisdiction to act on your
behalf; or (b) such third party has been appointed by you to act on your behalf
for all your financial affairs.
DOLLAR COST AVERAGING
Dollar cost averaging is a process whose objective is to shield investments
from short term price fluctuations. Since the same dollar amount is transferred
to selected Subaccounts each month, over time more purchases of Portfolio shares
are made when the value of those shares is low, and fewer shares are purchased
when the value is high. As a result, a lower than average cost of purchases may
be achieved over the long term. While this process allows you to take advantage
of investment price fluctuations, it does not assure a profit or protect against
a loss in declining markets.
Our dollar cost averaging program allows you to automatically transfer, on a
periodic basis, a predetermined amount or percentage specified by you from any
one Subaccount or the Fixed Account to any Subaccount(s) of the Variable
Account. The automatic transfers can occur monthly, quarterly, semi-annually, or
annually, and the amount transferred each time must be at least $100 and must be
$50 per Subaccount. At the time the program begins, there must be at least
$5,000 of Accumulation Value in the applicable Subaccount or the Fixed Account
being transferred from. If transfers are made from the Fixed Account, the
maximum periodic transfer amount is 10% of that account's value at the time of
election, or a sufficient amount to provide transfers for 10 months. There is no
maximum transfer amount requirement out of the Subaccounts of the Variable
Account.
You can request participation in the Dollar Cost Averaging program when
purchasing the Policy or at a later date. Transfers will begin on the first or
15th day (or, if not a Valuation Date, the next following Valuation Date) of the
month, as specified by you, during which the request is processed. You can
specify that only a certain number of transfers will be made, in which case the
program will terminate when that number of transfers has been made. Otherwise,
the program will terminate when the amount remaining in the applicable
Subaccount or, if applicable, the Fixed Account, is less than $500.
You can increase or decrease the amount or percentage of the transfers or
discontinue the program by notifying us of the change. There is no charge for
participation in this program.
ASSET ALLOCATION PROGRAM
Under the Asset Allocation Program, you can instruct us to allocate premium
and Accumulation Value among the Subaccounts of the Variable Account and the
Fixed Account pursuant to allocation instructions you specify or recommended by
us and approved by you. We will rebalance your Policy's assets on a quarterly,
semi-annual or annual basis, as specified by you, to ensure conformity with your
allocation instructions. Such asset rebalancing is intended to transfer cash
value from Subaccounts that have increased in value to those that have declined,
or not increased as much, in value. Over time, this method of investing may help
you to "buy low and sell high," although there can be no assurance this
objective will be achieved.
Transfers of Accumulation Value made pursuant to this program will not be
counted in determining whether the Transfer Fee applies. At the time the program
begins, there must be at least $20,000 of Accumulation Value under the Policy.
You can request participation in the Asset Allocation Program when
purchasing the Policy or at a later date. You can change your allocation
percentage or discontinue the program by notifying us of the change. There is no
charge for participation in this program.
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THE POLICY
POLICY APPLICATION AND ISSUANCE
To purchase a Policy, you must submit an application and provide evidence of
insurability of the proposed Insured. The initial premium also must be paid
before we will issue the Policy. We will not issue a Policy if the Insured is
older than age 90. Before accepting an application, we conduct underwriting to
determine insurability. We reserve the right to reject an application or premium
for any reason. If a Policy is not issued, we will return any premium payment
you submitted. If a Policy is issued, it will be effective on the date of issue.
PREMIUM PAYMENTS
The minimum initial premium for a Policy is $20,000. Your initial premium
will be credited to the Policy on the date the Policy is issued. Premiums will
be allocated to the Money Market portfolio until the Allocation Date. You may
purchase a Policy with the proceeds of another life insurance policy, provided
that the following conditions are met. First, the applicable application forms
must be completed. Second, if the value to be applied from the existing policy
to a Policy is subject to a policy loan, then the amount of the loan cannot
exceed 50% of the cash value of the Policy at issue, and the amount of the
policy loan plus the initial premium for the Policy must be at least $20,000. IT
MAY NOT BE ADVANTAGEOUS TO REPLACE EXISTING INSURANCE WITH A POLICY.
Additional payments may be made until the Insured attains age 90, subject to
our underwriting requirements and the following rules. Except with respect to
additional payments required in a grace period, an additional payment must be at
least $ 5,000, and only one additional payment may be made each Policy Year
beginning with the second Policy Year. A payment received after issuance of the
Policy while a loan is outstanding generally is treated first as repayment of
Policy loan interest, second as repayment of a Policy loan, and last as
additional Premium, unless you designate otherwise in writing when submitting
the payment to us.
No additional Premium payments may be made on or after age 90 of the
Insured, except as may be required in a grace period. The tax consequences
associated with continuing a Policy beyond age 90 of the Insured are unclear. A
tax advisor should be consulted on this issue.
Because any additional premium payment will result in an increase in the
Policy's Specified Amount, we will require satisfactory evidence of insurability
before accepting additional premiums after the date of issue. However, we
reserve the right to reject an additional payment for any reason. If additional
Premium is accepted, we will credit it to your Policy's Accumulation Value
pursuant to your current accumulation instructions, unless you provide other
instructions as of the date underwriting was completed.
LAPSE AND GRACE PERIOD
If there is no outstanding Policy loan, the Policy will lapse if, on a
Monthly Deduction Date, the Accumulation Value is insufficient to cover the
Monthly Deduction due on that date (subject to the Guaranteed Death Benefit
provision; SEE "DISTRIBUTIONS: GUARANTEED DEATH BENEFIT"), and a grace period
expires without a sufficient premium payment. If there is an outstanding loan,
the Policy will lapse on any Monthly Deduction Date when the Cash Surrender
Value is insufficient to cover the Monthly Deduction and any loan interest due,
subject to the Grace Period provision. We allow you a 61 day grace period to
make a premium payment sufficient to cover the Monthly Deduction and any loan
interest due. The grace period begins the day we mail notice to you of the
insufficiency. The Policy will terminate as of the first day of the grace period
if necessary additional premium is not paid.
Payment received during the grace period is first applied to repay Policy
debt before the remaining amount of the payment is applied as additional Premium
to keep the Policy in force.
Insurance coverage continues during the grace period, but the Policy will be
deemed to have no Accumulation Value for purposes of Policy loans, surrender and
withdrawals. If the Insured dies during the grace period, the Death Benefit
proceeds payable during the grace period will equal the amount of the Death
Benefit in effect immediately prior to the commencement of the grace period less
any due and unpaid Monthly Deduction. A lapse of the Policy may result in
adverse tax consequences.
REINSTATEMENT
If the Policy is terminated during the Insured's life because a grace period
ended without a sufficient payment being made, the Policy may be reinstated.
Reinstatement must occur within five years of the expiration of the grace period
and prior to the Maturity Date. To reinstate, we must receive: (a) a written
application signed by you and the Insured; (b) satisfactory evidence that the
Insured is insurable; (c) payment of an amount sufficient to continue the Policy
in force for three months; and (d) repayment or reinstatement of any outstanding
Policy loan along with unpaid loan interest from the date of lapse. Upon
reinstatement, Surrender Charges, if any, will be re-established as of the
original date of issue.
MATURITY DATE
THE POLICY'S MATURITY DATE IS THE POLICY ANNIVERSARY NEXT FOLLOWING THE
INSURED'S 100TH BIRTHDAY. ON THE MATURITY DATE WE WILL PAY YOU THE POLICY'S
ACCUMULATION VALUE, LESS ANY LOAN AND UNPAID LOAN INTEREST, IF (A) THE INSURED
IS THEN LIVING, AND (B) THIS POLICY IS IN FORCE. THE POLICY MAY TERMINATE PRIOR
TO THE MATURITY DATE IF THE PREMIUMS PAID ARE INSUFFICIENT TO CONTINUE THIS
POLICY IN FORCE. IF THE POLICY DOES CONTINUE IN FORCE TO THE MATURITY DATE, IT
IS POSSIBLE THERE WILL BE LITTLE OR NO CASH SURRENDER VALUE AT THAT TIME. POLICY
VALUES WILL BE AFFECTED BY THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT AND
TO THE EXTENT COST OF INSURANCE CHARGES ARE MORE FAVORABLE THAN GUARANTEED
CHARGES.
- -----------------------------------------------------------
DISTRIBUTIONS
POLICY LOANS
After the first Policy Year, you may obtain a loan for up to 90% of the
Cash Surrender Value less loan interest to the end of the Policy Year, and less
the Monthly Deduction amount sufficient to continue this Policy in force for one
month. This Policy must be assigned to us as sole security for the loan. We will
transfer all loan amounts from the Fixed Account and the Subaccounts to the Loan
Account. The amounts will be transferred on a pro rata basis.
Loan interest is payable at a rate of 5.7% in advance (6.0% effective annual
rate). Interest is due on each Policy Anniversary. If the interest is not paid
when due, we will transfer an amount equal to the unpaid loan interest from the
Fixed Account and the Subaccounts, to the Loan Account on a pro rata basis. We
will credit 4.5% interest to any amounts in the Loan Account, except amounts
equal to a Preferred Loan as described below, for a net annual Loan interest
rate of 1.5%.
The death benefit will be reduced by the amount of any loan outstanding on
the date of the Insured's death. We may defer making a loan for six months
unless the loan is to pay premiums to us.
A Preferred Loan is available if the Cash Surrender Value exceeds the total
of all premiums paid since issue. The amount available for a Preferred Loan is
the amount by which the Cash Surrender Value exceeds the total of premiums paid.
The amount of the Loan Account that equals a Preferred Loan will be credited
with 6% interest, for a net annual Preferred Loan interest rate of 0%. The
amount of indebtedness that qualifies as a Preferred Loan is determined on each
Monthly Deduction Date.
All or part of a loan may be repaid at any time while the Policy is in
force. The amount of a loan repayment will be deducted from the Loan Account and
will be allocated among the Fixed Account and the Subaccounts in the same
percentages as premiums are currently allocated.
SURRENDER
While the Insured is alive, you may terminate this Policy for its Cash
Surrender Value. If you request a cash surrender, the Policy must be returned to
us to receive the Cash Surrender Value
With regard to amounts allocated to the Fixed Account, the Cash Surrender
Value will be equal to or greater than the minimum Cash Surrender Values
required by the State in which this Policy was delivered. The value is based on
the Commissioners 1980 Standard Mortality Table, age last birthday, with
interest at 4.5%. The maximum applicable Surrender Charge is 9.50% (SEE "CHARGES
AND FEES.") Also, a 10% federal tax penalty may apply. (SEE "TAX MATTERS.") We
may defer payment of a cash surrender from the Fixed Account for up to six
months.
PARTIAL WITHDRAWALS
After the first Policy Year, you may withdraw part of the Accumulation
Value. Withdrawals are made first from earnings and then from Premiums paid,
beginning with the earliest Premium payment. The minimum partial withdrawal
amount is $500. The maximum partial withdrawal amount is an amount such that the
remaining Accumulation Value is not less than $20,000.
Each Policy year you may withdraw, without a surrender charge, the greater
of: (a) 15% of the Accumulation Value as of the first withdrawal that Policy
year; or (b) that portion of the Accumulation Value which is in excess of
total premiums paid.
Partial withdrawals in excess of this amount may be subject to a Surrender
Charge of up to 9.5%. The Surrender Charge is a percentage of the premiums
withdrawn. The applicable percentage varies according to the length of time
since the premium was paid. The percentages are shown on the data pages.
The amount of cash withdrawal requested and any Surrender Charge will be
deducted from the Accumulation Value on the date we receive your written
request. Partial withdrawals will result in cancellation of Accumulation Units
from each applicable Subaccount. In the absence of instructions from you,
amounts will be deducted from the Subaccounts and the Fixed Account on a pro
rata basis. No more than a pro rata amount may be withdrawn from the Fixed
Account for a partial withdrawal. We reserve the right to defer withdrawals from
the Fixed Account for up to six months from the date we receive your written
request.
The Specified Amount will be reduced in the same proportion as the
Accumulation Value is reduced as a result of any partial withdrawal.
DEATH BENEFIT
The death benefit equals the greater of:
(a) the initial Specified Amount plus any later increase and less any later
decrease; or
(b) the policy's Accumulation Value on the date of death multiplied by
the corridor percentage from the table shown below for the Insured's
attained age;
less any outstanding loans and unpaid loan interest. To determine the initial
specified amount, multiply the single premium amount by the corresponding issue
age premium factor; deposits after issue will increase the specified amount by
the amount of the additional deposit multiplied by the attained age premium
factor.
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Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage
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0-40 250% 54 157% 68 117%
41 243% 55 150% 69 116%
42 236% 56 146% 70 115%
43 229% 57 142% 71 113%
44 222% 58 138% 72 111%
45 215% 59 134% 73 109%
46 209% 60 130% 74 107%
47 203% 61 128% 75-90 105%
48 197% 62 126% 91 104%
49 191% 63 124% 92 103%
50 185% 64 122% 93 102%
51 178% 65 120% 94 101%
52 171% 66 119% 95-100 100%
53 164% 67 118%
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GUARANTEED DEATH BENEFIT
If no Policy loans are taken, we guarantee coverage will remain in force
until the 5th policy anniversary or the policy anniversary next following the
Insured's 75th birthday, whichever is earlier.
PAYMENT OF PROCEEDS
While the Insured is alive, you may choose to have Proceeds that become
payable paid under any combination of the fixed and variable payout options
shown in this Policy. A Beneficiary may also have the Death Benefit applied to a
payout option. If another option is not chosen within 60 days of the date we
receive due proof of death, we will make payment in a lump sum.
We reserve the right to pay the Proceeds in one sum when it is less than
$2,000, or when the option of payment chosen would result in periodic payments
of less than $20. Payees must be individuals who receive payments in their own
behalf unless otherwise agreed to by us. Any option chosen will be effective
when we acknowledge it.
We may require proof of your age or survival or the age or survival of the
Payee.
The guaranteed minimum interest rate used in the fixed payout options
is 3%. We may pay or credit additional interest annually.
When the last Payee dies, we will pay to the estate of that Payee any amount
on deposit, or the then present value of any remaining guaranteed payments under
a fixed option.
FIXED PAYMENTS
Fixed payments are available under all six Payout Options below. The
Proceeds will be transferred to our general account, and the Payments will be
fixed in amount by the provisions selected and the age and sex (if consideration
of sex is allowed) of the Payee. The guaranteed effective annual interest rate
used in the Payout Options is 3%. We may, AT OUR SOLE DISCRETION, declare
additional interest to be paid or credited annually for Payout Options 1, 2, 3,
or 6. The guaranteed amounts are based on the 1983a Mortality Table, and 3%
guaranteed interest rate. Current amounts may be obtained from us.
VARIABLE PAYMENTS
Only Payout Options 2, 4, and 6 are available for variable payments. The
dollar amount of the first monthly payment will be determined by applying the
Proceeds allocated to variable Subaccounts to the Variable Payout Options table
shown in the Policy applicable to the Payout Option chosen. The tables are
determined from the 1983a Mortality Table with an assumed investment rate of 4%.
If more than one Subaccount has been selected, the accumulation value of each
Subaccount is applied separately to the applicable table to determine the amount
of the first payment attributable to that particular Subaccount.
All variable payments other than the first will vary in amount according to
the investment performance of the applicable Subaccounts. The amount of each
subsequent payment equals the number of Variable Payment Units for each
Subaccount as determined for the first payment, multiplied by the value of a
Variable Payment Unit for that Subaccount 10 days prior to the date the variable
payment is due. This amount may increase or decrease from month to month.
If the net investment return of a Subaccount for a payment period is equal
to the pro-rated portion of the 4% annual assumed investment rate, the variable
payment attributable to that Subaccount for that period will equal the payment
for the prior period. To the extent that such net investment return exceeds an
annualized rate of 4% for a payment period, the payment for that period will be
greater than the payment for the prior period and to the extent that such return
for a period falls short of an annualized rate of 4%, the payment for that
period will be less than the payment for the prior period. A charge equal on an
annual basis to 1.20% of the daily net asset value of the Variable Account is
applied in calculating variable payouts.
TRANSFERS BETWEEN FIXED AND VARIABLE SUBACCOUNTS
The Payee may exchange the value of a designated number of Variable Payment
Units of a particular Subaccount into other Variable Payment Units, the value of
which would be such that the dollar amount of a payment made on the date of the
exchange would be unaffected by the fact of the exchange. No more than four (4)
exchanges may be made within each Policy year.
Transfers may be made between Subaccounts and from a Subaccount to the Fixed
Account. No exchanges may be made from the Fixed Account to the variable
Subaccounts. Transfers will be made using the variable payment unit values for
the Valuation Period during which any request is received by us.
PAYMENT OPTIONS
OPTION 1 -- PROCEEDS HELD ON DEPOSIT AT INTEREST. While the Proceeds are
held by us, we will annually:
(a) pay interest to the Payee; or
(b) add interest to the Proceeds.
OPTION 2 -- INCOME OF A SPECIFIED AMOUNT. We will pay the Proceeds in
monthly installments of a specified amount until the Proceeds, with
interest, have been fully paid.
OPTION 3 -- INCOME FOR A SPECIFIED PERIOD. We will pay the Proceeds in
installments for the number of years you choose. The monthly incomes for
each $1,000 of Proceeds,shown in the table set forth in the Policy, include
interest. We will provide the income amounts for payments other than monthly
upon request.
OPTION 4 -- LIFETIME INCOME. We will pay the Proceeds as a monthly income
for as long as the Payee lives. The following guarantees are available:
GUARANTEED PERIOD - The monthly income will be paid for a certain
number of years and as long thereafter as the Payee lives; or
GUARANTEED AMOUNT (INSTALLMENT REFUND) - The monthly income will be
paid until the sum of all payments equals the Proceeds placed under this
option and as long thereafter as the Payee lives.
If a fixed Payment Option is chosen, the monthly income will be
the amount computed using either the Lifetime Monthly Income Table set
forth in the Policy (which is based on the 1983a Mortality Table and
interest at 3% or, if more favorable to the Payee, our then current
lifetime monthly income rates for payment of Proceeds. If a variable
Payout Option is chosen, all variable payments, other than the first
variable payment, will vary in amount according to the investment
performance of the applicable Subaccounts.
NOTE CAREFULLY. If no guarantee is elected, then IT WOULD BE
POSSIBLE FOR ONLY ONE PAYMENT TO BE MADE if the Payee(s) were to die
before the due date of the second payment; only two Payments if the
Payee(s) were to die before the due date of the third payment; and so
forth. When the last Payee dies, we will pay to the estate of that Payee
any remaining guaranteed Payments under a fixed payout option.
OPTION 5 -- LUMP SUM. The Proceeds will be paid in one sum.
OPTION 6 -- ALTERNATIVE SCHEDULE. Upon request and if available, we will
provide payments for other options, including joint and survivor periods.
Certain options may not be available in some States.
If variable payments are being made under Option 2 or 6 and do not involve life
contingencies, then you may surrender the Policy and receive the commuted value
of an1y unpaid payments.
Additional information about any Payout Option may be obtained by contacting
us.
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CHARGES AND FEES
CHARGES DEDUCTED UNDER THE POLICY
DEDUCTIONS FROM INITIAL PREMIUM
We deduct no charges from Premium before allocation to the Variable Account,
although the Monthly Deduction includes deductions for cost of insurance charges
and for expense charges, and a Surrender Charge based on Premium may apply to
surrenders or partial withdrawals during the Surrender Charge period.
MONTHLY DEDUCTION
We deduct a charge from the entire Accumulation Value on each Monthly
Deduction Date. This Monthly Deduction equals the cost of insurance charge* for
the current month, plus the expense charge (annualized charge is 1.53% for the
first ten Policy Years and 1.14% for Policy Years thereafter).
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* No cost of insurance charge is deducted on or after the Policy Anniversary
when the age of the Insured is equal to 100.
Each charge is calculated as a percentage of Accumulation Value (including
amounts of Accumulation Value moved to the Loan Account as collateral for Policy
loans) in the following manner: first, all charges are calculated, based on the
Accumulation Value on the Monthly Deduction Date (before monthly charges are
deducted, but reflecting charges deducted from Subaccount assets), and then
deducted. The Monthly Deduction is deducted pro rata from the Accumulation Value
in the Subaccounts and the Fixed Account.
CHARGES DEDUCTED ON SURRENDER OR PARTIAL WITHDRAWAL
If the Policy is surrendered or lapses or a partial withdrawal is taken
during the Surrender Charge period (which is the first nine Years after each
premium payment), a Surrender Charge may be deducted. This charge declines over
the course of the Surrender Charge period. Any Surrender Charge deduction is
deducted pro rata from the Accumulation Value in the Subaccounts and the Fixed
Account.
MORE INFORMATION ABOUT THE ABOVE CHARGES
SURRENDER CHARGE
If a Policy is totally surrendered or lapses or a partial withdrawal is
made, we may deduct a Surrender Charge from the amount requested to be
surrendered. The percentage varies according to the length of time since each
premium was paid. Any applicable Surrender Charge will be deducted on a full
surrender or a partial withdrawal. The Surrender Charge period and the amount of
the Surrender Charge are shown in the following table:
YEARS SINCE
PREMIUM PAYMENT SURRENDER CHARGE
1 9.50%
2 9.50
3 9.50
4 9.00
5 7.50
6 6.00
7 4.50
8 3.00
9 1.50
10 & later 0
EXPENSE CHARGE
The expense charge consists of charges for administrative, tax (first ten
Policy Years only) and mortality and expense risk charges. This charge is no
longer deducted beginning on the Policy anniversary next following the insured's
100th birthday if coverage beyond maturity is elected.
ADMINISTRATIVE CHARGE. This charge is deducted from your Policy's
Accumulation Value on each Monthly Deduction Date after the date of issue, as
part of the Monthly Deduction. This charge is currently set at an annual rate of
0.24% of the Accumulation Value on each Monthly Deduction Date. This charge is
for the cost of administering the Policies (such as the cost of processing
Policy transactions, issuing Policy Owner statements and reports, and record
keeping), as well as legal, actuarial, systems, mailing and other overhead costs
connected with our variable life insurance operations
TAX EXPENSE CHARGE. We will deduct this charge as part of the Monthly
Deduction from your Accumulation Value on each Monthly Deduction Date for the
first ten Policy Years. The annual rate of this charge is 0.39% of the
Accumulation Value and is to reimburse us for State premium taxes, federal
deferred acquisition cost taxes, and related administrative expenses.
MORTALITY AND EXPENSE RISK CHARGE. We deduct a charge from your Accumulation
Value on each Monthly Deduction Date for the mortality and expense risks that we
assume. This charge is currently set at an annual rate of 0.90% of the
Accumulation Value on each Monthly Deduction Date. The mortality risk we assume
is that Insureds may live for shorter periods of time than we estimated. The
expense risk is that our costs of issuing and administering the Policies may be
more than we estimated.
If all the money we collect from this charge is not needed to cover death
benefits and expenses, the money is contributed to our general account.
Conversely, even if the money we collect is insufficient, we will provide for
all death benefits and expenses.
COST OF INSURANCE CHARGE
This charge is deducted from the Policy's Accumulation Value on each Monthly
Deduction Date, as part of the Monthly Deduction. This charge is no longer
deducted beginning on the Policy anniversary next following the Insured's 100th
birthday if coverage beyond maturity is elected.
The cost of insurance charge covers the cost of providing insurance
protection under your Policy. Currently, the amount of this charge is based on
the rate class of the Insured. We assign Insureds to rate classes based on
underwriting conducted when we receive a Policy application. Currently, we
assign Insureds to the following rate classes: preferred and standard. Once a
Policy is issued, an Insured's rate class does not change except if an
additional premium is submitted and the underwriting review determines that the
Insured qualifies for a better rate class. If the Insured qualifies for a better
rate class, the rate class for the additional premium will be used for cost of
insurance charges under the entire Policy.
Currently, the cost of insurance charge for a Policy is calculated as a
percentage of the Accumulation Value on the Monthly Deduction Date. The charge
is based on the duration of the Policy, and the Insured's rate class. The
current monthly rates for these classes are equivalent to the annual percentage
rates shown in the following table:
POLICY YEAR(S) ACCUMULATION VALUE ACCUMULATION VALUE
OF $45,000 OR LESS. GREATER THAN $45,000.
PREFERRED RATE CLASS
1-10 0.70% 0.60%
11 and later 0.60% 0.50%
STANDARD RATE CLASS
1-10 1.30% 1.20%
11 and later 0.94% 0.84%
We reserve the right to change the cost of insurance charges upon appropriate
regulatory approval. For purposes of determining the current cost of
insurance charge on a Monthly Deduction Date, the
applicable cost of insurance percentage is applied to the Accumulation Value.
The cost of insurance charge deducted on a Monthly Deduction Date is
guaranteed not to exceed the amount calculated using the guaranteed cost of
insurance rates set forth in the Policy for that date. The maximum cost of
insurance charge for a Monthly Deduction Date determined is equal to the "net
amount at risk" under the Policy, multiplied by the guaranteed cost of insurance
rate for that date. The net amount at risk is determined on the last day of the
Policy Month. The amount at risk at any point in time is just the death benefit
at that point in time, less the Accumulation Value at that point in time after
deducting the Expense Charge and the cost of any Policy riders.
The guaranteed cost of insurance rate for a Monthly Deduction Date under a
Policy depends on the Insured's sex, and age on the first day of a Policy Year.
Current cost of insurance rates are more favorable for preferred rate class
than for standard rate class Insureds. Within a given class, guaranteed cost of
insurance rates are generally more favorable for Insureds of lower ages than for
Insureds of higher ages, and are generally more favorable for female Insureds
than for male Insureds.
If a Policy loan is outstanding, and the Cash Surrender Value on a Monthly
Deduction Date is not enough to cover the entire Monthly Deduction and any loan
interest due for the Policy Month, we will notify you that the Policy is going
to terminate unless a sufficient payment is made within the 61-day grace period.
(SEE "THE POLICY: LAPSE AND GRACE PERIOD.")
TRANSFER CHARGES
A transfer fee of $10 may be imposed for any transfer in excess of 12 per
Policy Year. The transfer fee is deducted from the amount transferred.
SERIES FUND CHARGES
Each Portfolio of the Series Funds is responsible for all of its expenses.
The net assets of each Portfolio of the Series Funds will reflect deductions in
connection with the investment advisory fee and other expenses. For more
information concerning the investment advisory fee and other charges against the
Portfolios, see the prospectuses for the Series Funds, current copies of which
accompany this Prospectus.
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OTHER POLICY PROVISIONS
NOTICE TO US
All notices or requests under the Policy must be sent to us by written
notice, unless you have authorized us in writing to acknowledge Telephone
Transactions from you. Written notices to us are not effective until our receipt
at this address: Companion Life Insurance Company, Variable Life Service
Department, P.O. Box 3664, Omaha, Nebraska 68103-0664. Our toll-free telephone
number is 800-238-9354.
ENTIRE CONTRACT
The entire contract is the Policy, any riders, endorsements and amendments,
and the signed application. All statements made in the application will, in the
absence of fraud, be deemed representations and not warranties. We will not use
any statement to contest the Policy or deny a claim unless it is in the
application. Any change of the Policy requires the written consent of an
executive officer. No agent has the authority to change this contract or waive
any of its terms.
RIGHT TO EXAMINE
If you are not satisfied with your Policy, you may return it to us or our
agent within 10 days after you receive the Policy or 45 days after you signed
the application, whichever is later. We will cancel your Policy as of the date
any insurance became effective and refund the premiums paid within seven days
after we receive the returned policy.
DELAY OF PAYMENTS
We will usually pay any amounts payable from the Variable Account as a
Policy loan, partial withdrawal or Cash Surrender within 7 days after we receive
your written request in a form satisfactory to us. We can postpone such payments
or any transfers of amounts between Subaccounts or into the Fixed Account or the
Loan Account if: (i) the New York Stock Exchange ("NYSE") is closed for other
than customary weekend and holiday closings; (ii) trading on the NYSE is
restricted; (iii) an emergency exists as determined by the SEC, as a result of
which it is not reasonably practical to dispose of securities, or not reasonably
practical to determine the value of the Net Assets of the Variable Account; or
(iv) the SEC permits delay for the protection of security holders. The
applicable rules of the Securities and Exchange Commission will govern as to
whether the conditions in (iii) or (iv) exist. We may defer payment of Policy
loans, partial withdrawals or a Cash Surrender from the Fixed Account for up to
six months from the date we receive your written request.
CHANGE OF OWNERSHIP AND ASSIGNMENT
You may name a new owner of this Policy or pledge it as collateral by
assigning it. The assignment must be in writing. No assignment will be binding
on us until we record and acknowledge it. We are not responsible for the
validity or effect of an assignment of this Policy. The rights of any
Beneficiary will be subject to a collateral assignment. If the Beneficiary of
this Policy is irrevocable, a change of ownership or a collateral assignment may
be made only by joint written request from you and the irrevocable Beneficiary.
BENEFICIARY
The Beneficiary is named in the Policy application and may be changed,
unless the Beneficiary is irrevocable. (SEE "BENEFICIARY CHANGE.")
BENEFICIARY CHANGE
To change a Beneficiary, send us a written request. When recorded and
acknowledged by us, the change will be effective as of the date you signed the
request. The change will not apply to any payments made or other action taken by
us before recording. If the Beneficiary is irrevocable, you may change the
Beneficiary only by joint written request from you and the irrevocable
Beneficiary.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, all payments and
benefits under the Policy will be those which the premiums would have purchased
at the correct age and sex.
SUICIDE
We will not pay the Death Benefit if the Insured's death results from
suicide, while sane or insane, within two years from the date of issue. Instead
we will pay the sum of the premiums paid since issue less any loans and unpaid
loan interest and less any partial withdrawals.
We will not pay that portion of the Death Benefit resulting from an increase
in Specified Amount if the Insured's death results from suicide, while sane or
insane, within two years from the effective date of the increase. Instead we
will pay the sum of the premiums paid for the increase.
INCONTESTABILITY
We will not contest the validity of the Policy after it has been in force
during the lifetime of the Insured for two years from the date of issue.
We will not contest the validity of an increase in Specified Amount after
the Policy has been in force during the lifetime of the Insured for two years
from the effective date of the increase. Any contest of an increase in Specified
Amount will be based on the application for that increase.
REINSTATEMENT
If this policy lapses, you may reinstate it within five years of the date of
lapse and prior to the maturity date, subject to the following: (i) we receive a
written application signed by you and the Insured; (ii) we receive evidence of
insurability satisfactory to us; (iii) we receive payment of an amount large
enough to continue this Policy in force for three months; (iv) re-establishment
of surrender charges, if any, measured from the original date of issue; and (iv)
repayment or reinstatement of any outstanding Policy loan along with unpaid loan
interest from the date of lapse. The effective date of reinstatement will be the
date we approve the application for reinstatement.
The Specified Amount of the reinstated Policy may not exceed the Specified
Amount at the time of lapse. The Accumulation Value on the effective date of
reinstatement will reflect (I) the Accumulation Value at the time of lapse,
except that the value in the Loan Account may be repaid prior to reinstatement;
less (ii) the Monthly Deduction for the current month.
NONPARTICIPATING
The Policy does not share in our surplus earnings or profits. No dividends
are paid by us on this Policy.
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TAX MATTERS
GENERAL
The following is a discussion of federal income tax considerations relating
to the Policy. It is based upon our understanding of laws as they now exist and
are currently interpreted by the Internal Revenue Service ("IRS"). These laws
are complex, and tax results may vary among individuals. If you contemplate the
purchase of or exercise of elections under the Policy, you are encouraged to
seek independent competent tax advice.
LIFE INSURANCE QUALIFICATION
Section 7702 of the Internal Revenue Code of 1986, as amended ("Code")
defines a life insurance contract for Federal income tax purposes. The Section
7702 definition can be met if a life insurance contract satisfies either one of
two tests set forth in that section. The manner in which these tests should be
applied to certain features of the Policy is not directly addressed by Section
7702 or proposed regulations issued under that section. The presence of these
Policy features, the absence of final regulations, and the lack of other
pertinent interpretations of Section 7702, thus creates some uncertainty about
the application of Section 7702 to the Policy.
Nevertheless, we believe it is reasonable to conclude that the Policy
qualifies as a life insurance contract for federal tax purposes, so that:
o the death benefit should be fully excludable from the gross income of the
Beneficiary under Section 101(a)(1) of the Code; and
o you should not be considered in constructive receipt of the cash surrender
value, including any increases, unless and until it is distributed from the
Policy.
If a Policy were determined not to be a life insurance contract for
purposes of Section 7702, such Policy would not provide most of the tax
advantages normally provided by a life insurance contract. We thus reserve the
right to make changes in the Policy if such changes are deemed necessary to
attempt to assure its qualification as a life insurance contract for tax
purposes.
TAX TREATMENT OF LOANS AND OTHER DISTRIBUTIONS
Federal tax law establishes a class of life insurance policies referred to
as modified endowment contracts. In almost all cases, this Policy will be a
modified endowment contract. (SEE, HOWEVER, THE DISCUSSION BELOW IN THIS SECTION
ON A POLICY ISSUED IN EXCHANGE FOR ANOTHER LIFE INSURANCE POLICY.) Except as
specifically noted, the remainder of this discussion assumes that this Policy
will be a modified endowment contract. Loans and partial withdrawals from, as
well as collateral assignments of, modified endowment contracts will be treated
as distributions to you. All pre-death distributions (including loans, partial
withdrawals and collateral assignments) from these Policies will be included in
gross income on an income-first basis to the extent of any income in the Policy
immediately before the distribution.
The law also imposes a 10% penalty tax on pre-death distributions (including
loans, collateral assignments, partial withdrawals and complete surrenders) from
modified endowment contracts to the extent they are included in income, unless
such amounts are distributed on or after the taxpayer attains age 59 1/2,
because the taxpayer is disabled, or as substantially equal periodic payments
over the taxpayer's life (or life expectancy) or over the joint lives (or joint
life expectancies) of the taxpayer and his or her Beneficiary. Furthermore, if
the loan interest is capitalized by adding the amount due to the balance of the
loan, the amount of the capitalized interest will be treated as an additional
distribution subject to income tax as well as the 10% penalty tax, if
applicable, to the extent of income in the Policy.
Any Policy issued in exchange for a modified endowment contract will be
subject to the tax treatment accorded to modified endowment contracts. However,
we believe that any Policy issued in exchange for a life insurance policy that
is not a modified endowment contract will generally not be treated as a modified
endowment contract if the death benefit of the Policy is greater than or equal
to the death benefit of the policy being exchanged. The payment of any premiums
at the time of or after the exchange may, however, cause the Policy to become a
modified endowment contract. You may, of course, choose not to exercise the
right to make additional payments in order to prevent a Policy from being
treated as a modified endowment Policy.
If a Policy that was not a modified endowment contract at issue subsequently
becomes a modified endowment contract, distributions made during the Policy year
in which it becomes a modified endowment contract, distributions in any
subsequent Policy year and distributions within two years before the Policy
becomes a modified endowment contract will be subject to the tax treatment
described above. This means that a distribution from a Policy that is not a
modified endowment contract could later become taxable as a distribution from a
modified endowment contract. In addition, regulations or other interpretations
may be issued which will apply similar tax treatment to other distributions made
in anticipation of a Policy becoming a modified endowment contract.
SPECIAL TREATMENT OF POLICY LOAN INTEREST
If there is any borrowing against the Policy, the interest paid on loans may
not be tax deductible.
AGGREGATION OF MODIFIED ENDOWMENT CONTRACTS
In the case of a pre-death distribution (including a loan, partial
withdrawal, collateral assignment or full surrender) from a Policy that is
treated as a modified endowment contract, a special aggregation requirement may
apply for purposes of determining the amount of the income on the Policy.
Specifically, if we or any of our affiliates issue to the same Policy Owner more
than one modified endowment contract within a calendar year, then for purposes
of measuring the income on the Policy with respect to a distribution from any of
those policies, the income for all those policies will be aggregated and
attributed to that distribution.
OTHER POLICY OWNER TAX MATTERS
Federal and state estate, inheritance and other tax consequences of
ownership or receipt of proceeds under the Policy depend upon your or the
beneficiary's individual circumstances.
Section 817(h) of the Code requires the investments of the Variable Account
to be "adequately diversified" in accordance with Treasury Regulations for the
Policy to qualify as a life insurance contract under Section 7702 of the Code.
Failure to comply with the diversification requirements may result in the Policy
not qualifying as life insurance under the Code, which may subject you to
immediate taxation on the incremental increases in Accumulation Value of the
Policy plus the cost of insurance protection for the year. Regulations
specifying the diversification requirements have been issued by the Department
of Treasury, and we believe the Policy complies fully with such requirements.
In connection with the issuance of the diversification regulations, the
Treasury Department stated that it anticipates the issuance of regulations or
rulings prescribing the circumstances in which your control of the investments
of the Variable Account may cause you, rather than us, to be treated as the
owner of the assets in the Variable Account. To date, no such regulations or
guidance has been issued. If you are considered the owner of the assets of the
Variable Account, income and gains from the Account would be included in your
gross income.
The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it
determined that the owners were not owners of separate account assets. For
example, you have additional flexibility in allocating Policy Premium and
Accumulation Values. These differences could result in you being treated as the
owner of a pro rata share of the assets of the Variable Account. In addition, we
do not know what standards will be set forth in the regulations or rulings which
the Treasury may issue. We therefore reserve the right to modify the Policy as
necessary to attempt to prevent you from being considered the owner of the
assets of the Variable Account.
The Policy may be used in various arrangements, including non-qualified
deferred compensation or salary continuance plans, split dollar insurance plans,
executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree
medical benefit plans and others. The tax consequences of such plans may vary
depending on the particular facts and circumstances of each individual
arrangement. Therefore, if you are contemplating the use of the Policy in any
arrangement the value of which depends in part on its tax consequences, you
should be sure to consult a qualified tax advisor regarding the tax attributes
of the particular arrangement and the suitability of this product for the
arrangement.
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MANAGEMENT
Our Directors and senior officers are:
DIRECTORS
Thomas J. Skutt Chairman (Mutual of Omaha Companies Executive)
Ernest B. Johnston Vice-Chairman (Mutual of Omaha Companies Executive)
John W. Weekly Vice-Chairman (Mutual of Omaha Companies Executive)
William G. Campbell Director (Private Practice Attorney, Campbell Law Offices)
Samuel L. Foggie Director (Retired Banking and Finance Industry Executive)
M. Jane Huerter Director (Mutual of Omaha Companies Executive)
Charles T. Locke III Director (Private Practice Attorney, Locke & Herbert)
John L. Maginn Director (Mutual of Omaha Companies Executive)
Thomas T. Sawicz Director (Mutual of Omaha Companies Executive)
Oscar S. Straus Director (President, Daniel and Florence Guggenheim
Foundation)
John A. Sturgeon Director (Mutual of Omaha Companies Executive)
Daniel R. Varona Director (Private Practice Attorney)
OFFICERS
Ernest B. Johnston President & Chief Executive Officer
Fred C. Boddy Vice President, Treasurer & Assistant Secretary
Linda Goodwin, MD Vice President & Senior Medical Director
Bruce Henricks, MD Vice President & Senior Medical Director
Denise P. Power Vice President, Underwriting
M. Jane Huerter Vice President & Secretary
Burton D. Jay Vice President & Actuary
John L. Maginn Vice President & Assistant Treasurer
Russ Wiltgen Vice President & Actuary
James O'Connor Vice President & Compliance Officer
* Business address for all directors and officers is Mutual of Omaha Plaza,
Omaha, Nebraska 68175.
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OTHER INFORMATION
REPORTS TO YOU
We will send you a statement at least annually showing your Policy's death
benefit, Accumulation Value and any outstanding Policy loan balance. We will
also confirm Policy loans, Subaccount transfers, lapses, surrenders and other
Policy transactions as they occur. If you have Accumulation Value in the
Variable Account you will receive such additional periodic reports as may be
required by the SEC.
VOTING RIGHTS
We own the Series Fund shares held in the Variable Account and have the
right to vote those shares. However, to the extent required by applicable
Federal securities law, we will give you, as Policy Owner, the right to instruct
us how to vote the shares that are attributable to your Policy.
The Policy Owners who are entitled to give voting instructions and the
number of shares attributable to their Policies will be determined as of the
record date for the meeting. All Series Fund shares held in any Subaccount of
the Variable Account, or in any other separate account of ours or an affiliate,
the policyholders of which have rights of instruction with respect to the Series
Fund shares, and for which timely instructions are not received, will be voted
in the same proportion as (i) the aggregate cash value of policies giving
instructions, respectively, to vote, for, against, or withhold votes on a
proposition, bears to (ii) the total Accumulation Value in that Subaccount for
all policies for which voting instructions are received. No voting privileges
apply with respect to Accumulation Value removed from the Variable Account as a
result of a Policy loan.
If required by State insurance authorities, we may disregard voting
instructions if they would require that shares be voted to cause a change in the
investment objectives of the portfolios of the Series Funds or to approve or
disapprove an investment advisory or underwriting contract for a portfolio. In
addition, we may disregard voting instructions in favor of changes, initiated by
a Policy Owner or an Eligible Fund's Board of Trustees, in the investment
policy, investment adviser or principal underwriter of the Series Fund portfolio
if we (i) reasonably disapprove of the changes and (ii) in the case of a change
in investment policy or investment adviser, make a good faith determination that
the proposed change is contrary to State law or is prohibited by State
regulatory authorities or that the change would be inconsistent with a
Subaccount's investment objectives or would result in the purchase of securities
which vary from the general quality and nature of investments and investment
techniques utilized by other separate accounts of ours or of an affiliated life
insurance company, which separate accounts have investment objectives similar to
those of the Subaccount. If we do disregard voting instructions, a summary of
that action and the reasons for it will be included in the next semi-annual
report to Policy Owners.
DISTRIBUTION OF THE POLICIES
Mutual of Omaha Investor Services ("MOIS"), Mutual of Omaha Plaza, Omaha,
Nebraska 68175, is the principal underwriter of the Policy. MOIS is a 100% owned
subsidiary of Mutual of Omaha Insurance Company. MOIS is registered as a
broker-dealer with the SEC and is a member of the National Association of
Securities Dealers, Inc. ("NASD"). MOIS contracts with one or more registered
broker-dealers ("Distributors") to offer and sell the Policy. All persons
selling the Policy will be registered representatives of the Distributors, and
will also be licensed as insurance agents to sell variable life insurance.
Commissions paid to Distributors may be up to 7% of the Premium paid.
STATE REGULATION
We are subject to regulation and supervision by the Insurance Department of
the State of New York, which periodically examines our affairs. We are also
subject to the insurance laws and regulations of all jurisdictions where we are
authorized to do business. The Policy has been approved by the Insurance
Department of the State of New York and other jurisdictions.
We submit annual statements of our operations, including financial
statements, to the insurance departments of the various jurisdictions in which
we do business, for the purpose of determining solvency and compliance with
local insurance laws and regulations.
LEGAL MATTERS
We know of no material legal proceedings pending to which the Variable
Account is a party or which would materially affect the Variable Account. We are
not involved in any litigation of material importance to our total assets or to
the Variable Account. Legal matters in connection with the Policy have been
passed upon by our Law Staff.
INDEPENDENT AUDITORS
Deloitte and Touche, 2000 First National Center, Omaha, Nebraska, are the
independent auditors for the Variable Account and us. The services provided to
the Variable Account include primarily the examination of the Variable Account's
financial statements and the review of filings made with the SEC.
REGISTRATION STATEMENT
This prospectus omits certain information contained in the Registration
Statement filed with the SEC. Copies of such additional information may be
obtained from the SEC upon payment of the prescribed fee.
- -----------------------------------------------------------
ILLUSTRATIONS
DEATH BENEFITS, CASH SURRENDER VALUE AND ACCUMULATED PREMIUMS
The tables in this Section illustrate how the Policy operates. They show how
the Death Benefit, Cash Surrender Value, and Accumulation Value could vary over
an extended period of time assuming hypothetical gross rates of return. (i.e.
investment income and capital gains and losses, realized or unrealized) for the
Variable Account equal to constant after tax annual rates of 0%, 6%, and 12%.
The tables are based on an initial premium of $20,000. A male age 55, 65 and 75
with specified amounts of $43,200, $36,867, and $29,134, respectively, are
illustrated for this Policy. The Insureds are assumed to be preferred rate
class. Values are given based on current and guaranteed Policy charges. These
tables may assist in comparison of Death Benefits, Cash Surrender Values and
Accumulation Values with those under other variable life insurance policies that
may be issued by us or other companies.
Death Benefits, Cash Surrender Values, and Accumulation Values for a Policy
would be different from the amounts shown if the actual gross rates of return
averaged 0%, 6% or 12%, but varied above and below that average for the period,
if the initial premium was paid in another amount, if additional payments were
made, or if any Policy loan or partial withdrawal was made during the period of
time illustrated. They would also be different depending on the allocation of
Accumulation Value among the Variable Account's Subaccounts, if the actual gross
rates of return averaged 0%, 6% or 12%, but varied above and below that average
for the period.
The amounts for the Death Benefit, Cash Surrender Value, and Accumulation
Value shown in the tables reflect the fact that an expense charge and a charge
for the cost of insurance are deducted from the Accumulation Value on each
Monthly Deduction Date. The Cash Surrender Values shown in the tables reflect
the fact that a Surrender Charge is deducted from the Accumulation Value upon
surrender or lapse during the first nine years following each premium payment.
The amounts shown in the tables take into account an average daily charge equal
to an annual charge 0.89% of the average daily net assets of the Series Funds
for the investment advisory fees and operating expenses incurred by the Series
Funds The gross annual investment return rates of 0%, 6%, and 12% on the Fund's
assets are equal to net annual investment return rates of -0.89%, 5.11%, 11.11%,
respectively.
The hypothetical rates of return shown in the tables do not reflect any tax
charges attributable to the Variable Account, since no such charges are
currently made. If any such charges are imposed in the future, the gross annual
rate of return would have to exceed the rates shown by an amount sufficient to
cover the tax charges, in order to produce the Death Benefits, Cash Surrender
Values and Accumulation Values illustrated.
The second column of each table shows the amount which would accumulate if
the initial premium of $20,000 were invested to earn interest, after taxes, of
5% per year, compounded annually.
Upon request, we will provide a comparable illustration based upon the
proposed Insured's actual age, sex and underwriting classification, the
specified amount, the proposed amount and frequency of premium payments and any
available riders requested.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.11% NET)
Male issue age 55 Initial Premium $20,000
Preferred Class Face Amount $52,000
CURRENT CHARGES * GUARANTEED CHARGES **
------------------------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 21,731 19,831 52,000 21,523 19,623 52,000
2 22,505 23,613 21,713 52,000 23,177 21,277 52,000
3 23,153 25,657 23,757 52,000 24,976 23,076 52,000
4 24,310 27,878 26,078 52,000 26,939 25,139 52,000
5 25,526 30,292 28,792 52,000 29,086 27,586 52,000
6 26,802 32,914 31,714 52,000 31,440 30,240 52,000
7 28,142 35,764 34,864 52,000 34,028 33,128 52,000
8 29,549 38,860 38,260 52,000 36,880 36,280 52,000
9 31,027 42,254 42,954 52,395 40,036 39,736 52,000
10 32,578 45,987 45,987 56,105 43,540 43,540 53,119
11 34,207 50,265 50,265 60,318 47,575 47,575 57,090
12 35,917 54,940 54,940 65,379 51,972 51,972 61,847
13 37,713 60,050 60,050 70,859 56,765 56,765 66,983
14 39,599 65,636 65,636 76,794 61,990 61,990 72,528
15 41,579 71,741 71,741 83,220 67,684 67,684 78,514
16 43,657 78,414 78,414 90,176 73,891 73,891 84,974
17 45,840 85,708 85,708 96,850 80,690 80,690 91,180
18 48,132 93,680 93,680 103,984 88,151 88,151 97,848
19 50,539 102,395 102,395 111,611 96,352 96,352 105,024
20 53,066 112,000 112,000 119,840 105,390 105,390 112,768
25 67,727 175,570 175,570 184,348 165,208 165,208 173,468
35 110,320 427,275 427,275 448,639 391,185 391,185 410,744
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of
insurance rates and expense charges.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.11% NET)
Male issue age 55 Initial Premium $20,000
Preferred Class Face Amount $52,000
CURRENT CHARGES * GUARANTEED CHARGES **
------------------------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 20,558 18,658 52,000 20,347 18,447 52,000
2 22,505 21,132 19,232 52,000 20,677 18,777 52,000
3 23,153 21,721 19,821 52,000 20,988 19,088 52,000
4 24,310 22,327 20,527 52,000 21,279 19,479 52,000
5 25,526 22,950 21,450 52,000 21,545 20,045 52,000
6 26,802 23,590 22,390 52,000 21,782 20,582 52,000
7 28,142 24,248 23,348 52,000 21,982 21,082 52,000
8 29,549 24,925 24,325 52,000 22,140 21,540 52,000
9 31,027 25,620 25,320 52,000 22,246 21,946 52,000
10 32,578 26,335 26,335 52,000 22,291 22,291 52,000
11 34,207 27,203 27,203 52,000 22,357 22,357 52,000
12 35,917 28,099 28,099 52,000 22,350 22,350 52,000
13 37,713 29,025 29,025 52,000 22,261 22,261 52,000
14 39,599 29,982 29,982 52,000 22,077 22,077 52,000
15 41,579 30,970 30,970 52,000 21,781 21,781 52,000
16 43,657 31,991 31,991 52,000 21,348 21,348 52,000
17 45,840 33,045 33,045 52,000 20,749 20,749 52,000
18 48,132 34,134 34,134 52,000 19,944 19,944 52,000
19 50,539 35,259 35,259 52,000 18,885 18,885 52,000
20 53,066 36,421 36,421 52,000 17,519 17,519 52,000
25 67,727 42,831 42,831 52,000 3,303 3,303 52,000
35 110,320 59,736 59,736 62,723 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.89% NET)
Male issue age 55 Initial Premium $20,000
Preferred Class Face Amount $52,000
CURRENT CHARGES * GUARANTEED CHARGES **
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 19,384 17,484 52,000 19,170 17,270 52,000
2 22,505 18,788 16,888 52,000 18,318 16,418 52,000
3 23,153 18,210 16,310 52,000 17,440 15,540 52,000
4 24,310 17,649 15,849 52,000 16,532 14,732 52,000
5 25,526 17,106 15,606 52,000 15,589 14,089 52,000
6 26,802 16,580 15,380 52,000 14,603 13,403 52,000
7 28,142 16,069 15,169 52,000 13,566 12,666 52,000
8 29,549 15,575 14,975 52,000 12,467 11,867 52,000
9 31,027 15,095 14,795 52,000 11,293 10,993 52,000
10 32,578 14,631 14,631 52,000 10,032 10,032 52,000
11 34,207 14,250 14,250 52,000 8,708 8,708 52,000
12 35,917 13,880 13,880 52,000 7,265 7,265 52,000
13 37,713 13,519 13,519 52,000 5,688 5,688 52,000
14 39,599 13,167 13,167 52,000 3,958 3,958 52,000
15 41,579 12,825 12,825 52,000 2,047 2,047 52,000
16 43,657 12,491 12,491 52,000 *** *** ***
17 45,840 12,166 12,166 52,000 *** *** ***
18 48,132 11,850 11,850 52,000 *** *** ***
19 50,539 11,542 11,542 52,000 *** *** ***
20 53,066 11,241 11,241 52,000 *** *** ***
25 67,727 9,854 9,854 52,000 *** *** ***
35 110,320 7,571 7,571 52,000 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges. *** The Policy is lapsed.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.11% NET)
Male issue age 65 Initial Premium $20,000
Preferred Class Face Amount $36,867
CURRENT CHARGES * GUARANTEED CHARGES **
------------------------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 21,731 19,831 36,867 21,430 19,530 36,867
2 22,505 23,613 21,713 36,867 22,997 21,097 36,867
3 23,153 25,657 23,757 36,867 24,726 22,826 36,867
4 24,310 27,878 26,078 36,867 26,644 24,844 36,867
5 25,526 30,292 28,792 36,867 28,785 27,285 36,867
6 26,802 32,924 31,724 37,863 31,192 29,992 36,867
7 28,142 35,814 34,914 40,470 33,904 33,004 38,311
8 29,549 38,973 38,373 43,260 36,894 36,294 40,953
9 31,027 42,432 42,132 46,251 40,170 39,870 43,785
10 32,578 46,232 46,232 49,468 43,766 43,766 46,830
11 34,207 50,615 50,615 53,146 47,916 47,916 50,312
12 35,917 55,396 55,396 58,166 52,442 52,442 55,064
13 37,713 60,608 60,608 63,638 57,376 57,376 60,245
14 39,599 66,287 66,287 69,602 62,752 62,752 65,890
15 41,579 72,472 72,472 76,096 68,607 68,607 72,038
16 43,657 79,213 79,213 83,174 74,978 74,978 78,727
17 45,840 86,581 86,581 90,910 81,902 81,902 85,997
18 48,132 94,634 94,634 99,366 89,420 89,420 93,891
19 50,539 103,437 103,437 108,609 97,572 97,572 102,450
20 53,066 113,058 113,058 118,711 106,401 106,401 111,721
25 67,727 176,372 176,372 185,191 162,450 162,450 170,573
35 110,320 440,945 440,945 440,945 400,215 400,215 400,215
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.11% NET)
Male issue age 65 Initial Premium $20,000
Preferred Class Face Amount $36,867
CURRENT CHARGES * GUARANTEED CHARGES **
------------------------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 20,558 18,658 36,867 20,248 18,348 36,867
2 22,505 21,132 19,232 36,867 20,468 18,568 36,867
3 23,153 21,721 19,821 36,867 20,658 18,758 36,867
4 24,310 22,327 20,527 36,867 20,813 19,013 36,867
5 25,526 22,950 21,450 36,867 20,927 19,427 36,867
6 26,802 23,590 22,390 36,867 20,990 19,790 36,867
7 28,142 24,248 23,348 36,867 20,992 20,092 36,867
8 29,549 24,925 24,325 36,867 20,917 20,317 36,867
9 31,027 25,620 25,320 36,867 20,747 20,447 36,867
10 32,578 26,335 26,335 36,867 20,463 20,463 36,867
11 34,207 27,203 27,203 36,867 20,127 20,127 36,867
12 35,917 28,099 28,099 36,867 19,368 19,368 36,867
13 37,713 29,025 29,025 36,867 18,967 18,967 36,867
14 39,599 29,982 29,982 36,867 18,078 18,078 36,867
15 41,579 30,970 30,970 36,867 16,915 16,915 36,867
16 43,657 31,991 31,991 36,867 15,410 15,410 36,867
17 45,840 33,045 33,045 36,867 13,456 13,456 36,867
18 48,132 34,134 34,134 36,867 10,914 10,914 36,867
19 50,539 35,259 35,259 37,022 7,591 7,591 36,867
20 53,066 36,421 36,421 38,242 3,229 3,229 36,867
25 67,727 42,831 42,831 44,973 *** *** ***
35 110,320 61,367 61,367 61,367 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-.89% NET)
Male issue age 65 Initial Premium $20,000
Preferred Class Face Amount $36,867
CURRENT CHARGES * GUARANTEED CHARGES **
------------------------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 19,384 17,484 36,867 19,066 17,166 36,867
2 22,505 18,788 17,888 36,867 18,084 16,184 36,867
3 23,153 18,210 16,310 36,867 17,045 15,145 36,867
4 24,310 17,649 16,849 36,867 15,941 14,141 36,867
5 25,526 17,106 15,606 36,867 14,757 13,257 36,867
6 26,802 16,580 15,380 36,867 13,475 12,275 36,867
7 28,142 16,069 15,169 36,867 12,073 11,173 36,867
8 29,549 15,575 15,975 36,867 10,522 9,922 36,867
9 31,027 15,095 14,795 36,867 8,785 8,485 36,867
10 32,578 14,631 14,631 36,867 6,825 6,825 36,867
11 34,207 14,250 14,250 36,867 4,621 4,621 36,867
12 35,917 13,880 13,880 36,867 2,091 2,091 36,867
13 37,713 13,519 13,519 36,867 *** *** ***
14 39,599 13,167 13,167 36,867 *** *** ***
15 41,579 12,825 12,825 36,867 *** *** ***
16 43,657 12,491 12,491 36,867 *** *** ***
17 45,840 12,166 12,166 36,867 *** *** ***
18 48,132 11,850 11,850 36,867 *** *** ***
19 50,539 11,542 11,542 36,867 *** *** ***
20 53,066 11,241 11,241 36,867 *** *** ***
25 67,727 9,854 9,854 36,867 *** *** ***
35 110,320 7,571 7,571 36,867 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.11% NET)
Male issue age 75 Initial Premium $20,000
Preferred Class Face Amount $29,134
CURRENT CHARGES * GUARANTEED CHARGES **
------------------------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 21,731 19,831 29,134 21,278 19,378 29,134
2 22,505 23,613 21,713 29,134 22,723 20,823 29,134
3 23,153 25,657 23,757 29,134 24,383 22,483 29,134
4 24,310 27,892 26,092 29,287 26,322 24,522 29,134
5 25,526 30,376 28,876 31,895 28,609 27,109 30,040
6 26,802 33,067 31,867 34,720 31,144 29,944 32,701
7 28,142 35,980 35,080 37,779 33,888 32,988 35,582
8 29,549 39,129 38,529 41,086 36,854 36,254 38,696
9 31,027 42,530 42,230 44,656 40,057 39,757 42,060
10 32,578 46,223 46,223 48,535 43,511 43,511 45,687
11 34,207 50,523 50,523 53,049 47,418 47,418 49,789
12 35,917 55,222 55,222 57,983 51,642 51,642 54,224
13 37,713 60,359 60,359 63,377 56,203 56,203 59,013
14 39,599 65,973 65,973 69,271 61,126 61,126 64,182
15 41,579 72,109 72,109 75,715 66,432 66,432 69,753
16 43,657 78,816 78,816 82,757 72,145 72,145 75,753
17 45,840 86,147 86,147 89,593 78,480 78,480 81,620
18 48,132 94,160 94,160 96,985 85,536 85,536 88,102
19 50,539 102,919 102,919 104,977 93,432 93,432 95,301
20 53,066 112,706 112,706 113,833 102,317 102,317 103,341
25 67,727 180,279 180,279 180,279 163,662 163,662 163,662
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.11% NET)
Male issue age 75 Initial Premium $20,000
Preferred Class Face Amount $29,134
CURRENT CHARGES * GUARANTEED CHARGES **
------------------------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 20,558 18,658 29,134 20,078 18,178 29,134
2 22,505 21,132 19,232 29,134 20,104 18,204 29,134
3 23,153 21,721 19,821 29,134 20,068 18,168 29,134
4 24,310 22,327 20,527 29,134 19,961 18,165 29,134
5 25,526 22,950 21,450 29,134 19,767 18,285 29,134
6 26,802 23,590 22,390 29,134 19,464 18,296 29,134
7 28,142 24,248 23,348 29,134 19,019 18,163 29,134
8 29,549 24,925 24,325 29,134 18,389 17,838 29,134
9 31,027 25,620 25,320 29,134 17,516 17,252 29,134
10 32,578 26,335 26,335 29,134 16,320 16,320 29,134
11 34,207 27,203 27,203 29,134 14,767 14,767 29,134
12 35,917 28,099 28,099 29,504 12,654 12,654 29,134
13 37,713 29,025 29,025 30,477 9,784 9,784 29,134
14 39,599 29,982 29,982 31,481 5873 5873 29,134
15 41,579 30,970 30,970 32,519 515 515 29,134
16 43,657 31,991 31,991 33,590 *** *** ***
17 45,840 33,045 33,045 34,367 *** *** ***
18 48,132 34,134 34,134 35,158 *** *** ***
19 50,539 35,272 35,272 35,977 *** *** ***
20 53,066 36,540 36,540 36,905 *** *** ***
25 67,727 44,281 44,281 44,281 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.89% NET)
Male issue age 75 Initial Premium $20,000
Preferred Class Face Amount $29,134
CURRENT CHARGES * GUARANTEED CHARGES **
------------------------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 19,384 17,484 29,134 18,880 17,980 29,134
2 22,505 18,788 16,888 29,134 17,639 15,739 29,134
3 23,153 18,210 16,310 29,134 16,254 14,354 29,134
4 24,310 17,649 15,849 29,134 14,691 13,891 29,134
5 25,526 17,106 15,606 29,134 12,911 11,411 29,134
6 26,802 16,480 15,380 29,134 10,857 10,657 29,134
7 28,142 16,069 15,169 29,134 8,451 8,551 29,134
8 29,549 15,575 14,975 29,134 5,590 5,990 29,134
9 31,027 15,095 14,795 29,134 2,136 2,836 29,134
10 32,578 14,631 14,631 29,134 *** *** ***
11 34,207 14,250 14,250 29,134 *** *** ***
12 35,917 13,880 13,880 29,134 *** *** ***
13 37,713 13,519 13,519 29,134 *** *** ***
14 39,599 13,167 13,167 29,134 *** *** ***
15 41,579 12,825 12,825 29,134 *** *** ***
16 43,657 12,491 12,491 29,134 *** *** ***
17 45,840 12,166 12,166 29,134 *** *** ***
18 48,132 11,850 11,850 29,134 *** *** ***
19 50,539 11,542 11,542 29,134 *** *** ***
20 53,066 11,241 11,241 29,134 *** *** ***
25 67,727 9,854 9,854 29,134 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. Theses values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.11% NET)
Male issue age 65 Initial Premium $20,000
Standard Class Specified Amount $36,867
CURRENT CHARGES * GUARANTEED CHARGES **
----------------------------- ----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCUM. SURRENDER DEATH ACCUM. SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $21,000 $21,601 $19,701 $36,867 $21,430 $19,530 $36,867
2 22,505 23,331 21,431 36,867 22,997 21,097 36,867
3 23,153 25,198 23,298 36,867 24,726 22,826 36,867
4 24,310 27,217 25,417 36,867 26,644 24,844 36,867
5 25,526 29,438 27,938 36,867 28,785 27,285 36,867
6 26,802 31,936 30,736 36,867 31,192 29,992 36,867
7 28,142 34,732 33,832 39,248 33,904 33,004 38,311
8 29,549 37,796 37,196 41,953 36,894 36,294 40,953
9 31,027 41,151 40,851 44,855 40,170 39,870 43,785
10 32,578 44,836 44,836 47,974 43,766 43,766 46,830
11 34,207 49,086 49,086 51,541 47,916 47,916 50,312
12 35,917 53,723 53,723 56,409 52,442 52,442 55,064
13 37,713 58,778 58,778 61,717 57,376 57,376 60,245
14 39,599 64,286 64,286 67,500 62,752 62,752 65,890
15 41,579 70,284 70,284 73,798 68,607 68,607 72,038
16 43,657 76,810 76,810 80,650 74,978 74,978 78,727
17 45,840 83,903 83,903 88,098 81,902 81,902 85,997
18 48,132 91,605 91,605 96,185 89,420 89,420 93,891
19 50,539 99,956 99,956 104,953 97,572 97,572 102,450
20 53,066 109,001 109,001 114,451 106,401 106,401 111,721
25 67,727 167,248 167,248 175,610 162,450 162,450 170,573
35 110,320 413,849 413,849 413849 400,215 400,215 400,215
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the Owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. These values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.11% NET)
Male issue age 65 Initial Premium $20,000
Standard Class Specified Amount $36,867
CURRENT CHARGES * GUARANTEED CHARGES **
----------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
POLICY AT 5% ACCUM. SURRENDER DEATH ACCUM. SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
--------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $21,000 $20,435 $18,535 $36,867 $20,248 $18,348 $36,867
2 22,505 20,879 18,979 36,867 20,468 18,568 36,867
3 23,153 21,333 19,433 36,867 20,658 18,758 36,867
4 24,310 21,796 19,996 36,867 20,813 19,013 36,867
5 25,526 22,270 20,770 36,867 20,927 19,427 36,867
6 26,802 22,754 21,554 36,867 20,990 19,790 36,867
7 28,142 23,249 22,349 36,867 20,992 20,092 36,867
8 29,549 23,754 23,154 36,867 20,917 20,317 36,867
9 31,027 24,271 23,971 36,867 20,747 20,447 36,867
10 32,578 24,798 24,798 36,867 20,463 20,463 36,867
11 34,207 25,528 25,528 36,867 20,127 20,127 36,867
12 35,917 26,280 26,280 36,867 19,368 19,368 36,867
13 37,713 27,054 27,054 36,867 18,967 18,967 36,867
14 39,599 27,850 27,850 36,867 18,078 18,078 36,867
15 41,579 28,670 28,670 36,867 16,915 16,915 36,867
16 43,657 29,515 29,515 36,867 15,410 15,410 36,867
17 45,840 30,384 30,384 36,867 13,456 13,456 36,867
18 48,132 31,278 31,278 36,867 10,914 10,914 36,867
19 50,539 32,199 32,199 36,867 7,591 7,591 36,867
20 53,066 33,147 33,147 36,867 3,229 3,229 36,867
25 67,727 38,329 38,329 40,246 *** *** ***
35 110,320 54,331 54,331 54,331 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the Owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. These values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
<TABLE>
<CAPTION>
COMPANION LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-.89% NET)
Male issue age 65 Initial Premium $20,000
Standard Class Specified Amount $36,867
CURRENT CHARGES * GUARANTEED CHARGES **
----------------------------- -----------------------------------
PREMIUMS
END OF ACCUMULATED CASH CASH
POLICY AT 5% ACCUM. SURRENDER DEATH ACCUM. SURRENDER DEATH
YEAR INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- PER YEAR ----- ----- ------- ----- ----- -------
-------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $21,000 $19,268 $17,438 $36,867 $19,066 $17,255 $36,867
2 22,505 18,563 16,800 36,867 18,084 16,366 36,867
3 23,153 17,884 16,185 36,867 17,045 15,426 36,867
4 24,310 17,230 15,679 36,867 15,941 14,506 36,867
5 25,526 16,599 15,354 36,867 14,757 13,650 36,867
6 26,802 15,992 15,033 36,867 13,475 12,666 36,867
7 28,142 15,407 14,714 36,867 12,073 11,530 36,867
8 29,549 14,843 14,398 36,867 10,522 10,206 36,867
9 31,027 14,300 14,086 36,867 8,785 8,654 36,867
10 32,578 13,777 13,777 36,867 6,825 6,825 36,867
11 34,207 13,373 13,373 36,867 4,621 4,621 36,867
12 35,917 12,981 12,981 36,867 2,091 2,091 36,867
13 37,713 12,600 12,600 36,867 *** *** ***
14 39,599 12,231 12,231 36,867 *** *** ***
15 41,579 11,872 11,872 36,867 *** *** ***
16 43,657 11,524 11,524 36,867 *** *** ***
17 45,840 11,186 11,186 36,867 *** *** ***
18 48,132 10,858 10,858 36,867 *** *** ***
19 50,539 10,540 10,540 36,867 *** *** ***
20 53,066 10,231 10,231 36,867 *** *** ***
25 67,727 8,817 8,817 36,867 *** *** ***
35 110,320 6,547 6,547 36,867 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the Owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. These values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
<PAGE>
- -----------------------------------------------------------
FINANCIAL STATEMENTS
[TO BE INCLUDED BY PRE-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT.]
<PAGE>
PART II - OTHER INFORMATION
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
The Bylaws of Companion Life, adopted by Companion's Stockholder's on
November 9, 1971 and amended on December 13, 1996, provides for indemnification
of a director, officer or employee to the full extent of the law. Generally, the
New York Business Corporation Act permits indemnification against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
if the indemnitee acted in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the corporation. However, no
indemnification shall be made in any type of action by or in the right of
Companion if the proposed indemnitee is adjudged to be liable for negligence or
misconduct in the performance of his or her duty to Companion, unless a court
determines otherwise.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of United
pursuant to the foregoing provisions, or otherwise, Companion has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification may be against public policy as expressed in the Act and may be,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by Companion of expenses incurred or paid
by a director, officer, or controlling person of Companion in the successful
defense of any action, suite or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, Companion will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
REPRESENTATION PURSUANT TO SECTION 26(E)
Companion Life Insurance Company represents that the fees and charges under
the Policy, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by
Companion Life Insurance Company.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement consists of the following papers and documents:
The facing sheet.
A reconciliation and tie of the information shown in the prospectus with the
items of Form N-8B-2.
The prospectus consisting of 38 pages.
The undertaking to file reports.
The Rule 484 Undertaking.
The Section 26(e) Representation.
The signatures.
Written consents of the following persons:
Independent Auditors (included in Exhibit 7) (to be filed by amendment)
M. Jane Huerter, Esquire (included in Exhibit 2) (to be filed by
amendment)
Burton D. Jay, F.S.A., M.A.A.A. (included in Exhibit 6) (to be filed by
amendment)
The following exhibits:
1.A. (1) Resolution of the Board of Directors of Companion Life Insurance
Company establishing the Variable Account.
(2) None.
(3)(a) Principal Underwriter Agreement by and between Companion, on its own
behalf and on behalf of the Variable Account, and Mutual of Omaha
Investor Services.
(b) Form of Broker/Dealer Supervision and Sales Agreement by and between
Mutual of Omaha Investor Services, Inc. and the Broker/Dealer. *
(c) Commission Schedule for Policies. *
(4) None.
(5)(a) Form of Policy for the ULTRALIFE modified single premium
variable life insurance policy.
(b) Form of Riders to the Policy.
(6)(a) Articles of Incorporation of Companion Life Insurance Company. *
(b) Bylaws of Companion Life Insurance Company.
(7) None.
(8)(a) Participation Agreement with the Alger American Fund. *
(b) Participation Agreement with the Insurance Management Series. *
(c) Participation Agreement with the Fidelity VIP Fund and Fidelity
VIP Fund II. *
(d) Participation Agreement with MFS Variable Insurance Trust. *
(e) Participation Agreement with the Scudder Variable Life Investment
Fund. *
(f) Participation Agreement with T. Rowe Price International Series, T.
Rowe Price Fixed Income Series, and T. Rowe Price Equity Series. *
(9) None.
(10) Form of Application for the Companion Life Insurance Company
ULTRALIFE Modified Single Premium Variable Life Insurance
Policy.
(11) Issuance, Transfer and Redemption Memorandum *
2. Opinion and Consent of Counsel. *
3. Not Applicable.
4. Not Applicable.
5. Not Applicable.
6. Opinion and Consent of Actuary. *
7. Consent of Independent Auditor. *
8. Consent of Outside Counsel.
9. Powers of Attorney. *
* To be filed by pre-effective amendment to this Registration Statement.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Registrant has caused this
Registration Statement to be signed on its behalf, in the City of Omaha and
State of Nebraska, on this 27TH day of January, 1997.
COMPANION LIFE SEPARATE ACCOUNT B
(Registrant)
COMPANION LIFE INSURANCE COMPANY
(Depositor)
/s/ M. Jane Huerter, by Kenneth W. Reitz *
By: M. Jane Huerter, Vice President and Secretary
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the duties indicated:
SIGNATURES TITLE DATE
_____*____________________ Chairman of the Board January 27, 1997
-
Thomas J. Skutt
_____*____________________ Vice-Chairman of the Board January 27, 1997
-
John W. Weekly
_____*____________________ Vice-Chairman of the Board, January 27, 1997
-
Ernest B. Johnston President and Chief Executive
Officer January 27, 1997
_____*____________________
Fred C. Boddy Vice President & Treasurer
(Principal Financial Officer, and
Principal Accounting Officer) January 27, 1997
_____*____________________
William C. Campbell Director January 27, 1997
_____*___________________
Samuel L. Foggie Director January 27, 1997
_____*___________________
Charles T. Locke Director January 27, 1997
_____*__________________
John Maginn Director January 27, 1997
_____*___________________
-
Thomas T. Sawicz Director January 27, 1997
_____*___________________
-
Oscar S. Straus Director January 27, 1997
_____*___________________
John A. Sturgeon Director January 27, 1997
_____*___________________
Daniel R. Varona Director January 27, 1997
By: /S/ KENNETH W. REITZ Date: JANUARY 27, 1997
Kenneth W. Reitz
* Signed by Kenneth W. Reitz under Powers of Attorney executed on May 22 and
23 and June 1, 1995, and January 21, 1997, filed as exhibits incorporated by
reference in this registration statement.
EXHIBIT 1.A. (1): RESOLUTION OF THE BOARD OF DIRECTORS ESTABLISHING THE
VARIABLE ACCOUNT
<PAGE>
- --------------------------------------------------------------------------------
CERTIFICATION
- --------------------------------------------------------------------------------
I, Kenneth R. Cook, Assistant Secretary of Companion Life Insurance Company, a
New York Corporation, do hereby certify that the following is a true and exact
copy of a resolution unanimously adopted by the Board of Directors of the
Corporation at a meeting held August 27, 1996:
WHEREAS, Companion Life Insurance Company is developing variable life
insurance products to be registered as securities and desires to
establish a separate account for its initial variable life products;
WHEREAS, at its February 1994 meeting the Company authorized
establishment of Companion Life Separate Account B for use the issuance
of variable annuity contracts, but that separate account has never been
established, so remains available for use;
BE IT RESOLVED, That the Board of Directors of the Company hereby
authorizes the appropriate officers of the Company to establish a
separate account, pursuant to New York Insurance Laws, Chapter 28,
Section 4240, and any other applicable statute and the regulations
thereunder, designated Companion Life Separate Account B ("Variable
Account") for the following use and purposes, and subject to such
conditions as set forth herein and in the Company's February 1994 Board
resolution; and
FURTHER RESOLVED, That the Variable Account is established for the
purpose of providing for the issuance by the Company of certain variable
life insurance contracts ("Contracts"), and shall constitute a funding
medium to support reserves under such Contracts; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized and empowered to prepare, execute
and cause to be filed with the Securities and Exchange Commission on
behalf of the Variable Account, and by the Company as sponsor and
depositor, Registration Statements registering the Variable Account as
investment companies under the Investment Company Act of 1940 (the "1940
Act") and the Contracts under the Securities Act of 1933 (the "1933
Act"), and all amendments to the Acts on behalf of the Variable Account
and the Company and on behalf of and as attorneys-in-fact for the
principal executive officer and/or the principal financial officer
and/or the principal accounting officer and/or any other officer or
director of the Company; and
FURTHER RESOLVED, That Daniel R. Varona, Chief Administrative Officer,
General Counsel and Secretary of the Company, or his designate, may
serve as duly appointed as agent for service under any such registration
statement, duly authorized to receive communications and notices from
the Securities and Exchange Commission with respect thereto.
DATED THIS 27th DAY OF JANUARY, 1997 COMPANION
LIFE INSURANCE COMPANY
/s/ Kenneth R. Cook
Assistant Secretary
- --------------------------------------------------------------------------------
EXHIBIT 1.A. (3)(A): PRINCIPAL UNDERWRITING AGREEMENT
- --------------------------------------------------------------------------------
<PAGE>
PRINCIPAL UNDERWRITING AGREEMENT
COMPANION LIFE SEPARATE ACCOUNT B
PRINCIPAL UNDERWRITING AGREEMENT effective JANUARY 1, 1997, by and between
COMPANION LIFE INSURANCE COMPANY ("COMPANION") on its own behalf and on behalf
of COMPANION SEPARATE ACCOUNT B ("ACCOUNT") and MUTUAL OF OMAHA INVESTOR
SERVICES, INC. ("UNDERWRITER").
WHEREAS:
o The ACCOUNT was established under authority of a resolution of COMPANION's
Board of Directors on August 27, 1996, in order to set aside and invest
assets attributable to certain variable life contracts ("Contracts") issued
by COMPANION;
o COMPANION has registered the ACCOUNT as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act") and has registered the
Contracts under the Securities Act of 1933 (the "1933 Act");
o UNDERWRITER is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD");
o COMPANION and the ACCOUNT desire to have the Contracts sold and distributed
through UNDERWRITER and UNDERWRITER is willing to sell and distribute such
Contracts under the terms stated herein; and
o UNDERWRITER desires to have COMPANION perform certain services in
connection with the sale of the Contracts;
NOW, THEREFORE, the parties agree as follows:
A. UNDERWRITER APPOINTMENT. COMPANION appoints UNDERWRITER, and UNDERWRITER
agrees to serve as, distributor and principal underwriter of the Contracts
during the term of this Agreement. UNDERWRITER will be under no obligation
to effectuate any particular amount of sales of Contracts or to promote or
to make sales, except to the extent that COMPANION deems advisable.
UNDERWRITER shall be responsible for carrying out its sales and
underwriting obligations hereunder in continued compliance with the NASD
Rules of Fair Practice and federal and state securities laws.
B. RETAIL BROKER-DEALER AGREEMENTS
B.1 COMPANION authorizes UNDERWRITER to enter into separate written agreements,
on terms and conditions UNDERWRITER determines are not inconsistent with
this Agreement, with independent broker-dealers who are registered as such
under the 1934 Act and are members of the NASD, and who agree to
participate in the distribution of the Contracts and to use their best
efforts to solicit applications for the Contracts. UNDERWRITER and
COMPANION may also enter into consulting and/or wholesale agreements with
other distributors to obtain assistance in locating independent
broker-dealers who are willing to enter into retail broker-dealer
agreements for the sale of Contracts.
B.2 Each retail broker-dealer agreement shall require that each retail
broker-dealer shall be responsible for carrying out its sales obligations
hereunder in compliance with the NASD Rules of Fair Practice and federal
and state securities laws, and specifically shall be fully responsible for:
(a) ensuring that no person shall offer or sell the Contracts on the retail
broker-dealer's behalf until such person is duly registered as a
representative of such retail broker-dealer, duly appointed by COMPANION,
and appropriately licensed, registered or otherwise qualified to offer and
sell such Contracts under the federal securities laws and any applicable
securities laws of each state or other jurisdiction in which such Contracts
may be lawfully sold, in which COMPANION is licensed to sell the Contracts
and in which such person shall offer or sell the Contracts (such persons
hereinafter referred to as "Representatives"); and
(b) training, supervising, and controlling of all such persons for purposes of
complying on a continuous basis with the NASD Rules of Fair Practice and
with federal and state securities law requirements applicable in connection
with the offering and sale of the Contracts. In this connection, the retail
broker-dealer shall:
(1) conduct its training (including the preparation and utilization of
training materials) as in the opinion of UNDERWRITER is necessary to
accomplish the purposes of this Agreement;
(2) establish and implement reasonable written procedures for supervision
of sales practices of agents, representatives or brokers selling
the Contracts; and
(3) take reasonable steps to ensure that its associated persons shall not
make recommendations to an applicant to purchase a Contract and shall
not sell a Contract in the absence of reasonable grounds to believe
that the purchase of the Contract is suitable for such applicant.
Without limiting any of the following, a determination of suitability
shall be based upon information furnished after reasonable inquiry
of the applicant concerning the applicant's insurance and investment
objectives, financial situation and needs, and the likelihood of
whether the applicant will persist with the Contract for such a period
of time that COMPANION's acquisition costs are amortized over a
reasonable period of time. COMPANION and UNDERWRITER will rely on the
signature of a principal of the retail broker-dealer as
evidence that the broker-dealer has made a reasonable determination
of suitability.
B.3 Each retail broker-dealer shall provide that the only information or
representations made concerning the Contracts are those contained in the
Registration Statement and prospectus filed with the SEC or are contained
in sales or promotional material approved by COMPANION and UNDERWRITER.
B.4 Applications for Contracts solicited by retail broker-dealers through their
Representatives shall be forwarded to COMPANION. All payment for Contracts
shall be remitted promptly to COMPANION as agent for UNDERWRITER.
B.5 Each broker-dealer who agrees to participate in the distribution of the
Contracts shall act as an independent contractor and nothing herein shall
constitute such broker-dealer or its agents or employees as employees of
UNDERWRITER or COMPANION in connection with the sale of Contracts.
B.6 COMPANION shall apply for the proper insurance licenses in the appropriate
states or jurisdictions for the Representatives associated with UNDERWRITER
or with other independent retail broker-dealers which have entered into
agreements with UNDERWRITER for the sale of Contracts, provided that
COMPANION reserves the right to refuse to appoint any proposed
Representative as an agent or broker, or to terminate a Representative once
appointed.
C. PROSPECTUSES AND PROMOTIONAL MATERIAL.
C.1 COMPANION shall furnish UNDERWRITER with copies of all prospectuses,
financial statements and other documents and materials which UNDERWRITER
reasonably requests for use in connection with the distribution of
Contracts. COMPANION shall have responsibility for the preparation, filing
and printing of all required prospectuses and/or registration statements in
connection with the marketing or sales of the Contracts, and the payment of
all related expenses. UNDERWRITER will, at COMPANION's sole expense,
execute such papers and do such acts and things that shall from time to
time be reasonably requested by COMPANION for the purpose of maintaining
the registration of the Contracts under the 1933 Act and the Account under
the 1940 Act, and qualifying and maintaining qualification of the Contracts
for sale under the applicable laws of any state.
C.2 UNDERWRITER and COMPANION shall cooperate fully in designing, drafting and
reviewing of sales promotion materials. UNDERWRITER shall only use such
materials that have been provided or approved by COMPANION. UNDERWRITER
will make timely filings with the SEC, NASD and any other securities
regulatory authorities of any sales literature or materials relating to the
Account as required by law to be filed.
C.3 COMPANION, on behalf of UNDERWRITER, will make timely filings with those
state securities regulatory authorities of any information related to the
Contracts as required by such state's Blue Sky laws in order to qualify and
maintain qualification of the Contracts for sale in such state.
D. REPRESENTATIVES RECORDS. COMPANION, on behalf of UNDERWRITER, shall have
the responsibility for maintaining the records of Representatives licensed,
registered or otherwise qualified to sell the Contracts.
E. OTHER RECORDS. COMPANION agrees to maintain all required books of account
and related financial records on behalf of UNDERWRITER. All such books of
account and records shall be maintained and preserved pursuant to 1934 Act
Rules 17a-3 and 17a-4 (or the corresponding provisions of any future
federal securities laws or regulations). All such books and records shall
be maintained by COMPANION on behalf of and as agent for UNDERWRITER whose
property they are and shall remain for all purposes and shall at all times
be subject to reasonable periodic, special or other examination by the SEC
and all other regulatory bodies having jurisdiction. COMPANION also agrees
to send to UNDERWRITER's customers all required confirmations of customer
transactions.
F. COMPENSATION.
F.1 As compensation for UNDERWRITER's assuming its distribution expenses and
performing the services to be assumed and performed by it pursuant to this
Agreement, UNDERWRITER shall receive from COMPANION such amounts and at
such times as may from time to time be agreed upon in writing by
UNDERWRITER and COMPANION.
F.2 COMPANION will, on behalf of UNDERWRITER and on its account, in connection
with the sale of the Contracts, pay all amounts (including the sales
commissions described in the Prospectus for the Contracts) due to
Representatives or to those broker-dealers who have entered into a standard
form Retail Broker-Dealer Agreement with UNDERWRITER and COMPANION, and
UNDERWRITER shall have no interest whatsoever in, nor any obligation to
pay, such accounts.
F.3 As compensation for its services performed and expenses incurred under this
Agreement, COMPANION will receive all amounts charged as sales charges
under the Contracts. It is understood that COMPANION assumes the risk that
the above compensation for its services may not prove sufficient to cover
its actual expenses in connection therewith.
G. INVESTIGATION AND PROCEEDINGS. UNDERWRITER and COMPANION agree to cooperate
fully in any customer complaint, insurance regulatory investigation or
proceeding or judicial proceeding arising in connection with the Contracts
distributed under this Agreement. UNDERWRITER and COMPANION further agree
to cooperate fully in any securities regulatory inspection, inquiry,
investigation or proceeding or any judicial proceeding with respect to
UNDERWRITER, COMPANION, their affiliates and their Representatives to the
extent that such inspection, inquiry, investigation or proceeding is in
connection with Contracts distributed under this Agreement. Such
cooperation shall include prompt notification to the other party of any
customer complaint or notice of any regulatory inspection, inquiry,
investigation or proceeding received in connection with any activity in
connection with any such Contract.
H. INDEMNIFICATION.
H.1 COMPANION and UNDERWRITER each, as the indemnifying party, agree to
indemnify and hold harmless, as the indemnified party, the other and the
other's directors and officers against any and all losses, claims, damages,
liabilities (including amounts paid in settlement by the indemnified party
with the written consent of the indemnifying party) or litigation
(including reasonable legal expenses and expenses of counsel chosen by the
indemnified party and consented to by the indemnifying party, which consent
shall not be unreasonably withheld, and other reasonable expenses), to
which the indemnified party may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or
settlements are related directly or indirectly to the sale or distribution
of the Contracts and:
(a) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the Registration Statement,
Prospectus, Contracts or sales literature for the Contracts (or any
amendment or supplement to any of the foregoing), for which the
indemnifying party is responsible or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply if
such statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to the
indemnifying party by the indemnified party for use in the Registration
Statement, Prospectus, Contracts or sales literature for the Contracts (or
any amendment or supplement) or otherwise for use in connection with the
sale of the Contracts; or
(b) arise as the result of any failure by the indemnifying party to provide the
services and furnish the materials under the terms of this Agreement; or
(c) arise out of or result from any material breach or representation and/or
warranty made by the indemnifying party in this Agreement or arise out of
or result from any other material breach of this Agreement by the
indemnifying party, as limited by and in accordance with the provisions of
Sections H.1(a) and H.1(b) hereof; or
(d) arise out of wrongful conduct of the indemnifying party or persons under
its control with respect to the Registration Statement, Prospectus,
materials furnished, or this Agreement.
H.2 The indemnifying party shall not be liable under this Indemnification
Provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against the indemnified party as such may
arise from the indemnified party's wilful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reasons of its reckless
disregard, obligations or duties under this Agreement.
H.3 The indemnifying party shall not be liable under this Indemnification
Provision with respect to any claim made against the indemnified party
unless the indemnified party shall have notified the indemnifying party in
writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon the indemnified party (or after the indemnified party shall
have received notice of such service on any designated agent), but failure
to notify the indemnifying party of any such claim shall not relieve the
indemnifying party from any liability which it may have to the indemnified
party otherwise than on account of this Indemnification Provision. In case
any such action is brought against the indemnified party, the indemnifying
party shall be entitled to participate at the indemnifying party's own
expense, in the defense of such action. The indemnifying party shall be
entitled to assume the defense thereof, at the indemnifying party's own
cost and expense, with counsel satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of the election
by the indemnifying party to assume the defense thereof, the indemnified
party shall bear the fees and expenses of any additional counsel retained
by it, and the indemnifying party will not be liable to the indemnified
party under this Agreement for any legal or other expenses subsequently
incurred by the indemnified party independently in connection with the
defense thereof other than reasonable costs of investigation.
H.4 The indemnified party will promptly notify the indemnifying party of the
commencement of any litigation or proceedings against it in connection with
the issuance for sale of the Contracts.
I. TERMINATION. This Agreement may be terminated at any time by either party
upon 60 days written notice to the other party, without the payment of any
penalty. This Agreement shall terminate automatically if it shall be
assigned. Upon termination of this Agreement, all authorizations, rights
and obligations shall cease except the obligation to settle accounts
hereunder, including commissions on premiums subsequently received for
Contracts in effect at the time of termination or issued pursuant to
obligations received by COMPANION prior to termination, and the agreements
contained in Section G, above.
J. REGULATION. This Agreement shall be subject to the provisions to the 1940
Act and the 1934 Act and the rules, regulations and rulings thereunder and
of the NASD, from time-to-time in effect, including such exemptions from
the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assigned" shall not include any
transaction exempted from Section 15(b)(2) of the 1940 Act.
UNDERWRITER shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of the Accounts, present or future, any
information, reports or other material which such body by reason of this
Agreement may request or require pursuant to applicable laws or
regulations.
K. SEVERABILITY. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
L. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Nebraska.
Signed by the parties.
COMPANION LIFE INSURANCE COMPANY
By:
Print Name: Ernest B. Johnston
Title: President
Date:
MUTUAL OF OMAHA INVESTOR SERVICES, INC.
By:
Print Name: Richard A. Witt
Title: President
Date:
<PAGE>
COMPENSATION SCHEDULE to the
PRINCIPAL UNDERWRITING AGREEMENT between
COMPANION LIFE INSURANCE COMPANY
("COMPANION")
and
MUTUAL OF OMAHA INVESTOR SERVICES, INC.
("UNDERWRITER")
for
COMPANION SEPARATE ACCOUNT B
Compensation Schedule Effective Date: JANUARY 1, 1997
For Services Rendered by UNDERWRITER to COMPANION on COMPANION'S own behalf and
on behalf of COMPANION OF OMAHA SEPARATE ACCOUNT B, COMPANION shall pay to
UNDERWRITER:
[DRAFT. TO BE COMPLETED WHEN AGREEMENT IS EXECUTED]
This compensation schedule shall remain in effect until amended by mutual
agreement of the parties.
EXHIBIT 1.A. (5)(A): FORM OF POLICY
<PAGE>
[GRAPHIC OMITTED]
COMPANION
LIFE INSURANCE
COMPANY
A STOCK COMPANY
Insured JOHN J. DOE Date of Issue JUNE 1, 1997
Policy Number 1234567 Initial Specified Amount $107,776
[GRAPHIC OMITTED]
LIFE INSURANCE POLICY
- --------------------------------------------------------------------------------
THIS IS A MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY. THE
POLICY'S ACCUMULATION VALUE IN THE VARIABLE ACCOUNT IS BASED ON THE INVESTMENT
EXPERIENCE IN THAT ACCOUNT AND WILL INCREASE OR DECREASE DAILY. THE DOLLAR
AMOUNT IS NOT GUARANTEED. THE AMOUNT OF THE DEATH BENEFIT MAY BE FIXED OR
VARIABLE, DEPENDING ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT. PLEASE
SEE THE DEATH BENEFIT PROVISION ON PAGE 5. IF NO POLICY LOANS ARE TAKEN, WE
GUARANTEE COVERAGE TO THE EARLIER OF THE FIFTH POLICY ANNIVERSARY OR THE POLICY
ANNIVERSARY NEXT FOLLOWING THE INSURED'S 75TH BIRTHDAY. NO DIVIDENDS ARE
PAYABLE.
Companion Life Insurance Company will pay the death benefit of this policy to
the beneficiary within two months after we receive proof at the Home Office that
the Insured died while this policy was in force. On the maturity date we will
pay you the policy's Accumulation Value, less any loan and unpaid loan interest,
if (a) the Insured is then living; (b) this policy is in force; and (c) coverage
beyond maturity is not elected.
READ YOUR POLICY CAREFULLY.
IT INCLUDES THE PROVISIONS ON THE FOLLOWING PAGES.
THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND
COMPANION LIFE INSURANCE COMPANY.
RIGHT TO EXAMINE THIS POLICY. IF YOU ARE NOT SATISFIED WITH YOUR POLICY, RETURN
IT TO US OR OUR AGENT WITHIN 10 DAYS AFTER YOU RECEIVE THE POLICY OR 45 DAYS
AFTER YOU SIGNED THE APPLICATION, WHICHEVER IS LATER. WE WILL CANCEL YOUR POLICY
AS OF THE DATE ANY INSURANCE BECAME EFFECTIVE. WE WILL REFUND THE PREMIUMS PAID
WITHIN SEVEN DAYS AFTER WE RECEIVE THE RETURNED POLICY.
For customer service or questions about your coverage, please call
1-800-238-9354.
[GRAPHIC OMITTED] /s/ Ernest B. Johnston
President and Chief Executive Officer
[GRAPHIC OMITTED] /s/ M Jane Huerter
Secretary
[GRAPHIC OMITTED]
COMPANION OF
NEW YORK
HOME OFFICE: 401 THEODORE FREMD AVENUE
RYE, NEW YORK 10580-1493
<PAGE>
PLAN OF INSURANCE
===============================================================================
Modified Single Premium Variable Universal Life Insurance
POLICY DATA
Insured JOHN J. DOE
Policy Number 1234567 Initial Specified Amount $107,776
Age at Issue 35 Sex MALE
Rate Class PREFERRED
Date of Issue JUNE 1, 1997
Maturity Date* JUNE 1, 2062
Initial Premium $20,000.00
Policyowner See Application or Endorsement
Beneficiary See Application or Endorsement
- --------------------------------------------------------------------------------
SCHEDULE OF BENEFITS
MONTHLY COST
OF INSURANCE BENEFIT
FORM BENEFIT AND RIDERS YEARS
745Y 6/97 Life Insurance See Data Pages 65
* The maturity date is the policy anniversary next following the Insured's
100th birthday. If no policy loans are taken, coverage is guaranteed to the
earlier of the fifth policy anniversary or the policy anniversary next
following the Insured's 75th birthday. The policy may terminate prior to
the maturity date if the premiums paid are insufficient to continue this
policy in force. If the policy does continue in force to the maturity date,
it is possible there will be little or no cash surrender value at that
time. Policy values will be affected by the investment experience of the
Variable Account and to the extent cost of insurance charges are more
favorable than guaranteed charges.
<PAGE>
INVESTMENTS
VARIABLE ACCOUNT: Companion Life Separate
Account B
INVESTMENT OPTIONS: INITIAL ALLOCATION (%):
Companion Fixed Account 10
[Alger American Growth Portfolio] 0
[Alger American Small Capitalization Portfolio] 30
[Federated Prime Money Fund II ("Money Market") Portfolio] 30
[Federated Fund for US Government Securities II Portfolio] 0
[Fidelity VIP II Asset Manager: Growth Portfolio] 0
[Fidelity VIP Equity-Income Portfolio] 0
[Fidelity Contrafund Portfolio] 30
[MFS Emerging Growth Portfolio] 0
[MFS High Income Fund Portfolio] 0
[MFS Research Portfolio] 0
[MFS World Government Portfolio] 0
[Scudder International Portfolio] 0
[T. Rowe Price Equity Income Portfolio] 0
[T. Rowe Price International Stock Portfolio] 0
[T. Rowe Price Limited-Term Bond Portfolio] 0
[T. Rowe Price New American Growth Portfolio] 0
[T. Rowe Price Personal Strategy Balanced Portfolio] 0
<PAGE>
POLICY CHARGES
EXPENSE CHARGE: 0.1275% of the Accumulation Value, deducted on each Monthly
Deduction Date during policy years 1 through 10. 0.0950% of
the Accumulation Value, deducted on each Monthly Deduction Date
during policy years 11 and later.
TRANSFER CHARGE: After the 12th transfer each policy year, $10.
SURRENDER CHARGE
The surrender charge equals a percentage of premiums withdrawn. The percentage
varies according to the length of time since the premium was paid. Any
applicable surrender charge will be deducted on a full surrender or a partial
withdrawal.
YEARS SINCE
PREMIUM PAYMENT SURRENDER CHARGE
1 9.50%
2 9.50%
3 9.50%
4 9.00%
5 7.50%
6 6.00%
7 4.50%
8 3.00%
9 1.50%
10 and later 0%
<PAGE>
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE CHARGES
PER $1,000 OF NET AMOUNT AT RISK
The Guaranteed Monthly Cost of Insurance Charges Reflect the Insured's
Age and Sex
Age Charge Age Charge Age Charge Age Charge
35 0.1808 51 0.6358 67 2.6492 83 11.1533
36 0.1933 52 0.6942 68 2.8875 84 12.1767
37 0.2075 53 0.7608 69 3.1508 85 13.2483
38 0.2233 54 0.8342 70 3.4475 86 14.3508
39 0.2417 55 0.9133 71 3.7858 87 15.4775
40 0.2625 56 0.9975 72 4.1733 88 16.6275
41 0.2850 57 1.0867 73 4.6117 89 17.8075
42 0.3092 58 1.1817 74 5.0917 90 19.0358
43 0.3358 59 1.2850 75 5.6042 91 20.3425
44 0.3642 60 1.4000 76 6.1417 92 21.7858
45 0.3942 61 1.5300 77 6.6975 93 23.5108
46 0.4267 62 1.6767 78 7.2767 94 25.8308
47 0.4608 63 1.8408 79 7.8967 95 29.3217
48 0.4975 64 2.0225 80 8.5783 96 35.0825
49 0.5383 65 2.2183 81 9.3408 97 45.0833
50 0.5833 66 2.4275 82 10.2008 98 62.0958
99 83.3333
<PAGE>
TABLE OF CONTENTS
DEFINITIONS...................................................................1
GENERAL PROVISIONS............................................................2
The Contract................................................................2
Delay of Payments...........................................................2
Incontestability............................................................2
Misstatement of Age or Sex..................................................2
Nonparticipating............................................................2
Periodic Reports............................................................3
Policy Dates................................................................3
EXCLUSION.....................................................................3
Suicide.....................................................................3
POLICYOWNER AND BENEFICIARY...................................................3
Ownership...................................................................3
Change of Ownership and Assignment..........................................3
Beneficiary.................................................................4
Beneficiary Change..........................................................4
PREMIUMS AND REINSTATEMENT....................................................4
Consideration...............................................................4
Premium Payments After the Initial Premium..................................4
Allocation of Premiums.....................................................4
Grace Period................................................................4
Reinstatement...............................................................5
DEATH BENEFIT.................................................................5
Death Benefit...............................................................5
Death Benefit Guarantee.....................................................6
THE VARIABLE ACCOUNT..........................................................6
General Description.........................................................6
Investment Allocations to the Variable Account..............................6
Valuation of Assets.........................................................6
Transfers Between Subaccounts...............................................6
Dollar Cost Averaging.......................................................6
Asset Allocation Program....................................................7
THE FIXED ACCOUNT.............................................................7
General Description.........................................................7
Transfers from the Fixed Account............................................7
POLICY VALUES.................................................................8
Accumulation Value..........................................................8
Accumulation Unit...........................................................8
The Fixed Account...........................................................8
Partial Withdrawals.........................................................9
POLICY CHARGES................................................................9
Monthly Deduction...........................................................9
Cost of Insurance...........................................................9
POLICY LOANS AND REPAYMENTS..................................................10
Policy Loans...............................................................10
Preferred Loan.............................................................10
Loan Repayments............................................................10
INSURANCE AND NONFORFEITURE OPTIONS..........................................11
Surrender for Cash.........................................................11
Continuation of Insurance..................................................11
PAYOUT OPTIONS FOR PAYMENT OF POLICY PROCEEDS................................11
General Conditions.........................................................11
Payout Options.............................................................12
Variable Payout Options....................................................15
First Variable Payment.....................................................15
Second and Later Variable Payments.........................................15
Variable Payment Unit Value................................................15
Number of Variable Payment Units...........................................16
Exchange of Variable Payment Units.........................................16
<PAGE>
================================================================================
DEFINITIONS
================================================================================
ACCUMULATION UNIT means an accounting unit of measure used to calculate the
accumulation value of the Variable Account.
ACCUMULATION VALUE means the dollar value as of any Valuation Date of all
amounts accumulated under this policy.
AGE means age last birthday.
ALLOCATION DATE means the first business day following the completion of the
RIGHT TO EXAMINE THIS POLICY period or our approval of an additional premium
payment.
BENEFICIARY means the person, persons or entity you name to receive the death
benefit of this policy.
EXECUTIVE OFFICER means the president, vice president, the secretary or
assistant secretary of Companion Life Insurance Company.
FIXED ACCOUNT means the account which consists of general account assets of
Companion Life Insurance Company.
INVESTMENT OPTIONS means the Series Funds currently available under the policy,
plus the Fixed Account. Current Investment Options are shown on the data pages.
LOAN ACCOUNT means an account established for any amounts transferred from the
Fixed Account and Subaccounts as a result of loans. The Loan Account is credited
with interest and is not based on the experience of the Variable Account.
MONTHLY DEDUCTION DATE means the date of issue and the same date each month
thereafter.
NET ASSETS OF THE VARIABLE ACCOUNT means the market value of the investments
held by the Variable Account.
NET ASSET VALUE PER SHARE means the market value of a Series Fund's investment
Portfolio divided by the number of shares in the Portfolio.
OUR, US AND WE refer to Companion Life Insurance Company, 401 Theordore Fremd
Avenue, Rye, New York 10580-1498.
PAYEE means the person who receives payments under this policy.
PORTFOLIO means a Series Fund's separate investment series that is available
under the policy.
PROCEEDS means the death benefit, the cash surrender value or the amount payable
at maturity.
RIDER means a policy provision added to this policy to expand or limit the
benefits payable.
SERIES FUNDS means those open-ended management companies in which the Variable
Account invests.
SPECIFIED AMOUNT means the amount of insurance selected. The initial Specified
Amount is shown on the data pages.
SUBACCOUNT means that portion of the Variable Account which invests in shares of
mutual funds or any other investment Portfolios that we determine to be suitable
for this policy's purposes.
VALUATION DATE means each day that the New York Stock Exchange is open for
trading.
VALUATION PERIOD means the period commencing at the close of business of the New
York Stock Exchange on each Valuation Date and ending at the close of business
for the next succeeding Valuation Date.
VARIABLE ACCOUNT means a separate account maintained by us in which a portion of
our assets has been allocated for this and certain other policies. It has been
designated on the data pages.
YOU and YOUR refer to the owner of this policy.
GENERAL PROVISIONS
The Contract
The entire contract is this policy, any riders, endorsements and amendments, and
the signed application(s), a copy of which is attached. All statements made in
the application will, in the absence of fraud, be deemed representations and not
warranties. We will not use any statement to contest this policy or deny a claim
unless it is in the application.
Any change of this policy requires the written consent of an executive officer.
No agent has the authority to change this contract or waive any of its terms.
We may amend this policy to qualify it as life insurance under the Internal
Revenue Code of 1986, as amended. Any amendment may be effective as of the
policy's date of issue.
Delay of Payments
We will usually pay any amounts payable from the Variable Account as a policy
loan, partial withdrawal or cash surrender within seven days after we receive
your written request in a form satisfactory to us. We can postpone such payments
or any transfers of amounts between Subaccounts or into the Fixed Account or the
Loan Account if:
(a) the New York Stock Exchange is closed for other than customary weekend
and holiday closings;
(b) trading on the New York Stock Exchange is restricted;
(c) an emergency exists as determined by the Securities and Exchange
Commission, as a result of which it is not reasonably practical to
dispose of securities, or not reasonably practical to determine the
value of the Net Assets of the Variable Account;
(d) the Securities and Exchange Commission permits delay for the protection
of security holders.
The applicable rules of the Securities and Exchange Commission will govern as to
whether the conditions in (c) or (d) exist.
We may defer payment of policy loans, partial withdrawals or a cash surrender
from the Fixed Account for up to six months from the date we receive your
written request.
Incontestability
We will not contest the validity of this policy after it has been in force
during the lifetime of the Insured for two years from the date of issue.
We will not contest the validity of an increase in Specified Amount after this
policy has been in force during the lifetime of the Insured for two years from
the effective date of the increase. Any contest of an increase in Specified
Amount will be based on the application for that increase.
Misstatement of Age or Sex
If the age or sex of the Insured has been misstated, all payments and benefits
under the policy will be those which the premiums paid would have purchased at
the correct age and sex.
Nonparticipating
No dividends will be paid. This policy will not share in our surplus earnings or
profits.
Periodic Reports
At least once each calendar year we will send you a statement showing your
Accumulation Value and death benefit as of a date not more than two months prior
to the date of mailing. We will also send such statements as may be required by
applicable state and federal laws, rules and regulations.
Policy Dates
The following dates are measured from the date of issue:
(a) policy months;
(b) policy years;
(c) policy anniversaries;
(d) Monthly Deduction Dates;
(e) the maturity date; and
(f) the effective date of surrender.
EXCLUSION
Suicide
We will not pay the death benefit if the Insured's death results from suicide,
while sane or insane, within two years from the date of issue. Instead we will
pay the sum of the premiums paid since issue less any loans and unpaid loan
interest and less any partial withdrawals.
We will not pay that portion of the death benefit resulting from an increase in
Specified Amount if the Insured's death results from suicide, while sane or
insane, within two years from the effective date of the increase. Instead we
will pay the sum of the premiums paid for the increase.
POLICYOWNER AND BENEFICIARY
Ownership
The owner is:
(a) the Insured;
(b) the applicant, if other than the Insured; or
(c) any assignee of record.
While the Insured is alive, only you may exercise the rights under this policy.
You may name a new owner as described in the CHANGE OF OWNERSHIP AND ASSIGNMENT
provision.
Change of Ownership and Assignment
You may name a new owner of this policy or pledge it as collateral by assigning
it. The assignment must be in writing. No assignment will be binding on us until
we record and acknowledge it. We are not responsible for the validity or effect
of an assignment of this policy. The rights of any Beneficiary will be subject
to a collateral assignment.
If the Beneficiary of this policy is irrevocable, a change of ownership or a
collateral assignment may be made only by joint written request from you and the
irrevocable Beneficiary.
Beneficiary
The Beneficiary is named in the application and may be changed as stated in the
BENEFICIARY CHANGE provision, unless the Beneficiary is irrevocable.
Beneficiary Change
To change a Beneficiary, send us a written request. When recorded and
acknowledged by us, the change will be effective as of the date you signed the
request. The change will not apply to any payments made or other action taken by
us before recording.
If the Beneficiary is irrevocable, you may change the Beneficiary only by joint
written request from you and the irrevocable Beneficiary.
PREMIUMS AND REINSTATEMENT
Consideration
The consideration for this policy is the application and the payment of the
initial premium.
Premium Payments After the Initial Premium
Additional premium payments after the initial premium are not allowed in the
first policy year. After the first policy year you may make no more than one
additional premium payment each policy year to our Home Office or to an
authorized agent. Any additional premium payment must be at least $5,000. No
additional premium payments may be made after the Insured's 90th birthday,
except as may be required in the grace period.
Since any additional premium payment will result in an increase in Specified
Amount, we will accept additional premiums only if you submit satisfactory
evidence of insurability.
If there is a policy loan outstanding at the time a payment is received, and in
the absence of other instructions from you, we will treat the payment first as
payment of loan interest, then as repayment of the loan, then as an additional
premium payment subject to evidence of insurability.
We will send you a receipt for any payment signed by an executive officer if you
request one.
We reserve the right to limit premiums or refund any values in order to qualify
this policy as life insurance under the Internal Revenue Code of 1986, as
amended.
Allocation of Premiums
We will allocate premiums to the Money Market Fund until the Allocation Date. On
the Allocation Date the premium will be allocated to one or more Investment
Options according to your instructions.
You may change your allocation instructions by written request. The change will
be effective on the date we receive your request. The change will apply to any
additional premiums paid after the date of the change.
Grace Period
If there is no outstanding policy loan, the grace period will begin on any
Monthly Deduction Date when the Accumulation Value is not enough to pay the
Monthly Deduction, unless the death benefit guarantee is in effect as described
in the DEATH BENEFIT GUARANTEE provision. If there is an outstanding policy
loan, the grace period will begin on any Monthly Deduction Date when the cash
surrender value is not enough to pay the Monthly Deduction and any loan interest
due.
Written notice will be sent to your last known address and that of any assignee
of record within 30 days after the start of the grace period. We will allow 61
days from the start of the grace period for the payment of an amount large
enough to pay all unpaid Monthly Deductions and unpaid loan interest. This
policy will remain in force during the grace period. If the payment is not
received by the end of the grace period, this policy will terminate as of the
first day of the grace period. If the death of the Insured occurs on the Monthly
Deduction Date or during the grace period, any past due Monthly Deductions and
unpaid loan interest will be deducted in figuring the death benefit.
Reinstatement
If this policy lapses, you may reinstate it within five years of the date of
lapse and prior to the maturity date, subject to the following:
(a) written application signed by you and the Insured;
(b) evidence of insurability satisfactory to us;
(c) payment of an amount large enough to continue this policy in force for
three months;
(d) re-establishment of surrender charges, if any, measured f rom the
original date of issue; and
(e) repayment or reinstatement of any outstanding policy loan along with
unpaid loan interest from the date of lapse.
The effective date of reinstatement will be the date we approve the application
for reinstatement.
The Specified Amount of the reinstated policy may not exceed the Specified
Amount at the time of lapse. The Accumulation Value on the effective date of
reinstatement will reflect:
(a) the Accumulation Value at the time of lapse, except that the value
in the Loan Account may be repaid prior to reinstatement; less
(b) the Monthly Deduction for the current month.
DEATH BENEFIT
Death Benefit
The death benefit equals the greater of:
(a) the initial Specified Amount plus any later increase and less any later
decrease; or
(b) the policy's Accumulation Value on the date of death multiplied by
the corridor percentage from the table shown below fo the Insured's
attained age;
less any outstanding loans and unpaid loan interest.
- ---------------------------------------------------------
Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage
- ---------------------------------------------------------
0-40 250% 54 157% 68 117%
41 243% 55 150% 69 116%
42 236% 56 146% 70 115%
43 229% 57 142% 71 113%
44 222% 58 138% 72 111%
45 215% 59 134% 73 109%
46 209% 60 130% 74 107%
47 203% 61 128% 75-90 105%
48 197% 62 126% 91 104%
49 191% 63 124% 92 103%
50 185% 64 122% 93 102%
51 178% 65 120% 94 101%
52 171% 66 119% 95-100 100%
53 164% 67 118% 100+ 101%
- ---------------------------------------------------------
DEATH BENEFIT GUARANTEE
If no policy loans are taken, we guarantee that coverage will remain in force
until the earlier of the fifth policy anniversary or the policy anniversary next
following the Insured's 75th birthday.
THE VARIABLE ACCOUNT
General Description
The name of the Variable Account is shown on the data pages. The assets of the
Variable Account are our property. These assets are not chargeable with the
liabilities arising out of any other business we may conduct, except to the
extent that they exceed the liabilities of the Variable Account arising under
the policies supported by the Variable Account.
Investment Allocations to the Variable Account
The assets of the Variable Account are divided by Portfolios. Where appropriate,
the Portfolios are divided by Funds within the Portfolio. This establishes a
series of Subaccounts within the Variable Account.
We may, from time to time, add other Investment Options. In such event you may
be permitted to select from these other Investment Options. Your selections may
be limited by the terms and conditions we may impose on such transactions.
We may also substitute other Investment Options. If required, approval of or
change of any investment policy will be filed with the Insurance Department of
the state in which this policy was delivered.
Valuation of Assets
Assets of shares of Portfolios within each Subaccount will be valued at their
Net Asset Value on each Valuation Date.
Transfers Between Subaccounts
After the end of the RIGHT TO EXAMINE THIS POLICY period, you may transfer all
or part of your interest in a Subaccount to another Subaccount or to the Fixed
Account. You may make 12 transfers each policy year without charge. We reserve
the right to charge a $10 fee for additional transfers, to be deducted from the
amount transferred.
The minimum transfer amount is $500 or the entire amount in the Subaccount if it
is less than $1,000. The minimum amount that can remain in a Subaccount after a
transfer is $500.
We reserve the right at any time and without prior notice to any party to modify
the transfer privileges described above.
DOLLAR COST AVERAGING
Under the Dollar Cost Averaging program you may instruct us to automatically
transfer between Investment Options, on a periodic basis, a predetermined dollar
amount or percentage of accumulation value. The automatic transfers will be made
from any one Subaccount or the Fixed Account to any other Subaccount.
Automatic transfers can occur monthly, quarterly, semi-annually or annually. The
amount transferred each time must be at least $100 and at least $50 per
Subaccount. At the time the program begins there must be at least $5,000 of
accumulation value in the applicable Subaccount or the Fixed Account, or enough
to cover one year's transfers.
If transfers are made from the Fixed Account, the maximum periodic transfer
amount is 10% of that account's value at the time of election, or enough to
provided transfers for 10 months. There is no maximum transfer amount for the
Subaccounts.
You may request Dollar Cost Averaging at the time of application or at a later
date. Transfers will begin on the first or 15th day of the month, as you
request. If the first or 15th day of the month is not a Valuation Date, then the
transfer will be processed on the next following Valuation Date. The program
will end when:
(a) the number of transfers you have requested have been made; or
(b) when the value in the applicable Subaccount or the Fixed Account is less
than $500;
whichever occurs first.
You may increase or decrease the amount or percentage of the transfers or end
the program by sending us written notice. There is no charge for participation
in this program.
ASSET ALLOCATION PROGRAM
Under the Asset Allocation Program you may instruct us to allocate premium
payments and the Accumulation Value among the Subaccounts and the Fixed Account
according to your instructions, or according to instructions recommended by us
and approved by you. We will allocate your premium payments and transfer
accumulation value among the Investment Options to maintain conformity with
current instructions. This will "rebalance" your investments.
At the time the program begins, there must be at least $20,000 of Accumulation
Value in the policy. Rebalancing will be done on a quarterly, semi-annual or
annual basis, as you request. Transfers made in accordance with this program
will not be counted toward the 12 free transfers allowed each policy year.
You may request participation in the Asset Allocation Program at the time of
application or at a later date. You may change your allocation percentages or
end the program by sending us written notice. There is no charge for
participation in this program.
THE FIXED ACCOUNT
General Description
Any part of the premium allocated to the Fixed Account or transferred to the
Fixed Account under the policy becomes part of the general account assets of
Companion Life Insurance Company. The Fixed Account includes our assets that are
not segregated in separate accounts. We maintain sole discretion to invest the
assets of the Fixed Account, subject to applicable law.
Transfers from the Fixed Account
Once each policy year you may transfer part of the accumulation value in the
Fixed Account to the Subaccounts. The maximum percentage that may be transferred
is 10% of the value in the Fixed Account on the date of the transfer. There is
no charge for this transfer.
We reserve the right to defer transfers from the Fixed Account to the
Subaccounts for up to six months from the date we receive your written request.
You may transfer amounts from the Subaccounts to the Fixed Account at any time.
However, we reserve the right to restrict transfers back to the Fixed Account
for up to six months immediately following a transfer to the Subaccounts.
POLICY VALUES
Accumulation Value
On the date of issue the Accumulation Value equals the initial premium less the
Monthly Deduction for the first month. On any Monthly Deduction Date after the
date of issue the Accumulation Value equals:
(a) the total of the values in each Subaccount; plus
(b) the accumulation value of the Fixed Account; plus
(c) the accumulation value of the Loan Account; less
(d) the Monthly Deduction for the current month.
The value for each Subaccount equals:
(a) the current number of Accumulation Units; multiplied by
(b) the current unit value.
Accumulation Unit
Each premium is converted into Accumulation Units. This is done by dividing the
premium by the Accumulation Unit value for the Valuation Period during which the
premium is allocated to the Variable Account. The initial Accumulation Unit
value for each Subaccount was set when the Subaccount was established. The unit
value may increase or decrease from one Valuation Date to the next.
The Accumulation Unit value for a Subaccount on any Valuation Date is calculated
as follows:
(a) the Net Asset Value Per Share of the Fund multiplied by the number of
shares held in the Subaccount, before the purchase or redemption of any
shares on that date; divided by
(b) the total number of Accumulation Units held in the Subaccount on the
Valuation Date, before the purchase or redemption of any shares on that
date.
The Fixed Account
The accumulation value of the Fixed Account on any Monthly Deduction Date
equals:
(a) the value as of the last Monthly Deduction Date; plus
(b) any premiums credited since the last Monthly Deduction Date; plus
(c) any transfers from the Subaccounts to the Fixed Account since the last
Monthly Deduction Date; plus
(d) any transfers from the Loan Account to the Fixed Account since the
last Monthly Deduction Date; less
(e) any transfers from the Fixed Account to the Subaccounts since the
last Monthly Deduction Date; less
(f) any transfers from the Fixed Account to the Loan Account since the
last Monthly Deduction Date; less
(g) any partial withdrawals and surrender charge taken from the Fixed
Account since the last Monthly Deduction Date; less
(h) that part of the Monthly Deduction taken from the Fixed Account; plus
(i) interest credited on the balance.
We guarantee that the accumulation value in the Fixed Account will be credited
with an effective annual interest rate of at least 4.5%. Using a procedure
approved by our Board of Directors, we may credit interest to the Fixed Account
at a current rate in excess of the guaranteed minimum interest rate. Any such
current interest rate will be guaranteed for one year.
Partial Withdrawals
After the first policy year you may withdraw part of the Accumulation Value.
Withdrawals are made first from earnings and then from premiums paid, beginning
with the earliest premium payment. The minimum partial withdrawal amount is
$500. The maximum partial withdrawal amount is an amount such that the remaining
Accumulation Value is not less than $20,000.
Each policy year you may withdraw, without a surrender charge, the greater of:
(a) 15% of the Accumulation Value as of the first withdrawal that policy
year; or
(b) that part of the Accumulation Value which is in excess of total
premiums paid.
Partial withdrawals in excess of this amount may be subject to a surrender
charge. The surrender charge is a percentage of the premiums withdrawn. The
applicable percentage varies according to the length of time since the premium
was paid. The percentages are shown on the data pages.
The amount of cash withdrawal requested and any surrender charge will be
deducted from the Accumulation Value on the date we receive your written
request. Partial withdrawals will result in cancellation of Accumulation Units
from each applicable Subaccount. In the absence of instructions from you,
amounts will be deducted from the Subaccounts and the Fixed Account on a pro
rata basis. No more than a pro rata amount may be withdrawn from the Fixed
Account for any partial withdrawal. We reserve the right to defer withdrawals
from the Fixed Account for up to six months from the date we receive your
written request.
The Specified Amount will be reduced in the same proportion as the Accumulation
Value is reduced as a result of any partial withdrawal.
POLICY CHARGES
Monthly Deduction
The Monthly Deduction equals:
(a) the cost of insurance for the current month; plus
(b) the cost of any riders for the current month; plus
(c) the expense charge shown on the data pages.
The Monthly Deduction will be deducted from the Subaccounts, the Fixed Account
and the Loan Account on a pro rata basis on each Monthly Deduction Date.
Cost of Insurance
The guaranteed cost of insurance each month used in calculating the Monthly
Deduction equals:
(a) the net amount at risk for the month; multiplied by
(b) the guaranteed cost of insurance charge per $1,000 of Specified Amount;
divided by
(c) 1,000.
The guaranteed monthly cost of insurance charge for each $1,000 is shown on the
data pages. The charge is based on the Insured's attained age and sex.
The net amount at risk in any month equals:
(a) the death benefit; less
(b) the Accumulation Value on the Monthly Deduction Date after deducting the
rider charge, if any, and the expense charge for the current month.
We may use current cost of insurance charges less than those shown. Current cost
of insurance charges are based on the Insured's rate class. We reserve the right
to change current cost of insurance charges. Changes in cost of insurance rates
will be by class and will be based on changes in future expectations of factors
such as:
(a) investment earnings;
(b) mortality;
(c) persistency;
(d) expenses; and
(e) taxes.
POLICY LOANS AND REPAYMENTS
Policy Loans
After the first policy year you may obtain a loan for up to 90% of the cash
surrender value less:
(a) the loan interest to the end of the policy year; and
(b) the Monthly Deduction large enough to continue this policy in force for
one month.
This policy must be assigned to us as sole security for the loan.
We will transfer all loan amounts from the Subaccounts and the Fixed Account to
the Loan Account. The amounts will be transferred on a pro rata basis.
Loan interest is payable at the rate of 5.7% in advance (6% effective annual
rate). Interest is due on each policy anniversary. If the interest is not paid
when due, we will transfer an amount equal to the unpaid loan interest from the
Subaccounts and the Fixed Account to the Loan Account on a pro rata basis.
We will credit 4.5% interest to any amounts in the Loan Account, except amounts
equal to a Preferred Loan as described below.
The death benefit will be reduced by the amount of any loan outstanding on the
date of the Insured's death.
We may defer making a loan for six months unless the loan is to pay premiums to
us.
Preferred Loan
A Preferred Loan is available if the cash surrender value exceeds the total of
all premiums paid since issue. The amount available for a Preferred Loan is the
amount by which the cash surrender value exceeds the total of premiums paid. The
amount of the Loan Account that equals a Preferred Loan will be credited with 6%
interest. The amount of indebtedness that qualifies as a Preferred Loan is
determined on each Monthly Deduction Date.
Loan Repayments
All or part of the loan may be repaid at any time while this policy is in force.
The amount of a loan repayment will be deducted from the Loan Account. It will
be allocated among the Fixed Account and the Subaccounts in the same percentages
as premiums are allocated.
INSURANCE AND NONFORFEITURE OPTIONS
Surrender for Cash
While the Insured is alive, you may terminate this policy for its cash surrender
value. The policy must be returned to us to receive the cash surrender value.
The cash surrender value equals:
(a) the Accumulation Value at the end of the Valuation Period in which we
receive your written request; less
(b) any outstanding policy loan and unpaid loan interest; and less
(c) any applicable surrender charge.
With regard to amounts allocated to the Fixed Account, the cash surrender value
will be equal to or greater than the minimum cash surrender value required by
the state in which this policy was delivered. The value is based on the
Commissioners 1980 Standard Mortality Table, age last birthday, with interest at
4.5%.
We may defer payment of a cash surrender from the Fixed Account for six months.
Continuation of Insurance
If no additional premiums are paid, this policy will continue as follows:
(a) if there are no outstanding policy loans, until the Accumulation Value
is not enough to pay the Monthly Deduction, subject to the DEATH BENEFIT
GUARANTEE provision and the GRACE PERIOD provision;
(b) if there are any outstanding policy loans, until the cash surrender
value is not enough to pay the Monthly Deduction and any loan interest
due, subject to the GRACE PERIOD provision; or
(c) until the maturity date,
whichever occurs first.
We will pay you any remaining Accumulation Value less any outstanding policy
loan and unpaid loan interest at maturity if the Insured is then living and
coverage beyond maturity is not elected.
PAYOUT OPTIONS FOR PAYMENT OF POLICY PROCEEDS
GENERAL CONDITIONS
While the Insured is alive, you may choose to have the Proceeds paid under any
combination of the fixed and variable payout options shown in this policy. A
Beneficiary may also have the death benefit applied to a payout option. If
another option is not chosen within 60 days of the date we receive due proof of
death, we will make payment in a lump sum.
We reserve the right to pay the Proceeds in one sum:
(a) when the Proceeds are less than $2,000; or
(b) when the option of payment chosen would result in periodic payments of
less than $20.
Payees must be individuals who receive payments in their own behalf unless
otherwise agreed to by us. Any option chosen will be effective when we
acknowledge it.
We may require proof of your age or survival or the age or survival of the
Payee.
The guaranteed minimum interest rate used in the fixed payout options is 3%.
Using a procedure approved by our Board of Directors, we may pay or credit
additional interest annually.
When the last Payee dies, we will pay to the estate of that Payee:
(a) any amount on deposit; or
(b) the then present value of any remaining guaranteed payments under a
fixed option.
PAYOUT OPTIONS
1. PROCEEDS HELD ON DEPOSIT AT INTEREST
This option is available on a fixed basis. While the Proceeds are held by
us, we will annually:
(a)pay interest to any Payee; or
(b)add interest to the Proceeds.
2. INCOME OF A SPECIFIED AMOUNT
This option is available on either a fixed or variable basis. We will pay
the Proceeds in installments of a specified amount until the Proceeds with
interest have been fully paid.
3. INCOME FOR A SPECIFIED PERIOD
This option is available on a fixed basis. We will pay the Proceeds in
installments for the number of years you choose. The monthly incomes for
each $1,000 of Proceeds are shown in the following table. These amounts
include interest. We will provide the income amounts for payments other than
monthly upon request.
- --------=========-------========----------------
Years Monthly Years Monthly Years Monthly
Chosen Income Chosen Income Chosen Income
- --------=========-------========----------------
1 $84.47 8 $11.68 15 $6.87
2 42.86 9 10.53 16 6.53
3 28.99 10 9.61 17 6.23
4 22.06 11 8.86 18 5.96
5 17.91 12 8.24 19 5.73
6 15.14 13 7.71 20 5.51
7 13.16 14 7.26
- --------=========-------========----------------
4. LIFETIME INCOME
This option is available on either a fixed or variable basis. We will pay
the Proceeds as a monthly income for as long as the Payee lives. The
following guarantees are available:
(a)GUARANTEED PERIOD - The monthly income will be paid for a certain
number of years and as long thereafter as the Payee lives; or
(b)GUARANTEED AMOUNT (INSTALLMENT REFUND) - The monthly income will be
paid until the sum of all payments equals the Proceeds placed under
this option and as long thereafter as the Payee lives.
The monthly income as a fixed payout will be the amount computed using one
of the following bases:
(a) the Lifetime Monthly Income Table for Fixed Payout Option 4 shown
in this policy; or
(b) if more favorable to the Payee, our then current lifetime monthly
income rates for payment of Proceeds. Payments will not be less than
payments made if the proceeds were used to purchase a single premium
immediate annuity available from us at that time to the same class of
payees.
The Lifetime Monthly Income Table for Fixed Payout Option 4 is based on the
1983a Mortality Table and interest at 3%.
5. LUMP SUM
The Proceeds will be paid in one sum.
6. OTHER OPTIONS
Upon request and if available, we will provide payments for other options,
including joint and survivor periods.
Additional information about any of the options may be obtained by contacting
us.
<PAGE>
<TABLE>
<CAPTION>
LIFETIME MONTHLY INCOME TABLE FOR FIXED PAYOUT OPTION 4
MONTHLY INCOME FOR EACH $1,000 OF PROCEEDS
- --------------------------------------------------------------------------------------------------------------
Age Last Guaranteed Guaranteed Age Last Guaranteed Guaranteed Age Last Guaranteed Guaranteed
Birthday Period Amount Birthday Period Amount Birthday Period Amount
------------ ---------- ------------ ----------- ----------- -----------
of Payee Male Female Male Female of Payee Male Female Male Female of Payee Male Female Male Female
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7 and
under $2.84 $2.77 $2.83 $2.76
8 2.85 2.78 2.84 2.77 34 $3.40 $3.23 $3.36 $3.20 60 $5.14 $4.66 $4.86 $4.48
9 2.86 2.79 2.85 2.78 35 3.44 3.26 3.39 3.23 61 5.27 4.76 4.96 4.56
10 2.87 2.80 2.86 2.79 36 3.48 3.29 3.42 3.26 62 5.39 4.87 5.07 4.66
11 2.89 2.81 2.88 2.80 37 3.52 3.32 3.46 3.29 63 5.53 4.98 5.19 4.75
12 2.90 2.82 2.89 2.82 38 3.56 3.35 3.49 3.32 64 5.66 5.10 5.30 4.86
13 2.91 2.83 2.90 2.83 39 3.60 3.38 3.53 3.35 65 5.81 5.22 5.43 4.96
14 2.93 2.85 2.92 2.84 40 3.65 3.42 3.57 3.38 66 5.96 5.36 5.56 5.08
15 2.95 2.86 2.93 2.85 41 3.69 3.46 3.61 3.42 67 6.12 5.50 5.70 5.20
16 2.96 2.87 2.95 2.86 42 3.74 3.50 3.66 3.45 68 6.28 5.65 5.85 5.33
17 2.98 2.89 2.96 2.88 43 3.79 3.54 3.70 3.49 69 6.44 5.80 6.00 5.47
18 3.00 2.90 2.98 2.89 44 3.85 3.58 3.75 3.53 70 6.61 5.97 6.16 5.61
19 3.01 2.92 3.00 2.91 45 3.90 3.63 3.80 3.57 71 6.79 6.14 6.33 5.76
20 3.03 2.93 3.02 2.92 46 3.96 3.67 3.85 3.61 72 6.96 6.32 6.51 5.93
21 3.05 2.95 3.04 2.94 47 4.02 3.72 3.90 3.66 73 7.14 6.50 6.69 6.10
22 3.07 2.96 3.06 2.95 48 4.09 3.78 3.96 3.70 74 7.32 6.69 6.90 6.28
23 3.09 2.98 3.08 2.97 49 4.15 3.83 4.01 3.75 75 7.50 6.89 7.10 6.47
24 3.12 3.00 3.10 2.99 50 4.22 3.89 4.07 3.80 76 7.67 7.09 7.32 6.68
25 3.14 3.02 3.12 3.01 51 4.30 3.95 4.14 3.86 77 7.84 7.29 7.54 6.90
26 3.16 3.04 3.14 3.02 52 4.37 4.01 4.20 3.91 78 8.01 7.49 7.78 7.12
27 3.19 3.06 3.16 3.04 53 4.45 4.08 4.27 3.97 79 8.18 7.69 8.03 7.37
28 3.22 3.08 3.19 3.06 54 4.54 4.15 4.34 4.03 80 8.33 7.89 8.30 7.64
29 3.24 3.10 3.21 3.09 55 4.62 4.22 4.42 4.10 81 8.48 8.08 8.58 7.90
30 3.27 3.12 3.24 3.11 56 4.72 4.30 4.50 4.17 82 8.61 8.26 8.88 8.20
31 3.30 3.15 3.27 3.13 57 4.82 4.38 4.58 4.24 83 8.74 8.43 9.19 8.50
32 3.33 3.17 3.30 3.15 58 4.92 4.47 4.67 4.31 84 8.86 8.59 9.53 8.81
33 3.37 3.20 3.33 3.18 59 5.03 4.56 4.77 4.39 85 8.97 8.74 9.83 9.18
and over
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Variable Payout Options
You may choose payout options 2, 4 or 6 to be paid as variable payments.
Variable payments vary according to the net investment return of the Subaccounts
chosen. If variable payments are being made under Option 2 or 6 and do not
involve life contingencies, then you may surrender the policy and receive the
commuted value of any unpaid payments.
First Variable Payment
We will compute the dollar amount of the first monthly variable payment by
applying all or part of the Proceeds to the Variable Payout Options table shown
in this policy for the payout option you choose. The table shows the dollar
amount of monthly payment that you can buy with each $1,000 of Proceeds.
If you have chosen more than one Subaccount, we will apply the accumulation
value of each Subaccount separately to the Variable Payout Options table. The
total amount of the first variable payment equals the sum of the payment amounts
payable for each Subaccount.
SECOND AND LATER VARIABLE PAYMENTS
The dollar amount of the second and later variable payments is not set. It may
change from month to month. We will compute the payment on the 10th Valuation
Date before the payment is due.
The amount of each variable payment after the first equals:
(a) the sum of the number of variable payment units under each
Subaccount; multiplied by
(b) the current variable payment unit value for each Subaccount as of the
date we compute the payment.
A variable payment unit is a measuring unit used in computing the amount of the
variable payments. The value of a variable payment unit for each Subaccount will
vary with the net investment return of the Subaccount.
Variable Payment Unit Value
The current value of a variable payment unit for each Subaccount is:
(a) the value as of the date we computed the last payment; multiplied by
(b) the Net Investment Factor for the Subaccount as of the date on which
we are computing the current payment.
The Net Investment Factor is figured by dividing (a) by (b), then subtracting
(c) from the result, then multiplying by the offset factor described below. The
values of (a), (b) and (c) are defined as follows:
(a) is the net result of
(1)the Net Asset Value of a Fund share held in a Subaccount as of the
end of the current payment period; plus or minus
(2)a per share credit or charge for any taxes we incurred since the last
computation date that were charged to the operation of the
Subaccount.
(b) is the Net Asset Value of a Fund share held in the Subaccount as of the
beginning of the current payment period.
(c) is the asset charge factor that reflects the expense charges deducted
from the Variable Account. This factor is equal, on an annual basis, to
1.20% of the daily net asset value of the Variable Account.
The result of the calculation described above is then multiplied by a factor
that offsets the assumed investment rate upon which the Variable Payout Options
table is based. This allows the actual investment rate to be credited. For a
one-day Valuation Period the factor is 0.99989255, using an assumed investment
rate of 4% per year.
Number of Variable Payment Units
The number of variable payment units payable for each Subaccount equals:
(a) the amount of the first monthly variable payment payable for that
Subaccount; divided by
(b) the variable payment unit value for that Subaccount as of the 10th
Valuation Date before the first variable payment is made.
The number of variable payment units payable for each Subaccount is fixed when
we compute the first variable payment. The number remains fixed unless you
exchange variable payment units between Subaccounts. The number of variable
payment units will not change as a result of investment experience.
We guarantee that the dollar amount of each variable payment after the first
will not be affected by actual expenses or changes in mortality experience.
Exchange of Variable Payment Units
After the first variable payment is made, you may exchange the value of a
specified number of variable payment units of one Subaccount for variable
payment units of another Subaccount or the Fixed Account. You may not exchange
variable payment units of the Fixed Account for variable payment units of the
Subaccounts.
The value of the variable payment units being exchanged will be the value for
the Valuation Period during which we receive your request for the exchange. The
value of the new variable payment units will be such that the dollar amount of a
payment made on the date of the exchange would not change as a result of the
exchange.
No more than four exchanges may be made each policy year.
<TABLE>
<CAPTION>
VARIABLE PAYOUT OPTIONS TABLE
MONTHLY PAYOUTS PER $1,000 BASED ON 4.00% INTEREST AND
1983a MORTALITY TABLE ALB PROJECTED 20 YEARS WITH
PROJECTION SCALE 'G'
- -------------------------------------------------------------------------------------------------------
- ---------------------------------------------------- --------------------------------------------------
FEMALE RATES MALE RATES
- ---------------------------------------------------- --------------------------------------------------
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
Age 20 Year 10 Year Life Only Installmen20 Year 10 Year Life Only Installment Age
Certain Certain Refund Certain Certain Refund
& Life & Life & Life & Life
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 0
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
1 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 1
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
2 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 2
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
3 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 3
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
4 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 4
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
5 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 5
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
6 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 6
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
7 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 7
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
8 3.44 3.45 3.45 3.44 3.50 3.50 3.51 3.50 8
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
9 3.45 3.45 3.45 3.45 3.51 3.51 3.51 3.50 9
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
10 3.46 3.46 3.46 3.46 3.52 3.52 3.53 3.51 10
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
11 3.47 3.47 3.47 3.47 3.53 3.53 3.53 3.52 11
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
12 3.48 3.48 3.48 3.47 3.54 3.54 3.54 3.53 12
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
13 3.48 3.49 3.49 3.48 3.55 3.55 3.56 3.54 13
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
14 3.49 3.50 3.50 3.49 3.56 3.57 3.57 3.56 14
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
15 3.50 3.51 3.51 3.50 3.57 3.58 3.58 3.57 15
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
16 3.51 3.51 3.52 3.51 3.58 3.59 3.59 3.58 16
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
17 3.52 3.53 3.53 3.52 3.60 3.60 3.60 3.59 17
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
18 3.53 3.54 3.54 3.53 3.61 3.62 3.62 3.60 18
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
19 3.54 3.55 3.55 3.54 3.62 3.63 3.63 3.62 19
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
20 3.55 3.56 3.56 3.55 3.64 3.64 3.65 3.63 20
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
21 3.57 357 3.57 3.56 3.65 3.66 3.66 3.65 21
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
22 3.58 3.58 3.58 3.58 3.67 3.67 3.68 3.66 22
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
23 3.59 3.60 3.60 3.59 3.68 3.69 3.70 3.68 23
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
24 3.61 3.61 3.61 3.60 3.70 3.71 3.71 3.70 24
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
25 3.62 3.62 3.63 3.62 3.72 3.73 3.73 3.71 25
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
26 3.63 3.64 3.64 3.63 3.74 3.75 3.75 3.73 26
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
27 3.65 3.65 3.66 3.65 3.76 3.77 3.77 3.75 27
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
28 3.67 3.67 3.67 3.66 3.78 3.79 3.79 3.77 28
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
29 3.68 3.69 3.69 3.68 3.80 3.81 3.81 3.79 29
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
30 3.70 3.71 3.71 3.70 3.82 3.83 3.84 3.81 30
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
31 3.72 3.73 3.73 3.72 3.84 3.86 3.86 3.84 31
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
32 3.74 3.75 3.75 3.74 3.87 3.88 3.89 3.86 32
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
33 3.76 3.77 3.77 3.76 3.89 3.91 3.91 3.89 33
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
34 3.78 3.79 3.79 3.78 3.92 3.94 3.94 3.92 34
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
35 3.80 3.81 3.81 3.80 3.95 3.97 3.97 3.94 35
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
36 3.82 3.84 3.84 3.82 3.97 4.00 4.00 3.97 36
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
37 3.85 3.86 3.86 3.85 4.00 4.03 4.04 4.00 37
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
38 3.87 3.89 3.89 3.87 4.04 4.07 4.07 4.03 38
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
39 3.90 3.92 3.92 3.90 4.07 4.10 4.11 4.06 39
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
40 3.93 3.95 3.95 3.93 4.10 4.14 4.15 4.10 40
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
41 3.96 3.98 3.98 3.96 4.14 4.18 4.19 4.14 41
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
42 3.99 4.01 4.01 3.99 4.18 4.22 4.24 4.18 42
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
43 4.02 4.04 4.05 4.02 4.22 4.27 4.28 4.21 43
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
44 4.05 4.08 4.09 4.05 4.25 4.32 4.33 4.25 44
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
45 4.09 4.12 4.13 4.09 4.30 4.36 4.38 4.30 45
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
46 4.13 4.16 4.17 4.13 4.34 4.41 4.43 4.35 46
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
47 4.16 4.20 4.21 4.16 4.38 4.47 4.49 4.39 47
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
48 4.20 4.24 4.25 4.20 4.43 4.52 4.55 4.44 48
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
49 4.24 4.29 4.30 4.24 4.48 4.58 4.61 4.49 49
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
50 4.29 4.34 4.35 4.29 4.53 4.64 4.68 4.55 50
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
51 4.33 4.39 4.40 4.34 4.58 4.70 4.74 4.61 51
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
52 4.38 4.44 4.46 4.39 4.63 4.77 4.81 4.67 52
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
53 4.43 4.50 4.52 4.44 4.69 4.84 4.89 4.73 53
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
54 4.48 4.56 4.58 4.49 4.74 4.91 4.97 4.80 54
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
55 4.53 4.62 4.65 4.56 4.80 4.99 5.06 4.87 55
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
56 4.59 4.69 4.72 4.62 4.86 5.08 5.14 4.94 56
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
57 4.65 4.76 4.79 4.68 4.92 5.16 5.24 5.02 57
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
58 4.71 4.83 4.87 4.74 4.98 5.25 5.34 5.10 58
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
59 4.77 4.91 4.96 4.82 5.04 5.35 5.45 5.19 59
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
60 4.83 5.00 5.05 4.89 5.01 5.45 5.57 5.28 60
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
61 4.89 5.08 5.14 4.97 5.17 5.56 5.69 5.37 61
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
62 4.96 5.18 5.24 5.06 5.23 5.67 5.82 5.47 62
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
63 5.03 5.28 5.35 5.14 5.29 5.79 5.97 5.58 63
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
64 5.09 5.38 5.47 5.24 5.35 5.92 6.11 5.69 64
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
65 5.16 5.49 5.59 5.34 5.41 6.05 6.28 5.81 65
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
66 5.23 5.61 5.72 5.45 5.47 6.19 6.45 5.93 66
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
67 5.30 5.74 5.86 5.56 5.52 6.32 6.63 6.06 67
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
68 5.37 5.86 6.02 5.68 5.58 6.47 6.84 6.20 68
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
69 5.43 6.00 6.18 5.80 5.63 6.62 7.05 6.35 69
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
70 5.50 6.15 6.36 5.93 5.67 6.78 7.28 6.50 70
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
71 5.56 6.30 6.55 6.07 5.72 6.94 7.51 6.64 71
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
72 5.61 6.46 6.76 6.22 5.76 7.10 7.77 6.82 72
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
73 5.67 6.63 6.99 6.37 5.80 7.27 8.04 6.99 73
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
74 5.72 6.80 7.23 6.55 5.83 7.43 8.33 7.17 74
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
75 5.76 6.99 7.49 6.72 5.86 7.60 8.64 7.37 75
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
76 5.80 7.17 7.77 6.91 5.89 7.77 8.97 7.57 76
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
77 5.83 7.36 8.07 7.11 5.91 7.94 9.32 7.78 77
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
78 5.86 7.55 8.40 7.33 5.93 8.11 9.70 8.01 78
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
79 5.89 7.74 8.75 7.55 5.94 8.28 10.10 8.25 79
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
80 5.91 7.93 9.14 7.78 5.96 8.44 10.54 8.50 80
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
81 5.93 8.12 9.55 8.03 5.97 8.60 10.99 8.76 81
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
82 5.95 8.31 9.99 8.30 5.98 8.75 11.49 9.03 82
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
83 5.96 8.49 10.47 8.57 5.98 8.89 12.01 9.33 83
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
84 5.97 8.66 10.99 8.86 5.99 9.03 12.57 9.62 84
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
85 5.98 8.82 11.56 9.18 6.00 9.16 13.14 9.94 85
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
86 5.99 8.97 12.17 9.49 6.00 9.28 13.77 10.28 86
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
87 5.99 9.11 12.80 9.82 6.00 9.38 14.44 10.62 87
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
88 6.00 9.24 13.51 10.17 6.00 9.48 15.18 11.00 88
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
89 6.00 9.35 14.25 10.53 6.00 9.58 16.96 11.38 89
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
90 6.00 9.46 15.04 10.90 6.00 9.66 15.80 11.81 90
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
91 6.00 9.56 15.81 11.29 6.00 9.74 17.62 12.22 91
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
92 6.00 9.63 16.60 11.69 6.00 9.79 18.52 12.65 92
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
93 6.00 9.71 17.43 12.10 6.00 9.85 19.47 13.15 93
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
94 6.00 9.78 18.32 12.53 6.00 9.90 20.48 13.66 94
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
95 6.00 9.84 19.20 12.99 6.00 9.94 21.59 14.21 95
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
</TABLE>
<PAGE>
THIS IS A MODIFIED SINGLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY. THE
POLICY'S ACCUMULATION VALUE IN THE VARIABLE ACCOUNT IS BASED ON THE INVESTMENT
EXPERIENCE IN THAT ACCOUNT AND WILL INCREASE OR DECREASE DAILY. THE DOLLAR
AMOUNT IS NOT GUARANTEED. THE AMOUNT OF THE DEATH BENEFIT MAY BE FIXED OR
VARIABLE, DEPENDING ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT. IF NO
POLICY LOANS ARE TAKEN, WE GUARANTEE COVERAGE TO THE EARLIER OF THE FIFTH POLICY
ANNIVERSARY OR THE POLICY ANNIVERSARY NEXT FOLLOWING THE INSURED'S 75TH
BIRTHDAY. NO DIVIDENDS ARE PAYABLE.
EXHIBIT 1.A. (6)(B): BYLAWS OF COMPANION LIFE INSURANCE COMPANY
<PAGE>
COMPANION LIFE INSURANCE COMPANY
BYLAWS
ARTICLE I
OFFICES - The principal office of the Corporation shall be located in the City
of Rye, County of Westchester, State of New York. The Corporation may have such
other offices, agencies or branches within or without the State of New York, and
in every part of the world, as the Board of Directors may from time to time
determine, and may carry on its business wherever it is duly licensed so to do.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the Stockholders of the
Corporation, for the election of directors and the transaction of such other
business as may properly come before the meeting, shall be held at the principal
office of the Corporation in the State of New York in the month of December, not
later than the fourth Wednesday of that month in each and every year, or, if a
legal holiday, then on the next succeeding business day. The Chairman of the
Board, or in his absence, the President, or in his absence, an Executive Vice
President shall preside at any meeting of the stockholders.
SECTION 2. NOTICE OF ANNUAL MEETING. Written notice of the annual meeting of the
stockholders shall be signed by the Chairman of the Board or the President, or
the Secretary. It shall state the purpose or purposes for which the meeting is
called and the time when and the place within the State of New York where it is
to be held, and a copy thereof shall be served, either personally or by mail,
upon each stockholder of record entitled to vote at such meeting, not less than
ten nor more than forty days before the meeting. If mailed, it shall be directed
to a stockholder at his address as it appears on the stock book of the
Corporation unless he shall have filed with the Secretary of the Corporation a
written request that notices intended for him be mailed to some other address,
in which case, it shall be mailed to the address designated in such request. A
copy of the notice of the annual meeting for the election of Directors shall be
filed in the office of the Superintendent of Insurance of the State of New York
at least ten days before the day of such election, in addition to the service
thereof, as made in accordance with the provisions of this section.
SECTION 3. INSPECTORS OF ELECTION. The election of Directors shall be conducted
by two inspectors of election, neither of whom shall be a candidate for the
office of Director. The inspectors shall be chosen at each meeting of
stockholders to serve for that meeting. The inspectors, before entering upon the
discharge of their duties, shall be sworn to execute faithfully the duties of
inspectors at such meeting with strict impartiality, and according to the best
of their ability, and the oath so taken shall be subscribed by them. They shall
make a written certificate of the result of the election.
SECTION 4. SPECIAL MEETINGS. Special meetings of the stockholders for any
purpose or purposes other than those regulated by statute may be held at the
principal office of the Corporation or at any other convenient place in the
State of New York. Such special meetings may be called by a majority of the
Board of Directors or by the Chairman of the Board or by the President. Business
transacted at all special meetings shall be confined to the objects stated in
the call and matters germane thereto.
SECTION 5. NOTICE OF SPECIAL MEETINGS. Written notice of a special meeting of
stockholders, stating the time, place and object thereof, shall be given to each
stockholder entitled thereto, in the same manner and within the same time as
provided herein for the service of notice of an annual meeting.
SECTION 6. QUORUM: MAJORITY VOTE. The presence of the holders of a majority of
the stock issued and outstanding entitled to vote, present in person or
represented by proxy, shall be requisite for and shall constitute a quorum at
all meetings of the stockholders for the transaction of business except as
otherwise provided by law. If such majority shall not be present or represented,
those present in person or by proxy shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until the
requisite amount of stock shall be present, when any business may be transacted
which might have been transacted at the meeting as originally called. A majority
vote of the quorum present in person or by proxy at any meeting shall govern all
proceedings not herein or by law requiring a different vote.
SECTION 7. NUMBER OF VOTES. At all stockholders' meetings, each stockholder
entitled to vote shall be entitled to one vote for every full share of voting
stock standing in his name on the books of the Corporation on the date for the
determination of stockholders entitled to vote at such meeting.
ARTICLE III.
DIRECTORS
SECTION 1. BOARD OF DIRECTORS. The property and business of the Corporation
shall be managed by a Board of Directors, each of whom shall be at least
eighteen years of age, of not fewer than thirteen and not more than seventeen
members. At all times, a majority of the Directors shall be citizens and
residents of the United States and not less than three thereof shall be
residents of this State. Not less than one-third of the Directors shall be
persons who are not officers or employees of the Corporation or of any entity
controlling, controlled by, or under common control with the Corporation and who
are not beneficial owners of a controlling interest in the voting stock of the
Corporation or any such entity. At least one such person must be included in any
quorum for the transaction of business at any meeting of the Board.
Policyholders of the Corporation shall be eligible for election as Directors or
Officers, whether or not they be stockholders. The Board of Directors shall have
all the powers in the management of the Corporation's affairs which are not
inconsistent with law.
However, if the Corporation shall have admitted assets of less than Five Hundred
Million Dollars, the minimum number of the Directors instead shall in no case be
less than nine of which at least four must not be officers or employees of the
Corporation or any entity controlling, controlled by, or under common control
with the Corporation an who are not beneficial owners of a controlling interest
in the voting stock of the Corporation or any such entity. SECTION 2. TERM. At
each annual meeting of stockholders, Directors shall be elected to hold office
until the next annual meeting. Each Director shall hold office until the
expiration of the term for which he is elected, and until his successor has been
elected and qualified.
SECTION 3. ELECTION. The Directors shall be elected at each annual meeting of
the stockholders or at any adjourned meeting thereof, and the number of persons
requisite to constitute said Board of Directors receiving a plurality of votes
cast at the election shall be directors until the next annual meeting, and until
his successor has been elected and qualified. If at any annual meeting less than
seventeen Directors are elected, an additional Director or Directors may be
elected at a special meeting of the stockholders and said Director or Directors
shall serve until the next annual meeting and until his successor has been
elected and qualified. No election of Directors shall be valid unless a copy of
the Notice of Election shall have been filed in the Office of the Superintendent
of Insurance at least ten days before the day of such election.
SECTION 4. VACANCIES. In case of any vacancy in the Board of Directors, through
death, resignation, or other cause, the remaining Directors, by the affirmative
vote of a majority of the Board of Directors, may elect a successor to hold
office for the unexpired portion of the term of the Director whose place shall
have become vacant, and until the election of a successor. Such successor shall
not take office, nor exercise the duties thereof, until ten days after written
notice of his election shall have been filed in the Office of the Superintendent
of Insurance of the State of New York.
SECTION 5. REGULAR MEETINGS Regular Meetings of the Board of Directors shall be
held each year, upon notice, on any day of any month in the first, second, and
third quarters of said year, except for the meeting (in the fourth quarter) in
December, which shall be held on any day during that month subsequent to the
Annual Meeting of Stockholders.
SECTION 6. SPECIAL MEETINGS. Special Meetings of the Board may be called by
the Chairman of the Board, or by the President, or by any two Directors on
two days' notice to each Director, either personally, or by mail or wire.
SECTION 7. PLACE OF MEETING. Directors may hold their meetings in such place or
places, both within and without the State of New York, as the Board of Directors
from time to time may determine.
SECTION 8. QUORUM AND VOTE. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting. An
affirmative vote of a majority of the Directors present at any meeting shall
govern all proceedings provided at least one Director in the quorum is a person
who is not an officer or employee of the Corporation or of any entity
controlling, controlled by, or under common control with the Corporation and who
is not a beneficial owner of a controlling interest in the voting stock of the
Corporation or any such entity and provided a different vote is not required
herein or by law.
SECTION 9. ADJOURNMENT OF MEETINGS. A majority of the Directors present, whether
or not a quorum is present, may adjourn any meeting to another time and place.
Notice of any adjournment of a meeting shall be given to the Directors who were
not present at the time of the adjournment and, unless such time and place are
announced at the meeting, to the other Directors.
SECTION 10. CONDUCT OF MEETINGS. At any meeting of the Board of Directors, the
Chairman of the Board, or in his absence, the President, or in his absence, any
Director elected by the Directors present thereat, shall preside, and the
Secretary, or in his absence, any person appointed by the presiding officer,
shall act as Secretary thereof and shall keep a record of the proceedings.
SECTION 11. COMPENSATION. Directors as such shall not receive any salary for
their services but by resolution of the Board, meeting fees and expenses of
attendance, if any, may be allowed, except that no such fee or allowance shall
be paid to a Director who is a salaried employee of the Corporation. Nothing
herein contained shall be construed to preclude any Directors, other than
salaried employees of the Corporation, from serving the Corporation in any other
capacity and receiving compensation therefor.
SECTION 12. INDEMNIFICATION. The Corporation shall indemnify any person, made,
or threatened to be made, a party to any action or proceeding other than one by
or in the right of the Corporation to procure a judgment in its favor, whether
civil or criminal, which any Director of the Corporation served in any capacity
at the request of the Corporation, by reason of the fact that he, his testator
or intestate, was a Director of the Corporation, against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred as a result of such action or proceeding, or
any appeal therein, if such Director acted, in good faith, for a purpose which
he reasonably believed to be in the best interests of the Corporation and, in
criminal actions or proceedings, in addition, had no reasonable cause to believe
that his conduct was unlawful. The termination of any such civil or criminal
action proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create a presumption that any
such Director did not act, in good faith, for a purpose which he reasonably
believed to be in the best interests of the Corporation or that he had
reasonable cause to believe that his conduct was unlawful.
ARTICLE IV
STANDING COMMITTEES
SECTION 1. The standing committees of the Board of Directors shall consist of an
Executive Committee, an Investment Committee, an Audit Committee and a Committee
of Planning, Operations and Personnel, the members of which shall be elected by
the Board of Directors. No Director shall be a chairman of both the Investment
Committee and the Audit Committee. Members of the respective committees shall be
chosen by resolution adopted by a majority of the entire Board. At least
one-third of the members of the Executive Committee and the Investment Committee
shall be persons who are not officers or employees of the Corporation or of any
entity controlling, controlled by, or under common control with the Corporation
and who are not beneficial owners of a controlling interest in the voting stock
of the Corporation or any such entity. The Audit Committee and the Planning,
Operations and Personnel Committee shall be comprised solely of Directors who
are not officers or employees of the Corporation or of any entity controlling,
controlled by, or under common control with the Corporation and who are not
beneficial owners of a controlling interest in the voting stock of the
Corporation or any such entity.
SECTION 2. EXECUTIVE COMMITTEE The Executive Committee shall consist of three or
more Directors and be vested with the power of the Board of Directors during
intervals when the Board is not in session, so far as permitted by law and not
otherwise prescribed by these By-laws.
SECTION 3. INVESTMENT COMMITTEE The Investment Committee shall consist of three
or more Directors and shall exercise general control and supervision of the
financial affairs of the Company, including the purchase and sale of securities
and the management of the assets of the Company, and shall adopt rules
regulating their custody and safekeeping. It may authorize expenditures in
connection with the investments of the Company. Every purchase, sale, exchange
or conversion of real estate, stock, bonds, or other securities, and the making
or purchase of every collateral or mortgage loan or other investment must be
authorized or approved by the Investment Committee in accordance with
requirements of the Insurance Law of the State of New York. No purchase or sale
shall be made without the consent of all the members of the Committee present.
The Treasurer, or in his absence, one of his assistants designated by the
Investment Committee, shall act as its Secretary.
SECTION 4. AUDIT COMMITTEE. The Audit Committee shall consist of three or more
Directors and shall have responsibility for recommending the selection of
independent certified public accountants and for reviewing the scope and results
of the independent audit and any internal audit.
SECTION 5. PLANNING, OPERATIONS and PERSONNEL COMMITTEE. The Planning,
Operations and Personnel Committee shall consist of three or more Directors and
shall have responsibility for reviewing the Corporation's financial condition,
nominating candidates for Director for election by the shareholders, and
evaluating the performance of officers deemed to be principal officers of the
Corporation and recommending to the Board of Directors the selection and
compensation of such principal officers.
SECTION 6. RULES FOR COMMITTEES. Each Standing Committee shall elect its own
Chairman and Secretary and shall hold regular meetings which shall be convened
on the call of the President, or of the Executive Vice President, or of the
Chairman of the Boards, or of the Chairman of the Committee and shall submit a
report to the Board of Directors at its next meeting. All Standing Committees
shall keep minutes of their meetings and shall have the power to make Rules and
Regulations not inconsistent or in conflict with the Charter and By-laws
concerning the conduct of the business entrusted to them. A majority of the
members of the Standing Committees shall constitute a quorum provided such
majority includes at least one person who it not an officer or employee of the
Corporation or of any entity controlling, controlled by, or under common control
with the Corporation and who is not a beneficial owner of a controlling interest
in the voting stock of the Corporation or any such entity. An affirmative vote
of a majority of the Standing Committee members present at any meeting shall
govern all proceedings except those proceedings herein or by law requiring a
different vote.
SECTION 7. MEETINGS BY MAIL. Where time is of the essence, but not in lieu of a
regularly scheduled meeting of the Board of Directors or any Committee thereof,
any action required or permitted to be taken by a Committee may be taken without
a meeting if all Members of the Committee consent in writing to the adoption of
a resolution authorizing the action. Any resolution adopted pursuant to this
paragraph shall be ratified by the Board at the next regular meeting thereof. If
the Board fails to ratify such resolution it shall be of no further force or
effect.
SECTION 8. COMPENSATION. Directors who hereafter serve on the Standing
Committees of this Corporation shall be paid meeting fees and expenses, if any,
for attendance at any committee meeting as shall be established by resolution of
the Board. No such fee or allowance shall be paid to a Director who is a
salaried employee of the Corporation.
ARTICLE V
OFFICERS
SECTION 1. OFFICERS. The Officers of the Corporation shall be a Chairman of the
Board, a President, one or more Executive Vice Presidents, a Secretary and a
Treasurer, and may include, at the sole discretion of the Board of Directors,
one or more Vice Chairmen of the Board. Policyholders shall be eligible to
election as officers, whether or not they be stockholders. Any two or more
offices may be held by the same person, except the office of President and
Secretary.
SECTION 2. ELECTION AND TERM OF OFFICERS. The Board of Directors, at the meeting
immediately following the annual stockholders' meeting, shall elect, by a
majority vote of the Directors present: a Chairman of the Board, a President,
one or more Executive Vice Presidents, a Secretary and a Treasurer, all of whom
shall hold office until he shall resign or shall be removed or otherwise
disqualified to serve, or his successor shall be elected and qualified. The
Board of Directors, at the aforesaid meeting, may elect, at their sole
discretion, by a majority vote of Directors present, one or more Vice Chairmen
of the Board, who shall hold office for one year.
SECTION 3. OTHER OFFICERS. The Board may appoint such other officers, agents,
and employees as it shall deem necessary, who shall have such authority and
shall perform such duties as from time to time shall be prescribed by the Board.
SECTION 4. REMOVAL OF OFFICERS. Any officer may be removed either with or
without cause by a vote of a majority of the Board of Directors.
SECTION 5. POWERS AND DUTIES OF OFFICERS.
(a) THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at all meetings of the Stockholder and the Board of Directors.
(b) THE PRESIDENT. The President shall be the chief executive officer
and the chief operating officer of the Corporation. He shall have general charge
and control of the business and affairs of the Corporation, and shall perform
all duties commonly incident to his office and such other duties as the Board
may prescribe.
(c) THE VICE CHAIRMAN OF THE BOARD. There may be one or more Vice
Chairmen of the Board, who shall have such authority and perform such duties as
from time to time shall be prescribed by the Board.
(d) THE EXECUTIVE VICE PRESIDENT. There shall be one or more Executive
Vice Presidents appointed by the Board, who shall have such authority and
perform such duties as from time to time shall be prescribed by the Board.
(e) THE SECRETARY. The Secretary shall attend all meetings of the Board
and of the stockholders and shall record all votes and minutes of all
proceedings in a book to be kept for that purpose. He shall cause to be given
notice of all meetings of stockholders and directors and shall perform such
other duties as pertain to his office. He shall have charge of the corporate
seal.
(f) THE TREASURER. The Treasurer shall have the custody of all the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board, taking proper vouchers for such disbursements, and shall render to
the President and Directors at a regular meeting of the Board, or whenever they
may require it, an account of all transactions as Treasurer and of the financial
condition of this Corporation.
SECTION 6. VACANCIES. In the event of a vacancy in any office for any reason
whatsoever, the Board of Directors at any regular meeting or special meeting may
elect any person to fill the balance of the term.
SECTION 7. COMPENSATION OF OFFICERS. The compensation of officers shall be fixed
by theBoard of Directors.
SECTION 8. INDEMNIFICATION. The Corporation shall indemnify any person, made, or
threatened to be made, a party to any action or proceeding other than one by or
in the right of the Corporation to procure a judgment in its favor, whether
civil or criminal, which any officer of the Corporation served in any capacity
at the request of the Corporation, by reason of the fact that he, his testator
or intestate, was an officer of the Corporation, against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred as a result of such action or proceeding, or
any appeal therein, if such officer acted, in good faith, for a purpose which he
reasonably believed to be in the best interests of the Corporation and, in
criminal actions or proceedings, in addition, had no reasonable cause to believe
that his conduct was unlawful. The termination of any such civil or criminal
action proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create a presumption that any
such officer did not act, in good faith, for a purpose which he reasonably
believed to be in the best interests of the Corporation or that he had
reasonable cause to believe that his conduct was unlawful.
ARTICLE VI
EXPENDITURES
No salary, compensation or emolument shall be paid to any officer,
trustee, or director of the Corporation, nor shall any salary, compensation or
emolument amounting in any year to more than sixty-thousand dollars be paid to
any person, firm or corporation, unless such payment be first authorized by the
Board of Directors.
ARTICLE VII
STOCK CERTIFICATES
SECTION 1. ISSUE AND REGISTRATION. The certificates of stock of the Corporation
shall be numbered and registered as they are issued. They shall bear the
holder's name and number of shares and shall be signed by the President and the
Treasurer or Secretary, and shall bear the corporate seal.
SECTION 2. TRANSFERS. Transfers of stock shall be made on the books of the
Corporation by the person named in the certificate or by his attorney lawfully
constituted and upon surrender of such certificate. Every such transfer of stock
shall be entered on the stock book of the Corporation. The Corporation shall be
entitled to treat the holder of record any share or shares of stock as the
holder in fact thereof, and accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of New York.
SECTION 3. CLOSING OF TRANSFER BOOKS. The transfer books by resolution of the
Board of Directors, may be closed for a period not exceeding thirty days prior
to any meeting of stockholders or the day designated for the payment of a
dividend.
ARTICLE VIII
DIVIDENDS
The Directors may from time to time manifest an intention to declare cash
dividends out of any funds of the Corporation available therefor at such times
and in such amounts as the Board of Directors may from time to time designate,
but no such cash dividends shall be paid to stockholders of the Corporation
unless a notice of such intention to declare such dividend and the amount
thereof shall have been filed with the Superintendent of Insurance of the State
of New York not less that thirty days in advance of such proposed declaration,
nor if the Superintendent, within thirty days after such filing, gives written
notice to the Corporation of his disapproval of such payment.
ARTICLE IX
INDEMNIFICATION
Any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, other than an action by or in the right of the
Company, by reason of the fact that he is or was a supervisory employee of the
Company, shall be and hereby is indemnified, without need of affirmative act on
his part, or on the part of the Company's Board of Directors, against all
expenses, including attorneys' fees, judgements, fines and amounts paid in
settlement, actually and reasonably incurred by such employee in connection with
such action, suit or proceeding if said employee acted in good faith, and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful. The Company shall have the
power to make other additional indemnifications that may be authorized by the
Articles of Incorporation, or Stockholders Resolutions, or duly enacted By-laws.
The termination of any action, suit or proceeding by judgment, order settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
ARTICLE X
SEAL
The seal of the Corporation shall be circular in form and contain the name of
the Corporation, the year of its organization, and the words "Corporate Seal,
New York."
ARTICLE XI
WAIVERS
The giving of notice to any stockholder or Director, required to be given under
these By-laws or the laws of the State of New York, may be waived by an
instrument in writing, signed by the person or persons entitled to said notice,
whether before or after the time or event referred to in said notice, which
waiver shall be deemed equivalent to such notice.
ARTICLE XII
AMENDMENTS
These By-laws may be altered, amended or repealed by the affirmative vote of the
holders of a majority of the number of shares of the stock of the Corporation
issued and outstanding and entitled to vote at any annual or special meeting of
the Stockholders.
ARTICLE XIII
CONSTRUCTION
The masculine gender, where appearing in the By-laws, shall be deemed to
included the feminine gender.
COMPANION LIFE INSURANCE COMPANY
BY-LAWS
Adopted At Special Meeting of Stockholder on November 9, 1971
As Amended Through December 13, 1996
EXHIBIT 1.A. (10): FORM OF APPLICATION FOR THE POLICY
<PAGE>
VARIABLE UNIVERSAL LIFE INSURANCE APPLICATION.
=========================================================================
Name: Former Name (if applicable):
Address:
Sex: -- M -- F Age: Date of Birth: Place of Birth:
Social Security Number: Drivers License Number: State of Issue:
Height: Weight: Tobacco User: --Yes--No
Are you a U.S. citizen? --Yes. --No. If "No", date of arrival in the U.S.
Do you have an alien registration receipt "Permanent Visa"? --Yes. --No
If "Yes" Permanent Visa #.
Phone Number: ( ) -- Home. -- Business. Best Time to Call:
================================================================================
Name: Relationship to Proposed Insured:
Address:
Social Security Number or Taxpayer ID Number:
================================================================================
Note - Unless you specify otherwise, payments will be shared
equally by all primary beneficiaries who survive the Insured
or, if none, by all contingent beneficiaries who survive the
Insured. The right to change the beneficiary is reserved
unless otherwise stated.
Primary Beneficiary(ies):
Name: Relationship: SSN:
Name: Relationship: SSN:
Contingent Beneficiary(ies):
Name: Relationship: SSN:
Name: Relationship: SSN:
==========================================================================
d. Have you ever been declined or rated for life insurance? -- Yes. --No.
NOTE: IF (A) ANY ANSWERS ABOVE ARE "YES", OR (B) THE PREMIUM IS OVER
$100,000, OR (C) THE PROPOSED INSURED IS UNDER AGE 45 OR OVER AGE 80,
THEN FULL UNDERWRITING IS REQUIRED. AN AUTHORIZED REPRESENTATIVE
WILL CONTACT YOU TO COMPLETE PARTS II, III AND IV OF THIS APPLICATION
FOR LIFE INSURANCE.
If the Proposed Insured does not qualify for variable life insurance
under this application, shall the Company send the Proposed Insured an
application for our Variable Annuity product? ---Yes. --- No.
===============================================================================
a. List all Life Insurance now in force. If none, write "None." Will the
insurance applied for replace or change any existing Life Insurance or
Annuities? If "Yes", so indicate below.
===============================================================================
(Make checks payable to UNITED OF OMAHA LIFE INSURANCE COMPANY)
Initial Premium. (Note: Minimum premium of $20,000 required):
Select your investment portfolio either by allocating your premium among
the funds in section 6a (total must equal 100%), or by choosing a Model
Portfolio in section 6b. Unless otherwise specified, additional premium
payments will be allocated according to this election.
6a. --- Allocate my premium as follows:
6b. --- Allocate my premium to one of the following model portfolios:
Aggressive. Moderate. Conservative.
6c. Rebalance my portfolio as indicated in 6a or 6b: -- Yes. -- No.
If yes, check how often you would like your portfolio rebalanced:
--- Quarterly. --- Semi-Annually. --- Annually.
================================================================================
(A minimum value of $5,000 is required in the subaccount from which
transfers will be made at the time of election. No more than 10% can be
transferred from the Fixed Account at the time of election).
Frequency: -- Monthly. -- Semi-Annually. -- Quarterly. -- Annually.
Date of Transfer: -- 1st of the Month. -- 15th of the Month.
Minimum Transfer: $100 minimum; $50 per Subaccount.
===============================================================================
Policyowner Telephone Transfer.
-- I authorize the Company to act on telephone instructions from
any owner to transfer account values among subaccounts, subject to the
conditions of the prospectus. Neither the Company nor any person authorized
by the Company will be responsible for any claim, loss, liability or
expense in connection with a telephone transfer if the Company or
such person acted on telephone transfer instructions in good
faith in reliance on this authorization.
Agent Transfer.
-- I authorize under a Limited Power of Attorney the agency that signs
this application to effect exchanges among my subaccounts, without the
requirement of any further authorization or instructions. I
understand that this authorization shall continue to be effective
until a written, signed revocation is receive by the Company.
Neither the Company nor any person authorized by the Company will be
responsible for any claim, loss, liability or expense in connection
with action taken in good faith in honoring this Limited Power of
Attorney appointment and authorization. Owner's initials ____________.
Initial if the Agent Transfer is chosen.
================================================================================
I, the undersigned, agree that:
1. All answers in this application and its supplements, if any: (a) are true
and complete to the best of my knowledge and belief; and (b) will be relied
on to determine insurability; and (c) which contain any materially incorrect
or misleading answer, may void the application effective the issue date. I
will inform United of any changes to the answers in my application before I
receive the policy.
2. If the full initial premium is paid and I am eligible for the policy
applied for in accordance with the underwriting standards of United of Omaha,
the life policy will be in effect from the date of the application.
3. Except as provided by any Temporary Life Insurance Agreement provided with
my Application, the insurance applied for will not take effect until: (a) the
policy has been delivered to and accepted by me; (b0 the required first
premium has been received during my lifetime; and (c) any amendments issued
with the policy have been completed and signed, all while there has been no
change in my insurability, according to United's underwriting standards,
since the date of the application.
4. In no event will benefits be paid for the same loss under any Temporary
Life Insurance Agreement and any life insurance policy issued from this
application.
5. If the applicant is other than the proposed insured, the policy will be
owned by the applicant.
6. No agent/broker can :(a) waive or change any receipt or policy provision;
or (b) agree to issue a policy.
7. I have received the Notice of Information Gathering Practices.
I have: (a) read the Agreements Section and the receipt(s) and (b) read and
approved the answers as recorded.
1. Do you have reason to believe the policy applied for will replace any
existing life insurance or annuities?
2. Have you asked each question as written and recorded the answers
completely and accurately?
<PAGE>
10. Receipt
ALL CHECKS FOR PREMIUMS MUST BE MADE PAYABLE TO UNITED OF OMAHA.
DO NOT MAKE CHECKS PAYABLE TO THE AGENT/BROKER OR LEAVE THE PAYEE BLANK.
TEMPORARY LIFE INSURANCE AGREEMENT AND RECEIPT ("Agreement").
If any of questions 4a, 4b, 4c or 4d of the application having the same date
as this Agreement is answered "Yes", or not answered, or if the Proposed
Insured is over age 80, or if the premium is over $100,000, no Agent/Broker
of United is authorized to accept money with the application and no coverage
will take effect under this Agreement.
In consideration of the application and payment of $____________________ by
the Applicant, receipt of which is hereby acknowledged, United agrees to
provide temporary life insurance for the Proposed Insured(s) effective on the
date of the application, for a limited period of time, subject to the
following conditions and limitations.
1. If any answer to any of questions 4a, 4b, 4c or 4d is materially
incorrect or misleading, then this Agreement is void and never went
into effect.
2. Temporary life insurance under this Agreement will automatically
terminate on the earliest of the following dates:
(a) 90 days from the date of this Agreements, except in Connecticut; or
(b) The date that insurance takes effect under the policy applied for;
or
(c) The date of the letter offering to the Applicant a policy, other
than as applied for; or
(d) The date a policy, other than as applied for, is offered by an
Agent/Broker to the Applicant; or
(e) The date the premium refund is mailed; or
(f) The date United mails notice of termination of coverage.
3. The temporary life insurance provided by this Agreement is subject to
the provisions of the policy form applied for; however, no benefits
will be paid for:
(a) disability; or
(b) death from suicide while sane or insane (in Missouri, only if
suicide was intended at the time of this application and we can
prove it was intended); or
(c) the same loss under both this Agreement and any life policy issued
from the application.
This Agreement does not limit United in applying its underwriting standards
to the application nor does this Agreement limit or waive any rights under
any life insurance policy issued. If the application is rejected by United,
the amount paid with the application will be refunded to the Applicant
regardless of whether a claim has been filed or benefits have been paid under
this Agreement.
No change may be made to the terms and conditions of this Agreement by
anyone, including the Agent/Broker.
IF THE PROPOSED INSURED DIES PRIOR TO THE TERMINATION OF THIS AGREEMENT,
UNITED WILL PAY THE BENEFICIARY THE FACE AMOUNT APPLIED FOR, BASED ON THE
PREMIUM PAID, UP TO A MAXIMUM FACE AMOUNT OF $500,000.
I have read and received a copy of this Agreement and understand and agree to
all of its terms. I verify the above answers are true to the best of my
knowledge and belief.
Signed this day of _______________, 19__, at.
<PAGE>
To all physicians, medical or dental practitioners, hospitals, clinics, other
medical care facilities or other providers of medical or dental care
services, insurers, employers and consumer reporting agencies:
I authorize you to release all medical and nonmedical information about me
(the undersigned) or my children to Mutual of Omaha and/or United of Omaha,
its reinsurers and any consumer reporting agency acting for them. This
authorization includes information about medical history, mental and physical
condition, drug and alcohol use, and other personal information such as
finances, occupation and general reputation.
To the Medial Information Bureau, Inc. (MIB):
I authorize you to release all medical and nonmedical information about me
(the undersigned) to Mutual of Omaha and/or United of Omaha and their
reinsurers. This authorization includes information about medical history,
mental and physical condition, drug and alcohol use, and other personal
information.
Information received will be used to determine insurability. This
authorization is valid for 30 months from the date below. A photocopy of this
authorization is as valid as the original. I have receive the Notice of
Information Gathering Practices, including MIB notices. I will receive a copy
of this authorization and any investigative consumer report upon request.
If an investigative consumer report is prepare, I may request to be
interviewed. (Check if an interview is desired). ----
Name used for medical records.
Date.
