File No. 811-08433
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
N-8B-2
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUSTS
WHICH ARE CURRENTLY ISSUING SECURITIES
PURSUANT TO SECTION 8(B) OF THE
INVESTMENT COMPANY ACT OF 1940
COVA VARIABLE LIFE ACCOUNT FIVE
______________________________________________________________________
(NAME OF UNIT INVESTMENT TRUST)
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Furnish name of the trust and the Internal Revenue Service Employer
Identification Number.
Cova Variable Life Account Five ("Separate Account").
IRS Employer Identification Number: N/A
(b) Furnish title of each class or series of securities issued by the trust.
Modified Single Premium Variable Life Insurance Policy ("Policy").
2. Furnish name and principal business address and ZIP Code and the
Internal Revenue Service Employer Identification Number of each depositor of
the trust.
Cova Financial Life Insurance Company ("Company")
573 Anton Boulevard
Costa Mesa, CA 92626
800-523-1661
IRS Employer Identification Number: 94-2176117
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3. Furnish name and principal business address and ZIP Code and the
Internal Revenue Service Employer Identification Number of each custodian or
trustee of the trust indicating for which class or series of securities each
custodian or trustee is acting.
Not Applicable
4. Furnish name and principal business address and ZIP Code and the
Internal Revenue Service Employer Identification Number of each principal
underwriter currently distributing securities of the trust.
The Policy is not currently being distributed. When such distribution
commences, Cova Life Sales Company will be the "Principal Underwriter."
Cova Life Sales Company ("Life Sales")
One Tower Lane, Suite 3000
Oakbrook Terrace, IL 60181
IRS Employer Identification Number: 36-3324851
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5. Furnish name of state or sovereign power, the laws of which govern with
respect to the organization of the trust.
California
6. (a) Furnish the dates of execution and termination of any indenture or
agreement currently in effect under the terms of which the trust was organized
and issued or proposes to issue securities.
The Separate Account was established pursuant to a resolution of the
Board of Directors of the Company on March 24, 1992, and was designated as
an operational Separate Account on March 24, 1992. The Separate Account
will continue in existence until its complete liquidation and the distribution
of its assets to the persons entitled to received them.
(b) Furnish the dates of execution and termination of any indenture or
agreement currently in effect pursuant to which the proceeds of payments on
securities issued or to be issued by the trust are held by the custodian or
trustee.
Not Applicable.
7. Furnish in chronological order the following information with respect
to each change of name of the trust since January 1, 1930. If the name has
never been changed, so state.
The Separate Account has never been known by any other name.
8. State the date on which the fiscal year of the trust ends.
The fiscal year of the Separate Account ends on December 31.
9. MATERIAL LITIGATION. Furnish a description of any pending legal
proceedings, material with respect to the security holders of the trust by
reason of the nature of the claim or the amount thereof, to which the trust,
the depositor, or the principal underwriter is a party or of which the assets
of the trust are the subject, including the substance of the claims involved
in such proceeding and the title of the proceeding. Furnish a similar
statement with respect to any pending administrative proceeding commenced by a
governmental authority or any such proceeding or legal proceeding known to be
contemplated by a governmental authority. Include any proceeding which,
altogether immaterial itself, is representative of, or one of, a group which
in the aggregate is material.
There are no legal proceedings to which the Separate Account or the Principal
Underwriter is a party. The Company is engaged in various kinds of routine
litigation, which in its judgement are not of material importance in relation
to the total capital and surplus of the Company.
II. GENERAL DESCRIPTION OF THE TRUST
AND SECURITIES OF THE TRUST
GENERAL INFORMATION CONCERNING THE SECURITIES OF THE TRUST AND THE RIGHTS OF
HOLDERS.
10. Furnish a brief statement with respect to the following matters for
each class or series of securities issued by the trust:
(a) Whether the securities are of the registered or bearer type;
The Policy which is to issued is of the registered type insofar as the Policy
is personal to the Owner, and the records concerning the Owner are maintained
by the Company.
(b) Whether the securities are of the cumulative or distributive type;
The Policy is of the cumulative type.
(c) The rights of security holders with respect to withdrawal or redemption;
The Owner may make withdrawals from the Policy for its Cash Surrender
Value.
(d) The rights of security holders with respect to conversion, transfer,
partial redemption, and similar matters;
The Owner may transfer a Policy's Account Value from one Sub-Account to
another Sub-Account.
(e) If the trust is the issuer of periodic payment plan certificates, the
substance of the provisions of any indenture or agreement with respect to
lapses or defaults by security holders in making principal payments, and with
respect to reinstatement;
Not Applicable
(f) The substance of the provisions of any indenture or agreement with respect
to voting rights, together with the names of any persons other than security
holders given the right to exercise voting rights pertaining to the trust's
securities or the underlying securities and the relationship of such persons
to the trust;
The underlying securities of the Separate Account are shares issued by:
Cova Series Trust, Lord Abbett Series Fund, Inc. and General American Capital
Company, collectively, the Funds.
The Company will vote the shares held in the Separate Account in
accordance with instructions received from persons having a voting interest in
the Separate Account. The Company will vote shares for which it has not
received instructions in the same proportion as it votes shares for which it
has received instructions. The Company will vote shares it owns in the same
proportion as it votes shares for which it has received instructions.
(g) Whether security holders must be given notice of any change in:
(1) the composition of the assets of the trust;
Notice must be given of any such proposed change.
(2) the terms and conditions of the securities issued by the trust;
Notice must be given of any such proposed change.
(3) the provisions of any indenture or agreement of the trust;
Notice must be given of any such proposed change.
(4) the identity of the depositor, trustee or custodian;
There is no provision requiring notice to or consent of Owners with
respect to any change in the identity of the Separate Account's depositor.
The Company's obligations under the Policy, however, cannot be transferred to
any other entity without notice to the Owner.
(h) Whether the consent of the security holders is required in order for
action to be taken concerning any change in:
(1) the composition of the assets of the trust;
Consent of Owners is not required when substituting the underlying
securities of the Separate Account. However, to substitute such securities,
approval of the Securities and Exchange Commission is required in compliance
with Section 26(b) of the Investment Company Act of 1940. The Company may,
however, add additional Sub-Accounts without the consent of Owners. Except as
required by federal or state law or regulation, no action will be taken by the
Company which will adversely affect the rights of Owners without their
consent.
(2) the terms and conditions of the securities issued by the trust;
No change in the terms and conditions of the Policy can be made without
the consent of the Owners except as required by federal or state law or
regulation.
(3) the provisions of any indenture or agreement of the trust;
Not Applicable.
(4) the identity of the depositor, trustee or custodian;
There is no provision requiring notice to or consent of Owners with
respect to any change in the identity of the Separate Account's depositor. The
Company's obligations under the Policy, however, cannot be transferred to any
other entity without compliance with state insurance law, which may under some
circumstances, require the Owner's consent.
(i) Any other principal feature of the securities issued by the trust or any
other principal right, privilege or obligation not covered by subdivisions (a)
to (g) or by any other item in this form.
In return for the payment of premiums, the Policy provides insurance
coverage on the life of the insured.
The Policy provides for the right to borrow from the Company using the
Policy's Cash Value as collateral.
INFORMATION CONCERNING THE SECURITIES UNDERLYING THE TRUST'S SECURITIES.
11. Describe briefly the kind or type of securities comprising the unit of
specified securities in which security holders have an interest.
The securities held in the Separate Account will be shares of Cova Series
Trust, Lord Abbett Series Fund, Inc. and General American Capital Company, all
of which are open-end, management investment companies of the series type.
12. If the trust is the issuer of periodic payment plan certificates and
if any underlying securities were issued by another investment company,
furnish the following information for each such company:
(a) Name of company;
Cova Series Trust
Lord Abbett Series Fund, Inc.
General American Capital Company
(b) Name and principal business address of depositor;
Cova Financial Life Insurance Company is the depositor of the Cova
Series Trust. Its address is: One Tower Lane, Suite 3000, Oakbrook Terrace,
IL 60181.
Lord, Abbett & Co. is the depositor of the Lord Abbett Series Fund, Inc. Its
address is: 767 Fifth Avenue, New York, NY 10153.
General American Life Insurance Company is the depositor of the General
American Capital Company. Its address is: 700 Market Street, St. Louis, MO
63101.
(c) Name and principal business address of trustee or custodian;
Investor's Bank & Trust Company is the custodian for the Cova Series Trust.
Its address is: 89 South Street, Boston, MA 02111.
The Bank of New York is the custodian for the Lord Abbett Series Fund, Inc.
Its address is: 40 Wall Street, New York, NY 10286.
The Bank of New York is the custodian for the General American Capital
Company. Its address is: 40 Wall Street, New York, NY 10286.
(d) Name and principal business address of principal underwriter;
Cova Series Trust and Lord Abbett Series Fund, Inc. distribute their own
shares.
Walnut Street Securities Inc, acts as the principal underwriter for General
American Capital Company.
(e) The period during which the securities of such company have been the
underlying securities.
No underlying securities have yet been acquired by the Separate Account.
INFORMATION CONCERNING LOADS, FEES, CHARGES AND EXPENSES.
13. (a)Furnish the following information with respect to each load, fee,
expense or charge to which: (1) principal payments; (2) underlying securities;
(3) distributions; (4) cumulated or reinvested distributions or income; and
(5) redeemed or liquidated assets of the trust's securities are subject; (A)
the nature of such load, fee, expense, or charge; (B) the amount thereof; (C)
the name of the person to whom such amounts are paid and his relationship to
the trust; (D) the nature of the services performed by such person in
consideration for such load, fee, expense or charge.
1. Principal Payments
MORTALITY AND EXPENSE RISK CHARGE. For the first ten years, the Company
deducts a charge equal, on an annual basis, to 0.90% of the Account Value
allocated to the Separate Account. For the eleventh year and after, the
charge is 0.75%. This compensates the Company for assuming the mortality and
expense risks under the Policy.
ADMINISTRATIVE CHARGE. The Company deducts a charge equal, on an annual
basis, to 0.40% of the Account Value. This compensates the Company for
expenses incurred in the operation of the Separate Account and for
administering the Policy.
TAX EXPENSE CHARGE. This deduction is the sum of the Premium Tax Charge and
the Federal Tax Charge. It is deducted monthly for the first ten years. It
is equal, on an annual basis, to .40% (.15% for Federal Tax Charge and .25%
for Premium Tax Charge) of the Account Value. This compensates the Company
for federal and state tax incurred as a result of issuing the Policy.
COST OF INSURANCE CHARGE. Each month the Company deducts a charge for the
cost of insurance which provides the Death Benefit for the following month.
ANNUAL POLICY MAINTENANCE FEE. Every year on the anniversary of the Policy
Date, Cova deducts $30 as a policy maintenance fee. Under some circumstances,
this charge is waived. This, in addition to the Administrative Charge,
compensates the Company for the administrative expenses incurred.
2. Underlying Securities
The Funds are charged management fees by their respective investment adviser
and incur operating expenses.
3. Distributions
Not Applicable.
4. Cumulated or reinvested distributions or income.
All investment income and other distributions are reinvested in Fund shares at
net asset value.
5. Redeemed or liquidated assets.
SURRENDER CHARGE. The surrender charge is taken out of the Account Value
surrendered during the first ten years which is not part of the Annual
Withdrawal Amount. The Surrender Charges, which are equal to a percent of
Premium surrendered are:
<TABLE>
<CAPTION>
<S> <C>
Policy Year Surrender Charge
- ----------- -----------------
1 7.5%
2 7.5%
3 7.5%
4 6.0%
5 5.0%
6 4.0%
7 3.0%
8 2.0%
9 1.0%
10 + 0%
</TABLE>
This compensates the Company for the expenses incurred in distributing the
Policy.
DEFERRED PREMIUM TAX CHARGE. This charge is assessed on premiums surrendered
from the Policy. It is equal to:
<TABLE>
<CAPTION>
<S> <C>
Policy Year Deferred Premium Tax Charge
- ----------- ----------------------------
1 2.25%
2 2.00%
3 1.75%
4 1.50%
5 1.25%
6 1.00%
7 .75%
8 .50%
9 .25%
10 + 0%
</TABLE>
This charge enables the Company to collect that portion of the Premium Tax
Charge it has not collected before the Policy is surrendered.
(b) For each installment payment type of periodic payment plan certificate of
the trust, furnish the following information with respect to sales load and
other deductions from principal payments.
See response to item 13(a)(1).
(c) State the amount of total deductions as a percentage of the net amount
invested for each type of security issued by the trust. State each different
sales charge available as a percentage of the public offering price and as a
percentage of the net amount invested. List any special purchase plans or
methods established by rule or exemptive order that reflect scheduled
variations in, or elimination of, the sales load, and identify each class of
individuals or transactions to which such plans apply.
(1) The amount of sales load as a percentage of the net amount invested is 0%.
(2) There is no charge deducted from premiums.
(d) Explain fully the reasons for any difference in the price at which
securities are offered generally to the public, and the price at which
securities are offered for any class of transactions to any class or group of
individuals, including officers, directors, or employees of the depositor,
trustee, custodian or principal underwriter.
Not Applicable.
(e) Furnish a brief description of any loads, fees, expenses or charges not
covered in Item 13(a) which may be paid by security holders in connection with
the trust or its securities.
None.
(f) State whether the depositor, principal underwriter, custodian or trustee,
or any affiliated person of the foregoing may receive profits or other
benefits not included in answer to Item 13(a) or 13 (d) through the sale or
purchase of the trust's securities or interests in such securities, or
underlying securities or interests in underlying securities, and describe
fully the nature and extent of such profits or benefits.
None.
(g) State the percentage that the aggregate annual charges and deductions for
maintenance and other expenses of the trust bear to the dividend and interest
income from the trust property during the period covered by the financial
statements filed herewith.
Not Applicable
INFORMATION CONCERNING THE OPERATIONS OF THE TRUST.
14. Describe the procedure with respect to applications (if any) and the
issuance and authentication of the trust's securities, and state the substance
of the provisions of any indenture or agreement pertaining thereto.
A person desiring to purchase a Policy must complete an application on a form
provided by the Company. The Company will underwrite the Policy before it is
issued and, if the applicant meets the underwriting standards of the Company,
the Policy will be issued.
15. Describe the procedure with respect to the receipt of payments from
purchasers of the trust's securities and the handling of the proceeds thereof,
and state the substance of the provisions of any indenture or agreement
pertaining thereto.
When a Policy is purchased, the Company will initially invest the premium in
the Money Market Portfolio. After 15 days (or longer in those states where
required) from the Policy Issue Date, the Company will allocate the Account
Value to the Investment Portfolios as requested in the application.
16. Describe the procedure with respect to the acquisition of underlying
securities and the disposition thereof, and state the substance of the
provisions of any indenture or agreement pertaining thereto.
The Company applies premiums to the purchase of Investment Portfolio shares at
their net asset value. Redemption of Investment Portfolio shares may be made
by the Company to permit the payment of benefits or amounts in connection with
requests for surrender or for other purposes contemplated by the Policy.
17. (a) Describe the procedure with respect to withdrawal or redemption by
security holders.
Any surrender by an owner may be made by communication in writing to the
Company at its service office. Upon written receipt of such request, the
Company will cancel accumulation units in the Policy and redeem Investment
Portfolio shares in sufficient amount to meet any requests. See Item 10.
(b) Furnish the names of any persons who may redeem or repurchase, or are
required to redeem or repurchase, the trust's securities or underlying
securities from security holders, and the substance of the provisions of any
indenture or agreement pertaining thereto.
The Company is required to honor surrender requests as described in Items
10(c) and 17(a). With respect to the Separate Account's underlying
securities, the Investment Options are required to redeem their shares at net
asset value and to make payment therefore within 3 business days.
(c) Indicate whether repurchased or redeemed securities will be canceled or
may be resold.
When there is a total withdrawal from a Policy, it is canceled.
18. (a) Describe the procedure with respect to the receipt, custody and
disposition of the income and other distributable funds of the trust and state
the substance of the provisions of any indenture or agreement pertaining
thereto.
All income and other distributable funds of the Separate Account are
reinvested in Investment Option shares and are added to the assets of the
Separate Account.
(b) Describe the procedure, if any, with respect to the reinvestment of
distributions to security holders and state the substance of the provisions of
any indenture or agreement pertaining thereto.
Not Applicable.
(c) If any reserves or special funds are created out of income or principal,
state with respect to each such reserve or fund the purpose and ultimate
disposition thereof, and describe the manner of handling of same.
Not Applicable.
(d) Submit a schedule showing the periodic and special distributions which
have been made to security holders during the three years covered by the
financial statements filed herewith. State for each distribution the
aggregate amount and amount per share. If distributions from sources other
than current income have been made, identify each such other source and
indicate whether such distribution represents the return of principal payments
to security holders. If payments other than cash were made describe the
nature thereof, the account charged and the basis of determining the amount of
such charge.
No distributions have been made.
19. Describe the procedure with respect to the keeping of records and
accounts of the trust, the making of reports and the furnishing of information
to security holders, and the substance of the provisions of any indenture or
agreement pertaining thereto.
The Company provides confirmations with respect to all premiums received, loan
transactions and any surrenders. The Company also provides each Policy owner
with an annual statement which will show the current amount of death benefit
payable under the Policy, the current Account Value, the current Cash
Surrender Value, current Debt and will show all transactions previously
confirmed. The statement will also show all premiums paid and all charges
deducted during the policy year.
20. State the substance of the provisions of any indenture or agreement
concerning the trust with respect to the following:
(a) Amendments to such indenture or agreement;
Not Applicable.
(b) The extension or termination of such indenture or agreement;
Not Applicable.
(c) The removal or resignation of the trustee or custodian, or the failure of
the trustee or custodian to perform its duties, obligations and functions;
Not Applicable.
(d) The appointment of a successor trustee and the procedure if a successor
trustee is not appointed;
The Separate Account has no trustees.
(e) The removal or resignation of the depositor, or the failure of the
depositor to perform its duties, obligations and functions;
There are no provisions relating to the removal or resignation of the
depositor or the failure of the depositor to perform its duties, obligations
and functions.
(f) The appointment of a successor depositor and the procedure if a successor
depositor is not appointed.
There are no provisions relating to the appointment of a successor
depositor or the procedure if a successor depositor is not appointed.
21. (a) State the substance of the provisions of any indenture or
agreement with respect to loans to security holders.
Policy owners may borrow from the Company using the Policy as the sole
security.
(b) Furnish a brief description of any procedure or arrangement by which loans
are made available to security holders by the depositor, principal
underwriter, trustee or custodian, or any affiliated person of the foregoing.
The following items should be covered.
(1) the name of each person who makes such agreements or arrangements with
security holders;
The Company will make a loan to an Owner with the Policy as the sole
security.
(2) the rate of interest payable on such loans;
The interest rate for a Policy loan is 6% per annum.
(3) the period for which loans may be made;
Loans can be made while the Policy is in force.
(4) costs or charges for default in repayment at maturity;
Not applicable.
(5) other material provisions of the agreements or arrangements;
A policy loan will result in accumulation units being redeemed from
the Investment Portfolios and the proceeds being transferred to the Loan
Account. The Company will pay interest on the Loan Account at an annual rate
of 4.0% (unless a Preferred Loan is in effect which earns 6%). An outstanding
loan reduces the amount of death proceeds and the cash surrender value.
(c) If such loans are made, furnish the aggregate amount of loans outstanding
at the end of the last fiscal year, the amount of interest collected during
the last fiscal year allocated to the depositor, principal underwriter,
trustee or custodian or affiliated person of the foregoing and the aggregate
amount of loans in default at the end of the last fiscal year covered by
financial statements filed herewith.
Not Applicable.
22. State the substance of the provisions of any indenture or agreement
with respect to limitations on the liabilities of the depositor, trustee or
custodian, or any other party to such indenture or agreement.
There is no such provision or agreement.
23. Describe any bonding arrangement for officers, directors, partners or
employees of the depositor or principal underwriter of the trust, including
the amount of coverage and the type of bond.
The officers and directors of the Company are covered under a fidelity
bond in the amount of $5,000,000. The officers and directors of Cova Life Sales
Company are covered under a fidelity bond in the amount of $5,000,000 for each
loss, $5,000,000 for aggregate losses with a $250,000 deductible.
24. State the substance of any other material provisions of any indenture
or agreement concerning the trust or its securities and a description of any
other material functions or duties of the depositor, trustee or custodian not
stated in Item 10 or Items 14 to 23 inclusive.
The Owner may assign his rights under the Policy. The Owner may change owners
during the life time of the Insured while the Policy is in force.
III. ORGANIZATION, PERSONNEL AND AFFILIATED
PERSONS OF DEPOSITOR
ORGANIZATION AND OPERATIONS OF DEPOSITOR.
25. State the form of organization of the depositor of the trust, the name
of the state or other sovereign power under the laws of which the depositor
was organized and the date of organization.
The Company was incorporated in California in 1972 as a stock life insurance
company.
26. (a) Furnish the following information with respect to all fees
received by the depositor of the trust in connection with the exercise of any
functions or duties concerning securities of the trust during the period
covered by the financial statements filed herewith.
Not Applicable.
(b) Furnish the following information with respect to any fee or any
participation in fees received by the depositor from any underlying investment
company or any affiliated person or investment adviser of such company.
See Item 13(a).
27. Describe the general character of the business engaged in by the
depositor including a statement as to any business other than that of
depositor of the trust. If the depositor acts or has acted in any capacity
with respect to any investment company or companies other than the trust,
state the name or names of such company or companies, their relationship, if
any, to the trust, and the nature of the depositor's activities therewith. If
the depositor has ceased to act in such named capacity, state the date of and
circumstances surrounding such cessation.
The Company is presently licensed to do business in the State of California.
It acts as the depositor of Cova Variable Annuity Account Five. The portfolios
of Cova Series Trust represent some of the Investment Portfolios under the
Policies.
OFFICIALS AND AFFILIATED PERSONS OF DEPOSITOR.
28. (a) Furnish as at latest practicable date the following information
with respect to the depositor of the trust, with respect to each officer,
director, or partner of the depositor, and with respect to each natural person
directly or indirectly owning, controlling or holding with power to vote five
percent or more of the outstanding voting securities of the depositor.
See Item 29.
(b) Furnish a brief statement of the business experience during the last five
years of each officer, director or partner of the depositor.
The directors and executive officers of the Company are listed below:
<TABLE>
<CAPTION>
<S> <C>
Name Principal Occupation During the Past Five Years
- ------- -----------------------------------------------
John W. Barber*** Director of Cova-June, 1995 to present;
Director of First Cova Life Insurance Company
(FCLIC)-June, 1995 to present; Director of
CFLIC June, 1995 to present; Vice President
and Controller of General American Life Insurance
Company-December, 1984 to present; President
and Director of Equity Intermediary Company-
October, 1988 to present.
Jerome P. Darga* Vice President and
Assistant Secretary of Cova-1992
to present; Vice President and
Assistant Secretary of CFLIC-1992
to present; Vice President and
Assistant Secretary of CLMC-1992
to present.
Connie A. Doern**** Vice President of Cova-1997 to Present, prior thereto
Assistant Vice President from 1990 to 1995; Vice
President of CFLIC- 1997 to Present, prior
thereto Assistant Vice President from 1990
to 1995; Vice President of FCLIC-1997 to
Present, prior thereto Assistant Vice
President from 1993 to 1995; Vice President
of J&H/KVI-1989 to Present.
Judy M. Drew* Vice President of Cova-1988 to present;
Vice President of CFLIC-1988 to present;
Vice President of FCLIC-1992 to present;
Senior Vice President of CLMC-1996 to
present, prior thereto Vice President from 1989
to 1996; President, COO and Director of Cova
Life Sales Company (CLSC)-1988 to present.
Patricia E. Gubbe* Vice President of Cova-1989 to present;
Vice President of CFLIC-1989 to present;
Vice President of FCLIC-1992 to present;
First Vice President of CLMC-1996 to
present, prior thereto Vice President from 1989
to 1996; Vice President and Chief Compliance
Officer of CLSC-1989 to present.
Philip A. Haley* Executive Vice President of Cova-May 1997 to
present, prior thereto Vice President from 1990
to 1997 and Assistant Vice President from 1989
to 1990; Executive Vice President of FCLIC-
May, 1997 to present, prior thereto Vice
President from 1995 to 1997; Executive Vice
President of CFLIC-May 1997 to present,
prior thereto Vice President from 1990 to
1997 and Assistant Vice President from 1989
to 1990; Executive Vice President of CLMC from
May, 1997 to present, prior thereto Senior
Vice President from 1996 to 1997 and Vice
President from 1990 to 1996 and Assistant Vice
President from 1989 to 1990; Vice President of
CLSC from 1991 to present, prior thereto
Assistant Vice President from 1989 to 1991.
Christopher S. Harden* Vice President of Cova-
1991 to present; Vice President of
CFLIC-1991 to present; First Vice
President of CLMC-1996 to
present, prior thereto Vice
President-1991 to 1996.
J. Robert Hopson* Vice President, Chief Actuary and Director of
Cova-1991 to present; Vice President, Chief
Actuary and Director of CFLIC-1991 to
present; Vice President, Chief Actuary and
Director of FCLIC-1992 to present;
Senior Vice President, Chief Actuary and Director
of CLMC-1996 to present, prior thereto Vice
President and Director from 1993 to 1996 and Vice
President from 1991 to 1993.
Thomas E. Hughes, Jr.** Treasurer and Director of Cova-June, 1995 to
present; Treasurer and Director of CFLIC-June,
1995 to present; Treasurer of FCLIC-June, 1995
to present; Corporate Actuary and Treasurer of
General American Life Insurance Company-
October, 1994 to present. Formerly, Executive
Vice President-Group Pensions General
American Life Insurance Company-March, 1990 to
October, 1994. In addition to the Cova companies,
Director of the following General American
subsidiary companies: Paragon Life Insurance
Company and RGA Reinsurance Company-October,
1994 to present. Treasurer of the following
General American subsidiary companies: Paragon
Life Insurance Company, General Life Insurance
Company of America, General Life Insurance
Company, General American Holding Company, Red
Oak Realty Company, Gen Mark Incorporated,
Walnut Street Securities, Inc., Walnut Street
Adviser's Inc., White Oak Royalty Company,
Walnut Street Funds, Inc., and RGA Reinsurance
Company-October, 1994 to present.
Lisa O. Kirchner**** Vice President of Cova-1997 to present, prior
thereto Assistant Vice President from 1990 to
1995; Vice President of CFLIC-1997 to present,
prior thereto Assistant Vice President from
1988 to 1995; Vice President of FCLIC-1997 to
present, prior thereto Assistant Vice
President from 1993 to 1995; Vice President
of J&H/KVI-1985 to present.
Douglas E. Jacobs* Vice President of Cova-
1985 to present; Vice President of
CFLIC-1985 to present; Vice
President of CLMC-1985 to
present.
Richard A. Liddy** Chairman of the Board of Directors of Cova,
CFLIC, FCLIC, CLMC, Advisory and Allocation-
April, 1997 to present; Chairman of the Board,
President and Chief Executive Officer of
General American Life Insurance Company-May,
1992 to present; Mr. Liddy also holds various
positions with the General American
subsidiaries as follows: Chairman of the Board
and President of General American Mutual
Holding Company, GenAmerica Corporation and
General American Holding Company; Chairman of
the Board of Security Equity Life Insurance
Company, Conning Corporation, The Walnut Street
Funds, Inc., General American Capital Company,
Reinsurance Group of America, Inc., RGA Life
Reinsurance Company of Canada, and RGA
Reinsurance Company.
William C. Mair* Vice President, Controller and Director of Cova
since 1995 to present, prior thereto Vice
President, Controller, Treasurer and Director.
Vice President, Controller and Director of CFLIC
since 1995 to present, prior thereto Vice
President, Controller, Treasurer and Director;
Vice President, Controller and Director of FCLIC-
from 1992 to present; Vice President, Treasurer,
Controller and Director of Advisory-1993 to
present; Vice President, Treasurer, Controller
and Director of Allocation-1994 to present;
Director of CLSC-1992 to present; Senior Vice
President, Treasurer, Controller and Director of
CLMC-1989 to present; Vice President,
Treasurer, Controller, Chief Financial Officer,
Chief Accounting Officer and Director of Trust-
1996 to present.
Matthew P. McCauley** Assistant Secretary and Director of Cova-June,
1995 to present; Assistant Secretary and Director
of CFLIC-June, 1995 to present; Assistant
Secretary and Director of FCLIC-June, 1995 to
present; Associate General Counsel and Vice
President of General American Life Insurance
Company-1973 to present; Also, Director, Vice
President, General Counsel and Secretary for
several other General American subsidiaries;
including Equity Intermediary Company, Red Oak
Realty Company, and White Oak Royalty Company;
General American Holding Company and Paragon
Life Insurance Company. General Counsel and
Secretary, Reinsurance Group of America,
Incorporated. Director and Secretary, General
American Capital Company. General Counsel and
Secretary, Conning Corporation. General Counsel,
Conning Asset Management Company. Director of
RGA Reinsurance Company, Walnut Street
Securities, Inc. Secretary to the Walnut Street
Funds, Inc.
Mark E. Reynolds* Executive Vice President of Cova-May, 1997 to
present; Executive Vice President of CFLIC-May,
1997 to present; Executive Vice President of
CFSLIC-May, 1997 to present; Executive Vice
President of CLMC-May, 1997 to present;
Executive Vice President and Director of Cova
Investment Advisory Corporation-December, 1996
to present; Executive Vice President and
Director of Cova Investment Allocation
Corporation-December, 1996 to present.
Leonard M. Rubenstein** Director of Cova, CFLIC, FCLIC, and CLMC-January,
1996 to present; Director of Advisory and
Allocation from 1995 to present; Executive Vice
President and Director of General American Life
Insurance Company-1992 to present. Mr.
Rubenstein also holds various positions with the
General American subsidiaries as follows:
Director and Treasurer of General American
Capital Company; Senior Vice President
Investments, Treasurer and Director of
Reinsurance Group of America, Incorporated;
Director of Paragon Life Insurance Company;
Director of General American Holding Company;
Chief Executive Officer, Chairman and Director
for Conning Corporation; Director of the
following: General Life Insurance Company,
Security Equity Life Insurance Company, BHIF
America de Vida Seguros S.A. (Chile), Manatial
Seguros de Vida, S.A. (Argentina), Red Oak
Realty Company, General Life Insurance Company
of America; RGA Reinsurance Company;
Secretary and Director for RGA Sud America S.A.
Myron H. Sandberg* Vice President of Cova-1985 to present; Vice
President of CFLIC-1985 to present; and CLMC
1989 to present.
John W. Schaus* Vice President of Cova-
1988 to present; Vice President of
CFLIC-1988 to present; and CLMC-
1989 to present.
Norman A. Skinrood Jr.**** Vice President of Cova-1997 to present; Vice
President of CFLIC-1997 to present; Vice
President of FCLIC-1997 to present;
Vice President of J&H/KVI-1996 to present,
Director/PH Manager of DST, Kansas City,
Missouri from 1993-1996.
Lorry J. Stensrud* President and Director of Cova from June, 1995
to present, prior thereto Executive Vice
President; President and Director of CFLIC from
June, 1995 to present, prior thereto Executive
Vice President; President and Director of FCLIC
from June, 1995 to present, prior thereto
Executive Vice President; President and Director
of CLMC from June, 1995 to present, prior thereto
Executive Vice President only; President and
Director of Advisory from 1993 to present;
President and Director of Allocation from 1994 to
present. Director of CLSC from 1989 to
present; President, Chief Executive Officer and
Director of Trust-1996 to present.
Peter L. Witkewicz***** Vice President of Cova-1997 to present; Vice
President of CFLIC-1997 to present; Vice
President of FCLIC-1997 to present, prior
thereto from 1995 to 1996.
Kent R. Zimmerman** Assistant Treasurer of Cova-May, 1996 to
present; Assistant Treasurer of CFLIC-May,
1996 to present; Assistant Treasurer of CLMC-
1996 to present. Second Vice President of
General American Life Insurance Company-
1997 to present, prior thereto Vice President
1992 to 1997. Mr. Zimmerman holds various
positions with the General American
subsidiaries - Assistant Treasurer, Security
Equity Life Insurance Company, Paragon Life
Insurance Company, General Life Insurance
Company of America and RGA Reinsurance Co.
* Business Address: Cova, One Tower Lane, Suite 3000, Oakbrook
Terrace, IL 60181
** Business Address: General American, 700 S. Market Street, St. Louis,
MO 63101
*** Business Address: General American, 13045 Tesson Ferry Road,
St. Louis, MO 63128
**** Business Address: J&H/KVI, 1776 West Lakes Parkway,
West Des Moines, IA 50266
</TABLE>
COMPANIES OWNING SECURITIES OF DEPOSITOR.
29. Furnish as at latest practicable date the following information with
respect to each company which directly or indirectly owns, controls or holds
with power to vote five percent or more of the outstanding voting securities
of the depositor.
The Company is a wholly owned subsidiary of Cova Financial Services Life
Insurance Company, which in turn is a wholly owned subsidiary of General
American Life Insurance Company.
CONTROLLING PERSONS.
30. Furnish as at latest practicable date the following information with
respect to any person, other than those covered by Items 28, 29, and 42 who
directly or indirectly controls the depositor.
None.
COMPENSATION OF OFFICERS AND DIRECTORS OF DEPOSITOR:
COMPENSATION OF OFFICERS OF DEPOSITOR.
31. Furnish the following information with respect to the remuneration for
services paid by the depositor during the last fiscal year covered by
financial statements filed herewith:
(a) Directly to each of the officers or partners of the depositor directly
receiving the three highest amounts of remuneration.
Not Applicable. As of the date hereof, the Separate Account had not yet
commenced operations.
(b) Directly to all officers or partners of the depositor as a group exclusive
of persons whose remuneration is included under Item 31(a), stating separately
the aggregate amount paid by the depositor itself and the aggregate amount
paid by all the subsidiaries.
Not Applicable. As of the date hereof, the Separate Account had not yet
commenced operations.
(c) Indirectly or through subsidiaries to each of the officers or partners of
the depositor.
Not Applicable. As of the date hereof, the Separate Account had not yet
commenced operations.
COMPENSATION OF DIRECTORS
32. Furnish the following information with respect to the remuneration for
services, exclusive of remuneration reported under Item 31, paid by the
depositor during the last fiscal year covered by financial statements filed
herewith:
(a) The aggregate direct remuneration to directors;
Not Applicable. See Item 31.
(b) Indirectly through subsidiaries to directors.
Not Applicable. See Item 31.
COMPENSATION TO EMPLOYEES.
33. (a) Furnish the following information with respect to the aggregate
amount of remuneration for services of all employees of the depositor
(exclusive of persons whose remuneration is reported in Items 31 and 32) who
received remuneration in excess of $10,000 during the last fiscal year covered
by financial statements filed herewith from the depositor and any of its
subsidiaries.
Not Applicable. See Item 31.
(b) Furnish the following information with respect to the remuneration for
services paid directly during the last fiscal year covered by financial
statements filed herewith to the following classes of persons (exclusive of
those person covered by Item 33(a)): (1) sales managers, branch managers,
district managers and other persons supervising the sale of registrant's
securities; (2) salesmen, sales agents, canvassers and other persons making
solicitations but not in a supervisory capacity; (3) administrative and
clerical employees; and (4) others (specify). If a person is employed in more
than one capacity, classify according to predominant type of work.
Not Applicable. See Item 31.
COMPENSATION TO OTHER PERSONS.
34. Furnish the following information with respect to the aggregate amount
of compensation for services paid any person (exclusive of persons whose
remuneration is reported in Items 31, 32, and 33), whose aggregate
compensation in connection with services rendered with respect to the trust in
all capacities exceeded $10,000 during the last fiscal year covered by
financial statements filed herewith from the depositor and any of its
subsidiaries:
Not Applicable. See Item 31.
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
DISTRIBUTION OF SECURITIES.
35. Furnish the names of the States in which sales of the trust's
securities: (a) are currently being made, (b) are presently proposed to be
made, and (c) have been discontinued, indicating by appropriate letter the
status with respect to each State.
No sales of the Policy have been made or are currently being made. It is
presently proposed to sell the Policy in the states where the Company is
licensed to do business.
36. If sales of the trust's securities have at any time since January 1,
1936 been suspended for more than a month describe briefly the reasons for
such suspension.
Not Applicable.
37. (a) Furnish the following information with respect to each instance
where subsequent to January 1, 1937, any Federal or State governmental
officer, agency, or regulatory body denied authority to distribute securities
of the trust, excluding a denial which was merely a procedural step prior to
any determination by such officer, etc. and which denial was subsequently
rescinded: (1) name of officer, agency or body; (2) date of denial; (3) brief
statement of reason given for denial.
Not Applicable.
(b) Furnish the following information with regard to each instance where,
subsequent to January 1, 1937, the authority to distribute securities of the
trust has been revoked by any Federal or State governmental officer, agency
or regulatory body: (1) name of officer, agency or body; (2) date of
revocation; (3) brief statement of reason given for revocation.
Not Applicable.
38. (a) Furnish a general description of the method of distribution of
securities of the trust.
The Policy issued by the Separate Account will be sold by licensed
insurance agents in those states where the Policy may be lawfully sold. Such
agents will be registered representatives of a broker-dealer registered under
the Securities Exchange Act of 1934 which is a member of the National
Association of Securities Dealers, Inc.
(b) State the substance of any current selling agreement between each
principal underwriter and the trust or the depositor, including a statement as
to the inception and termination dates of the agreement, any renewal and
termination provisions, and any assignment provisions.
The Company intends to execute an agreement with the Principal
Underwriter whereby it will distribute the Policy by executing selling
agreements with other broker-dealers. The agreement will be effective on the
date executed and will remain effective until terminated by either party upon
sixty (60) days notice, and may not be assigned.
(c) State the substance of any current agreements or arrangements of each
principal underwriter with dealers, agents, salesmen, etc. with respect to
commissions and overriding commissions, territories, franchises,
qualifications and revocations. If the trust is the issuer of periodic
payment plan certificates, furnish schedules of commissions and the bases
thereof. In lieu of a statement concerning schedules of commissions, such
schedules of commissions may be filed as Exhibit A(3)(c).
See Exhibit A(3)(c).
INFORMATION CONCERNING PRINCIPAL UNDERWRITER.
39. (a) State the form of organization of each principal underwriter of
securities of the trust, the name of the State or other sovereign power under
the laws of which each underwriter was organized and the date of the
organization.
Cova Life Sales Company is a corporation organized under the laws of
Illinois on 9/25/84.
(b) State whether any principal underwriter currently distributing securities
of the trust is a member of the National Association of Securities Dealers,
Inc.
Cova Life Sales Company is a member of the National Association of
Securities Dealers, Inc.
40. a) Furnish the following information with respect to all fees received
by each principal underwriter of the trust from the sale of securities of the
trust and any other functions in connection therewith exercised by such
underwriter in such capacity or otherwise during the period covered by the
financial statements filed herewith.
Not Applicable.
(b) Furnish the following information with respect to any fee or any
participation in fees received by each principal underwriter from any
underlying investment company or any affiliated person or investment adviser
of such company: (1) the nature of such fee or participation; (2) the name of
the person making payment; (3) the nature of the services rendered in
consideration for such fee or participation; (4) the aggregate amount received
during the last fiscal year covered by the financial statements filed
herewith.
Not Applicable.
41. (a) Describe the general character of the business engaged in by each
principal underwriter, including a statement as to any business other than the
distribution of securities of the trust. If a principal underwriter acts or
has acted in any capacity with respect to any investment company or companies
other than the trust, state the name or names of such company or companies,
their relationship, if any, to the trust and the nature of such activities.
If a principal underwriter has ceased to act in such named capacity, state the
date of and the circumstances surrounding such cessation.
Cova Life Sales Company also acts as the principal underwriter of
variable annuity contracts issued by the Company and its affiliated insurance
companies.
(b) Furnish as at latest practicable date the address of each branch office of
each principal underwriter currently selling securities of the trust and
furnish the name and residence address of the person in charge of such office.
Not Applicable.
(c) Furnish the number of individual salesmen of each principal underwriter
through whom any of the securities of the trust were distributed for the last
fiscal year of the trust covered by the financial statements filed herewith
and furnish the aggregate amount of compensation received by such salesmen in
such year.
Not Applicable.
42. Furnish as at latest practicable date the following information with
respect to each principal underwriter currently distributing securities of the
trust and with respect to each of the officers, directors, or partners of such
underwriter.
Not Applicable.
43. Furnish, for the last fiscal year covered by the financial statements
filed herewith, the amount of brokerage commissions received by any principal
underwriter who is a member of a national securities exchange and who is
currently distributing the securities of the trust or effecting transactions
for the trust in the portfolio securities of the trust.
None.
OFFERING PRICE OR ACQUISITION VALUATION OF SECURITIES OF THE TRUST.
44. (a) Furnish the following information with respect to the method of
valuation used by the trust for purposes of determining the offering price to
the public of securities issued by the trust or the valuation of shares or
interests in the underlying securities acquired by the holder of a periodic
payment plan certificate.
Account Values allocated to the Separate Account are invested at net
asset value in the Investment Portfolios in accordance with the selection made
by the owner.
Account Values will fluctuate in accordance with investment results of
the Investment Portfolios selected. In order to determine how these
fluctuations affect Account Value, accumulation units are used. Every
business day the Company determines the value of an accumulation unit for each
of the Investment Portfolios. The value of an accumulation unit for any given
business day is determined by multiplying a factor referred to as the net
investment factor times the value of an Accumulation unit for the previous
business day. The net investment factor is a number that reflects the change
(up or down) in an underlying Investment Portfolio share.
(b) Furnish a specimen schedule showing the components of the offering price
of the trust's securities as at the latest practicable date.
Not Applicable.
(c) If there is any variation in the offering price of the trust's securities
to any person or classes of persons other than underwriters, state the nature
and amount of such variation and indicate the person or classes of persons to
whom such offering is made.
Not Applicable.
45. Furnish the following information with respect to any suspension of
the redemption rights of securities issued by the trust during the three
fiscal years covered by the financial statements filed herewith: (a) by whose
action redemption rights were suspended; (b) the number of days' notice given
to security holders prior to suspension of redemption rights; (c) reason for
suspension; (d) period during which suspension was in effect.
Not Applicable.
REDEMPTION VALUATION OF SECURITIES OF THE TRUST.
46. (a) Furnish the following information with respect to the method of
determining the redemption or withdrawal valuation of securities issued by the
trust:
(1) the source of quotations used to determine the value of portfolio
securities;
The Custodians for the underlying series funds.
(2) whether opening, closing bid, asked or any other price is used;
Net asset value is used.
(3) whether price is as of the day of sale or as of any other time;
As of the next compute price.
(4) a brief description of the methods used by registrant for determining
other assets and liabilities including accrual for expenses and taxes
(including taxes on unrealized appreciation);
See item 13(a).
(5) other items which registrant deducts from the net asset value in
computing redemption value of its securities; and
See item 13(a).
(6) whether adjustments are made for fractions.
Not applicable.
(b) Furnish a specimen schedule showing the components of the redemption price
to the holders of the trust's securities as at the latest practicable date.
Not applicable.
PURCHASE AND SALE OF INTERESTS IN UNDERLYING SECURITIES FROM AND TO SECURITY
HOLDERS.
47. Furnish a statement as to the procedure with respect to the
maintenance of a position in the underlying securities or interests in the
underlying securities, the extent and nature thereof and the person who
maintains such a position. Include a description of the procedure with
respect to the purchase of underlying securities or interest in the underlying
securities from security holders who exercise redemption or withdrawal rights
and the sale of such underlying securities and interests in the underlying
securities to other security holders. State whether the method of valuation
of such underlying securities or interests in the underlying securities
differs from that set forth in Items 44 and 46. If any item of expenditure
included in the determination of the valuation is not or may not actually be
incurred or expended, explain the nature of such item and who may benefit from
the transaction.
The Company will maintain a position in Investment Portfolio shares by
purchasing Investment Portfolio shares at net asset value in connection with
premiums allocated to the Separate Account in accordance with instructions
from the Owners and to redeem Investment Portfolio shares at net asset value
for the purposes of making Policy obligations, or making adjustments in the
reserves held in the Separate Account. There are no procedures for the
purchase of underlying securities or interests therein from Owners who
exercise surrender rights in that Owners have no direct interest therein.
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Furnish the following information as to each trustee or custodian of
the trust:
(a) Name and principal business address;
None.
(b) Form of organization;
Not Applicable.
(c) State or other sovereign power under the laws of which the trustee or
custodian was organized;
Not Applicable.
(d) Name of governmental supervising or examining authority.
Not Applicable.
49. State the basis for payment of fees or expenses of the trustee or
custodian for services rendered with respect to the trust and its securities,
and the aggregate amount thereof for the last fiscal year. Indicate the
person paying such fees or expenses. If any fees or expenses are prepaid,
state the unearned amount.
Not Applicable.
50. State whether the trustee or custodian or any other person has or may
create a lien on the assets of the trust, and if so, give full particulars,
outlining the substance of the provisions of any indenture or agreement with
respect thereto.
Not Applicable.
VI. INFORMATION CONCERNING THE INSURANCE OF
HOLDERS OF SECURITIES
51. Furnish the following information with respect to insurance holders of
securities:
(a) The name and address of the insurance company;
Cova Financial Life Insurance Company
573 Anton Boulevard
Costa Mesa, California 92626
800-523-1661
(b) The types of policies and whether individual or group policies;
The Policy is an individual modified single premium variable life
insurance policy.
(c) The types of risks insured and excluded;
The Policy provides for a death benefit upon the death of the Insured. Under
some circumstances, a portion of the death benefit will be paid out if the
Insured is terminally ill. The death benefit is the only insurance benefit
offered.
(d) The coverage of the policies;
While the Policy remains in force, it provides for a death benefit on the life
of the Insured.
(e) The beneficiaries of such policies and the uses to which the proceeds of
policies must be put;
The Owner designates one or more persons to be the beneficiaries of the
death benefit. There are no limitations on the use of the proceeds.
(f) The terms and manner of cancellation and of reinstatement;
The Policy will terminate if (1) the owner makes a total surrender of the
Policy, (2) the grace period has ended, or (3) the Insured has died. The
Policy can be reinstated if the owner did not make a total surrender and if
the Insured is still alive within five years after the end of the grace period.
To reinstate the Policy, the Insured must provide evidence of insurability and
either repay any outstanding loan and accrued interest or reinstate the loan
plus interest. A sufficient premium must be paid to (1) cover all deductions
that are due and unpaid and (2) be sufficient to keep the Policy in force for
2 months.
(g) The method of determining the amount of premiums to be paid by holders of
securities;
See Item 13(a) for information on the types of charges and methods of
assessing them.
(h) The amount of aggregate premiums paid to the insurance company during the
last fiscal year;
Not Applicable.
(i) Whether any person other than the insurance company receives any part of
such premiums, the name of each such person and the amounts involved, and the
nature of the services rendered therefor;
The Company may from time to time, enter into reinsurance treaties with
other insurers whereby such insurers may agree to reimburse the Company for
mortality expenses.
(j) The substance of any other material provisions of any indenture or
agreement of the trust relating to insurance.
Not Applicable.
VII. POLICY OF REGISTRANT
52. (a) Furnish the substance of the provisions of any indenture or
agreement with respect to the conditions upon which and the method of
selection by which particular portfolio securities must or may be eliminated
from assets of the trust or must or may be replaced by other portfolio
securities. If an investment adviser or other person is to be employed in
connection with such selection, elimination or substitution, state the name of
such person, the nature of any affiliation to the depositor, trustee or
custodian, any principal underwriter, and the amount of remuneration to be
received for such services. If any particular person is not designated in the
indenture or agreement, describe briefly the method of selection of such
person.
The Company will not substitute another security for the underlying
securities of the trust unless the Securities and Exchange Commission shall
have approved such substitution.
(b) Furnish the following information with respect to each transaction
involving the elimination of any underlying security during the period covered
by the financial statements filed herewith.
Not Applicable.
(c) Describe the policy of the trust with respect to the substitution and
elimination of the underlying securities of the trust with respect to: (1) the
grounds for elimination and substitution; (2) the type of securities which may
be substituted for any underlying security; (3) whether the acquisition of
such substituted security or securities would constitute the concentration of
investment in a particular industry or group of industries or would conform to
a policy of concentration of investment in a particular industry or group of
industries; (4) whether such substituted securities may be the securities of
another investment company; and (5) the substance of the provisions of any
indenture or agreement which authorize or restrict the policy of the
registrant in this regard.
Not Applicable.
(d) Furnish a description of any policy (exclusive of policies covered by
paragraphs (a) and (b) herein) of the trust which is deemed a matter of
fundamental policy and which is elected to be treated as such.
None.
REGULATED INVESTMENT COMPANY.
53. (a) State the taxable status of the trust.
The Company is taxed as a life insurance company under the Internal
Revenue Code. Since the Separate Account is not a separate entity from the
Company and its operations form a part of the company, it will not be taxed
separately as a "regulated investment company" under the Subchapter M of the
Code.
(b) State whether the trust qualified for the last taxable year as a regulated
investment company as defined in Section 851 of the Internal Revenue Code of
1954, and state its present intention with respect to such qualifications
during the current taxable year.
Not Applicable.
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. If the trust is not the issuer of periodic payment plan certificates,
furnish the following information with respect to each class or series of its
securities.
Not Applicable.
55. If the trust is the issuer of periodic payment plan certificates, a
transcript of a hypothetical account shall be filed in approximately the
following form on the basis of the certificate calling for the smallest amount
of payments. The schedule shall cover a certificate of the type currently
being sold assuming that such certificate had been sold at a date
approximately 10 years prior to the date of registration or at the approximate
date of organization of the trust.
Not Applicable.
56. If the trust is the issuer of periodic payment plan certificates,
furnish by years for the period covered by the financial statements filed
herewith in respect of certificates sold during such period, the following
information for each fully paid type and each installment payment type of
periodic payment plan certificate currently being issued by the trust.
Not Applicable.
57. If the trust is the issuer of periodic payment plan certificates,
furnish by years for the period covered by the financial statements filed
herewith the following information for each installment payment type of
periodic payment plan certificate currently being issued by the trust.
Not Applicable.
58. If the trust is the issuer of periodic payment plan certificates,
furnish the following information for each installment payment type of
periodic payment plan certificate outstanding as at the latest practicable
date.
Not Applicable.
59. Financial statements:
Financial Statements of the Trust
The financial statements have not been filed for the Separate Account.
It has not yet commenced operations, has no assets or liabilities and has
received no income nor incurred any expense.
Financial Statements of the Depositor
The financial statements of the Company will be filed by amendment.
IX. EXHIBITS
A. (1) Resolution of Board of directors of the Company authorizing the
Separate Account.
(2) None.
(3) (a) Principal Underwriter's Agreement (to be filed by Amendment)
(b) Selling Agreement (to be filed by Amendment)
(c) Schedules of sales commissions referred to in Item 38(c)
(to be filed by Amendment)
(4) None
(5) Modified Single Premium Life Insurance Policy
(6) (a) Articles of Incorporation of the Company (to be filed by
Amendment)
(b) Bylaws of the Company (to be filed by Amendment)
(7) Not Applicable
(8) Not Applicable
(9) None
(10) Form of application
B. Furnish copies of each of the following:
(1) Not Applicable
(2) Not Applicable
C. Not Applicable
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940 the
depositor of the Registrant has caused this registration statement to be duly
signed on behalf of the Registrant in the City of Oakbrook Terrace and State
of Illinois on the 3rd day of September, 1997.
[SEAL]
COVA VARIABLE LIFE ACCOUNT FIVE
By: COVA FINANCIAL LIFE INSURANCE COMPANY
__________________________________________
By: /s/LORRY J. STENSRUD
______________________________
COVA FINANCIAL LIFE INSURANCE COMPANY
By: /s/J. ROBERT HOPSON
______________________________
Attest: /s/FRANCES S. COOK
________________________________
(Name)
First Vice President and Associate
Counsel
_________________________________
(Title)
COVA FINANCIAL LIFE INSURANCE COMPANY
I, FRANCES S. COOK, Secretary of Cova Financial Life Insurance Company (the
"Corporation"), do hereby certify that the attached is a true and accurate copy
of resolutions adopted by the Board of Directors of Cova Financial Life
Insurance Company dated March 24, 1992, and I do further certify that said
resolutions have not been amended or rescinded.
VARIABLE AUTHORITY
WHEREAS, the Corporation is desirous of developing and marketing certain types
of variable and fixed annuity contracts, including modified guaranteed annuity
contracts, and variable life insurance contracts, which may be required to be
registered with the Securities and Exchange Commission pursuant to the various
securities laws (collectively, the "Contracts"); and
WHEREAS, it will be necessary to take certain actions in connection with the
Contracts including, but not limited to, establishing separate accounts for
segregation of assets and seeking approval of regulatory authorities;
NOW, THEREFORE, BE IT
RESOLVED, that the Corporation is hereby authorized to develop the necessary
program in order to effectuate the issuance and sale of the Contracts, and
further
RESOLVED, that the Corporation is hereby authorized to establish and to
designate one or more separate accounts of the Corporation in accordance with
the provisions of, and for the purposes authorized by Section 10506 of the
California Insurance Code, including among their respective purposes the
provision of an investment medium for such Contracts issued by the Corporation
pursuant to such section as may be designated as participating therein; and that
any such separate account shall receive, hold, invest and reinvest only the
monies arising from (i) premiums, contributions or payments made pursuant to the
Contracts participating therein; (ii) within the limits of such section, such
assets of the Corporation as shall be deemed appropriate to be invested in the
same manner as the assets applicable to the Corporation's reserve liability
under the Contracts participating in such separate accounts, or may be necessary
for the establishment of such separate accounts; and (iii) the dividends,
interest and gains produced by the foregoing; and further
RESOLVED, that the proper officers of the Corporation are hereby authorized:
(i) to register the Contracts participating in any such separate accounts under
the provisions of the Securities Act of 1933, as amended, to the extent that it
shall be determined that such registration is necessary;
(ii) to register any such separate accounts with the Securities Exchange
Commission under the provisions of the Investment Corporation Act of 1940; as
amended, to the extent that it shall be determined that such registration is
necessary;
(iii) To prepare, execute and file such amendments to any registration
statements filed under the aforementioned Acts (including post-effective
amendments), supplements and exhibits thereto as they may be deemed necessary or
desirable;
(iv) to apply for exemption from those provisions of the aforementioned Acts as
shall be deemed necessary and to take any and all other actions which shall be
deemed necessary, desirable, or appropriate in connection with such Acts;
(v) to file the Contracts participating in any such separate accounts with the
California Insurance Department and any other appropriate state insurance
departments and to prepare and execute all necessary documents to obtain
approval of said insurance departments;
(vi) to prepare or have prepared and execute all necessary documents to obtain
approval of, or clearance with, or other appropriate actions required, of any
other regulatory authority that may be necessary; and further
RESOLVED, that for the purposes of facilitating the execution and filing of any
registration statement and of remedying any deficiencies therein by appropriate
amendments (including post-effective amendments) or supplements thereto, the
President of the Corporation and the Secretary of the Corporation, and each of
them, are hereby designated as attorneys and agents of the Corporation, and the
appropriate officers of the Corporation be, and they hereby are, authorized and
directed to grant the power of attorney of the Corporation to the President of
the Corporation and to the Secretary of the Corporation by executing and
delivering to such individuals, on behalf of the Corporation, a power of
attorney, and further
RESOLVED, that in connection with the offering and sale of the Contracts in the
various States of the United States, as and to the extent necessary, the
appropriate officers of the Corporation be, and they hereby are, authorized to
take any and all such action, including but not limited to the preparation,
execution and filing with proper state authorities, on behalf of and in the name
of the Corporation, of such applications, notices, certificates, affidavits,
powers of attorney, consents to service of process, issuer's covenants,
certified copies of minutes of shareholders' and directors' meetings, bonds,
escrow and impounding agreements and other writings and instruments, as may be
required in order to render permissible the offering and sale of the Contracts
in such jurisdictions; and further
RESOLVED, that the forms of any resolutions required by any state authority to
be filed in connection with any of the documents or instruments referred to in
any part of the preceding resolutions be, and the same hereby are, adopted as if
fully set forth herein if (1) in the opinion of the appropriate officers of the
Corporation, the adoption of the resolutions is advisable and (2) Secretary of
the Corporation evidences such adoption by inserting into these minutes copies
of such resolutions.
IN WITNESS WHEREOF, I have hereunto set my hands as of the 7th day of October,
1997.
/s/ Frances S. Cook
_____________________
FRANCES S. COOK
COVA
Cova Financial Life Insurance Company
4100 Newport Place Drive
Newport Beach, California 92662
COVA FINANCIAL LIFE INSURANCE COMPANY ("Cova") will pay the Death Proceeds to
the Beneficiary upon receipt at its Policy Service Office of due proof of the
Insured's death while this Policy is in force.
This Policy is issued in return of the Application and payment of the Initial
Premium. A copy of the Application is attached to and made a part of this
Policy.
This is a legal contract between the Owner and the Company.
RIGHT TO EXAMINE
You may cancel this Policy during the Right To Examine Period. The Right To
Examine Period begins with the day You receive this Policy and continues for 10
days. During the Right To Examine Period You may return this Policy by
delivering or mailing it to Cova at its Policy Service Office or to the agent
through whom it was purchased. When this Policy is received by Cova, it will be
voided as if it had never been in force. Cova will pay an amount equal to the
greater of:
1. Premiums paid; or
2. the Account Value on the day this Policy is returned to Cova or the agent
through whom it was purchased.
ALLOCATION OF PREMIUM DURING THE RIGHT TO EXAMINE PERIOD
On the Policy Date, the Initial Premium Payment will be allocated to the Money
Market Subaccount shown on the Schedule Page. The Policy Date may be before or
the same as the Issue Date.
All Subsequent Premium Payments received by Cova before the expiration of the
Right to Examine Period will be allocated to the Money Market Subaccount. On the
expiration of 15 days from the Issue Date, the Subaccount Value of the Money
Market Subaccount will be allocated to the Subaccounts, in whole percentages, as
elected by You on the Application.
Signed for Cova.
/s/ JEFFERY K. HOELZEL /s/ LORRY J. STENSRUD
---------------------- ---------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH PROCEEDS PAYABLE AT DEATH
PERIOD OF COVERAGE NOT GUARANTEED
NONPARTICIPATING - NO DIVIDENDS
READ YOUR POLICY CAREFULLY
CASH VALUES PROVIDED BY THIS POLICY ARE BASED ON THE INVESTMENT EXPERIENCE OF
THE SEPARATE ACCOUNT AND MAY INCREASE OR DECREASE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT. THE DURATION OR AMOUNT OF THE DEATH BENEFIT MAY VARY BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. SEE PAGE 4 FOR A DESCRIPTION OF
THE DEATH BENEFIT.
THE VARIABLE PROVISIONS OF THIS POLICY CAN BE FOUND ON PAGES 5 AND 9.
INDEX
Page
----
Schedule Page
Definitions
Death Benefit Provisions
Premium Payment Provisions
Variable Account Provisions
Calculation of Values
Monthly Deduction Provisions
Transfer Provisions
Termination Provisions
Partial Surrenders, Annual Withdrawal Amount, Surrender Charge and Deferred
Premium Tax Charge
Policy Loans
Payment Provision
Taxes Provision
General Provisions
Ownership and Beneficiary
Settlement Options
SCHEDULE PAGE
INSURED: [JOHN DOE] POLICY NUMBER: [123]
ISSUE AGE/SEX: [35/MALE] POLICY DATE: [12/01/1996]
RATE CLASS: [STANDARD] ISSUE DATE: [12/01/1996]
OWNER: [JOHN DOE] PROCESSING DATE:[1ST]
INITIAL PREMIUM: [$10,000]
FACE AMOUNT: [$61,230]
INITIAL MAXIMUM PREMIUM LIMIT PERCENTAGE: [100%]
BENEFICIARY: As stated in the application for this Policy unless changed in
accordance with the Policy Provisions.
FEES AND CHARGES:
POLICY MAINTENANCE FEE: [ANNUAL POLICY MAINTENANCE FEE; $30 ASSESSED
ON A PRORATA BASIS FROM THE SUBACCOUNTS ON
EACH POLICY ANNIVERSARY. WAIVED IF THE ACCOUNT
VALUE ON A POLICY ANNIVERSARY IS AT LEAST
$50,000. DEDUCTED FROM A TOTAL SURRENDER
REGARDLESS OF SIZE OF ACCOUNT VALUE.]
TAX EXPENSE CHARGE: [THE FEDERAL TAX CHARGE OF .0015 IN YEARS 1-10
DIVIDED BY 12; PLUS THE PREMIUM TAX CHARGE OF
.0025 IN YEARS 1-10 DIVIDED BY 12; MULTIPLIED
BY THE ACCOUNT VALUE]
ADMINISTRATIVE CHARGE: [.0040 DIVIDED BY 12; MULTIPLIED BY THE ACCOUNT
VALUE.]
MORTALITY AND EXPENSE RISK CHARGE: [.0090 IN YEARS 1-10 (.0075 IN YEARS 11 AND
AFTER) DIVIDED BY 12; MULTIPLIED BY THE
TOTAL OF THE SUBACCOUNT VALUES.]
<TABLE>
<CAPTION>
SURRENDER CHARGE
[ASSESSED AGAINST PREMIUM SURRENDERED. NOT ASSESSED ON THE ANNUAL WITHDRAWAL AMOUNT.]
<S> <C> <C> <C>
POLICY POLICY
YEAR RATE YEAR RATE
---- ---- ---- ----
[1] [7.5%] [6] [4.0%]
[2] [7.5%] [7] [3.0%]
[3] [7.5%] [8] [2.0%]
[4] [6.0%] [9] [1.0%]
[5] [5.0%] [10+] [0%]
</TABLE>
<TABLE>
<CAPTION>
DEFERRED PREMIUM TAX CHARGE
[ASSESSED AGAINST PREMIUM SURRENDERED]
<S> <C> <C> <C>
POLICY POLICY
YEAR RATE YEAR RATE
---- ---- ---- ----
[1] [2.25%] [6] [1.00%]
[2] [2.00%] [7] [.75%]
[3] [1.75%] [8] [.50%]
[4] [1.50%] [9] [.25%]
[5] [1.25%] [10+] [0%]
</TABLE>
SCHEDULE PAGE
(continued)
ANNUAL WITHDRAWAL AMOUNT:
[THE SUM OF:
1. THE EXCESS OF THE ACCOUNT VALUE OVER PREMIUMS PAID WHICH HAVE NOT BEEN
PREVIOUSLY SURRENDERED; PLUS
2. 10% OF PREMIUMS.] AN ANNUAL WITHDRAWAL AMOUNT WHICH HAS NOT BEEN USED IN
ANY POLICY YEAR DOES NOT CARRY OVER TO FUTURE POLICY YEARS.
ORDER OF PARTIAL SURRENDERS:
[FOR PURPOSES OF DETERMINING THE CHARGES ASSESSED ON A PARTIAL SURRENDER, A
PARTIAL SURRENDER WILL BE CONSIDERED TO BE MADE FIRST FROM EARNINGS, THEN FROM
PREMIUMS.]
TRANSFER FEE:
[FOR A TRANSFER WHICH EXCEEDS 12 TRANSFERS IN A POLICY YEAR, $25 OR, IF SMALLER,
2% OF THE AMOUNT TRANSFERRED PER TRANSACTION.]
MINIMUM TRANSFER AMOUNT:
[$500 OR ENTIRE BALANCE IF LESS.]
MINIMUM PARTIAL SURRENDER AMOUNT: [$500]
REMAINING ACCOUNT VALUE AMOUNT: [$5,000]
MINIMUM LOAN AMOUNT: [$500]
LOAN ACCOUNT INTEREST RATE (CREDITED): [4%]
PREFERRED LOAN INTEREST RATE (CREDITED): [6%]
POLICY LOAN INTEREST RATE (CHARGED): [6%]
PREFERRED LOANS: DETERMINED ON THE [1ST DAY OF EACH POLICY YEAR]
ELIGIBLE INVESTMENTS:
[- COVA SERIES TRUST]
[- J.P. MORGAN INVESTMENT MANAGEMENT]
[- SELECT EQUITY PORTFOLIO]
[- SMALL CAP STOCK PORTFOLIO]
[- LARGE CAP STOCK PORTFOLIO]
[- INTERNATIONAL EQUITY PORTFOLIO]
[- QUALITY BOND PORTFOLIO]
[- LORD ABBETT ]
[- BOND DEBENTURE PORTFOLIO]
[- LORD ABBETT SERIES FUND, INC.]
[- LORD ABBETT]
[- GROWTH AND INCOME PORTFOLIO]
[- GENERAL AMERICAN CAPITAL COMPANY]
[- CONNING ]
[- MONEY MARKET PORTFOLIO]
VARIABLE ACCOUNT: [COVA VARIABLE LIFE ACCOUNT FIVE]
POLICY SERVICE OFFICE:
COVA FINANCIAL LIFE INSURANCE COMPANY
[P.O. BOX 10366]
[DES MOINES, IOWA 50306-0366]
FOR USE WITH [COVA VARIABLE LIFE ACCOUNT FIVE]
A SEPARATE INVESTMENT ACCOUNT OF
COVA FINANCIAL LIFE INSURANCE COMPANY
SCHEDULE PAGE
(continued)
<TABLE>
<CAPTION>
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
AND MONTHLY MAXIMUM COST OF INSURANCE CHARGE PER $1,000
MONTHLY MONTHLY MONTHLY
MINIMUM MAXIMUM MINIMUM MAXIMUM MINIMUM MAXIMUM
DEATH COST OF DEATH COST OF DEATH COST OF
BENEFIT INSURANCE BENEFIT INSURANCE BENEFIT INSURANCE
AGE PERCENTAGE CHARGE AGE PERCENTAGE CHARGE AGE PERCENTAGE CHARGE
--- ---------- ------ --- ----------------- --- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 250.0 0.1808 57 142.0 1.0867 79 105.0 7.8967
36 250.0 0.1933 58 138.0 1.1817 80 105.0 8.5783
37 250.0 0.2075 59 134.0 1.2850 81 105.0 9.3408
38 250.0 0.2233 60 130.0 1.4000 82 105.0 10.2008
39 250.0 0.2417 61 128.0 1.5300 83 105.0 11.1533
40 250.0 0.2625 62 126.0 1.6767 84 105.0 12.1767
41 243.0 0.2850 63 124.0 1.8408 85 105.0 13.2483
42 236.0 0.3092 64 122.0 2.0225 86 105.0 14.3508
43 229.0 0.3358 65 120.0 2.2183 87 105.0 15.4775
44 222.0 0.3642 66 119.0 2.4275 88 105.0 16.6275
45 215.0 0.3942 67 118.0 2.6492 89 105.0 17.8075
46 209.0 0.4267 68 117.0 2.8875 90 105.0 19.0358
47 203.0 0.4608 69 116.0 3.1508 91 104.0 20.3425
48 197.0 0.4975 70 115.0 3.4475 92 103.0 21.7858
49 191.0 0.5383 71 113.0 3.7858 93 102.0 23.5108
50 185.0 0.5833 72 111.0 4.1733 94 101.0 25.8308
51 178.0 0.6358 73 109.0 4.6117 95 101.0 29.3217
52 171.0 0.6942 74 107.0 5.0917 96 101.0 35.0825
53 164.0 0.7608 75 105.0 5.6042 97 101.0 45.0833
54 157.0 0.8342 76 105.0 6.1417 98 101.0 62.0958
55 150.0 0.9133 77 105.0 6.6975 99 101.0 83.3333
56 146.0 0.9975 78 105.0 7.2767
</TABLE>
THE MINIMUM DEATH BENEFIT PERCENTAGES ARE DETERMINED TO COMPLY WITH SECTION 7702
OF THE INTERNAL REVENUE CODE.
THE MAXIMUM COST OF INSURANCE CHARGES DO NOT EXCEED THE COST OF INSURANCE
CHARGES BASED ON THE 1980 COMMISSIONERS STANDARD ORDINARY TABLE, AGE LAST
BIRTHDAY.
DEFINITIONS
ACCOUNT -- One or more of the Subaccount(s) of the Variable Account.
ACCOUNT VALUE -- The value of the Subaccount(s) and the Loan Account.
ACCUMULATION UNIT -- An accounting unit used to calculate the value of a
Subaccount.
AGE -- The Insured's Issue Age plus the number of full Policy Years elapsed
since the Policy Date.
ANNUITY UNIT -- An accounting unit used to calculate the amount of Variable
Payments.
BENEFICIARY -- The person(s) or entity(ies) who/ which will receive the Death
Proceeds upon the death of the Insured.
CASH SURRENDER VALUE -- The Cash Value less Debt.
CASH VALUE -- The Account Value less any applicable Surrender Charge, Deferred
Premium Tax Charge and Policy Maintenance Fee.
COVA -- Cova Financial Life Insurance Company.
COVERAGE AMOUNT -- The Death Benefit less the Account Value.
DEATH PROCEEDS -- The amount Cova will pay upon death of the Insured.
DEBT -- Any outstanding Loans plus accrued Loan Interest.
DUE PROOF OF DEATH -- One of the following:
1 a certified death certificate;
2. a certified decree of a court or competent jurisdiction as to the finding
of death;
3. a written statement by a medical doctor who attended the deceased; or
4. any other proof satisfactory to Cova.
ELIGIBLE INVESTMENT(S) -- An investment entity which comprises the Portfolios of
this Policy.
FACE AMOUNT -- The Face Amount on the Issue Date is shown on the Schedule Page.
The Face Amount may change in accordance with the terms of the Partial Surrender
provision.
INCOME DATE -- The date payments under a Settlement Option begin.
INSURED -- The person whose life is insured under this Policy.
ISSUE AGE -- On the Policy Date, the Insured's age on his/her last birthday.
ISSUE DATE -- The date this Policy is issued.
LOAN -- The amount which is borrowed.
LOAN ACCOUNT -- An account established for any amounts transferred from the
Subaccounts as a result of a loan. The Loan Account is credited with interest
and is not based on the investment experience of any Subaccount.
MAXIMUM PREMIUM LIMIT -- The maximum total premiums that Cova permits to be paid
for this Policy. Cova sets this limit to be less than or equal to the limit
required to qualify this Policy as life insurance under the Internal Revenue
Code.
MONTHLY ANNIVERSARY -- An anniversary of the Policy Date which is the same day
each month as the Policy Date or the first day of the next month if that day
occurs on a day beyond the end of any month. If a Monthly Anniversary falls on a
date which is not a Valuation Date, the Monthly Anniversary will be the next
Valuation Date.
OWNER -- You as the person named on the Schedule Page who has all rights under
this Policy.
PAYEE -- The natural person receiving payments under a Settlement Option.
POLICY ANNIVERSARY -- An anniversary of the Policy Date.
POLICY DATE -- The Policy Date is the date from which Policy Anniversaries and
Policy Years are determined. The Policy Date is shown on the Schedule Page.
POLICY LOAN INTEREST RATE -- The interest rate charged on a Loan under this
Policy.
POLICY YEAR -- One year from the Policy Date and from each Policy Anniversary.
PORTFOLIO -- A segment of an Eligible Investment which constitutes a separate
and distinct class of shares.
PREMIUM TAX CHARGE -- The amount of tax charged due to assessment to Cova of
taxes by a state or municipal entity.
PROCESSING DATE -- The monthly date when certain charges are deducted from the
Account Value. The first Processing Date is the Issue Date. Thereafter, it is
the same day each month as the Policy Date or the first day of the next month if
that day occurs on a day beyond the end of any month. If a Processing Date falls
on a date which is not a Valuation Date, the Processing Date will be the next
Valuation Date.
PRORATA BASIS -- An allocation method based on the proportion of the Account
Value in each Subaccount.
SUBACCOUNT -- A segment of the Variable Account. Each Subaccount is invested in
a different Portfolio.
SUBACCOUNT VALUE -- The value of a Subaccount.
VALUATION DATE -- The Variable Account will be valued each day that the New York
Stock Exchange is open for trading.
VALUATION PERIOD -- The period of time beginning at the close of business of the
New York Stock Exchange and ending at the close of business for the next
succeeding Valuation Date. Values are determined at the end of a Valuation
Period.
VARIABLE ACCOUNT -- A separate investment account of Cova designated on the
Schedule Page.
WRITTEN REQUEST -- A request made in writing and received by Cova. YOU -- The
person named in the Application who as Owner has all rights under this policy.
DEATH BENEFIT PROVISIONS
DEATH BENEFIT -- While this Policy is in force, the Death Benefit is the greater
of:
1. the Face Amount; or
2. the Minimum Death Benefit.
MINIMUM DEATH BENEFIT -- To ensure that this Policy continues to qualify as life
insurance under the Internal Revenue Code, Cova will automatically increase the
Death Benefit so that it will never be less than the Minimum Death Benefit. The
Minimum Death Benefit is the Account Value as of the end of the Valuation Period
multiplied by the applicable percent shown in the Table of Minimum Death Benefit
Percentages.
PAYMENT OF DEATH BENEFIT -- The Death Proceeds equal the Death Benefit on the
date of the Insured's death less any Debt. Cova will pay the Death Proceeds to
the Beneficiary upon receipt at its Policy Service Office of due proof of the
Insured's death while this Policy is in force.
You may choose to have the Death Proceeds paid in a lump sum or under a
Settlement Option. If You have not made a choice before the Insured dies, the
Beneficiary may choose the manner in which the Death Proceeds are to be paid.
Unless chosen otherwise by You or the Beneficiary, if applicable, Cova reserves
the right to pay the Death Proceeds in a lump sum within 90 days of receipt of
due proof of death.
Interest at an annual rate of 3% or as required by law will be payable on the
Death Proceeds from the date of the Insured's death to:
1. if payment is made in a single sum, the date payment is made; or
2. if payment is made under a Settlement Option, the Income Date.
The Death Benefit payable during the Grace Period is equal to the Death Benefit
in effect immediately prior to the start of the Grace Period less any Debt and
any unpaid Monthly Deduction Amounts.
PREMIUM PAYMENT PROVISIONS
INITIAL PREMIUM -- The Initial Premium is due on the Policy Date. No insurance
is effective until Cova receives the Initial Premium. The Initial Maximum
Premium Limit Percentage is shown on the Schedule Page.
SUBSEQUENT PREMIUMS -- Subject to the Maximum Premium Limit, Cova will accept
Subsequent Premium Payments at any time. If the total of all Premium Payments
under this Policy exceed $1,000,000, You must obtain prior approval from Cova to
make a Subsequent Premium Payment. The amount and frequency of any Subsequent
Premium Payment made will affect the Account Value and the amount or duration of
insurance under this Policy.
A Subsequent Premium Payment that results in an increase in the Death Benefit
will be accepted only after Cova approves evidence of insurability.
A Subsequent Premium Payment must be made to Cova's Policy Service Office.
PREMIUM ALLOCATION -- The Allocation of Premium during the Initial Premium
Payment is allocated as stated in the Right to Examine Period Provision.
Upon written request, You may change the premium allocation. A Subsequent
Premium Payment received after the expiration of the Right to Examine Period
will be allocated to the Subaccounts according to Your most recent instructions.
GRACE PERIOD -- The Grace Period is the 61 days after a Processing Date on which
the Cash Surrender Value is not sufficient to cover any overdue Monthly
Deduction Amounts and the Policy Maintenance Fee. If sufficient Premium is not
paid by the end of the Grace Period, this Policy will terminate without value.
At least 61 days before the end of the Grace Period, Cova will mail to You at
your last known address and any assignee of record written notice of the length
of the Grace Period and the amount of Premium required to continue this Policy
in force.
The Premium required is the amount required to continue this Policy in force to
the end of the Grace Period.
VARIABLE ACCOUNT PROVISIONS
VARIABLE ACCOUNT -- The Variable Account is a separate investment account of
Cova. It is shown on the Schedule Page. Cova has allocated a part of its assets
for this and certain other contracts to the Variable Account. The assets of the
Variable Account are the property of Cova. However, assets equal to liabilities
are not chargeable with the liabilities arising out of any other business Cova
may conduct. The investment policy of the Variable Account will not be changed
without approval by the Insurance Commissioner of the state of California. If
required, the approval process is on file with the Commissioner of the state in
which this Policy is issued.
INVESTMENTS OF THE VARIABLE ACCOUNT -- Premium Payments applied to the Variable
Account are allocated to a Subaccount of the Variable Account. The assets of the
Subaccount are allocated to the Eligible Investment(s) and the Portfolio(s), if
any, within an Eligible Investment shown on the Schedule Page. Cova may, from
time to time, add additional Eligible Investments or Portfolios to those shown
on the Schedule Page. You may be permitted to transfer Account Values to the
additional Eligible Investments or Portfolios. However, the right to make any
transfer will be limited by the terms and conditions imposed by Cova.
If the shares of any of the Eligible Investment(s) or any Portfolio(s) within
the Eligible Investments become unavailable for investment by the Variable
Account, or the Board of Directors deems further investment in these shares
inappropriate, Cova may limit further investment in the shares or may substitute
shares of another Eligible Investment for shares already purchased under this
Policy.
VALUATION OF ASSETS -- Assets of the Variable Account are valued at their fair
market value in accordance with procedures of Cova.
ACCUMULATION UNIT -- An amount allocated to the Variable Account is converted
into Accumulation Units for each elected Subaccount. The number of Accumulation
Units credited to a Subaccount under this Policy is determined by dividing the
amount allocated to the Subaccount by the dollar value of one Accumulation Unit
for that Subaccount as of the Valuation Period during which the amount is
allocated to the Subaccount. The number of Accumulation Units will not be
affected by a subsequent change in the value of the units. The Accumulation Unit
Value in a Subaccount may increase or decrease daily.
The Account Value attributable to a Subaccount of the Variable Account is
determined by multiplying the number of Accumulation Units attributable to the
Subaccount by the Accumulation Unit Value for that Subaccount.
ACCUMULATION UNIT VALUE -- The Accumulation Unit Value for each Subaccount will
vary to reflect the investment experience of the applicable Portfolio and will
be determined on each Valuation Date by multiplying the Accumulation Unit Value
of the Subaccount on the preceding Valuation Date by a Net Investment Factor for
that Subaccount for the Valuation Period then ended. The Net Investment Factor
for each Subaccount is equal to the net asset value per share of the applicable
Portfolio at the end of the Valuation Period (plus the per share amount of any
divided or capital gains distribution paid by that Portfolio in the Valuation
Period then ended) divided by the net asset value per share of the corresponding
Portfolio at the beginning of the Valuation Period.
CALCULATION OF VALUES The Account Value reflects the Premiums Paid, the Monthly
Deductions, deduction of the Policy Maintenance Fee, the investment experience
of the Subaccounts, the value of amounts allocated to the Loan Account and
deductions due to a Partial Surrender in the following manner:
Premiums Paid are converted to Accumulation Units. The Initial Premium Payment
is allocated to the Policy on the Policy Date. On each Processing Date,
Accumulation Units are cancelled to reflect the deduction of the Monthly
Deduction Amount.
On each Policy Anniversary, Accumulation Units are cancelled to reflect the
deduction of the Policy Maintenance Fee.
The Accumulation Unit Value for a Subaccount is a result of the investment
experience of the Subaccount. A Subaccount Value is determined by multiplying
the number of Accumulation Units in the Subaccount by the Accumulation Unit
Value of the Subaccount.
Accumulation Units are cancelled to reflect loans and a Loan Account is
established. Accumulation Units are cancelled to reflect Partial Surrenders and
the Surrender Charge and Deferred Premium Tax Charge, if any.
CASH VALUE -- The Cash Value equals:
1. the Account Value; less
2. the Surrender Charge, if any; less
3. the Deferred Premium Tax Charge if any; less
4. the Policy Maintenance Fee.
CASH SURRENDER VALUE -- The Cash Surrender Value equals:
1. the Cash Value; less
2. Debt, if any.
POLICY MAINTENANCE FEE -- The Policy Maintenance Fee is shown on the Schedule
Page.
SURRENDER CHARGE -- The Surrender Charge is shown on the Schedule Page.
DEFERRED PREMIUM TAX CHARGE -- The Deferred Premium Tax Charge is shown on the
Schedule Page.
MONTHLY DEDUCTION PROVISIONS
MONTHLY DEDUCTION AMOUNT -- The Monthly Deduction Amount equals:
1. the Administrative Charge; plus
2. the Mortality and Expense Risk Charge; plus
3. the Tax Expense Charge; plus
4. the Cost of Insurance Charge.
The Monthly Deduction is determined on the Policy Date and
each Monthly Anniversary of the Policy Date. The Monthly Deduction is deducted
Prorata from the Subaccount Values on each Processing Date.
ADMINISTRATIVE CHARGE -- The Administrative Charge is shown on the Schedule
Page.
MORTALITY AND EXPENSE RISK CHARGE -- The Mortality and Expense Risk Charge is
shown on the Schedule Page.
TAX EXPENSE CHARGE -- The Tax Expense Charge is shown on the Schedule Page.
COST OF INSURANCE CHARGE -- The Monthly Maximum Cost of Insurance Charge is
equal to:
1. the Maximum Cost of Insurance Charge Rate per $1,000 shown on the Schedule
Page; multiplied by
2. the Coverage Amount; divided by
3. $1,000.
The Coverage Amount equals:
1. the Death Benefit; less
2. the Account Value.
The actual Cost of Insurance Charge assessed by Cova may be less than the
Maximum Cost of Insurance Charge shown on the Schedule Page. Cova will determine
the actual Cost of Insurance Charge based on its expectation of future
experience.
Any change Cova makes to the actual Cost of Insurance Charge will be made on a
uniform basis for Insureds of the same age, sex and rate class whose coverage
has been in force for the same length of time. No change in insurance class or
cost will be made due to deterioration of the Insured's health.
TRANSFER PROVISIONS Upon request while this Policy is in effect after the end of
the Right To Examine Period, You may make transfers between the Subaccounts.
A transfer is subject to the following:
1. The maximum number of transfers which may be made which are not subject to
a Transfer Fee is shown on the Schedule Page.
2. A Transfer Fee is deducted if a transfer exceeds the maximum number of
transfers not subject to a Transfer Fee. The Transfer Fee is shown on the
Schedule Page. The Transfer Fee is deducted from the amount which is
transferred.
3. The minimum amount which may be transferred is shown on the Schedule Page.
4. A transfer will be effected as of the end of the Valuation Period when Cova
receives an acceptable transfer request containing all required information
including the amount which is to be transferred and the Subaccount(s)
affected.
5. Neither Cova nor its Policy Service Office are liable for a transfer made
in accordance with Your instructions.
6. Cova reserves the right to restrict transfers to a maximum of 12 per year and
to restrict transfers from being made on consecutive Valuation Dates.
7. Your right to make transfers between the Subaccounts is subject to
modification if Cova determines, in its sole opinion, that the exercise of the
right by one or more Owners is, or would be, to the disadvantage of other
Owners. Restrictions may be applied in any manner reasonably designed to prevent
any use of the transfer right which is considered by Cova to be the disadvantage
of other Owners. A modification could be applied to transfers to or from one or
more of the Subaccounts and could include, but not be limited to:
a) the requirement of a minimum time period between each transfer;
b) not accepting transfer requests of an agent acting under a power of
attorney on behalf of more than one Owner; or
c) limiting the dollar amount that may be transferred between the Subaccounts
by an Owner at any one time.
8. Under a Settlement Option, only one transfer may be made per Policy Year. A
transfer may be made from Variable Payments to Fixed Payments. No transfer
may be made from Fixed Payments to the Variable Payments.
TRANSFERS TO OR FROM SUBACCOUNTS -- A transfer from a Subaccount will result in
a reduction of the number of Accumulation Units credited to the Subaccount from
which the transfer is made. The reduction will equal:
1. the amount transferred; divided by
2. the value of an Accumulation Unit for the Subaccount as of the Valuation
Date on which the transfer is made.
A transfer to a Subaccount will result in an increase in the number of
Accumulation Units credited to the Subaccount to which the transfer is made. The
increase will equal:
1. the amount transferred; divided by
2. the value of an Accumulation Unit for the Subaccount as of the Valuation
Date on which the transfer is made.
TERMINATION PROVISIONS TERMINATION -- This Policy will terminate on the earliest
of the following:
1. Total Surrender of this Policy;
2. the end of the Grace Period; or
3. the death of the Insured.
REINSTATEMENT -- If this Policy is terminated prior to the death of the Insured,
this Policy may be reinstated if:
1. a Total Surrender was not made for cash;
2. Your reinstatement request is made within 5 years of the end of the Grace
Period;
3. satisfactory evidence of insurability is provided to Cova;
4. any Debt is repaid or reinstated;
5. sufficient premium must be paid to:
a) cover all Monthly Deduction Amounts and the Policy Maintenance Fee
that are due and unpaid during the Grace Period; and
b) continue this Policy in force for 2 months after the date of
reinstatement. The Face Amount of the reinstated policy cannot exceed
the Face Amount at the time of termination. After adjusting for past
due charges, the Account Value on the reinstatement date will equal:
1. the Account Value at the time of termination; plus
2. premium paid at the time of reinstatement.
The Surrender Charge, if any, and the Deferred Premium Tax Charge, if any, are
based on the number of Policy Years from the original Policy Date. The effective
date of the reinstatement is the next Processing Date following approval by Cova
of the application for reinstatement.
TOTAL SURRENDER -- You may terminate this Policy at any time by submitting a
written request to Cova. Cova will pay the Cash Surrender Value to You at the
time of surrender and Cova's liability under this Policy will cease.
PARTIAL SURRENDERS, ANNUAL WITHDRAWAL AMOUNT, SURRENDER CHARGE AND DEFERRED
PREMIUM TAX CHARGE
PARTIAL SURRENDERS -- At any time after
the Right to Examine Period expires, You may, upon written request to Cova, make
a Partial Surrender of the Cash Surrender Value subject to the following:
1. A Partial Surrender must be for an amount at least equal to the Minimum
Partial Surrender Amount shown on the Schedule Page or, if smaller, the
remaining Cash Surrender Value.
2. The Account Value remaining after the Partial Surrender is completed must
be at least equal to the Remaining Account Value Amount shown on the
Schedule Page or Cova will terminate this Policy and pay the Cash Surrender
Value.
3. Unless You specify otherwise, the Partial Surrender will be deducted on a
Prorata basis from the Subaccounts.
4. The Face Amount will be reduced proportional to the reduction in the
Account Value resulting from the Partial Surrender.
ANNUAL WITHDRAWAL AMOUNT -- On a non-cumulative basis, You may make one or more
Partial Surrenders during any Policy Year equal to the Annual Withdrawal Amount
shown on the Schedule Page. The Deferred Premium Tax Charge is assessed against
the portion of the Annual Withdrawal Amount attributable to premiums
surrendered.
SURRENDER CHARGE AND DEFERRED PREMIUM TAX CHARGE -- A Total or Partial Surrender
of the Account Value may be subject to the Surrender Charge and Deferred Premium
Tax Charge. The Surrender Charge and the Deferred Premium Tax Charge are shown
on the Schedule Page.
The Policy Maintenance Fee is assessed against a Total Surrender.
No Surrender Charge or Deferred Premium Tax Charge is assessed if this Policy
terminates due to the death of the Insured.
POLICY LOANS
GENERAL -- At any time after the Right to Examine Period expires
and while this Policy is in force and not in the Grace Period, you may borrow
against this Policy by assigning it to Cova as sole security.
LOAN AMOUNTS -- The Maximum Loan Amount is equal to:
1. 90% of the Account Value; less
2. Loan Interest due on the next Policy Anniversary; less
3. the Surrender Charge, if any; less
4. the Policy Maintenance Fee, if any; less
5. the Deferred Premium Tax Charge, if any.
No new loan may be taken which, in combination with existing loans and accrued
interest, is greater than the Maximum Loan Amount. A loan amount will be
transferred from the Subaccounts to the Loan Account on a Prorata basis. The
Minimum Loan Amount for each new loan is shown on the Schedule Page. If total
loans equal or exceed the Cash Value, and sufficient loan repayment is not
received by Cova by the end of the Grace Period, this Policy will terminate
without value.
PREFERRED LOAN -- The amount available for a Preferred Loan is the amount by
which the Account Value exceeds the total Premiums paid which have not been
previously surrendered. The amount of the Loan Account equal to a Preferred Loan
will be credited with interest at the Preferred Loan Interest Rate. The
Preferred Loan Interest Rate is shown on the Schedule Page. The Preferred Loan
Amount will be determined at the intervals shown on the Schedule Page.
INTEREST CREDITED -- The amount of the Loan Account in excess of the Preferred
Loan will be credited daily with interest at the Loan Account Interest Rate. The
Loan Account Interest Rate is shown on the Schedule Page.
LOAN REPAYMENTS -- All or part of a Loan may be repaid at any time that:
1. this Policy is in force; and
2. the Insured is alive.
There is no minimum loan repayment amount. To repay a loan in full, the loan
repayment must equal the Debt.
The amount equivalent to a loan repayment will be deducted from the Loan Account
and allocated to the Subaccounts in the same percentage as premiums are
currently allocated to the Subaccounts.
Unless You request otherwise, all funds received while a loan is outstanding
will first be considered as a payment of any loan interest due, then as a loan
repayment, then as Premium paid.
LOAN INTEREST -- Loan Interest due Cova will accrue daily at a rate which does
not exceed the Policy Loan Interest Rate shown on the Schedule Page. Loan
Interest is due on each Policy Anniversary. If Loan Interest is not paid, the
difference between the value of the Loan Account and Debt will be transferred
from the Subaccounts on a Prorata Basis to the Loan Account.
PAYMENT PROVISION
PAYMENTS
BY COVA -- Cova will pay the Death Proceeds, Total and Partial Surrenders and
Loans attributable to the Subaccounts within 7 days of receipt of all
information needed to process the payment unless:
1. the New York Stock Exchange is closed on other than customary weekend and
holiday closings;
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of securities held in the
Variable Account is not reasonably practicable or it is not reasonably
practicable to determine the value of the net assets of the Variable
Account; or
during any other period when the Securities and Exchange Commission, by order,
so permits for the protection of Owners; provided that applicable rules and
regulations of the Securities and Exchange Commission will govern as to whether
the conditions described in (2) and (3) exist.
TAXES PROVISION
TAXES -- Cova may assess a charge against this Policy for any taxes attributable
to the Variable Account. Cova does not expect to incur such taxes.
GENERAL PROVISIONS
THE CONTRACT -- The entire contract consists of:
1. this Policy;
2. the Application which is attached to this Policy; and
3. any riders or endorsements attached to this Policy.
This Policy may be changed or altered only by the President or Secretary of
Cova. A change or alteration must be in writing.
RELIANCES -- This Policy has been issued based on the answers in the
Application. All statements in the Application will, in the absence of fraud, be
deemed representations and not warranties. Neither Cova nor its Policy Service
Office are liable for a request made in accordance with Your instructions.
SUICIDE -- If, within 2 years from the Policy Date, the Insured dies by suicide,
while sane or insane, Cova's liability will be limited to Premiums paid less
Debt and less Partial Surrenders.
INCONTESTABILITY -- Cova cannot contest this Policy after it has been in force,
during the Insured's lifetime, for 2 years from the Policy Date except in the
case of fraud. If this Policy is reinstated, Cova may contest this Policy for 2
years after the date of reinstatement or for any statements made in the
Application for reinstatement.
MISSTATEMENT OF AGE AND/OR SEX -- If it is determined that the age and/or sex of
the Insured was misstated, on the date of death of the Insured, the Death
Benefit will be reduced or increased by the difference between the Death Benefit
at the misstated age and/or sex of the Insured and the Death Benefit that would
have been provided by the last Cost of Insurance Charge at the correct age
and/or sex of the Insured.
NON-PARTICIPATING -- This Policy is non-participating. It does not share in
Cova's surplus.
REPORTS -- At least once each calendar year, Cova will provide You with a report
showing:
1. the amount of Death Benefit;
2. the Account Value, Cash Value, Cash Surrender Value and Face Amount;
3. Premiums paid, Monthly Deduction Amounts and Loans since the last report;
4. the amount of any Debt;
5. notifications required by the provisions of this Policy; and
6. any other information required by the state where this Policy was
delivered.
Cova will also send You any shareholder reports of the Portfolios and any other
notices, reports or documents as required by law. Reports will be sent to Your
last known address.
POLICY CHANGES -- To receive the tax treatment accorded life insurance under
Federal laws, insurance under this Policy must initially qualify and continue to
qualify as life insurance under the Internal Revenue Code. To maintain
qualification to the maximum extent permitted by law, Cova reserves the right to
return Premiums paid with interest which Cova determines will cause any coverage
under this Policy to fail to qualify as life insurance under applicable tax
laws. Additionally, Cova reserves the right to make changes in this Policy or to
make distributions to the extent Cova determines necessary to continue to
qualify this Policy as life insurance and to comply with applicable laws. Cova
will provide advance written notice of a change.
CLAIMS OF CREDITORS -- Proceeds described in this Policy will be free from
creditors' claims to the extent allowed by law.
ASSIGNMENT -- No assignment of this Policy by You will be binding on Cova until
it is filed with Cova. Cova assumes no responsibility for the validity of any
assignment. Any claim under an assignment will be subject to proof of the extent
of interest. If this Policy is assigned, Your rights and Beneficiary's rights
are subject to the rights of the assignee of record.
BASIS OF VALUES -- All values available under this Policy are at least equal to
those required by law. Where required, a detailed statement of the method of
computations has been filed with the insurance department of the state where
this Policy was delivered. Mortality and expense risks under this Policy are
borne by Cova.
OWNERSHIP AND BENEFICIARY
CHANGE OF OWNER OR BENEFICIARY -- The Owner and Beneficiary are named in the
Application unless changed by You. To change the Owner or Beneficiary, You must
notify Cova in writing while the Insured is alive. After Cova receives written
notice, the change will be effective as of the date You signed the notice,
whether or not the Insured is living when Cova receives it. However, the change
will be subject to any payment Cova made or actions Cova may have taken before
Cova received the request.
You may not change an irrevocable Beneficiary. If there is an irrevocable
Beneficiary, all policy changes except premium allocations and transfers require
the consent of the Beneficiary.
OWNERSHIP -- If the Owner dies while this Policy is in force and the Insured is
living, ownership rights pass to a successor owner, if any, or to the estate of
the Owner.
This Policy can be owned by joint owners. Authorization of the joint owners is
required for all policy changes except for telephone transfers.
NO NAMED BENEFICIARY -- If no named Beneficiary survives the Insured, then,
unless this Policy provides otherwise:
1. You will be the Beneficiary; or
2. if You are the Insured, Your estate will be the Beneficiary.
SETTLEMENT OPTIONS
GENERAL -- The Cash Surrender Value or the Death Proceeds may be paid in a lump
sum or may be applied to one of the following Settlement Options. No Total
Surrender or Partial Surrenders are permitted after payments begin. If the
amount applied under a Settlement Option is less than $5,000, Cova reserves the
right to make one lump sum payment in lieu of payments under the Settlement
Option. If the amount of a Settlement Option Payment would be or become less
than $100, Cova will reduce the frequency of payments to an interval which will
result in each payment being at least $100. The adjusted age of the Payee used
to determine payments under a Settlement Option is the Payee's age less one year
for every eight years elapsed between January 1, 1983 and the Income Date.
Cova may require proof of age of a Payee before making any payments under a life
Settlement Option under this Policy. If the age of the Payee has been misstated,
the amount payable will be the amount that the Cash Surrender Value would have
provided at the correct age.
After the Income Date, any under payments will be made up in one sum with the
next Payment. Any overpayments will be deducted from future Payments until the
total is repaid.
SETTLEMENT OPTIONS -- The following
Settlement Options or any other option acceptable to Cova may be elected.
OPTION 1: LIFE ANNUITY -- A life annuity is an annuity payable during the
lifetime of the Payee and terminating with the last payment preceding the death
of the Payee.
OPTION 2: LIFE ANNUITY WITH 5, 10 OR 20 YEARS GUARANTEED -- A life annuity with
a guaranteed period is an annuity payable monthly during the lifetime of the
Payee with the guarantee that payments will be made for a minimum of 5, 10 or 20
years, as elected. If, at the death of the Payee, payments have been made for
less than the guaranteed period elected, payments will continue to the
Beneficiary for the remainder of the guaranteed period.
OPTION 3: JOINT AND LAST SURVIVOR ANNUITY -- A joint and last survivor annuity
is an annuity payable monthly during the joint lifetime of the Payee and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered Cova, the Payee may elect that the
payment to the survivor be less than the payment made during the joint lifetime
of the Payee and the designated second person.
OPTION 4: PAYMENTS FOR A DESIGNATED PERIOD -- An amount payable monthly for the
number of years elected which may be from 5 to 30 years. If the Payee dies
before the end of the designated period, payments will continue to the
Beneficiary for the remainder of the designated period.
ALLOCATION OF SETTLEMENT OPTION -- If a Settlement Option is elected, unless
otherwise specified, the Cash Surrender Value or Death Proceeds held in the
Subaccounts will be applied to provide Variable Payments based on the Prorata
amount in the applicable Subaccounts. Fixed Payments are also available.
VARIABLE PAYMENTS -- Variable Payments are payments which increase or decrease
in amount in accordance with the investment experience of the Subaccounts. After
the first monthly Variable Payment has been determined by using the appropriate
Annuity Table, the number of Subaccount Annuity Units is determined by dividing
the first monthly payment by the appropriate Subaccount Annuity Unit Value on
the effective date of the payments. The Annuity Unit Value for each Subaccount
will depend on the investment experience of the applicable Portfolio.
The number of Annuity Units remains fixed with respect to a particular
Subaccount. If You make a transfer between Subaccounts, the number of Annuity
Units will change when the transfer is made and will then remain fixed in number
following the election. Only one transfer may be made per Policy Year between
the Subaccounts.
The dollar amount of the second and subsequent Variable Payments is not
predetermined and may increase or decrease from month to month. The actual
amount of each Variable Payment after the first is determined by multiplying the
number of Subaccount Annuity Units by the Subaccount Annuity Unit Value. The
Subaccount Annuity Unit Value will be determined on the date the Variable
Payment is due. The Subaccount Annuity Unit Value is adjusted for an assumed
investment rate of 3%.
ANNUITY UNIT -- The value of an Annuity Unit for each Subaccount of the Variable
Account was arbitrarily set initially at $10. This was done when the first
Eligible Investment shares were purchased.
The Subaccount Annuity Unit Value at the end of any subsequent Valuation Period
is determined by multiplying the Subaccount Annuity Unit Value for the
immediately preceding Valuation Period by the net investment factor for the day
for which the Annuity Unit Value is being calculated.
NET INVESTMENT FACTOR -- The Net Investment Factor for any Subaccount of the
Variable Account for any Valuation Period is determined by dividing:
1. the Accumulation Unit Value as of the close of the current Valuation
Period; by
2. the Accumulation Unit Value as of the close of the immediately preceding
Valuation Period.
The Net Investment Factor
may be greater or less than one, as the Annuity Unit Value may increase or
decrease.
FIXED PAYMENTS -- Fixed Payments are payments for which the amount is
predetermined on the date the first payment is made. Fixed Payments are
determined by multiplying the amount applied to the Settlement Option by a rate
which is not less than the rate specified in the Settlement Option Tables.
DESCRIPTION OF TABLES -- The Settlement Option Tables show the minimum dollar
amount of the first monthly payment for each $1,000 applied under an option.
Under Option 1 and 2, the amount of each payment will depend upon the Adjusted
Age and sex of the Payee at the time the first payment is due. Under Option 3,
the amount of each payment will depend upon the Adjusted Age and sex of both
Payees at the time the first payment is due.
The Settlement Option Tables are based on the 1983 Individual Annuity Mortality
Tables, Male/Female, with interest at an effective annual rate of 3%.
<TABLE>
<CAPTION>
SETTLEMENT OPTION TABLE FOR OPTION 1
Life Annuity
Monthly Annuity Payment Under Option 1
For Each $1,000 Of Amount Applied
Male Female Male Female Male Female
Monthly Monthly Monthly Monthly Monthly Monthly
Age Payment Payment Age Payment Payment Age Payment Payment
--- ------- ------- --- ------- ------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
5 2.82 2.76 32 3.35 3.19 59 5.18 4.63
6 2.83 2.77 33 3.38 3.21 60 5.31 4.74
7 2.85 2.78 34 3.42 3.24 61 5.45 4.85
8 2.86 2.79 35 3.46 3.27 62 5.61 4.97
9 2.87 2.80 36 3.50 3.30 63 5.77 5.10
10 2.88 2.81 37 3.54 3.33 64 5.95 5.24
11 2.90 2.82 38 3.58 3.37 65 6.13 5.38
12 2.91 2.83 39 3.62 3.40 66 6.34 5.54
13 2.93 2.84 40 3.67 3.44 67 6.55 5.71
14 2.94 2.85 41 3.72 3.48 68 6.78 5.89
15 2.96 2.87 42 3.77 3.52 69 7.02 6.08
16 2.97 2.88 43 3.83 3.56 70 7.29 6.29
17 2.99 2.90 44 3.88 3.60 71 7.57 6.51
18 3.01 2.91 45 3.94 3.65 72 7.87 6.76
19 3.03 2.93 46 4.01 3.70 73 8.19 7.02
20 3.05 2.94 47 4.07 3.75 74 8.53 7.31
21 3.07 2.96 48 4.14 3.80 75 8.90 7.62
22 3.09 2.97 49 4.21 3.86 76 9.30 7.96
23 3.11 2.99 50 4.29 3.92 77 9.72 8.33
24 3.13 3.01 51 4.36 3.98 78 10.18 8.73
25 3.15 3.03 52 4.45 4.05 79 10.67 9.16
26 3.18 3.05 53 4.53 4.12 80 11.19 9.63
27 3.20 3.07 54 4.63 4.19 81 11.75 10.14
28 3.23 3.09 55 4.72 4.27 82 12.35 10.69
29 3.26 3.11 56 4.83 4.36 83 12.99 11.29
30 3.29 3.14 57 4.94 4.44 84 13.66 11.94
31 3.32 3.16 58 5.05 4.54 85+ 14.37 12.64
</TABLE>
<TABLE>
<CAPTION>
SETTLEMENT OPTION TABLE FOR OPTION 2
Life Annuity With 5, 10 or 20 Years Guaranteed
Monthly Annuity Payment Under Option 2
For Each $1,000 Of Amount Applied
Male 5 Years 10 Years 20 Years Male 5 Years 10 Years 20 Years
Age Guaranteed Guaranteed Guaranteed Age Guaranteed Guaranteed Guaranteed
--- --------------------- ---------- --- --------------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
5 2.82 2.82 2.82 46 4.00 3.98 3.88
6 2.83 2.83 2.83 47 4.06 4.04 3.94
7 2.84 2.84 2.84 48 4.13 4.10 3.99
8 2.86 2.86 2.85 49 4.20 4.17 4.04
9 2.87 2.87 2.86 50 4.27 4.27 4.10
10 2.88 2.88 2.88 51 4.35 4.31 4.16
11 2.90 2.89 2.89 52 4.43 4.39 4.22
12 2.91 2.91 2.90 53 4.52 4.47 4.28
13 2.92 2.92 2.92 54 4.61 4.56 4.34
14 2.94 2.94 2.93 55 4.70 4.65 4.40
15 2.96 2.95 2.95 56 4.80 4.74 4.47
16 2.97 2.97 2.96 57 4.91 4.84 4.53
17 2.99 2.99 2.98 58 5.03 4.94 4.60
18 3.01 3.00 3.00 59 5.15 5.05 4.66
19 3.03 3.02 3.02 60 5.28 5.17 4.73
20 3.04 3.04 3.04 61 5.41 5.29 4.79
21 3.06 3.06 3.05 62 5.56 5.42 4.86
22 3.09 3.08 3.07 63 5.72 5.55 4.92
23 3.11 3.10 3.10 64 5.88 5.69 4.98
24 3.13 3.13 3.12 65 6.06 5.84 5.04
25 3.15 3.15 3.14 66 6.25 5.99 5.10
26 3.18 3.17 3.16 67 6.45 6.15 5.15
27 3.20 3.20 3.19 68 6.66 6.31 5.20
28 3.23 3.23 3.21 69 6.88 6.48 5.24
29 3.26 3.25 3.24 70 7.12 6.65 5.29
30 3.29 3.28 3.27 71 7.37 6.82 5.32
31 3.32 3.31 3.30 72 7.63 7.00 5.36
32 3.34 3.34 3.33 73 7.91 7.18 5.39
33 3.38 3.38 3.36 74 8.20 7.36 5.41
34 3.42 3.41 3.39 75 8.51 7.53 5.43
35 3.45 3.45 3.42 76 8.83 7.71 5.45
36 3.49 3.49 3.46 77 9.16 7.88 5.47
37 3.53 3.53 3.49 78 9.51 8.05 5.48
38 3.58 3.57 3.53 79 9.88 8.21 5.49
39 3.62 3.61 3.57 80 10.25 8.37 5.50
40 3.67 3.66 3.61 81 10.64 8.51 5.51
41 3.72 3.71 3.65 82 11.03 8.65 5.51
42 3.77 3.76 3.70 83 11.42 8.78 5.52
43 3.82 3.81 3.74 84 11.82 8.90 5.52
44 3.88 3.86 3.79 85+ 12.21 9.00 5.52
45 3.91 3.92 3.84
</TABLE>
<TABLE>
<CAPTION>
SETTLEMENT OPTION TABLE FOR OPTION 2
Life Annuity With 5, 10 or 20 Years Guaranteed
Monthly Annuity Payment Under Option 2
For Each $1,000 Of Amount Applied
Female 5 Years 10 Years 20 Years Female 5 Years 10 Years 20 Years
Age Guaranteed Guaranteed Guaranteed Age Guaranteed Guaranteed Guaranteed
--- -------------------------------- --- --------------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
5 2.76 2.76 2.75 46 3.70 3.69 3.65
6 2.77 2.77 2.76 47 3.75 3.74 3.69
7 2.78 2.78 2.77 48 3.80 3.79 3.74
8 2.79 2.79 2.78 49 3.86 3.84 3.79
9 2.80 2.80 2.79 50 3.92 3.90 3.84
10 2.81 2.81 2.80 51 3.98 3.96 3.89
11 2.82 2.82 2.82 52 4.04 4.03 3.94
12 2.83 2.83 2.83 53 4.11 4.09 4.00
13 2.84 2.84 2.84 54 4.19 4.16 4.06
14 2.85 2.85 2.85 55 4.26 4.24 4.12
15 2.87 2.87 2.86 56 4.35 4.32 4.18
16 2.88 2.88 2.88 57 4.43 4.40 4.25
17 2.90 2.90 2.89 58 4.53 4.49 4.31
18 2.91 2.91 2.91 59 4.62 4.58 4.38
19 2.92 2.92 2.92 60 4.73 4.68 4.45
20 2.94 2.94 2.94 61 4.84 4.78 4.52
21 2.96 2.96 2.95 62 4.95 4.89 4.60
22 2.97 2.97 2.97 63 5.08 5.00 4.67
23 2.99 2.99 2.99 64 5.21 5.12 4.74
24 3.01 3.01 3.00 65 5.35 5.25 4.81
25 3.03 3.03 3.02 66 5.50 5.38 4.88
26 3.05 3.05 3.04 67 5.66 5.53 4.95
27 3.07 3.07 3.06 68 5.83 5.68 5.02
28 3.09 3.09 3.08 69 6.02 5.83 5.08
29 3.11 3.11 3.10 70 6.22 6.00 5.14
30 3.14 3.14 3.13 71 6.43 6.17 5.20
31 3.16 3.16 3.15 72 6.66 6.35 5.25
32 3.19 3.19 3.17 73 6.90 6.54 5.29
33 3.21 3.21 3.20 74 7.17 6.73 5.33
34 3.24 3.24 3.23 75 7.45 6.93 5.37
35 3.27 3.27 3.25 76 7.75 7.13 5.40
36 3.30 3.30 3.28 77 8.06 7.33 5.43
37 3.33 3.33 3.31 78 8.40 7.53 5.45
38 3.36 3.36 3.34 79 8.76 7.73 5.47
39 3.40 3.40 3.38 80 9.14 7.93 5.48
40 3.44 3.44 3.41 81 9.54 8.12 5.49
41 3.47 3.47 3.45 82 9.95 8.30 5.50
42 3.51 3.51 3.48 83 10.39 8.47 5.51
43 3.56 3.56 3.52 84 10.83 8.63 5.51
44 3.60 3.60 3.56 85+ 11.29 8.78 5.52
45 3.65 3.65 3.60
</TABLE>
<TABLE>
<CAPTION>
SETTLEMENT OPTION TABLE FOR OPTION 3
Joint and Last Survivor Annuity
Monthly Annuity Payment Under Option 3
For Each $1,000 Of Amount Applied
Joint And 50% Survivor Annuity
Female
Age Male Age
--- --------
50 55 60 65 70 75
-- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
50 4.03 4.21 4.42 4.68 4.98 5.32
55 4.20 4.40 4.63 4.92 5.25 5.62
60 4.41 4.63 4.89 5.21 5.58 6.01
65 4.67 4.91 5.21 5.57 6.00 6.49
70 4.97 5.25 5.59 6.01 6.52 7.10
75 5.34 5.67 6.06 6.56 7.17 7.87
</TABLE>
<TABLE>
<CAPTION>
Joint And 66 2/3% Survivor Annuity
Female
Age Male Age
--- --------
50 55 60 65 70 75
-- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
50 3.86 4.00 4.16 4.33 4.51 4.70
55 4.02 4.19 4.38 4.58 4.79 5.02
60 4.20 4.40 4.63 4.87 5.14 5.41
65 4.40 4.64 4.91 5.22 5.55 5.89
70 4.61 4.90 5.23 5.62 6.04 6.49
75 4.85 5.18 5.58 6.06 6.62 7.22
</TABLE>
<TABLE>
<CAPTION>
Joint And 100% Survivor Annuity
Female
Age Male Age
--- --------
50 55 60 65 70 75
-- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
50 3.57 3.65 3.72 3.76 3.80 3.82
55 3.71 3.83 3.94 4.02 4.08 4.13
60 3.83 4.01 4.17 4.31 4.42 4.50
65 3.94 4.17 4.41 4.64 4.83 4.98
70 4.02 4.31 4.63 4.96 5.28 5.54
75 4.09 4.42 4.82 5.27 5.74 6.19
</TABLE>
Information about different age combinations will be furnished upon request.
<TABLE>
<CAPTION>
SETTLEMENT OPTION TABLE FOR OPTION 4
Payments For Designated Period
Monthly Annuity Payment Under Option 4
For Each $1,000 Of Amount Applied
Monthly Monthly Monthly
Years Payment Years Payment Years Payment
----- ------- ----- ------------- -------
<S> <C> <C> <C> <C> <C>
5 17.91 14 7.26 23 4.99
6 15.14 15 6.87 24 4.84
7 13.16 16 6.53 25 4.71
8 11.68 17 6.23 26 4.59
9 10.53 18 5.96 27 4.47
10 9.61 19 5.73 28 4.37
11 8.86 20 5.51 29 4.27
12 8.24 21 5.32 30 4.18
13 7.71 22 5.15
</TABLE>
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH PROCEEDS PAYABLE AT DEATH
PERIOD OF COVERAGE NOT GUARANTEED
NONPARTICIPATING - NO DIVIDENDS
Cova Financial Life Insurance Company
4100 Newport Place Drive
Newport Beach, California 92662
Cova Financial Life Insurance Company
4100 Newport Place Drive
Newport Beach, California 92662
JOINT LIFE RIDER
This Rider forms a part of the Policy to which it is attached. The effective
date of this Rider is the Issue Date shown on the Schedule Page. If spouses are
named as Joint Insureds under the Policy, the Death Benefit provision of the
Policy is amended to provide that the Death Benefit is payable on the death of
the last surviving Insured subject to the following:
1. The actual Cost of Insurance Charge assessed by Cova is determined
reflecting:
a) the anticipated life expectancy of both Insureds; and
b) that the Death Benefit is payable at the death of the last surviving
Insured.
2. The Policy may be reinstated only if both Insureds are living.
3. The Suicide, Incontestability and Misstatement of Age and/or Sex provisions
apply to both Insureds.
This Rider will terminate on the date the Policy terminates. All other terms and
conditions of the Policy remain unchanged.
Cova Financial Life Insurance Company has caused this Rider to be signed by its
President and Secretary.
/s/ JEFFERY K. HOELZEL /s/ LORRY J. STENSRUD
______________________Secretary _____________________President
Cova Financial Life Insurance Company
4100 Newport Place Drive
Newport Beach, California 92662
NURSING HOME RIDER
This Rider forms a part of the Policy to which it is attached. The effective
date of this Rider is the Issue Date shown on the Schedule Page.
While the Policy is in force after the first Policy Anniversary, You may, upon
written request received by Cova, request that Cova waive the Surrender Charge
upon the request for a Total or Partial Surrender of the Cash Surrender Value
if:
1. You or a joint owner are confined to a Nursing Home and/or Hospital for at
least 90 consecutive days or confined for a total of at least 90 days if
there is no more than a 6-month break in the confinement and the
confinements are for related causes; and
2. The confinement begins after the first Policy Anniversary;
3. A Total or Partial Surrender request and adequate proof of confinement are
received by Cova while You are confined or within 90 days after the
confinement ends; and
4. Confinement in a Nursing Home and/or Hospital is prescribed by a Physician
and is Medically necessary.
If ownership of the Policy is changed to an Owner who is a natural person, this
Rider will continue in effect. A request to waive the Surrender Charge may not
be made by the new Owner until one year following the effective date of the
change in ownership.
DEFINITIONS
Hospital - A facility which:
1. Is located in the United States or its territories;
2. Is licensed as a hospital by the jurisdiction in which it is located;
3. Is supervised by a staff of licensed physicians;
4. Provides nursing services 24 hours a day by, or under the supervision of, a
registered nurse (R.N.);
5. Operates primarily for the care and treatment of sick and injured persons
as inpatients for a charge; and
6. Has access to medical and diagnostic facilities.
Intermediary Care Facility - A facility which:
1. Is located in the United States or its territories;
2. Is licensed and operated as an Intermediate Care Facility according to the
laws of the jurisdiction in which it is located;
3. Provides continuous 24 hours a day nursing service by or under the
supervision of a registered graduate professional nurse (R.N.) or a
licensed practical nurse (L.P.N.); and
4. Maintains a daily medical record of each patient.
Medically Necessary - Appropriate and consistent with the diagnosis in
accordance with accepted standards of practice and which could not have been
omitted without adversely affecting the individual's condition.
Nursing Home - A Skilled Nursing Facility, an Intermediary Care Facility or a
Residential Care Facility. Nursing Home does not mean:
1. A home for the aged, a community living center or a place that primarily
provides domiciliary, residency or retirement care; or
2. A place owned or operated by a member of the Owner's immediate family.
Immediate family members include the Owner's spouse, children, parents,
grandparents, grandchildren, siblings and in-laws.
Physician - A doctor of medicine legally authorized to practice medicine and
surgery by the state in which he/she performs the examination and certification,
including a doctor of osteopathy practicing within the scope of his/her practice
under state law. A Physician may not be a family member of the Owner or the
Insured.
Residential Care Facility - A facility which:
1. Is located in the United States or its territories;
2. Is licensed and operated as a Residential Care Facility according to the
laws of the jurisdiction in which it is located; and
3. Provides nursing care under the supervision of a registered graduate
professional nurse (R.N.).
Skilled Nursing Facility - A facility which:
1. Is located in the United States or its territories;
2. Is licensed and operated as a Skilled Nursing Facility according to the
laws of the jurisdiction in which it is located;
3. Provides skilled nursing care under the supervision of a licensed
physician;
4. Provides continuous 24 hours a day nursing services by or under the
supervision of a registered graduate professional nurse (R.N.); and
5. Maintains a daily medical record of each patient.
This Rider will terminate on the date the Policy terminates.
All other terms and conditions of the Policy remain unchanged. Cova Financial
Life Insurance Company has caused this Rider to be signed by its President and
Secretary.
/s/ JEFFERY K. HOELZEL /s/ LORRY J. STENSRUD
______________________Secretary _____________________President
Cova Financial Life Insurance Company
4100 Newport Place Drive
Newport Beach, California 92662
ACCELERATED DEATH BENEFIT RIDER
This Rider forms a part of the Policy to which it is attached. The effective
date of this Rider is the Issue Date shown on the Schedule Page.
Cova will pay a portion of the Death Proceeds upon receipt of proof that the
Insured is Terminally Ill, subject to the following:
1. The Accelerated Death Benefit is payable once under this Rider.
2. You may elect to receive the Accelerated Death Benefit of up to 50% of the
Death Benefit but no greater than $500,000.
3. An Accelerated Death Benefit request and certification by a Physician that
the Insured is Terminally Ill must be received by Cova in a manner
satisfactory to Cova. Cova may require a second certification by a
Physician chosen by Cova. In the event of a conflict of opinion between
Physicians, Cova reserves the right to make the final determination.
4. The Accelerated Death Benefit will be used first to repay any outstanding
Debt. After repayment of the outstanding Debt, any remaining amount will be
paid to You as a lump sum or under a payment plan. Subsequent amounts
available for Loans or Partial Surrenders or as Death Proceeds will be
reduced by the amount of the Accelerated Death Benefit plus interest
accrued at the Policy Loan Interest Rate.
5. If the Policy is issued to Joint Insureds, an Accelerated Death Benefit
will only be payable upon the Terminal Illness of the last surviving
Insured.
DEFINITIONS
PHYSICIAN - A doctor of medicine legally authorized to practice medicine and
surgery by the state in which he performs the examination and certification,
including a doctor of osteopathy practicing within the scope of his practice
under the state law. A Physician may not be a family member of the Owner or the
Insured.
TERMINALLY ILL - Certification by a Physician that an individual has an illness
or physical condition which can reasonably be expected to result in death in 12
months or less after the date of the certification.
This Rider will terminate on the date the Policy terminates. All other terms and
conditions of the Policy remain unchanged. Cova Financial Life Insurance Company
has caused the Rider to be signed by its President and Secretary.
/s/ JEFFERY K. HOELZEL /s/ LORRY J. STENSRUD
______________________Secretary _____________________President
Send application and check to:
Cova Financial Life
Insurance Company
P. O. Box 10366
Des Moines, Iowa 50306-0366
Cova Financial Life Insurance Company
1. OWNER (If different than Proposed Insured named in Item 3)
Name___________________________________________________________________
(First) (Middle) (Last)
Address________________________________________________________________
(Street)
________________________________________________________________
(City) (State) (Zip)
Soc. Sec. or Tax I.D. Number_____________________
Phone Number_________________________
2. JOINT OWNER (If applicable)
Name___________________________________________________________________
(First) (Middle) (Last)
Address________________________________________________________________
(Street)
________________________________________________________________
(City) (State) (Zip)
Soc. Sec. or Tax I.D. Number_____________________
Phone Number_________________________
3. PROPOSED INSURED
Name___________________________________________________________________
(First) (Middle) (Last)
Address________________________________________________________________
(Street)
_______________________________________________________________________
(City) (State) (Zip)
Occupation______________________
Sex [ ] M [ ] F Age_______
Birthdate____________/___________/___________
(Month) (Day) (Year)
Place of Birth_______________________________
(City) (State) (Country)
Soc. Sec. No.________________________________
Phone Number_________________________________
4. PROPOSED JOINT INSURED (If applicable. Must be spouse of Proposed
Insured named in Item 3)
Name___________________________________________________________________
(First) (Middle) (Last)
Address________________________________________________________________
(Street)
________________________________________________________________
(City) (State) (Zip)
Occupation______________________
Sex [ ] M [ ] F Age________________
Birthdate____________/___________/___________
(Month) (Day) (Year)
Place of Birth_______________________________
(City) (State) (Country)
Soc. Sec. No.__________________
Phone Number___________________
5. Has the Proposed Insured ever been diagnosed or treated for: cancer, heart
attack, chest pain, stroke or insulin dependent diabetes? [ ] Yes [ ] No
Proposed Joint Insured? [ ] Yes [ ] No
6. AMOUNT OF INSURANCE/PREMIUM
Initial Premium $________________
I (We) (Owner) acknowledge that it is my (our) intention that the policy be
issued at the face amount corresponding to the maximum premium limit percentage.
If not, choose one: [ ] 80% [ ] 90%
Face Amount $_____________________
7.PREMIUM ALLOCATION
(Must be whole percentages. Must equal 100%)
J.P. Morgan Investment Management
____% Select Equity Portfolio
____% Large Cap Stock Portfolio
____% Small Cap Stock Portfolio
____% International Equity Portfolio
____% Quality Bond Portfolio
Lord Abbett
____% Growth & Income Portfolio
____% Bond Debenture Portfolio
Conning
____% Money Market Portfolio
8. ALLOCATION DURING RIGHT TO EXAMINE
As described in the accompanying Prospectus, the initial premium will be
allocated to the Money Market Portfolio during the Right to Examine Period.
Thereafter, the premiums will be allocated as directed in the Premium Allocation
Section.
CONDITIONAL RECEIPT
* A premium check must be made payable to the Company.
* Do not make the check payable to the agent.
* Do not leave the payee blank.
A payment of $________ in the form of a check made payable to Cova Financial
Life Insurance Company was received from __________________ for the insurance
applied for in the application which bears the same date as this Conditional
Receipt.
Signature of Agent_____________________ Date________________
This receipt is not valid unless it is signed by an agent of Cova. This receipt
is not valid unless the required premium has been received by Cova and, when
paid by check, is honored on its first presentation for payment.
* No agent can change the terms of this conditional receipt.
If you do not hear from Cova about the proposed insurance within 60 days after
the date of this Conditional Receipt, please call Cova at its toll free
telephone number: 1-800-343-8496.
Insurance In Force - Insurance under this Conditional Receipt will be in force
starting on the Start Date only. If each person proposed for insurance is a risk
acceptable to Cova for the policy exactly as applied for, Cova will make its
decision according to its current rules and practices.
(See other side)
9. UNDERWRITING CONTACT INFORMATION PROPOSED INSURED
Contact at:________________________ [ ] Home
(Phone Number)
[ ] Business_____________________
(Phone Number)
Best days and time________________________
Special Remarks___________________________
PROPOSED JOINT INSURED
Contact at: [ ] Home_________________________
(Phone Number)
[ ] Business______________________
(Phone Number)
Best days and time__________________________________
Special Remarks_____________________________________
10. SUITABILITY
A. Is the policy applied for consistent with your insurance needs and
financial objectives?
B. Do you understand that the amount and duration of the death benefit may
vary, depending on the investment performance of the portfolios?
C. Do you understand that the policy values may increase or decrease,
depending on the investment performance of the portfolios?
D. Did you receive the current prospectus for the policy applied for?
E. Do you understand that the initial premium will be allocated to the Money
Market Portfolio during the Right to Examine Period?
F. Will the policy applied for replace or change any existing life insurance
or annuity?
[ ] Yes [ ] No
[ ] Yes [ ] No
[ ] Yes [ ] No
[ ] Yes [ ] No
[ ] Yes [ ] No
[ ] Yes [ ] No
11. SPECIAL REQUESTS
12. TRANSFER AUTHORIZATIONS
I (We) acknowledge that neither Cova Financial Life Insurance Company (Cova) nor
any person authorized by Cova will be responsible for any claim, loss, liability
or expense in connection with a telephone transfer if Cova or such other person
acted on telephone transfer instructions in good faith in reliance on this
authorization.
Check here if you wish to authorize telephone transfer instructions. [ ]
Check here if you wish to authorize your Registered Representative/Agent to make
transfers. [ ]
13. DOLLAR COST AVERAGING TRANSFERS
I (We) authorize Dollar Cost Averaging Transfers of $______ to be transferred
each month from the Conning Money Market Portfolio ($5,000 minimum or amount
needed to complete all transfers.)
TO
J.P. Morgan Investment Management
_______% Select Equity Portfolio
_______% Large Cap Stock Portfolio
_______% Small Cap Stock Portfolio
_______% International Equity Portfolio
_______% Quality Bond Portfolio
Lord Abbett
_______% Growth and Income Portfolio
_______% Bond Debenture Portfolio
_______
_______
100 % Total
I (We) authorize transfers to be made for: [ ] 12 months [ ] 24 months [ ] 36
months [ ] 48 months [ ] 60 months Other _______ months
Dollar Cost Averaging Transfers and Rebalancing Transfers are not available
simultaneously.
14. REBALANCING TRANSFERS - I (We) authorize Rebalancing Transfers to be made in
the applicable percentages elected in the Premium Payment Allocation section.
Transfers are to be made: [ ] quarterly [ ] semi-annually [ ] annually.
Dollar Cost Averaging Transfers and Rebalancing Transfers are not available
simultaneously.
CONDITIONAL RECEIPT
Start Date - For acceptable risks, any insurance under the terms of this
Conditional Receipt begins on the Start Date, which is the latest of:
a) The date of completion of all parts of the application; or
b) The date of completion of all medical or paramedical exams, tests, x-rays,
and EKGs required by Cova; or
c) The date of Cova's receipt of all of the attending physician's statements
and medical reports required by Cova; or
d) A later date, if any, requested in the application; or
e) The date of Cova's receipt of the initial premium.
Amount - The amount of insurance provided by this Conditional Receipt is the
lesser of:
a) The face amount of insurance applied for in the application; or
b) For a Proposed Insured up to age 65: the initial premium plus $500,000; or
c) For a Proposed Insured over age 65: the initial premium plus $200,000.
This amount includes any life insurance and accidental death benefits applied
for or in force with Cova. The amount of insurance is subject to the Limitations
Section.
Limitations - If a person proposed for insurance dies and insurance is in force
under this Conditional Receipt, the benefits will be limited to a return of the
premium paid for this Conditional Receipt if:
a) The death is a result of suicide while sane or self-destruction while
insane; or
b) All questions in the application have not been answered; or
c) All answers in the application are not true and correct; or
d) The person proposed for insurance is not a risk acceptable to Cova for the
policy as exactly applied.
End of Insurance - Once started, insurance under this Conditional Receipt will
end at the earliest of:
a) 60 days after the date of the application; or
b) When Cova sends notice that the insurance cannot be issued for the policy
exactly as applied for; or
c) The date any policy issued goes into effect.
(See other side)
15. ACKNOWLEDGMENT AND AUTHORIZATION - Any person who, with intent to
defraud or knowing that he/she is facilitating a fraud against an insurer,
submits an application or files a claim containing false or deceptive statement
is guilty of insurance fraud.
I (we) have read all the questions and answers in this application. All
responses are true and complete to the best of my (our) knowledge and belief. No
coverage will be in effect until: a full application has been signed by the
proposed insured(s); and a policy has been issued; and the full first premium
has been received by Cova. Any coverage will be subject to the terms and
conditions of the policy.
I (we) have received the notification about the Federal Fair Credit
Reporting Act and the Medical Information Bureau.
I (we) hereby authorize: any licensed physician or medical practitioner;
any hospital, clinic or other medical or medically related facility; any
insurance company; the Medical Information Bureau; and any other organization,
institution or person, that has any records or knowledge of me (us) or my (our)
health, to give to Cova Financial Life Insurance Company, its Underwriters, or
its reinsurers, or the Medical Information Bureau, any such information. This
authorization is valid for two and one-half years from the date this form is
signed. An exact copy of this authorization is as valid as the original.
I (We) agree that the information and statements made on this application
are true and correct to the best of my (our) knowledge and belief and are made
as the basis of my (our) application.
I (We) acknowledge receipt of the current prospectus(es) of Cova Variable
Annuity Account One, Cova Series Trust and Lord Abbett Series Fund, Inc.
PAYMENTS AND VALUES PROVIDED BY THE POLICY FOR WHICH APPLICATION IS MADE ARE
VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. Complete Form W-9.
16. SIGNATURES
______________________________________________________________
City State Date
______________________________________________________________
Signature of Proposed Insured
______________________________________________________________
Signature of Proposed Joint Insured, if applicable
______________________________________________________________
Signature of Owner if other than Proposed Insured
______________________________________________________________
Signature of Joint Owner if applicable
17. AGENT'S REPORT Will the life insurance replace or change any existing life
insurance or annuity?
[ ] No [ ] Yes (Indicate type and cost basis information.)
Type Cost Basis
[ ] Life Pre-TEFRA $____________ $______________
(Cost Basis) (Gain)
[ ] Annuity Post-TEFRA $____________ $______________
(Cost Basis) (Gain)
Complete any required replacement forms.
Agent's Signature_________________________________
Phone_____________________________________________
Agent's Name and Number___________________________
Name and Address of Firm__________________________
Notice of Insurance Information Practices
* This notice must be detached and given to the Proposed Insured
Medical Information Bureau (Bureau) Notice - Information provided to Cova will
be treated as confidential. But Cova or its reinsurers may make a brief report
thereon to the Bureau. This is a non-profit membership organization of life
insurance companies that operates an information exchange for its members. If
you apply to a member company for life or health insurance or submit a claim for
benefits, the Bureau, on request, will supply the member company with the
information it may have in its file.
On request from you, the Bureau will arrange to disclose to you any information
it may have in your file. If you question the accuracy of the contents of your
file, you may contact the Bureau and seek a correction. Your request will be
handled as provided for in the Fair Credit Reporting Act. The address of the
Bureau's information office is: P.O. Box 105, Essex Station, Boston,
Massachusetts 02212; Telephone Number: (617) 426-3680.
Cova or its reinsurers also may release information to those other life
insurance companies to which you may apply for life or health insurance or
submit a claim for benefits.
(See other side)
Notice of Insurance Information Practices
* This notice must be detached and given to the Proposed Insured
General Information Practices - As authorized by you when you complete the
application, Cova may get information from sources other than the persons
proposed for insurance. In certain circumstances Cova may give information it
has gathered to third parties without your further authorization. Cova shares
only as much information as is needed to accomplish the purpose of the
disclosure. Cova discloses Medical Information Bureau information only to its
reinsurers. Persons who are the subject of information Cova collects may have
the right to access and correction. Cova may be required by law to furnish you
with a detailed description of our information practices upon receipt of a
request from you in writing.
Fair Credit Reporting Act Notice - As part of its regular procedures, Cova may
get an investigative consumer report. This report may concern each person
proposed for insurance. It may deal with character, general reputation, personal
traits and mode of living. It may involve personal interviews with friends,
neighbors, associates or other persons. You have the right to make, within a
reasonable amount of time, a written request for details on the nature and scope
of this report. You may have the right to ask to be interviewed in connection
with the making of the report and, contact the consumer reporting agency to
review a copy of the report. If you write to Cova, we will let you know whether
Cova has in fact obtained a report, and if so, the name and address of the
agency making the report.
(See other side)
