AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
One Corporate Drive, Shelton, Connecticut 06484
This Prospectus describes a flexible premium variable life insurance policy
being offered by American Skandia Life Assurance Corporation ("we," "our," "us,"
"American Skandia," or "the Company"), One Corporate Drive, P.O. Box 883,
Shelton, Connecticut, 06484. This policy may be offered as individual coverage
or as an interest in a group policy. This Prospectus provides a detailed
discussion of matters you should consider before buying a policy. This policy or
certain of its investment options may not be available in all jurisdictions.
Various rights and benefits may differ between jurisdictions to meet applicable
law and/or regulations. This Prospectus is made up of the following general
sections: Cover Page, Table of Contents, Definitions, Description of the
Offering, Miscellaneous Provisions and Additional Details. On this cover page
and in the Description of the Offering section, we use a "question and answer"
format to assist you in understanding this offering. The questions are numbered
for easy reference.
What is American Skandia offering? We are offering a type of cash value life
insurance coverage. This life insurance coverage is called a "flexible premium
variable life insurance policy." These technical terms can be explained as
follows:
The coverage is "life insurance" because a death benefit becomes payable to
a beneficiary upon the death of the insured person (if coverage is issued
on two insureds, the death benefit is payable upon the death of the second
of the insureds to die). It is "cash value" life insurance because, in
addition to a death benefit, it also provides living benefits for the
owner, such as the right to take withdrawals and the right to take loans
from us using the value of the policy as collateral. This type of coverage
is also referred to as "universal life."
The coverage is a "flexible premium" plan because it offers considerable
flexibility regarding the timing and amount of premium payments after the
initial premium. No additional premium must be paid unless it is required
to pay the ongoing monthly charges. However, there is a minimum amount we
accept, both for initial and subsequent premiums. There is also a maximum
total amount you can pay. In order to achieve certain beneficial tax
treatment for withdrawals and loans, you may need to limit the amounts you
pay. If you pay the maximum allowable amount, you may not be able to pay
any additional premiums without applying for, and our agreeing to issue,
additional insurance.
The coverage is "variable" because you can allocate all or part of your
premium to variable investment options that invest in an underlying mutual
fund or a portfolio of an underlying mutual fund. The variable investment
options are segments of American Skandia Life Assurance Corporation
Separate Account F ("Account F"). The following underlying mutual funds or
portfolios of the following underlying mutual funds are being offered:
American Skandia Trust, The Alger American Fund and Montgomery Variable
Series. The available portfolios of these underlying mutual funds and the
applicable investment management fees and operating expenses are listed on
page 21. The performance of the variable investment options is not
guaranteed. You bear the investment risk if you allocate funds to these
investment options because the performance of these investment options can
decrease or increase which can impact the death benefit and the cash value
of the Policy.
The coverage allows you to allocate all or part of your premiums to a fixed
option to which we credit a fixed rate of interest. We guarantee the rate
of return on this option. These obligations are supported by our general
account. We bear the investment risk if you allocate funds to this option.
Because this is life insurance, generally your beneficiary will owe no
Federal income tax on the death proceeds. The taxation of distributions
taken by the owner while the insured person is alive will depend on whether
the policy satisfies the "7-pay test" outlined in the Internal Revenue Code
(the "Code"). In general, the "7-pay test" compares the amount of premiums
paid to the amount of insurance purchased. If your policy "passes" the
7-pay test, it will not be treated as a "modified endowment contract" or
"MEC" for income tax purposes. As a "non-MEC", amounts you receive as a
partial withdrawal or a surrender are deemed to be distributed first from
any tax basis in the policy. You are allowed to withdraw your basis before
you are considered to have withdrawn any gain. Furthermore, loans taken on
a non-MEC policy are not treated as taxable distributions. If at any time
the policy "fails" the 7-pay test, the policy must be treated as a MEC for
income tax purposes. If your policy becomes a MEC, subsequent distributions
are deemed for tax purposes to come first from any gain in the policy, and
loans and assignments are deemed to be distributions. Whether or not a
policy is considered a MEC, any distribution deemed a distribution of gain
is taxable as ordinary income.
(continued on the next page)
The variable life insurance policy described in this Prospectus is not a deposit
of or guaranteed by, any bank or bank subsidiary, and is not insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency. The Policy is subject to investment risks, including the possible loss
of the principal amount invested.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PLEASE
READ THIS PROSPECTUS AND THE CURRENT PROSPECTUSES FOR THE UNDERLYING FUNDS. KEEP
IT FOR FUTURE REFERENCE.
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FPVLI-PROS (8/99) CALL 1-800-752-6342 FOR FURTHER INFORMATION Prospectus Dated: May 3, 1999,
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revised effective August 27, 1999
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During the first ten (10) years the coverage has a limited amount of
liquidity. During that period, you can only make withdrawals under certain
medically-related circumstances or from premium amounts made in excess of
certain limits. However, you can access a portion of the policy's value
through policy loans using a portion of its value as collateral. Assuming
that the policy is not treated as a MEC, policy loans receive favorable tax
treatment. Policy loans are currently available at no net cost. Loans can
have an impact on benefits that can be positive or negative.
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TABLE OF CONTENTS
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Definitions........................................................................................................................6
Summary of Costs...................................................................................................................9
Description of the Offering.......................................................................................................10
Purchasers.....................................................................................................................10
The Insurance Company..........................................................................................................10
Benefits at the Insured's Death................................................................................................10
Account Value and Cash Value...................................................................................................14
Cash Value Credits.............................................................................................................15
Costs..........................................................................................................................16
Buying a Policy................................................................................................................19
Variable Investment Options....................................................................................................21
Additional Premiums............................................................................................................27
Keeping the Policy In Force....................................................................................................28
Transfers and Allocation Services..............................................................................................29
Loans..........................................................................................................................29
Partial Withdrawals............................................................................................................30
Surrenders.....................................................................................................................31
Accelerated Death Benefit......................................................................................................31
Medically-Related Waiver.......................................................................................................32
Risks..........................................................................................................................32
Other Rights...................................................................................................................32
The Separate Account...........................................................................................................33
Taxes..........................................................................................................................33
Available Information..........................................................................................................34
Miscellaneous Provisions and Additional Details...................................................................................34
Providing Services to You......................................................................................................34
Designations...................................................................................................................34
Net Investment Factor..........................................................................................................35
Allocation Programs............................................................................................................35
Limitations on Transfers.......................................................................................................35
Death During the Grace Period..................................................................................................36
Reinstatement..................................................................................................................36
Maturity.......................................................................................................................36
Pricing Transactions...........................................................................................................36
Delaying Transactions..........................................................................................................37
Voting.........................................................................................................................37
Transfers, Assignments, Pledges................................................................................................37
Reports........................................................................................................................37
Incontestability...............................................................................................................38
Suicide........................................................................................................................38
Misstatement...................................................................................................................38
Backdating.....................................................................................................................38
Policy Loans on Exchanges......................................................................................................38
Resolving Material Conflicts...................................................................................................39
Modification of the Separate Account...........................................................................................39
Entire Contract................................................................................................................39
Additional Tax Considerations..................................................................................................39
Safekeeping of the Assets......................................................................................................41
Regulation.....................................................................................................................41
Legal Matters..................................................................................................................42
Legal Proceedings..............................................................................................................42
Experts........................................................................................................................42
Distribution of this Offering..................................................................................................42
Illustrations..................................................................................................................43
Executive Officers and Directors...............................................................................................44
AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN SKANDIA LIFE ASSURANCE CORPORATION...........................................1
Financial Statements for American Skandia Life Assurance Corporation Separate Account F............................................1
Appendix A Hypothetical Illustrations of Death Benefits, Account Values and Cash Values............................................1
Appendix B Multiple Factors for Determination of Minimum Required Death Benefits..................................................17
Appendix C Premium Tax Rates......................................................................................................19
Appendix D Guaranteed Maximum Monthly Cost of Insurance Charges...................................................................20
Appendix E Current Monthly Cost of Insurance Rates................................................................................22
Appendix F Description of the Calculation of Current Monthly Cost of Insurance Charges............................................24
Appendix G Maximum Annual Assessable Premiums per $1,000 of Specified Amount......................................................25
Appendix H Hypothetical Illustration of Accelerated Death Benefit.................................................................27
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DEFINITIONS
The following are key terms used in this Prospectus. Other terms are defined in
this Prospectus as they appear.
ACCOUNT VALUE is the value of your allocation to each Sub-account and any Fixed
Allocation, plus any earnings and less any losses, distributions and charges
thereon, plus the value of any amounts in the Loan Account, plus any earnings
and less any distributions and charges thereon, all before assessment of any
contingent deferred sales charge or Debt. Account Value is determined separately
for each Sub-account and each Fixed Allocation, as well as for any amounts in
the Loan Account, and then totaled to determine the Account Value of your entire
Policy.
AGE is the age of an Insured for purposes of this Policy. Initially, and for the
first Policy Year, it is the age last birthday of an Insured as of the Policy
Date. In each following Policy Year, it is the age last birthday of an Insured
as of the preceding Policy Anniversary.
APPLICATION is the form or combination of forms you must submit to apply for a
Policy. If there are two Insureds, the Application must be completed for both
Insureds.
ASSESSABLE PREMIUM is the portion of Premiums paid against which we assess any
applicable contingent deferred sales charge upon a surrender of the Policy.
BENEFICIARY is a person or entity you designate for us to pay any Death
Proceeds. Unless otherwise specified, Beneficiary refers to all persons or
entities so designated.
CASH VALUE is the Account Value less any contingent deferred sales charge, less
any unpaid charges and Debt.
CASH VALUE CREDITS are amounts we credit to your Account Value. We credit these
amounts if your total Cash Value on a Policy Anniversary equals or exceeds a
Cash Value trigger.
CODE is the Internal Revenue Code of 1986, as amended from time to time, and the
regulations thereunder.
DEATH BENEFIT is the amount payable as a result of an Insured's death before any
reduction due to Debt and any unpaid charges due and before addition of any
interest due pursuant to law. If there is a second Insured, the Death Benefit is
payable upon the death of the last surviving Insured.
DEATH PROCEEDS equals the Death Benefit less any reduction due to Debt and any
unpaid charges due and after addition of any interest due pursuant to law.
DEBT is the total of any outstanding loan and loan interest.
EXCHANGE POLICY is a Policy: (a) purchased as part of an exchange of life
insurance policies that does not incur any current taxation pursuant to Section
1035 of the Code or any successor provision; and (b) into which the surrender
value of one or more prior policies is contributed to the Policy in conjunction
with such exchange.
EXEMPT PREMIUM is the portion of Premiums paid against which we do not assess
any contingent deferred sales charge upon surrender or withdrawal and the amount
of any loans we establish in conjunction with your purchase of an Exchange
Policy.
FIXED ALLOCATION is an allocation of Account Value to our general account that
is credited a fixed rate of interest.
GUARANTEED MINIMUM DEATH BENEFIT is the minimum amount we guarantee is payable
as a result of the Insured's death, before we assess any unpaid charges due and
any reduction for Debt. However, this benefit does not apply once the Insured
reaches Age 100, or if there are two Insureds, when the younger Insured reaches
Age 100 or would have reached that Age if the younger Insured dies before the
older Insured.
IN WRITING is in a written form, in a manner we accept, that is satisfactory to
us and filed at our Office. We retain the right to specifically agree in advance
to accept communication regarding a specific matter by telephone or by some
other form of electronic transmission, in a manner we prescribe.
INSURED is the person upon whose life coverage is issued and as a result of
whose death the Death Proceeds are payable. If there is more than one Insured,
Insured means the last surviving Insured, unless otherwise stated.
ISSUE DATE is the date we issue your Policy.
LOAN ACCOUNT is where we maintain Account Value as collateral for a loan to you
from us.
MAXIMUM ANNUAL ASSESSABLE PREMIUM is the maximum amount of Premium against which
we will assess any contingent deferred sales charge upon surrender of the
Policy. We do not assess any contingent deferred sales charge upon surrender
against any portion of the Premium you pay that exceeds the maximum amount for
that Policy Year.
MEC is a modified endowment contract as defined in Section 7702A of the Code or
any successor provision thereto.
MEC THRESHOLD AMOUNT is the annual level amount of Premium which, if exceeded,
would cause the Policy to become a MEC.
MINIMUM REQUIRED DEATH BENEFIT is the minimum amount due as a result of the
Insured's death pursuant to the applicable test we apply in accordance with the
Code, prior to any reduction for Debt.
MONTHLY PROCESSING DAY/DATE is the Valuation Day each month when we deduct
charges from the Account Value. The first Monthly Processing Date is the Policy
Date. After that, the Monthly Processing Dates generally occur on the same day
of the month as the Policy Date. If the Monthly Processing Date occurs on a day
that is not a Valuation Day, the Monthly Processing Date that month will be the
next Valuation Day.
NET AMOUNT AT RISK is the difference between the Death Benefit, discounted to
the beginning of the applicable Policy Month at the rate of 4% per year, and the
Account Value.
NET PREMIUM is a Premium less the deduction for premium taxes, "DAC" taxes and
any amount deductible from Premium for an optional additional benefit should you
elect such benefits.
NET SINGLE PREMIUM is the amount that would be required, according to the Code
and the regulations based on the Code, to fund: (a) the Policy's Minimum
Required Death Benefit, assuming the current Minimum Required Death Benefit
would not change; and (b) future benefits and charges using assumptions about:
(i) growth of Account Value so that it would equal the current Minimum Required
Death Benefit as of the Policy Anniversary the Insured would turn Age 100; and
(ii) charges, as provided pursuant to the Code. The Net Single Premium depends
on the attained age, gender (where permitted), tobacco usage class and risk
class of each Insured. The Net Single Premium changes as each Insured ages. The
applicable Net Single Premiums would change if required under the Code or
regulations based on the Code.
NEW POLICY is a Policy that is not an Exchange Policy.
OFFICE is our administrative office: American Skandia Life Assurance
Corporation, P.O. Box 290698, Wethersfield, Connecticut 06129-0698.
OWNER is either an entity or person who may exercise the ownership rights
provided by a Policy. If we issue a certificate representing interests in a
group life insurance policy, the rights, benefits, and requirements of and the
events relating to an Owner, as described in this Prospectus, will be your
rights as participant in such group policy. Unless later changed, Owner refers
to all persons or entities designated as such in your Policy.
POLICY is the insurance contract or certificate we issue as evidence of our
commitment to pay the Death Proceeds upon the death of the Insured.
POLICY ANNIVERSARY is the anniversary of the Policy Date.
POLICY DATE is the effective date of your Policy.
POLICY MONTH is the period from one Monthly Processing Day to the next.
POLICY YEARS are continuous 12-month periods that begin on the Policy Date and
each Policy Anniversary thereafter.
PORTFOLIO is a portfolio of an underlying mutual fund.
PREMIUM is each consideration you give to us for the rights, privileges and
benefits provided by a Policy according to its terms. This includes Premium paid
as of the Policy Date, as shown in the Policy, and any additional consideration
we choose to accept.
SEPARATE ACCOUNT is our separate account to which we allocate assets in relation
to our obligations for benefits based on the variable investment options.
American Skandia Life Assurance Corporation Separate Account F (also referred to
as Separate Account F) is the separate account utilized for the Policy.
SPECIFIED AMOUNT is a measure we use in determining the Death Benefit.
SUB-ACCOUNT is a division of the Separate Account.
UNIT is a measure used to calculate Account Value in a Sub-account.
UNIT PRICE is used for calculating: (a) the number of Units allocated to a
Sub-account; and (b) the value of transactions into or out of a Sub-account or
benefits based on Account Value in a Sub-account. Each Sub-account has its own
Unit Price, which will vary each Valuation Period to reflect the investment
experience of that Sub-account.
VALUATION DAY/DATE is every day the New York Stock Exchange is open for trading
or any other day that the Securities and Exchange Commission requires mutual
funds or unit investment trusts to be valued.
VALUATION PERIOD is the period of time between the close of business of the New
York Stock Exchange on successive Valuation Days.
"we," "us," "our," "American Skandia," or "the Company" means American Skandia
Life Assurance Corporation.
"you" or "your" means the Owner.
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SUMMARY OF COSTS
The following is a summary of the cost of the Policies being offered, or, in the
case of costs that vary from Policy to Policy, a short description of how such
costs are determined. All of these costs are described in more detail within
this Prospectus.
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COST AMOUNT DEDUCTED/ WHEN DEDUCTED
DESCRIPTION OF COST
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Premium Tax Generally from 0% to 3.5% of Premium From each Premium payment
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"DAC" Tax 1.15% of Premium From each Premium payment
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Mortality & Expense Risk Charge 0.90% per year of the value of each Sub-account Daily
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Administration Charge 0.25% per year of the value of each Sub-account Daily
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Cost of Insurance Charge varies depending on a number of factors, including, the Monthly
(See Appendix D for information Age, gender (where permitted), tobacco usage class and risk class (Pro-rata from the
on guaranteed cost of insurance of each Insured. The charge is assessed as an amount per $1,000 of variable and fixed
rates and Appendix E for Net Amount at Risk plus a $12 monthly fee. The rate per $1,000 investment options in
information on current cost of of Net Amount at Risk generally increases as the Insured(s) which you maintain
insurance rates.) age(s). Current Cost of Insurance rates can be changed during the Account Value)
life of a Policy, but are subject to guaranteed maximum charges.
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Sales Charge 0.40% per year of the Account Value Monthly for the 1st 10
Policy Years
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Contingent Deferred Sales Charge Yr 1 2 3 4 5 6 7 8 9 10 Upon Surrender
(Policy Years 1 through 10)
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% 10 9 8 7 6 5 4 3 2 1
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Contingent Deferred Sales Charges are only assessed against
Assessable Premium. No Contingent Deferred Sales Charge is
assessed against Exempt Premium.
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Transfer Fee $10.00 After the 12th transfer each
Policy Year
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Partial Withdrawal Transaction Fee $25.00 Upon Partial Withdrawal
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Underlying Portfolio Daily
Expenses Each Portfolio has different fees and charges as provided in
the "Variable Investment Options" section of this
Prospectus. Total Portfolio expenses range from 0.60% to
1.75%. More detailed information about fees and charges can
be found in the prospectuses for the Portfolios.
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DESCRIPTION OF THE OFFERING
This Policy is described using a "question and answer" format that assumes you,
the prospective purchaser, are asking the questions. The description below is
divided into the following sections: Purchasers, The Insurance Company, Benefits
at the Insured's Death, Account Value and Cash Value, Cash Value Credits, Costs,
Buying a Policy, Variable Investment Options, Additional Premiums, Keeping the
Policy In Force, Transfers and Allocation Services, Loans, Partial Withdrawals,
Surrenders, Accelerated Death Benefit, Medically-Related Waiver, Risks, Other
Rights, The Separate Account, Taxes and Available Information. A section
addressing Miscellaneous Provisions and Additional Details about American
Skandia follows this description.
PURCHASERS
[1] .....Who should buy this Policy? Life insurance can be bought to meet a
number of needs of individuals or entities, such as corporations or trusts.
Different types of life insurance are designed to address certain needs more
than others. This Policy may be appropriate for a number of persons or entities,
but it may be especially useful for persons addressing a range of estate
planning needs who also may need access to some or all of the Cash Value to meet
supplemental retirement income needs or for emergency expenses. For estate tax
purposes, purchasers may want to consider placing this type of coverage in a
trust or transferring ownership of the Policy in an effort to remove the asset
from their estate, particularly if, at any point, the purchaser believes the
Cash Value may not be needed as a resource for other purposes. This Policy may
also be useful for persons seeking to make a sizable donation to a charity or
eligible non-profit organization, where the charity is named both Owner and
Beneficiary of the Policy, and the donor is named as the Insured. You should
carefully evaluate with your financial representative whether this Policy is
right for your specific needs in light of your entire situation and your
personal and financial goals. In particular, you should evaluate the advantages
and disadvantages of replacing any existing life insurance or annuity coverage
with this Policy. If you are seeking specific tax consequences, you should
consult with a competent tax advisor as to whether and how your goals may best
be achieved.
THE INSURANCE COMPANY
[2] .....Who is American Skandia? American Skandia Life Assurance Corporation is
organized as a stock insurance company domiciled in Connecticut. The predecessor
company of American Skandia was originally incorporated on May 21, 1969. We are
licensed as a life insurer in all 50 states and the District of Columbia. We are
a wholly owned subsidiary of American Skandia Investment Holding Corporation,
whose indirect parent is Skandia Insurance Company Ltd. Skandia Insurance
Company Ltd. is part of a group of companies whose predecessor began operations
in 1855. Two of our affiliates, American Skandia Marketing, Incorporated, and
American Skandia Information Services and Technology Corporation, may provide
certain administrative functions for us. We may also engage various independent
firms to provide various administrative functions for us. Another affiliate,
American Skandia Investment Services, Incorporated, currently acts as the
investment manager to American Skandia Trust, one of the underlying mutual funds
whose Portfolios are available as variable investment options. We currently
engage Skandia Investment Management, Inc., an affiliate whose indirect parent
is Skandia Insurance Company Ltd., as investment manager for our general
account. We are under no obligation to engage or continue to engage any
investment manager.
BENEFITS AT THE INSURED'S DEATH
[3] .....What benefits are due as a result of the Insured's death? The benefits
due as a result of the Insured's death are the Death Proceeds. If there are
joint Insureds, the benefits are due as a result of the death of the last
surviving Insured.
[4] .....What are the Death Proceeds? The Death Proceeds are based on the Death
Benefit as of the date we receive all our requirements for paying a death claim
and are satisfied that the death claim can be paid. These requirements include,
but are not limited to, receipt of a valid death certificate and information we
need to make payments to all Beneficiaries.
We determine the Death Proceeds by first subtracting any Debt and any unpaid
charges due from the Death Benefit. We then add any interest amount required by
law.
[5] .....What is the Death Benefit? The Death Benefit depends on the Death
Benefit option you select. Initially you select an option on your Application.
The Death Benefits options are Option A (Level) and Option B (Variable), as
discussed below.
[6] .....How is the Death Benefit determined under Option A? Under Option A
(Level), the Death Benefit on the Policy Date is the Specified Amount. After
that, the Death Benefit is the highest of the Specified Amount, the Minimum
Required Death Benefit and the Guaranteed Minimum Death Benefit, each as of the
date we receive due proof of death.
[7] .....How is the Death Benefit determined under Option B? Under Option B
(Variable), the Death Benefit on the Policy Date is the Specified Amount plus
the Account Value. After that, the Death Benefit is the highest of: the sum of
the Account Value plus the Specified Amount, the Minimum Required Death Benefit
and the Guaranteed Minimum Death Benefit, each as of the date we receive due
proof of death.
[8] .....Is there any age limit on the Death Benefit? Yes. On a single life
Policy, the Death Benefit equals the Account Value on or after the Policy
Anniversary the Insured attains Age 100. On a joint life Policy, the Death
Benefit equals the Account Value on or after the Policy Anniversary the younger
Insured, attains or, if that person is deceased, would have been, Age 100.
[9] .....What is the Specified Amount? The Specified Amount is a measuring
device we use in determining the Death Benefit before the Insured's Age 100. On
your Application, you indicate the Specified Amount you want us to issue for
your Policy. We may issue that amount, or we may offer to issue a lower
Specified Amount if the Insured(s) do(es) not qualify for the amount you seek
under our underwriting rules. The Specified Amount remains level unless you
request an increase or decrease and we agree to such a change. Under certain
circumstances, a partial withdrawal may also reduce the Specified Amount, as
discussed in the section on Partial Withdrawals.
[10] .....What is the Minimum Required Death Benefit? The Minimum Required Death
Benefit is the minimum amount that must be payable at the Insured's death,
before reduction for any Debt, for the Policy to be treated as life insurance
under the Code. The Minimum Required Death Benefit is determined by treating the
Account Value as if it were a Net Single Premium. We determine the Minimum
Required Death Benefit by multiplying the Account Value by factors that vary by
the attained Age, gender (where permitted), tobacco usage class and risk class
of each Insured, as shown in Appendix B. When there are joint Insureds, the
factors used to determine the Minimum Required Death Benefit are based on an
actuarial derivation of the factor applicable for each Insured. The gender and
risk class of the Insured does not change, so the only element that changes the
factors after the Policy Date is the aging of the Insured, unless the Insured
applies for and we agree to a change in tobacco usage class.
The following are representative examples of the factors for different Ages,
genders, tobacco usage class and risk class, as well as the amount of the
Minimum Required Death Benefit if the Account Value were $100,000. These
examples assume that the Insured is placed in the preferred risk class (see
"BUYING A POLICY - How do I buy a policy?" for a description of risk classes.)
Female, Age 45, not a tobacco user:
The factor is 3.410485. $100,000 multiplied by 3.410485 results in a
Minimum Required Death Benefit of $341,048.50.
Male, Age 50, a tobacco user:
The factor is 2.194449. $100,000 multiplied by 2.194449 results in a
Minimum Required Death Benefit of $219,444.90.
Female, Age 55, a tobacco user:
The factor is 2.298000. $100,000 multiplied by 2.298000 results in a
Minimum Required Death Benefit of $229,800.00.
Male, Age 60, not a tobacco user:
The factor is 1.919419. $100,000 multiplied by 1.919419 results in a
Minimum Required Death Benefit of $191,941.90.
The following example illustrates the effect of aging on the Minimum Required
Death Benefit.
Assume the Insured is a woman, Age 60, for whom coverage was issued at her Age
50. Assume further that she is not a tobacco user and is in the preferred risk
class. On the Valuation Day before the Policy Anniversary following the
Insured's 60th birthday, the Account Value is $100,000. The Minimum Required
Death Benefit as required under the Code for this Insured's age, gender, tobacco
usage class and risk class is $100,000 multiplied by the applicable factor of
2.217941, which results in a Minimum Required Death Benefit of $221,794.10. For
the sake of this example, assume that the next Valuation Day, which is the
Policy Anniversary after the Insured's 60th birthday (the day the Insured turns
Age 60 for purposes of the Policy), the Account Value remains $100,000. At the
higher Age of 60, the Minimum Required Death Benefit on the Policy Anniversary
is $100,000 multiplied by the applicable factor of 2.153572, which results in a
Minimum Required Death Benefit of $215,357.20.
[11] .....What else can affect the Minimum Required Death Benefit? The Minimum
Required Death Benefit changes as the Account Value changes. This is because the
Minimum Required Death Benefit is calculated based on the Account Value. A few
examples may help show what this means. Assume for purposes of these examples
that the Insured is a woman, Age 60, for whom coverage was issued at her Age 50.
Assume further that the Insured is not a tobacco user and is in the preferred
risk class.
(a) On a particular Monthly Processing Date, the Account Value of the
Policy is $100,000. The Minimum Required Death Benefit as of that
Valuation Day is $100,000 multiplied by the then applicable factor of
2.153572, or $215,357.20. As of the next Valuation Day, assume the
Account Value has grown to $100,010. The Minimum Required Death Benefit
is $100,010 multiplied by the same factor of 2.153572, or $215,378.74.
(b) On a particular Monthly Processing Date, the Account Value of the
Policy is $100,000. The Minimum Required Death Benefit as of that
Valuation Day is $100,000 multiplied by the then applicable factor of
2.153572, or $215,357.20. As of the next Valuation Day, assume the
Account Value has decreased to $99,990. The Minimum Required Death
Benefit is $99,990 multiplied by the same factor of 2.153572, or
$215,335.66.
(c) On a particular Monthly Processing Date, the Account Value of the
Policy before any partial withdrawal is $100,000. The Minimum Required
Death Benefit as of that Valuation Day is $100,000 multiplied by the
then applicable factor of 2.153572, or $215,357.20. On that same day,
assume $20,000 is taken as a partial withdrawal, and the $25.00 partial
withdrawal transaction fee is charged. Immediately after the partial
withdrawal, the Minimum Required Death Benefit is $79,975 multiplied by
the same factor of 2.153572, or $172,231.92.
[12] .....What is the Guaranteed Minimum Death Benefit? We use the Guaranteed
Minimum Death Benefit to determine the Death Proceeds under certain
circumstances. Under Option A, we use the Guaranteed Minimum Death Benefit when
it is higher than both the Specified Amount and the Minimum Required Death
Benefit. Under Option B, we use the Guaranteed Minimum Death Benefit when it is
higher than both the sum of the Account Value plus the Specified Amount, and the
Minimum Required Death Benefit. There is no Guaranteed Minimum Death Benefit
beyond Age 100 of the Insured, or if the policy terminates before the Insured's
death. The Guaranteed Minimum Death Benefit is determined as follows:
(a) On the Policy Date, the Guaranteed Minimum Death Benefit equals the
initial Premium.
(b) After the Policy Date and until the first Policy Anniversary, the
Guaranteed Minimum Death Benefit is the total of all Premiums paid less
any partial withdrawals.
(c) After the first Policy Anniversary but before the "target date," (the
Policy Anniversary when the Insured is Age 75), the Guaranteed Minimum
Death Benefit is the higher of (1) or (2), where: (1) is the total of
all Premiums paid less all partial withdrawals; and (2) is the highest
"Anniversary Value." "Anniversary Value" is the Account Value on any
Policy Anniversary less all subsequent partial withdrawals.
(d) On or after the "target date", the Guaranteed Minimum Death Benefit is
the higher of (1) or (2), where: (1) is the total of all Premiums paid
less all partial withdrawals and (2) is the highest Anniversary Value,
as defined above in (c), as of the "target date," less all partial
withdrawals after the "target date." If there are two Insureds, the
Guaranteed Minimum Death Benefit ends based on the Age of the younger
Insured, or what would have been the age of the younger Insured if the
younger Insured predeceases the older Insured.
(e) Notwithstanding items (a) through (d) above, if the Insured is Age 75
or older on the Policy Date, the Guaranteed Minimum Death Benefit is
the total of all Premiums paid less all partial withdrawals.
(f) If the Policy is issued for two (2) Insureds, the "target date" is
based on the age of the younger Insured, or what would have been the
age of the younger Insured if the younger Insured predeceases the older
Insured. This also applies if, as of the Policy Date, the younger
Insured is younger than Age 75.
[13] .....Would you please provide examples of how the Death Benefit is
determined? Below are six examples of how the Death Benefit is determined. Each
example assumes the death claim becomes payable exactly on the stated Policy
Anniversary. Values shown are hypothetical, including the amount of Premiums
paid, the Account Values shown as of the date the death claim is payable and the
Guaranteed Minimum Death Benefit then applicable.
The first three examples illustrate death benefit Option A. The first example is
a situation where the Death Benefit equals the Specified Amount. The second is
an example where the Death Benefit is the Minimum Required Death Benefit. The
third is an example where the Death Benefit is the Guaranteed Minimum Death
Benefit.
Examples four through six illustrate death benefit Option B. The fourth example
is a situation where the Death Benefit is the Specified Amount plus the Account
Value. The fifth is an example where the Death Benefit is the Minimum Required
Death Benefit. The sixth example is a situation where the Death Benefit is the
Guaranteed Minimum Death Benefit. In reviewing the examples for Option B, please
remember that the sum of the Specified Amount and the Account Value is compared
to the Minimum Required Death Benefit and the Guaranteed Minimum Death Benefit.
The third and sixth examples assume that positive investment performance
significantly increased Account Value, which was then followed by a period of
substantial negative investment performance.
Each example assumes that we issue a Policy to a 50 year old man who is not a
tobacco user and is in the preferred risk class. Assume we issue the Policy six
months after his 50th birthday, the Policy has a Specified Amount of $100,000
and there have been no withdrawals. Please remember that these examples show the
Death Benefit, and that the Death Proceeds equal the Death Benefit reduced by
any Debt and increased by any required interest.
<TABLE>
<CAPTION>
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Death Total Policy Account Value Specified Minimum Guaranteed Death Benefit
Benefit Premiums Paid Anniversary Amount Required Minimum Death
Option Claim is Death Benefit Benefit
Payable
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
A $ 15,000 1 $15,500 $100,000 $40,018 $15,500 $ 100,000
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
A 105,000 12 185,000 100,000 345,527 185,000 345,527
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
A 105,000 20 50,000 100,000 76,653 200,000 200,000
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
B 15,000 1 15,500 100,000 40,018 15,500 115,500
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
B 105,000 20 200,000 100,000 306,611 200,000 306,611
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
B 105,000 25 50,000 100,000 69,169 200,000 200,000
------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
</TABLE>
[14] .....Does choosing between Options A and B affect anything other than the
Death Benefit? Yes. Choosing Option A or Option B affects the Net Amount at Risk
which will have an impact on the amount you pay in cost of insurance charges.
Option B initially has a higher Net Amount at Risk which will result in a higher
cost of insurance charge. It may also have an impact on what you might pay upon
surrender. How these charges work are discussed in more detail below in the
section on Costs. An increase in charges has a negative impact on the growth of
your Account Value. A decrease in charges has a positive impact on the growth of
your Account Value.
[15] .....Who chooses which option to use? You choose the option on your
Application for a Policy. If you do not elect a Death Benefit option on your
Application we will review the Application to determine if our underwriting
requirements are met. However, we will require you to elect either Option A or
Option B prior to issuing a Policy.
[16] .....May I change the Death Benefit option or the Specified Amount? While
the Insured is alive, you may request to change the Death Benefit option or to
increase or decrease the Specified Amount to meet changing needs or goals.
Any change to the Death Benefit option is subject to our acceptance and our
rules, which include, but are not limited to the following:
1. Any change must take effect after the first Policy Year.
2. We only permit one such change per Policy Year.
3. We must receive the request In Writing at our Office.
4. We may require satisfactory evidence of insurability for any change that
prospectively increases the Net Amount at Risk.
5. If evidence of insurability is required, we will not accept the request
if the Insured(s) is over our then current maximum age for issuing a
Policy.
6. We may require you to sign an acknowledgment that you understand the
impact or potential impact of the change on the tax treatment of your
Policy, particularly if the change results or may result in your Policy
becoming a MEC. Changing between Option A and Option B also may have an
impact on whether a Policy is treated as a MEC. Therefore, you should
consult with a competent tax advisor before requesting a change.
7. If we grant any such request, it will take effect on the Monthly
Processing Day occurring on or immediately following the date we agree
to such a change.
8. On the date the change takes effect, there will be no change in the
Death Benefit. That means that, if you change from Option A to Option
B, the Specified Amount will be reduced.
Any change to the Specified Amount is subject to our rules, which include, but
are not limited to the eight rules outlined above for changing the Death Benefit
option, plus the following additional rules:
1. The amount of any increase or decrease may not be less than $5,000.
2. The Specified Amount after any decrease may not be less than $50,000
(single life Policy) or $100,000 (joint life Policy).
3. No decrease in the Specified Amount is permitted during the first five
Policy Years or during the five calendar years subsequent to any
increase in Specified Amount.
[17] .....What other parts of the Policy are affected if I change the Specified
Amount? Increasing the Specified Amount initially results in a higher Death
Benefit, unless the increased Specified Amount would then not exceed the Minimum
Required Death Benefit or the Guaranteed Minimum Death Benefit. When the Death
Benefit is increased in this way, it initially increases the Net Amount at Risk,
and therefore, the cost of insurance charge. Decreasing the Specified Amount
generally has the opposite effects. Changing the Specified Amount could affect
the maximum Premiums you may pay, as well as the Maximum Annual Assessable
Premium. Also, if your policy is not deemed to be a MEC, changing the Specified
Amount may affect how much Premium you may subsequently pay without the Policy
becoming a MEC.
[18] .....How are Death Proceeds paid? We pay the Death Proceeds as a lump sum
or in accordance with the terms of whatever settlement options we then make
available to Beneficiaries. Generally, Beneficiaries can choose a lump sum or
one of the settlement options we make available. However, you may choose the
method of payment for your Beneficiaries if you notify us In Writing before the
Insured's death how you want the Death Proceeds to be paid.
ACCOUNT VALUE AND CASH VALUE
[19] .....What is the Account Value? The Account Value is the value of a Policy
before any deduction for any contingent deferred sales charge and before any
reduction for any Debt. It is the total of the Account Value allocated to each
Sub-account and any Fixed Allocations plus any Account Value in the Loan
Account. You may allocate Account Value to the variable investment options,
which are each of the Sub-accounts of the Separate Account, or to Fixed
Allocations. Any portion of the Account Value maintained in the Loan Account
serves as collateral for outstanding Policy loans.
[20] .....How does American Skandia determine the Account Value in the variable
investment options? On each Valuation Date, the Account Value in any variable
investment option you utilize equals the number of Units you then maintain in
that investment option multiplied by that investment option's then current Unit
Price. When you allocate all or a portion of the Premium to an investment option
or when you transfer Account Value into a variable investment option, Units are
purchased using the then current Unit Price. When you take all or a portion of a
distribution or benefit from a variable investment option or you transfer
Account Value from a variable investment option, Units are sold at the then
current Unit Price in order to fund that distribution, benefit or transfer.
[21] .....How does American Skandia determine the Account Value for Fixed
Allocations? We credit a fixed rate of interest to Fixed Allocations. From time
to time we declare interest rates applicable to new Fixed Allocations. If you
make a Fixed Allocation, we credit the rate then in effect to that Fixed
Allocation until the next Policy Anniversary. Once that Policy Anniversary is
reached, we credit, for the next Policy Year, the then current rate applicable
to new Fixed Allocations. This applies to all your Fixed Allocations then in
effect. During each subsequent Policy Year, the rate we credit for that Policy
Year is the one then in effect for new Fixed Allocations.
- --------------------------------------------------------------------------------
The Policy offered pursuant to this Prospectus includes Fixed Allocations. These
Fixed Allocations are not registered as a security with the Securities and
Exchange Commission under either the Securities Act of 1933 or the Investment
Company Act of 1940. The Fixed Allocations are not subject to these Acts.
Information about the Fixed Allocations is included in this Prospectus to help
with your understanding of the features of the Policy. The staff of the
Securities and Exchange Commission has not reviewed this information. However,
the information may be subject to certain generally applicable provisions of the
Federal securities laws regarding accuracy and completeness. The assets
supporting Fixed Allocations are held in American Skandia's general account.
- --------------------------------------------------------------------------------
[22] .....How does American Skandia determine the interest rate for Fixed
Allocations? We determine the interest rate applied to Fixed Allocations based
on our assessment of the earnings we expect to achieve when investing to support
these obligations, our costs, competition, profit targets and other factors. We
have sole discretion to determine the rates. However, the interest rate will
never be less than 3.0% per year, compounded yearly.
[23] .....How does American Skandia determine the Account Value in the Loan
Account? As of the date of this Prospectus, we currently credit interest to
Account Value in the Loan Account at the rate of 6.0% per year, compounded
yearly. However, to the extent permitted by law, we retain the right to credit
less, but never less than 5.5% per year, compounded yearly.
[24] .....What is the Cash Value? The Cash Value is the total Account Value less
any contingent deferred sales charge, unpaid charges and Debt.
[25] .....Do I have to maintain a minimum Cash Value? There must always be
enough Cash Value so that, on any Monthly Processing Date, the Cash Value is
sufficient to pay for the charges then due. If the Cash Value is insufficient to
pay for the charges, we send you a notice giving you a 61-day "grace period" to
send us a required amount. If the Cash Value at the end of the grace period,
after deduction for all previously unpaid charges, is zero or less, the Policy
ends without value, unless the guaranteed continuation provision applies. This
provision is discussed in the section "Keeping the Policy In Force".
CASH VALUE CREDITS
[26] .....What are Cash Value Credits, and how do I get them? Cash Value Credits
are amounts we credit to your Account Value, where permitted by law. We provide
these amounts if your total Cash Value on a Policy Anniversary equals or exceeds
a Cash Value trigger. We determine if your Policy is eligible for a Cash Value
Credit on each Policy Anniversary. Your Policy's eligibility for Cash Value
Credits may change from year to year. The Cash Value trigger depends on the
total amount of Premiums paid. Whether your Cash Value meets or exceeds the
trigger depends on the investment performance of the investment options, partial
withdrawals, Debt and whether you pay back any loans or loan interest.
[27] .....What is the Cash Value trigger? The Cash Value trigger is 200% of the
Premiums you pay. Please note, even if your Account Value is greater than the
Cash Value trigger, you may not have reached the trigger amount, since the Cash
Value may be less than the Account Value due to the contingent deferred sales
charge and any Debt.
[28] .....How much is added to my Account Value? The Cash Value Credit, if any,
added to your Account Value equals 0.50% of the Cash Value on the applicable
Policy Anniversary. The following examples illustrate how this works:
(a) Assume that the total amount of Premiums paid is $70,000. Assume
that on the 14th Policy Anniversary the Cash Value is $150,000.
The Cash Value trigger is 200% of $70,000, which is $140,000. The
amount to be added to the Account Value is 0.50% of $150,000,
which is $750.
(b) For the same Policy, assume that the Cash Value on the 15th Policy
Anniversary is $115,000, due to a combination of investment
performance and a loan of $25,000 in the middle of the Policy
Year. The Cash Value trigger for this Policy remains $140,000.
Therefore, no Cash Value Credit is provided on the 15th Policy
Anniversary.
(c) For the same Policy, assume that the Cash Value on the 16th Policy
Anniversary is $160,000, due to a combination of investment
performance and repayment of the loan and loan interest. The Cash
Value trigger remains $140,000. The amount to be added is 0.50% of
$160,000, which is $800.
[29] .....Who pays for the Cash Value Credits, and how are they paid? We pay for
any Cash Value Credits out of our general account. We allocate any Cash Value
Credits due on the applicable Policy Anniversary to the variable investment
options and Fixed Allocations in which you then maintain Account Value. We make
the allocations pro-rata based on the Account Value in the variable investment
options and any Fixed Allocations on the applicable Policy Anniversary. No
allocation is made to the Loan Account.
Cash Value Credits cannot be used to repay Debt.
COSTS
[30] .....What kinds of charges are there for this Policy? The Policy has five
(5) different kinds of charges: (1) charges we deduct from Premiums; (2) charges
we assess daily against assets maintained in the Separate Account, which only
apply to the Account Value you allocate to the variable investment options; (3)
charges we deduct monthly from the Account Value and which are due in all Policy
Years to Age 100; (4) charges we deduct monthly from the Account Value only for
the first ten Policy Years; and (5) "contingent" charges, which are those
charges that you only pay in certain specified circumstances. There also are
fees and expenses charged by the Portfolios.
[31] .....What charges are deducted from Premiums? We deduct a percentage of
each Premium in relation to state and local premium taxes we may incur on that
Premium, and an amount in relation to our Federal taxes. We deduct these charges
before we allocate the net amount to the investment options.
[32] .....How much is charged for premium taxes? The amount we charge is based
on the rates determined by state and local governments. In most jurisdictions
these rates range for 0% to 3.5% of each Premium. The actual percentages we
charge for the states and the District of Columbia as of the date of this
Prospectus are found in Appendix C.
[33] .....What is the charge in relation to the Company's Federal taxes? The
Code requires a life insurer to capitalize an imputed acquisition expense,
thereby increasing its tax liability over what it would be without this special
provision. The tax liability created by this imputed acquisition expense is
sometimes referred to as a "deferred acquisition cost" tax, or "DAC" tax. To
reimburse us for this special insurance company tax at a rate we believe to be
reasonable in relation to the liability, we deduct an amount equal to 1.15% of
each Premium.
[34] .....What are the charges assessed against the Separate Account and when
are they paid? We assess a mortality and expense risk charge and an
administration charge against the assets in the Separate Account. The mortality
and expense risk charge is 0.90% per year. The mortality and expense risk we
assume is that charges and fees under the Policy will be insufficient to meet
our long-term costs and expenses in issuing, administering and paying claims
based on our obligations under the Policy. The charge for the administrative
expenses connected with operating the Separate Account is 0.25% per year. We
assess these charges each Valuation Period against the daily value of each
Sub-account. We reserve the right to assess the Separate Account for any taxes
that may be attributed to it. Currently, no such charge for taxes is assessed.
[35] .....What monthly charge applies in all Policy Years to Age 100? We deduct
the cost of insurance charge until the Policy Anniversary on or immediately
after the Insured's 100th birthday. For Policies with two Insureds, this is the
Policy Anniversary on or after the 100th birthday of the younger Insured, or if
that person is deceased, what would have been that Insured's 100th birthday. We
take this charge from your Account Value each Monthly Processing Day.
[36] .....How much is the cost of insurance charge? The monthly cost of
insurance charge is determined by multiplying the current monthly cost of
insurance rate by the Net Amount at Risk. To that amount we add a cost of
insurance fee. The current cost of insurance rates and cost of insurance fee are
subject to change; however, the combination will not exceed the product of the
guaranteed maximum cost of insurance charge multiplied by the Net Amount at
Risk. The cost of insurance charge is not a constant dollar amount.
Please note that in calculating the Net Amount at Risk, the Death Benefit that
would then apply is the highest of the Minimum Required Death Benefit, the
Guaranteed Minimum Death Benefit or, the Specified Amount (for Option A), or the
sum of the Specified Amount plus the Account Value (for Option B). The cost of
insurance rates increase as the Insured ages, although the rates may not
increase each Policy Year. We reserve the right to vary the rates per thousand
of Net Amount at Risk based on either the Net Amount at Risk or on the Specified
Amount.
We reserve the right to adjust current monthly cost of insurance rates by an
underwriting factor. As of the date of this Prospectus, we were not making any
such adjustments.
The guaranteed maximum monthly cost of insurance charges for Policies with one
Insured are shown in Appendix D. The current monthly cost of insurance rates as
of the date of this Prospectus for Policies with one Insured are shown in
Appendix E. Corresponding rates for two proposed Insureds are available from us
upon request. A detailed explanation of how we calculate the current monthly
cost of insurance charges and a sample calculation are provided in Appendix F.
The guaranteed maximum monthly cost of insurance charges shown in Appendix D and
the current monthly cost of insurance rates shown in Appendix E are for Insureds
in the preferred risk class. These amounts will differ for Insureds in a
substandard risk class.
[37] .....What is the guaranteed maximum cost of insurance charge? The
guaranteed maximum cost of insurance charge is different at each Age. The
guaranteed maximum cost of insurance charge depends on the tobacco usage class
and risk class of each Insured. We base the guaranteed maximum cost of insurance
charges on the sex distinct 1980 Commissioners Standard Ordinary Ultimate
Mortality Smoker/Non-Smoker Table, age last birthday. However, if required by
law, unisex charges will apply, and we will use a unisex variation of that
table. Charges for substandard risk classes are based on a multiple of the table
rates.
[38] .....What monthly charges apply only for a specified number of Policy
Years? We deduct a sales charge for a specified number of Policy Years.
[39] .....How much is the sales charge and when do I pay it? We deduct the sales
charge during the first ten (10) Policy Years. It is a percentage of your
Account Value and is the equivalent of 0.40% per year. We deduct this charge
from your Account Value each Monthly Processing Day.
There are certain circumstances which may result in reduction or elimination of
the sales charge. These are exactly the same circumstances that may result in
reduction or elimination of the contingent deferred sales charge, as described
below in response to the question "How much is the contingent deferred sales
charge and when must I pay it?"
[40] .....What are the contingent charges? The contingent charges are: (1) the
contingent deferred sales charge; (2) the transfer fee; and (3) the partial
withdrawal transaction fee.
[41] .....How much is the contingent deferred sales charge, and when must I pay
it? The contingent deferred sales charge is a percentage of the Assessable
Premium paid. It is charged if you surrender the Policy during the first ten
(10) Policy Years, unless the Policy qualifies for a medically-related waiver of
these charges, as discussed in the section of this Prospectus entitled
"Medically-Related Waiver".
The percentages that we assess against Assessable Premium upon a surrender are
as follows:
---------------------- -------------------
Policy Year Percentage (%)
---------------------- -------------------
---------------------- -------------------
1 10
---------------------- -------------------
---------------------- -------------------
2 9
---------------------- -------------------
---------------------- -------------------
3 8
---------------------- -------------------
---------------------- -------------------
4 7
---------------------- -------------------
---------------------- -------------------
5 6
---------------------- -------------------
---------------------- -------------------
6 5
---------------------- -------------------
---------------------- -------------------
7 4
---------------------- -------------------
---------------------- -------------------
8 3
---------------------- -------------------
---------------------- -------------------
9 2
---------------------- -------------------
---------------------- -------------------
10 1
---------------------- -------------------
---------------------- -------------------
11+ 0
---------------------- -------------------
[42] .....How does American Skandia determine the Assessable Premium? The
Assessable Premium equals the total Premiums less the total Exempt Premiums.
[43] .....What are Exempt Premiums? Exempt Premiums are the amounts against
which we will not charge a contingent deferred sales charge upon surrender or
withdrawal.
[44] .....How does American Skandia determine which Premium amounts are Exempt
Premiums? Exempt Premiums are that portion of Premiums paid in any Policy Year
that exceeds the Maximum Annual Assessable Premium.
[45] .....What is the Maximum Annual Assessable Premium? The Maximum Annual
Assessable Premium is an amount per thousand of Specified Amount. The amount is
cumulative from year to year. For example, if your Maximum Annual Assessable
Premium is $5,000 and you make a Premium payment of $4,000 in Policy Year 1, in
Policy Year 2 your Maximum Annual Assessable Premium is $5,000 plus $1,000 from
Policy Year 1, or $6,000. The Maximum Annual Assessable Premium depends on the
Age, tobacco usage class, risk class and, where permitted, gender of the
Insured. The Maximum Annual Assessable Premium is increased if you increase the
Specified Amount, and is decreased if you decrease the Specified Amount. We have
provided a table in Appendix G of the Maximum Annual Assessable Premium for
Policies with one Insured. The amounts shown in Appendix G are applicable for
Insureds in the preferred risk class. The Maximum Annual Assessable Premium for
Insureds in a substandard risk class are higher than for Insureds in a preferred
risk class.
[46] .....Please provide examples of what it would cost to surrender the Policy
The following are two hypothetical examples of how much it would cost to
surrender the Policy. In each example, it is assumed that neither the Specified
Amount nor the Death Benefit option is changed after the Policy Date.
(1) In this first example, assume that the Policy is a New Policy.
Assume also: (a) the Maximum Annual Assessable Premium is $10,000;
(b) $10,000 of Premium was paid in each of Policy Years 1 through
5, for a total of $50,000; (c) the Policy is being surrendered in
Policy Year 6; and (d) at the time of surrender, the Account Value
is $75,000.
Given these facts, the Assessable Premium equals the Premiums
paid. No amount paid in any Policy Year exceeded the Maximum
Annual Assessable Premium. The contingent deferred sales charge
for a surrender in Policy Year 6 is 5% of the Assessable Premium
(5% of $50,000 or $2,500). The amount payable upon surrender would
be $75,000 less $2,500, which equals $72,500
(2) In this second example, assume that the Policy is an Exchange
Policy. Assume also: (a) the Maximum Annual Assessable Premium is
$10,000; (b) the proceeds of the exchange were $50,000, which was
the initial Premium, and $5,000 of subsequent Premium was paid in
the second Policy Year; (c) the Policy is being surrendered in
Policy Year 6; and (d) at the time of surrender, the Account Value
is $85,000.
Given these facts, the Assessable Premium is less than the
Premiums paid. The amount of Premium paid in the first Policy Year
over $10,000 is Exempt Premium. Since $50,000 was paid in the
first Policy Year, the amount of the Exempt Premium paid in that
Policy Year was $50,000 minus $10,000, which is $40,000. There was
no Exempt Premium in the second Policy Year, since $5,000 is less
than the applicable Maximum Annual Assessable Premium for the
second Policy Year, which is $10,000. Since there has not been a
change to the Specified Amount or Death Benefit option, the
percentage to be assessed will be assessed against $55,000 of
Premium less $40,000 of Exempt Premium, which equals $15,000. The
contingent deferred sales charge for a surrender in Policy Year 6
is 5% of the Assessable Premium (5% of $15,000 or $750). The
amount payable upon surrender would be $85,000 less $750, which is
$84,250.
[47] .....Are there any situations in which the sales charge and the contingent
deferred sales charge are reduced or eliminated? From time to time, and to the
extent permitted by law, we may reduce the amount of the sales charge and the
contingent deferred sales charge, the period during which such charges apply, or
both, when Policies are sold to persons or groups of persons in a manner that
reduces sales expenses. We would consider such factors as: (a) the size and type
of group; (b) the amount of Premiums; and/or (c) other transactions where sales
expenses are likely to be reduced.
No sales charge or contingent deferred sales charge is imposed when, as of the
Policy Date, the Owner or the Insured of a Policy issued pursuant to this
Prospectus is: (a) any parent company, affiliate or subsidiary of ours; (b) an
officer, director, employee, retiree, sales representative, or in the case of an
affiliated broker-dealer, registered representative of such company; (c) a
director, officer or trustee of any underlying mutual fund; (d) a director,
officer or employee of any investment manager, sub-advisor, transfer agent,
custodian, auditing, legal or administrative services provider that is providing
investment management, advisory, transfer agency, custodianship, auditing, legal
and/or administrative services to an underlying mutual fund or any affiliate of
such firm; (e) a director, officer, employee or registered representative of a
broker-dealer or insurance agency that has a then current selling agreement with
us and/or with American Skandia Marketing, Incorporated; (f) a director,
officer, employee or authorized representative of any firm providing us or our
affiliates with regular legal, actuarial, auditing, underwriting, claims,
administrative, computer support, marketing, office or other services; (g) the
then current spouse of any such person noted in (b) through (f) above; (h) the
parents of such person noted in (b) through (g) above; (i) such person's
child(ren) or other legal dependent under the age of 21; and (j) the siblings of
any such persons noted in (b) through (h) above.
[48] .....How much is the transfer fee and when must I pay it? We charge $10.00
for every transfer after the 12th in each Policy Year. That includes transfers
into a Fixed Allocation and any transfers from a Fixed Allocation unless the
transfer occurs on a Policy Anniversary. It does not include transfers made as
part of any dollar cost averaging program we offer. For this purpose, all
transfers occurring during the same Valuation Period are considered one
transfer. We assess the transfer fee at the time of any transfer which is
subject to the fee.
[49] .....How much is the partial withdrawal transaction fee, and when must I
pay it? We charge $25.00 as a transaction fee for each partial withdrawal unless
the partial withdrawal qualifies as a medically-related withdrawal. This amount
is deducted separately from your Account Value.
[50] .....How are charges deducted from Account Value? We deduct charges from
your investment options pro-rata based on the Account Value in each investment
option. If you maintain Account Value in more than one Fixed Allocation in a
Policy Year, any applicable charges will be deducted on a "last-in, first-out"
basis, starting with the last Fixed Allocation that was made prior to the
Monthly Processing Date the deduction is made. Upon surrender or withdrawal, we
assess charges against the investment options pro-rata in the same ratio as
Account Value is being withdrawn from such investment options.
[51] .....What charges do the Portfolios make? We do not assess any charges
against the Portfolios. However, each Portfolio charges a total annual fee
comprised of an investment management fee and operating expenses. Expenses for
the Portfolios are provided in the "Variable Investment Options" section below.
More detailed information about fees and charges can be found in the
prospectuses for the Portfolios.
BUYING A POLICY
[52] .....How do I buy a Policy? We have established certain underwriting
standards to determine insurability. We require you to submit an Application to
provide information that enables us to determine if our standards have been met.
We may require additional information, including, but not limited to, some of
the proposed Insured's medical records and may also require the proposed Insured
to take certain medical tests. We evaluate this information to determine whether
we can issue a Policy. When we evaluate whether to issue a Policy, we will also
determine whether the proposed Insured is in the tobacco usage class and/or must
be placed in a substandard risk class. If the proposed Insured meets our
standards and we have received a Premium, we will issue a Policy. When issued,
your Policy will indicate if the Insured is in the tobacco usage class and
whether the Insured was placed in a substandard risk class in order to issue the
Policy. If our standards are not met and we received a Premium, we will return
an amount equal to the Premium to you. No interest will be paid.
Age Restrictions: For Single Life Policies - The Insured may not be older than
Age 80 on the Policy Date. There is no minimum age limit.
For Joint Life Policies - The Insureds may not be less than
Age 18 or older than Age 80 on the Policy Date.
Tobacco Usage Class: The Insured's tobacco usage class is a factor used to
determine the Specified Amount, the Minimum Required Death Benefit, the
Guaranteed Maximum Monthly Cost of Insurance Charge and the Current Monthly Cost
of Insurance rates. If the Insured was included in the tobacco usage class on
the Policy's Issue Date and subsequently ceases to be a tobacco user after the
first Policy Year, the Insured may apply for a change in status.
Substandard Risk Class: If the Insured is placed in a substandard risk class,
the factors used to determine the Minimum Required Death Benefit, the Guaranteed
Maximum Monthly Cost of Insurance Charge and the Current Monthly Cost of
Insurance rates under the Policy will be different than for an Insured in the
preferred risk class. For Insureds in a substandard risk class, the change in
these factors will generally result in a higher monthly cost of insurance charge
and may result in a lower Death Benefit as compared to an Insured in the
preferred risk class. Higher monthly cost of insurance charges will have an
impact on the Account Value and Cash Value of your Policy. NOTE: Where allowed
by law, Policies issued to Insured(s) in a substandard risk class may not be
eligible for certain benefits under the Policy.
To the extent permitted by law, we reserve the right to apply differing
standards of insurability to persons who may be part of a group or who may
qualify, for some other reason, as part of a different class. Such classes may
include, but are not limited to, persons seeking a Policy who are applying all
or a portion of proceeds from an insurance or annuity contract, or proceeds of a
redemption from another financial product, such as mutual funds. One of the
criteria we may apply in such a situation is that such differing standards of
insurability apply only after maintaining funds in such policy, contract, or
financial product for a specified period of time.
[53] .....When do I pay the initial Premium? You may submit Premium with the
Application if the Insured meets certain medical underwriting criteria.
If any portion of any Premium is to be received as part of a replacement of a
life insurance policy (whether or not a tax-free exchange), endowment or annuity
policy then we must receive all our requirements In Writing for all such
replacements as of the same date. This date must be prior to the date we decide
to issue a Policy. Replacements are subject to our acceptance.
If we do not accept Premium with the Application or you choose not to submit a
Premium with the Application, we will notify you if and when we have accepted
the Application and agreed, subject to submission of the Premium, to issue a
Policy. We will let you know at that time the minimum and maximum amounts we
accept as the initial Premium. We will not issue a Policy until we receive at
least the minimum initial Premium at our Office.
You may choose to use our funds transfer authorization procedures as part of
buying a Policy. If you elect this procedure, you authorize us to redeem funds
from one or more financial institutions with which you currently maintain funds
and use those funds to pay Premium. You must do so In Writing using a form that
authorizes us to obtain such funds only if and when we have determined that the
Application meets our standards for issuing a Policy. If you use this procedure,
you must provide us with all such authorizations simultaneously.
[54] .....What is the initial Premium? There is not a fixed amount of initial
Premium. Instead, we accept a range of initial Premium between a minimum and a
maximum. The minimum and maximum depends on the Specified Amount and the
Insured's age, tobacco usage class, risk class and gender, where permitted, as
of the Policy Date.
[55] .....What is the maximum initial Premium I can pay? The maximum initial
Premium we accept equals the maximum amount that can be paid without increasing
the Death Benefit on the Policy Date. However, if you submit any Premium before
we have determined whether you meet our requirements for issuing a Policy, we
will not accept more than $500,000 without prior Home Office approval.
[56] .....What is the minimum initial Premium I can pay? The minimum Premium we
generally accept as an initial Premium is one fourth (1/4th) of the Maximum
Annual Assessable Premium. We may accept less under certain circumstances, such
as when you authorize periodic withdrawals from an account you may have with a
bank or other financial institution in amounts designed to cumulatively pay
amounts equal to at least one fourth (1/4th) of the MEC Threshold Amount. We may
require a larger minimum Premium on Policies issued to Insureds in a substandard
risk class.
[57] .....Will you accept my initial Premium if it causes my Policy to be
treated as a MEC? We will not apply the portion of an initial Premium that we
believe would require us to treat your Policy as a MEC unless you acknowledge In
Writing before the Policy Date that we will treat the Policy as a MEC. If we do
not receive such notification, we will return to you the difference between the
amount you submitted and the amount we will apply as the initial Premium.
However, this will not apply in the case of an Exchange Policy where we receive
information we believe requires us to treat the Exchange Policy as a MEC in any
case.
[58] .....Am I covered while my Application is being reviewed? We may issue you
a temporary insurance agreement during the "underwriting period." The
"underwriting period" is the period between the time you first apply for a
Policy and the time we either issue the Policy or decide not to issue one. A
temporary insurance agreement may be issued if: (a) the Application is completed
in full; (b) the Insured answers "no" to certain questions on the Application
(these are questions we use as indicators of whether we will issue temporary
insurance); (c) no Insured is under age 18; and (d) a Premium is submitted with
the Application. If we issue a temporary insurance agreement and the Insured
(both Insureds if there are two Insureds) dies during the underwriting period,
the temporary insurance benefit will be payable if all the conditions of the
temporary insurance agreement are satisfied. If the Insured(s) die(s) during the
underwriting period and no temporary insurance agreement was in effect, no
benefit is payable.
We will return any Premium submitted with the Application if we cannot complete
underwriting within 60 days from the date the Application is signed. If you
notify us promptly, we will continue the underwriting process and notify you if
and when you meet our standards for issuing a Policy, at which time you may once
again send us a Premium. Temporary insurance lasts no longer than 90 days.
[59] .....What is the temporary insurance benefit? If the Insured dies while
temporary insurance is in effect, we pay the Beneficiary the lesser of the Death
Benefit that would be in effect on the Policy Date if a Policy had been issued
or $250,000. This $250,000 maximum applies to all temporary insurance then in
effect with us. Premium amounts in excess of this benefit are returned to you,
without interest or earnings.
[60] .....What happens if I change my mind about buying a Policy? You have a
"free-look" period during which you can change your mind about buying a Policy.
The free-look period is never less than 10 days from the date you receive your
Policy. It may be longer depending on the applicable state law and the
circumstances of your purchase. If you return your Policy to us within the
free-look period, we generally will return the greater of (1) the Premiums paid,
or (2) your Account Value plus an amount that equals any premium tax and DAC tax
deducted and any charges deducted from your Account Value. However, if you have
submitted a "return waiver," we will return only your Account Value plus any
premium and DAC taxes deducted and any charges deducted from your Account Value.
This may be more or less than the Premiums paid.
[61] .....How and when is my initial Premium invested? We invest your Net
Premium, which is the Premium less the charges deducted from each Premium and
any charge for optional additional benefits (should you elect such benefits). We
invest the initial Net Premium on the Policy Date. You can request that we
allocate the initial Net Premium using one or more variable investment options
and/or a Fixed Allocation. However, we initially invest the portion of the
initial Net Premium that you indicate you want invested in variable investment
options in the AST Money Market Sub-account, unless you submit a "return waiver"
In Writing before the Policy Date, where permitted by law. This also applies to
any additional Premium we receive during the "free-look" period discussed below.
A return waiver is an election by you to invest as soon as possible in the
variable investment options of your choice. If you submit a "return waiver" and
then decide to return your Policy during the "free-look" period, you may receive
back less than the Premium. Generally, we transfer the Account Value in the AST
Money Market Sub-account to the variable investment options you request as of
the Valuation Date which is on or immediately after the 15th day after the date
we issue a Policy. However, we will make the transfer as of a later date if your
"free-look" period is longer than 10 days to meet state law requirements.
[62] .....How do I choose how much of this type of life insurance to buy, which
Death Benefit Option to use and how much Premium to pay? The Death Benefit
Option, Specified Amount and the program of Premium payments that is right for
your needs depends on your particular circumstances and the reasons you are
buying a Policy. You and your financial representative should discuss your needs
and financial goals before applying for a Policy.
VARIABLE INVESTMENT OPTIONS
[63] .....What are the investment objectives and policies of the variable
investment options? What charges are made by the Portfolios in which these
options invest? Each variable investment option is a Sub-account of the Separate
Account. Each Sub-account invests exclusively in an underlying mutual fund or
one portfolio of an underlying mutual fund. Details about the investment
objectives, policies, risks, costs and management of the Portfolios are found in
the prospectuses for the underlying mutual funds. You should carefully read the
prospectuses for any Portfolio in which you are interested. To assist you in
determining which Portfolios may be of interest to you, we have provided below a
list of the Portfolios, their investment objectives (in italics) and a short,
summary description of their key policies. Next to each Portfolio's investment
objective and policies is the investment management fee, other expenses, and the
total annual expense for such Portfolio. The total annual expense is the sum of
the investment management fee and other expenses. Each figure is stated as a
percentage of the Portfolio's average daily net assets. Except as noted, all
expenses shown are after any applicable reimbursement or waiver of fees. These
percentages are fees for the calendar year that ended December 31, 1998. Those
Portfolios below that are marked with an asterisk (*) have not been in operation
for a full year. Therefore, the expenses shown are estimated and annualized. The
underlying mutual fund portfolio information was provided by the underlying
mutual funds and has not been independently verified by the Company.
<PAGE>
<TABLE>
<CAPTION>
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
Invest- Other Total
INVESTMENT OBJECTIVES/POLICIES Ment Expenses Net
Manage- Annual
ment Expenses
Fee
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
<S> <C> <C> <C> <C>
AST Money Market: seeks to maximize current income and maintain high levels of
CAPITAL liquidity. The Portfolio attempts to accomplish its objective by maintaining a
PRESERVATION dollar-weighted average maturity of not more than 90 days and by investing in 0.50% 0.16% 0.60%(1)
securities which have effective maturities of not more than 397 days.
---------------------------------------------------------------------------------- --------- --------- --------
- ------------------- ----------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond: seeks to maximize total return, consistent with
SHORT-TERM BOND preservation of capital and prudent investment management. The Portfolio will
invest in a diversified portfolio of fixed-income securities of varying
maturities. The average portfolio duration of the Portfolio generally will vary 0.65% 0.21% 0.86%
within a one- to three-year time frame based on the
Sub-advisor's forecast for interest rates.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
LONG-TERM AST PIMCO Total Return Bond: seeks to maximize total return consistent with
BOND preservation of capital and prudent investment management. The Portfolio will
invest in a diversified portfolio of fixed-income securities of varying 0.65% 0.18% 0.83%
maturities. The average portfolio duration of the Portfolio generally will vary
within a three- to six-year time frame based on the
Sub-advisor's forecast for interest rates.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
AST Federated High Yield: seeks high current income by investing primarily in a
diversified portfolio of fixed income securities. The Portfolio will invest at
least 65% of its assets in lower-rated corporate fixed income securities ("junk
HIGH YIELD BOND bonds"). These fixed income securities may include preferred stocks, convertible
securities, bonds, debentures, notes, equipment lease certificates and equipment 0.75% 0.20% 0.95%
trust certificates. A fund that invests primarily in lower-rated fixed income
securities will be subject to greater risk and share price fluctuation than a
typical fixed income fund, and may be subject to an amount
of risk that is comparable to or greater than many equity
funds.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
AST T. Rowe Price International Bond: seeks to provide high current income and
capital growth by investing in high-quality, non dollar-denominated government
and corporate bonds outside the United States. The Portfolio will invest at
least 65% of its assets in high-quality, non-U.S. dollar denominated government
INTERNATIONAL and corporate bonds outside the United States. The Sub-advisor bases its
BOND investment decisions on fundamental market factors, currency trends, and credit
quality. The Portfolio generally invests in countries where the combination of 0.80% 0.31% 1.11%
fixed-income returns and currency exchange rates appears attractive, or, if
the currency trend is unfavorable, where the Sub-advisor believes that the
currency risk can be minimized through hedging. The Portfolio may also invest up
to 20% of its assets in below investment-grade, high-risk bonds ("junk bonds"),
including bonds in default or those with the lowest rating.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
Invest- Other Total
INVESTMENT OBJECTIVES/POLICIES Ment Expenses Net
Manage- Annual
ment Expenses
Fee
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
<S> <C> <C> <C> <C>
AST T. Rowe Price Asset Allocation: seeks a high level of total return by
investing primarily in a diversified portfolio of fixed income and equity
securities. The Portfolio normally invests approximately 60% of its total
ASSET ALLOCATION assets in equity securities and 40% in fixed income securities. The 0.85% 0.24% 1.09%
Sub-advisor concentrates common stock investments in larger, more
established companies, but the Portfolio may include small and medium-sized
companies with good growth prospects. The fixed income portion of the
Portfolio will be allocated among investment grade securities, high
yield or "junk" bonds, foreign high quality debt securities and cash reserves.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
AST American Century Strategic Balanced: seeks capital growth and current
income. The Sub-advisor intends to maintain approximately 60% of the Portfolio's
assets in equity securities and the remainder in bonds and other fixed income
BALANCED securities. Both the Portfolio's equity and fixed income investments will 0.85% 0.28% 1.13%
fluctuate in value. The equity securities will fluctuate depending on the
performance of the companies that issued them, general market and economic
conditions, and investor confidence. The fixed income investments will be
affected primarily by rising or falling interest rates and the credit quality of
the issuers.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
AST AIM Balanced: seeks to provide a well-diversified portfolio of stocks and
bonds that will produce both capital growth and current income. The Portfolio
BALANCED attempts to meet its objective by investing, normally, a minimum of 30% and a
maximum of 70% of its total assets in equity securities and a minimum of 30% and 0.74% 0.26% 1.00%(2)
a maximum of 70% of its total assets in non-convertible debt securities. The
Sub-Advisor will primarily purchase equity securities for growth of capital
and debt securities for income purposes.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
AST Cohen & Steers Realty: seeks to maximize total return through investment in
real estate securities. The Portfolio pursues its investment objective by
REAL ESTATE seeking, with approximately equal emphasis, capital growth and current income.
(REIT) Under normal circumstances, the Portfolio will invest substantially all of its
assets in the equity securities of real estate companies, i.e., a company that 1.00% 0.30% 1.30%
derives at least 50% of its revenues from the ownership, construction,
financing, management or sale of real estate or that has at least 50% of its
assets in real estate. Real estate companies may include real estate investment
trusts or REITs.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
AST INVESCO Equity Income: seeks high current income while following sound
investment practices. Capital growth potential is an additional, but secondary,
EQUITY INCOME consideration in the selection of portfolio securities. The Portfolio seeks to
achieve its objective by investing in securities that will provide a relatively 0.75% 0.18% 0.93%
high yield and stable return and that, over a period of years, may also
provide capital appreciation. The Portfolio normally will invest at least
65% of its assets in dividend-paying common stocks of domestic and
foreign issuers.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
AST Bankers Trust Enhanced 500: seeks to outperform the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500(R)") through stock selection resulting
ENHANCED INDEX in different weightings of common stocks relative to the index. The Portfolio
will invest in the common stocks of companies included in the S&P 500(R). The 0.60% 0.26 0.80%(3)
majority of the issues held by the Portfolio will have neutral weightings to the
S&P 500, but approximately 100 will be over- or under-weighted relative to
the index.
- ------------------- ---------------------------------------------------------------------------------- ---------- --------- -------
</TABLE>
<TABLE>
<CAPTION>
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
Invest- Other Total
INVESTMENT OBJECTIVES/POLICIES Ment Expenses Net
Manage- Annual
ment Expenses
Fee
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
<S> <C> <C> <C> <C>
AST American Century Income & Growth: seeks capital growth with current income
GROWTH as a secondary objective. The Portfolio invests primarily in common stocks that
& offer potential for capital growth, and may, consistent with its investment
INCOME objectives, invest in stocks that offer potential for current income. The 0.75% 0.25% 1.00%(4)
Sub-adviser utilizes a quantitative management technique with a goal of building
an equity portfolio that provides better returns than the S&P 500
Index without taking on significant additional risk and while
attempting to create a dividend yield that will be greater than the
S&P 500 Index.
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
AST Lord Abbett Growth and Income: seeks long-term growth of capital and
GROWTH income while attempting to avoid excessive fluctuations in market value.
& The Portfolio normally will invest in common stocks (and securities
INCOME convertible into common stocks). The Sub-advisor will take a value-oriented 0.75% 0.16% 0.91%
approach, in that it will try to keep the Portfolio's assets invested in
securities that are selling at reasonable prices in relation to their value.
The stocks that the Portfolio will normally invest in are those of seasoned
companies that are expected to show above-average growth and that the
Sub-advisor believes are in sound financial condition.
- --------------- --------------------------------------------------------------------------------
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
AST T. Rowe Price Natural Resources: seeks long-term capital growth primarily
through the common stocks of companies that own or develop natural resources
NATURAL (such as energy products, precious metals, and forest products) and other
RESOURCES basic commodities. The Portfolio normally invests primarily (at least 65% of 0.90% 0.26% 1.16%
its total assets) in the common stocks of natural resource companies whose
earnings and tangible assets could benefit from accelerating inflation. The
Portfolio looks for companies that have the ability to expand production, to
maintain superior exploration programs and production facilities, and the
potential to accumulate new resources.
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
</TABLE>
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<CAPTION>
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
Invest- Other Total
INVESTMENT OBJECTIVES/POLICIES Ment Expenses Net
Manage- Annual
ment Expenses
Fee
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
<S> <C> <C> <C> <C>
AST JanCap Growth: seeks growth of capital in a manner consistent with
the preservation of capital. Realization of income is not a significant
GROWTH investment consideration and any income realized on the Portfolio's
investments, therefore, will be incidental to the Portfolio's objective.
The Portfolio will pursue its objective by investing primarily in common 0.90% 0.14% 1.02%(5)
stocks of companies that the Sub-advisor believes are experiencing favorable
demand for their products and services, and which operate in a favorable
competitive and regulatory environment. The Sub-advisor generally takes a
"bottom up" approach to choosing investments for the Portfolio. In other
words, the Sub-advisor seeks to identify individual companies with earnings
growth potential that may not be recognized by the market at large.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST Marsico Capital Growth: seeks capital growth. Income realization is not
an investment objective and any income realized on the Portfolio's
investments, therefore, will be incidental to the Portfolio's objective. The
GROWTH Portfolio will pursue its objective by investing primarily in common stocks
of larger, more established companies. In selecting investments for the 0.90% 0.21% 1.11%
Portfolio, the Sub-advisor uses an approach that combines "top down"
economic analysis with "bottom up" stock selection. The "top down" approach
identifies sectors, industries and companies that should benefit from the
trends the Sub-advisor has observed. The Sub-advisor then looks for individual
companies with earnings growth potential that may not be recognized by the
market at large. This is called "bottom up" stock selection.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
-----------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth: seeks capital growth. The
Portfolio primarily invests in the common stocks of mid-cap companies,
GROWTH i.e., companies with equity market capitalizations from $300 million
to $10 billion at the time of investment. The Portfolio is normally 0.90% 0.17% 1.07%(6)
managed using a growth-oriented investment approach. The Sub-advisor
looks for fast-growing companies that are in new or rapidly evolving
industries.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Value: seeks capital growth. The
Portfolio primarily invests in the common stocks of mid-cap companies.
Under the Portfolio's value-oriented investment approach, the
Sub-advisor looks for well-managed companies whose stock prices are
GROWTH undervalued and that may rise in price before other investors realize 0.90% 0.15% 1.05%(7)
their worth. Factors that the Sub-advisor may use to identify these
companies include strong fundamentals, including a low
price-to-earnings ratio, consistent cash flow, and a sound track record
through all phases of the market cycle.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST Oppenheimer Large-Cap Growth: seeks capital growth. The Portfolio seeks
its investment objective by emphasizing investment in common stocks
issued by established large-capitalization "growth companies" that, in the
opinion of the Sub-advisor, have above average earnings prospects
GROWTH but are selling at below normal prices. At least 65% of the Portfolio's 0.90% 0.22% 1.12%(8)
assets normally will be invested in companies that have market
capitalizations greater than $3 billion, and the Portfolio will normally
maintain a median market capitalization greater than $5 billion.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
The Alger American Fund - Growth: seeks long-term capital appreciation.
Except during temporary defensive periods, the Portfolio invests at least
GROWTH 65% of its total assets in equity securities of companies that, at 0.75% 0.04% 0.79%
the time of purchase, total market capitalization of $1 billion or greater.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
<S> <C> <C> <C> <C>
AGGRESSIVE The Alger American Fund - MidCap Growth: seeks long-term capital appreciation.
GROWTH Except during temporary defensive periods, the Portfolio invests at least
65% of its total assets in equity securities of companies that, at the time 0.80% 0.04% 0.84%
of purchase of the securities, have total market capitalization within the
range of companies included in the S&P MidCap 400 Index, updated quarterly.
- --------------- -------------------------------------------------------------------------------- ------------ --------- --------
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
Invest- Other Total
INVESTMENT OBJECTIVES/POLICIES Ment Expenses Net
Manage- Annual
ment Expenses
Fee
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
- --------------- ------------------------------------------------------------------------------ ------------ --------- ---------
AST Janus Small-Cap Growth: seeks capital growth. The Portfolio pursues its
objective by normally investing at least 65% of its total assets in the
SMALL common stocks of small-sized companies, i.e., those that have market
CAPITALIZATION capitalizations of less than $1.5 billion or annual gross revenues of less 0.90% 0.22% 1.12%(9)
than $500 million. As a Portfolio that invests primarily in smaller or
newer issuers, the Portfolio may be subject to greater risk of loss and share
price fluctuation than funds investing primarily in larger
or more established issuers.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST Kemper Small-Cap Growth: seeks maximum growth of investors'
capital from a portfolio primarily of growth stocks of smaller companies.
At least 65% of the Portfolio's total assets normally will be invested in
SMALL the equity securities of smaller companies, i.e., those having a market
CAPITALIZATION capitalization of $1.5 billion or less at the time of investment, many of
which would be in the early stages of their life cycle. The Portfolio seeks 0.95% 0.60% 1.35%(10)
attractive areas for investment that arise from factors such as technological
advances, new marketing methods, and changes in the economy and population.
Because of the Portfolio's focus on the stocks of smaller growth
companies, investment in the Portfolio may involve substantially
greater than average share price fluctuation and investment risk.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST Lord Abbett Small Cap Value: seeks long-term capital growth. The
Portfolio will seek its objective through investments primarily in
equity securities that are believed to be undervalued in the marketplace.
The Portfolio primarily seeks companies that are small-sized, based on the
SMALL value of their outstanding stock. Specifically, under normal circumstances, 0.95% 0.36% 1.31%
CAPITALIZATION at least 65% of the Portfolio's total assets will be invested in common
stocks issued by smaller, less well-known companies(with market
capitalizations of less than $1 billion) selected on the basis of
fundamental investment analysis. The small capitalization companies in
which the Portfolio primarily invests may offer significant appreciation
potential. However, smaller companies may carry more risk than larger companies.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST T. Rowe Price Small Company Value: seeks to provide long-term capital
growth by investing primarily in small-capitalization stocks that appear to
be undervalued. The Portfolio will normally invest at least 65% of its
total assets in stocks and equity-related securities of small companies ($1 0.90% 0.21% 1.11%
SMALL billion or less in market capitalization). Reflecting a value approach to
CAPITALIZATION investing, the Portfolio will seek the stocks of companies whose current stock
current stock prices do not appear to adequately reflect their underlying value
as measured by assets, earnings, cash flow or business franchises.Investing in
small companies involves greater risk of loss than is customarily associated
with more established companies.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
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<PAGE>
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
Invest- Other Total
STYLE/ INVESTMENT OBJECTIVES/POLICIES Ment Expenses Net
TYPE Manage- Annual
ment Expenses
Fee
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
- --------------- -------------------------------------------------------------------------------- ------------ --------- ---------
AST American Century International Growth: seeks capital growth. The
Portfolio will seek to achieve its investment objective by investing
primarily in equity securities of international companies that the
Sub-advisor believes will increase in value over time. Under normal
INTERNATIONAL conditions, the Portfolio will invest at least 65% of its assets in
EQUITY equity securities of issuers from at least three countries outside of
the United States. The Sub-advisor uses a growth investment 1.00% 0.65% 1.65%
strategy it developed that looks for companies with earnings and
revenue growth. The Sub-advisor will consider a number of other
factors in making investment selections, including the prospects
for relative economic growth among countries or regions, economic and
political conditions, expected inflation rates, currency exchange
fluctuations and tax considerations.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST Founders Passport: seeks capital growth. The Portfolio normally invests
primarily in securities issued by foreign companies that have market
capitalizations or annual revenues of $1 billion or less. These securities
INTERNATIONAL may represent companies in both established and emerging economies throughout
EQUITY the world. At least 65% of the Portfolio's total assets normally will be 1.00% 0.30% 1.30%
invested in foreign securities representing a minimum of three countries.
Foreign securities are generally considered to involve more risk than those
of U.S. companies, and securities of smaller companies are generally considered
to be riskier than those of larger companies.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST Janus Overseas Growth: seeks long-term growth of capital. The Portfolio
pursues its objective primarily through investments in common stocks of issuers
INTERNATIONAL from atleast five different countries, excluding the United States. Securities
EQUITY are generally selected without regard to any defined allocation among 1.00% 0.27% 1.27%
countries, geographic regions or industry sectors, or other similar selection
procedure.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST AIM International Equity: seeks capital growth. The Portfolio seeks
to meet its objective by investing, normally, at least 70% of its
assets in marketable equity securities of foreign companies that are
INTERNATIONAL listed on a recognized foreign securities exchange or traded in a 0.87% 0.26% 1.13%(11)
EQUITY foreign over-the-counter market. The Portfolio will normally invest in
a diversified portfolio that includes companies from at least four countries
outside the United States, emphasizing counties of Western Europe and the
Pacific Basin.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
AST T. Rowe Price International Equity: seeks total return from long-term
growth of capital and income, principally through investments in common
stocks of established, non-U.S. companies. Investments may be made solely
for capital appreciation or solely for income or any combination of both for
INTERNATIONAL the purpose of achieving a higher overall return. The Sub-advisor expects to 1.00% 0.25% 1.25%
EQUITY invest substantially all of the Portfolio's assets (with a minimum of 65%)
in established foreign companies. Geographic diversification will be wide,
including both developed and developing countries, and there will normally
be at least three different countries represented in the Portfolio.
- --------------- ---------------------------------------------------------------------------- ------------ --------- --------
----------------------------------------------------------------------------
Montgomery Variable Series - Emerging Markets: seeks capital appreciation,
which under normal conditions it seeks by investing at least 65% of its
total assets in equity securities of companies in countries having emerging 1.25% 0.56% 1.75(12)
EMERGING MARKETS markets. Under normal conditions, investments are maintained in at least
six emerging market countries at all times and no more than 35% of total
assets are invested in any one emerging market country.
- --------------- ---------------------------------------------------------------------------- ------------ --------- ---------
</TABLE>
1 The Total Net Annual Expenses reflect Fee Waivers and Expense Reimbursement
of 0.06%.
2 Prior to May 3, 1999, the Investment Manager had engaged Putnam Investment
Management, Inc. as Sub-Advisor for the Portfolio (formerly the AST Putnam
Balanced portfolio).
3 The Total Net Annual Expenses reflect Fee Waivers and Expense Reimbursement
of 0.06%.
4 Prior to May 3, 1999, the Investment Manager had engaged Putnam Investment
Management, Inc. as Sub-Advisor for the Portfolio (formerly the AST Putnam
Value Growth & Income portfolio).
5 The Total Net Annual Expenses reflect Fee Waivers and Expense Reimbursement
of 0.02%.
6 Prior to May 1, 1998, the Investment Manager had engaged Berger Associates,
Inc. as Sub-advisor for the Portfolio (formerly, the Berger Capital Growth
portfolio), for a total Investment Management fee payable at the annual
rate of .75% of the average daily nets assets of the Portfolio. As of May
1, 1998, the Investment Manager engaged Neuberger Berman Management
Incorporated as Sub-advisor for the Portfolio, for a total Investment
Management fee payable at the annual rate of 0.90% of the first $1 billion
of the average daily net assets of the Portfolio plus .85% of the
Portfolio's average daily net assets in excess of $1 billion. The
Management Fee in the above chart reflects the current Investment
Management fee payable to the Investment Manager.
7 Prior to May 1, 1998, the Investment Manager had engaged Federated
Investment Counseling as Sub-advisor for the Portfolio (formerly, the
Federated Utility Income portfolio), for a total Investment Management fee
payable at the annual rate of .75% of the first $50 million of the average
daily net assets of the Portfolio, plus .60% of the Portfolio's average
daily net assets in excess of $50 million. As of May 1, 1998, the
Investment Manager engaged Neuberger Berman Management Incorporated as
Sub-advisor for the Portfolio, for a total Investment Management fee
payable at the annual rate of 0.90% of the first $1 billion of the average
daily net assets of the Portfolio plus .85% of the Portfolio's average
daily net assets in excess of $1 billion. The Management Fee in the above
chart reflects the current Investment Management fee payable to the
Investment Manager.
8 Prior to January 1, 1999, the Investment Manager had engaged Robertson,
Stephens & Company Investment Management, L.P. as Sub-advisor for the
Portfolio (formerly the Robertson Stephens Value + Growth portfolio), and
the total Investment Management fee was at the annual rate of 1.00% of the
average daily net assets of the Portfolio. As of January 1, 1998, the
Investment Manager engaged OppenheimerFunds, Inc. as Sub-advisor for the
Portfolio, and the Investment Management fee is payable at the annual rate
of 0.90% of the first $1 billion of the average daily net assets of the
Portfolio, plus .85% of the Portfolio's average daily net assets in excess
of $1 billion. The Management Fee in the above chart reflects the current
Investment Management fee payable to the Investment Manager.
9 Prior to January 1, 1999, the Investment Manager had engaged Founders Asset
Management, LLC as Sub-Advisor for the Portfolio (formerly the Founders
Capital Appreciation portfolios).
10 This portfolio commenced operations in January 1999. The Total Net Annual
Expenses reflect Fee Waivers and Expense Reimbursement of 0.20%.
11 Prior to May 3, 1999, the Investment Manager had engaged Putnam Investment
Management, Inc. as Sub-Advisor for the Portfolio (formerly the AST Putnam
International Equity portfolio).
12 The Total Net Annual Expenses reflect Fee Waivers and Expense Reimbursement
of 0.06%.
ADDITIONAL PREMIUMS
[64] When may I contribute additional Premiums and how much may I pay? You may
send us additional Premiums at any time before the Insured's Age 100 and while
the Insured is alive unless the amount you have paid to-date equals the then
current maximum we permit. The amount you may pay is flexible within the limits
discussed below.
[65] When do you allocate additional Premiums? We allocate Net Premium resulting
from an additional Premium payment to the investment options as of the Valuation
Period we receive that Premium at our Office.
[66] How do you allocate additional Premiums among the investment options? We
allocate Net Premiums resulting from additional Premium payments according to
your most recent instructions to us. If you are participating in any allocation
programs we agree to support, such as any program of periodic rebalancing of
your Account Value among various investment options, we will allocate additional
Premiums in accordance with such a program unless we receive alternate
instructions.
[67] What is the most I may pay in total while I own a Policy? The maximum you
may pay changes. At any particular time, it is the amount which, at that time,
would not cause the Death Benefit to increase by more than the amount of the
Premium. We reserve the right to require new evidence satisfactory to us that
the Insured meets our underwriting standards before we agree to accept such
Premium. We discuss in the section on Loans what we do if there is any
outstanding Debt.
[68] What is the least amount I may pay at any one time? Unless you must make a
payment to keep the Policy in force, as discussed below, the minimum amount we
accept as an additional Premium depends on whether you have arranged to make
periodic withdrawals from a bank or other financial institution ($100), or
whether you make additional Premium payments directly ($500).
[69] Will you accept an additional Premium if it causes my Policy to be treated
as a MEC? We will not apply the portion of any Premium that we believe would
require us to treat your Policy as a MEC if it was not previously a MEC.
However, if you provide us with a notice In Writing that you understand that the
additional Premium will require us to treat your Policy as a MEC, we will accept
the Premium. If you do not give us such notice, we will return the difference
between the amount you submitted and any amount we apply as a Premium.
[70] How much may I pay as additional Premium if I don't want the Policy treated
as a MEC? If your Policy is not being treated as a MEC, the amount of additional
Premium you can pay at any time without your Policy subsequently being treated
as a MEC depends on the following factors:
(a) The Policy Year in which you want to make the payment and the
Premiums previously paid: The maximum additional Premium you can pay equals the
cumulative MEC Threshold Amount for the current Policy Year plus the prior
Policy Years, less the cumulative total amount previously paid. For example,
assume that as of the Policy Date, the MEC Threshold Amount was $10,000. Also
assume that you gave us $8,000 in each of the first three Policy Years. In the
fourth Policy Year, the maximum premium you can pay without the Policy being
treated as a MEC equals 4 X $10,000 ($40,000) minus 3 X $8,000 ($24,000), which
equals $16,000.
(b) The Specified Amount as of the time you make the payment: How much
you may pay without your Policy being treated as a MEC changes after any
increase or decrease to the Specified Amount. You may pay more after an increase
to the Specified Amount, subject to the maximum Premium rules noted above. You
may be able to pay less in additional Premium, or may not be able to pay any
further additional Premium after a change to the Specified Amount if you do not
want your Policy treated as a MEC. Whether you may pay anything further will
depend on the extent of the reduction to the Specified Amount.
(c) The amount of any proceeds contributed from any prior policy if you
purchased an Exchange Policy: Any proceeds contributed to an Exchange Policy
reduce the MEC Threshold Amount.
KEEPING THE POLICY IN FORCE
[71] What is the least amount I must pay so that the Policy doesn't end? We
cannot know in advance any minimum amount that will be required to keep the
Policy from ending without value. This is because: (1) the charges we deduct
each month are based on your Account Value, which may increase or decrease due
to the performance of the investment options; (2) we retain the right to
decrease or increase the current cost of insurance rates, subject to the
guaranteed maximums in the Policy; and (3) you may request and we may agree to a
change in the Death Benefit Option and/or the Specified Amount. If, on any
Monthly Processing Day, your Cash Value is insufficient to pay the current
deductions, a 61-day "grace period" begins unless the guaranteed continuation
provision is then applicable, as discussed below. If you enter the grace period,
we will send you a notice of how much you have to pay before the end of the
grace period to keep the Policy in force.
[72] Can the Policy end because of poor investment performance? The Policy could
enter the grace period because of poor investment performance combined with the
deduction of the Policy's fees and charges. If that were to occur and, by the
end of the grace period, there was not enough Cash Value to deduct the unpaid
charges, the Policy would end, unless the guaranteed continuation provision
applies.
[73] What is the guaranteed continuation provision? During the first ten Policy
Years, you may qualify for a guaranteed continuation provision if: (1) the total
amount of Premium you have paid is not less than a specified minimum for each
Policy Month times the number of Policy Months since the Policy Date; and (2)
there is no Debt. We call the specified minimum for each Policy Month the
"monthly continuation amount". This amount is 1/24th of the Maximum Annual
Assessable Premium. If you qualify for continuation under this provision, we
guarantee that your Policy will not enter into a grace period until the 10th
Policy Anniversary. NOTE: Where allowed by law, Policies issued to an Insured(s)
in a substandard risk class may not be eligible for the guaranteed continuation
provision.
For example, if the Maximum Annual Assessable Premium is $12,000, then the
monthly continuation amount is $500. If your Policy was in its 20th Policy
Month, the sum of the monthly continuation amounts would be $10,000. Therefore,
for purposes of this example, the guaranteed continuation provision would apply
in the 20th Policy Month if you had paid at least $10,000 to that point, and
would apply in the 21st Policy Month if you had paid at least $10,500 up to the
21st Policy Month, assuming there is no Debt. We adjust the monthly continuation
amount going forward after any increase or decrease to the Specified Amount in
the first 10 Policy Years.
The Death Benefit while the Policy is kept in force by this provision is the
Death Benefit in effect as of the Monthly Processing Day the grace period
otherwise would have begun.
TRANSFERS AND ALLOCATION SERVICES
[74] May I transfer Account Value between investment options? You may transfer
Account Value between investment options, but there are limits, as well as
potential charges, which are discussed above in the question "How much is the
transfer fee, and when must I pay it?" We permit the agent of record to make
transfers on your behalf unless you give us other instructions.
[75] Are there any limits on transfers? No transfers are permitted when the
Policy is in its "grace period." In order to maintain Account Value in an
investment option after transferring a portion of your Account Value out of that
investment option, we reserve the right to require that there be at least
$500.00 in such investment option after the transfer. If, as a result of the
transfer, there would be less than $500.00 in an investment option, we reserve
the right to transfer the remaining Account Value pro rata to the investment
option(s) that you were transferring to. We retain the right to impose a limit
of not more than 12 transfers per Policy Year, including transfers involving
Fixed Allocations. Unless such a limit is in effect, there is no limit on the
number of transfers that only involve variable investment options, or the number
of transfers from variable investment options to make Fixed Allocations.
However, we do limit each transfer from Fixed Allocations that are to be
effective on any day other than a Policy Anniversary to the greater of 25% of
the Account Value in your Fixed Allocations or $1,000. If you make such a
transfer from your Fixed Allocations, you cannot make another such transfer
until either 90 days has passed or the next Policy Anniversary occurs. We also
retain the right to refuse or limit transfers, either for one Owner or a group
of Owners, if we believe there may be adverse consequences for other Owners.
[76] What are 'allocation services'? Allocation services are programs that
automatically transfer Account Value between investment options. We may waive or
reduce the minimum amounts required for transfers noted above when your Policy
is participating in certain allocation programs, including, but not limited to,
static rebalancing programs. However, any limitations on transfers from Fixed
Allocations also apply if any allocation services are being utilized.
[77] What allocation services does American Skandia provide? We support dollar
cost averaging and static rebalancing. Dollar cost averaging allows you to
systematically transfer an amount periodically from one investment option to one
or more other investment options. With static rebalancing, you choose allocation
percentages for the Sub-accounts into which you allocate Account Value. However,
over time the performance of the variable investment options will differ,
causing your percentage allocations to shift. Periodically, we will "rebalance"
your allocations by transferring the appropriate amount from the "overweighted"
Sub-accounts to the "underweighted" Sub-accounts to return your allocations to
the percentages you request.
LOANS
[78] When can I take a loan? We offer loans using Account Value as collateral.
Where permitted by law, we reserve the right to limit the number of loans in
each Policy Year. The Insured must be alive when you take a loan (if there are
two Insureds, at least one must be alive when a loan is taken). Subject to our
rules, on the Policy Date we will establish a loan equal to the outstanding
indebtedness on previous life insurance exchanged for a Policy.
[79] Is this type of loan tax-free? A loan is not treated as a distribution and
does not result in any taxable income unless, for any reason, we believe your
Policy must be treated as a MEC.
[80] How much is available for a loan? The maximum amount available as a loan is
equal to 90% of your current Account Value less any applicable contingent
deferred sales charge. The minimum amount you may borrow is $1,000.
[81] What happens to the Account Value if I take a loan? When you take a loan,
we transfer Account Value equal to the amount of the loan into the Loan Account.
Account Value in the Loan Account is maintained in our general account. Unless
you give us different instructions, we move Account Value from the variable
investment options and the Fixed Allocations in the same proportion as your
Account Value in the investment options on the Valuation Date we move such
Account Value.
The impact of a loan on your Account Value may be positive or negative. At the
time a loan is taken, there is no impact. However, if the interest rate credited
to Account Value in the Loan Account is greater than what would be earned in the
investment options, the loan will have a positive impact on your Account Value.
If the interest rate credited to Account Value in the Loan Account is less than
what would be earned in the investment options, the loan will have a negative
impact on your Account Value. Because a loan can impact the Account Value, it
may also have an impact on the Minimum Required Death Benefit and, possibly, the
Death Benefit.
[82] What is the interest rate charged on any loan? You owe us interest on any
loan at the rate of 6.0% per year, compounded yearly, in arrears. Each Policy
Anniversary that the loan is not repaid, we add an amount equal to any unpaid
interest to your Debt.
[83] Does Account Value in the Loan Account earn interest? We credit interest to
Account Value in the Loan Account. We currently credit interest at the rate of
6.0% per year, compounded yearly, to the Account Value maintained in the Loan
Account. We may change this rate, but it will not be less than 5.5% per year,
compounded yearly.
[84] Once a loan is taken, does American Skandia ever require more 'collateral'
in the Loan Account? The Loan Account acts as collateral for any loans from us.
We monitor the Debt and the Account Value in the Loan Account to assure that
they are equal to each other. Therefore, on each Policy Anniversary we equalize
the Debt and the Account Value in the Loan Account. If the Debt is larger due to
outstanding loan interest, we transfer Account Value equal to the difference
pro-rata from the investment options and add it to the Loan Account.
We also match up the Debt and the Loan Account when you repay any portion of the
Debt. If the Account Value in the Loan Account then exceeds the Debt, we
transfer the excess pro-rata to the investment options which you are utilizing
at that time. Any amount then allocated to the fixed option will be treated as a
separate Fixed Allocation.
[85] When must I repay the loan? You are not required to repay the loan while
the Insured is alive, except if you request reinstatement if the Policy lapses.
[86] What happens at the Insured's death if I have not repaid the loan? If there
is any outstanding Debt when Death Proceeds are due, we subtract the Debt from
the Death Benefit as part of the calculation of the Death Proceeds.
[87] What happens if I repay any portion of the loan? The amount of Debt is
reduced by the amount of any loan repayment. Loan repayments reduce the amount
of principal and loan interest proportionately based on the ratio between
principal and loan interest as of the Valuation Date the loan repayment is
applied. We allocate any loan repayment to the variable investment and fixed
options pro-rata based on the Account Value in each investment option as of the
Valuation Period we receive your loan repayment. Any amount then allocated to
the fixed option will be treated as a separate Fixed Allocation.
[88] May I borrow from the Policy to make Premium payments? We will not accept
instructions to borrow from your Policy and use the loan to make Premium
payments.
[89] If I have an outstanding loan and send in money, do you use it to repay the
loan or do you consider it a Premium payment? We treat such funds as Premium or
loan repayment in accordance with your instructions, to the extent such
instructions comply with limitations such as the then applicable maximum Premium
for the Policy. If you send us funds and do not specify whether the money is to
be used as a Premium or to repay a loan, we treat the money as a Premium payment
to the extent such amount does not exceed the maximum Premium then allowed. We
will return to you any amount that exceeds the maximum Premium then allowed.
PARTIAL WITHDRAWALS
[90] When can I make a partial withdrawal? We allow partial withdrawals while
the Insured is alive, subject to the following limitations:
(a) In the first ten Policy Years, we permit a partial withdrawal if
such a withdrawal meets the requirements for a medically-related waiver, as
described in the section "Medically Related Waiver".
(b) After the tenth Policy Year, you may take up to the maximum partial
withdrawal amount as discussed below.
(c) At any time, you may withdraw amounts that cumulatively do not
exceed the total of any Exempt Premiums less the Exempt Premiums previously
withdrawn.
(d) No partial withdrawal may be less than $1,000.
[91] How much is available as a partial withdrawal? The maximum partial
withdrawal is up to 90% of the Cash Value. As a consequence of any partial
withdrawal, the Specified Amount must be at least a specified minimum and your
Cash Value must be at least $1,000. The specified minimum for Policies with one
Insured is $50,000. The specified minimum for Policies with two Insureds is
$100,000.
[92] What happens to the Account Value if I take a partial withdrawal? When you
take a partial withdrawal, we reduce your Account Value by an amount equal to
the amount of the partial withdrawal. Unless you give us different instructions,
we take Account Value from the variable investment options and the Fixed
Allocations in the same proportion as your Account Value in the investment
options on the Valuation Date we take such Account Value. If you have multiple
Fixed Allocations, amounts are taken on a "last in, first out" basis. Any
Account Value in the Loan Account is not available for a partial withdrawal.
[93] Is there a charge for a partial withdrawal? We charge a $25.00 transaction
fee on any partial withdrawal.
[94] Does a partial withdrawal affect the Death Benefit? A partial withdrawal
will have an immediate impact on the Death Benefit. A partial withdrawal always
reduces the Minimum Required Death Benefit, because the Minimum Required Death
Benefit is based on the Account Value. A partial withdrawal also results in a
reduction to the Guaranteed Minimum Death Benefit. If you are using Option B,
the Specified Amount is not reduced by a partial withdrawal. If you are using
Option A, the Specified Amount is reduced by the lesser of: (1) the amount of
the partial withdrawal, including the amount of the transaction fee; or (2) the
extent required such that, immediately after such reduction, the Specified
Amount equals the higher of the recalculated Minimum Required Death Benefit and
the recalculated Guaranteed Minimum Death Benefit.
If a partial withdrawal occurs on or after Age 100, it reduces the Death Benefit
by the exact amount of the partial withdrawal plus the partial withdrawal
transaction fee, because on or after that Age the Death Benefit equals the
Account Value.
SURRENDERS
[95] When can I surrender my Policy? You can surrender your Policy after the end
of the free-look period as long as the Insured is alive.
[96] What is paid out when a Policy is surrendered? If you surrender the Policy,
we will pay you the Cash Value.
ACCELERATED DEATH BENEFIT
[97] What is an accelerated death benefit? An accelerated death benefit is
pre-payment to the Owner of a portion of the Death Proceeds. The maximum we will
pay, before any reductions, is the lesser of 50% of the Death Benefit or
$250,000. The actual amount is reduced by a 12-month interest rate discount
(currently 6.0%) and a pro-rata portion of any Debt, based on the ratio by which
the Death Benefit is reduced as a result of the payment of the accelerated death
benefit. We reserve the right to change the interest rate discount percentage.
[98] When will American Skandia make such a payment? We will make such a payment
one time, where allowed by law, based on the Owner's request. The Insured may
not request such a payment unless the Insured is also the Owner. We only make
the payment if we receive all our requirements. Our requirements include, but
are not limited to, proof satisfactory to us In Writing that the Insured (the
last surviving Insured if there are two Insureds) became terminally ill, as
defined in your Policy: (a) at least 30 days after the Issue Date; or (b) as a
result of an accident that occurred after the Issue Date. To the extent
permitted by law, we will change our procedures in relation to this benefit or
the definition of terminally ill or any other applicable term in order to
maintain the tax-free status of any amounts paid out under this provision.
[99] What happens to the remaining benefits if American Skandia makes such a
payment? If we make such a payment, we first reduce the Policy's benefits and
any Debt proportionately. For example, if the Death Benefit before such a
payment is $200,000 and we make an accelerated Death Benefit payment of $50,000,
we reduce the Death Benefit by the ratio of the payment to the then current
Death Benefit, which in this case is by 25%, to $150,000. We also reduce the
Maximum Annual Assessable Premium. You should consult a tax advisor on the tax
consequences of such a payment. Please refer to Appendix H for a hypothetical
illustration of the accelerated death benefit provision.
MEDICALLY-RELATED WAIVER
[100] What is a medically-related waiver? A medically-related waiver is a waiver
of the contingent deferred sales charge that would otherwise apply to a
surrender. A medically-related waiver also is the only context in which we
permit a partial withdrawal in the first ten Policy Years of amounts other than
Exempt Premium. No contingent deferred sales charge or partial withdrawal
transaction fee applies to such a partial withdrawal. A medically-related waiver
is available by rider to the Policy and is currently at no charge to you.
[101] When would American Skandia waive the contingent deferred sales charge? We
will waive the contingent deferred sales charge, where allowed by law, if you
provide us with all of our requirements. Our requirements include, but are not
limited to, proof satisfactory to us In Writing that the Insured (the last
surviving Insured if there is more than one Insured) has continuously been
confined to a long term care facility, such as a nursing home or a hospital, as
defined in the rider, for at least a specified amount of time, and that such
confinement started after the Issue Date.
[102] Are there any restrictions on medically-related waivers? We will only
consider providing this benefit on amounts up to $500,000. The $500,000 maximum
will apply regardless of when taken, on any life insurance policy or annuity
contract issued by American Skandia where the Insured under this Policy is named
as the Insured, Owner or Annuitant under the other policy or contract. However,
once we have approved a medically-related waiver, should you choose to only take
a partial withdrawal, the waiver will apply to any subsequent withdrawals or
surrender, subject to the $500,000 cumulative limit. NOTE: Where allowed by law,
Policies issued to an Insured(s) in a substandard risk class may not be eligible
for a medically-related waiver.
[103] What happens to the remaining benefits if American Skandia makes such a
payment in connection with a partial withdrawal? A partial withdrawal during the
first ten Policy Years for which we grant a medically-related waiver has the
same impact on the remaining benefits that results from any other partial
withdrawal.
RISKS
[104] What are the risks, and who takes the risks? We bear the risk that, for
all the Policies we issue, when considered together, our expenses exceed our
charges, including the expense of providing the difference at death between the
Account Value and the Death Benefit. We also bear the investment and
reinvestment risk in providing interest crediting guarantees to Fixed
Allocations and to the Loan Account, as well as for any settlement options that
assume a fixed rate of return. We also bear the risk of having to waive monthly
charges we would otherwise deduct under the guaranteed continuation provision.
You bear the investment risk when allocating Account Value to any variable
investment option, since that will affect the amount available for any loans,
partial withdrawals or surrender. You bear a liquidity risk because you may not
make partial withdrawals except under limited circumstances and in limited
amounts during the first ten (10) Policy Years, although amounts are available
as loans. Any irrevocable beneficiary bears the risk as to the Death Proceeds,
which may be affected by investment performance of the investment options, the
age at which the Insured dies (if at such time the amount paid is based on the
Minimum Required Death Benefit), any loan or withdrawal activity by the Owner
prior to the Insured's death or payment of an accelerated death benefit.
OTHER RIGHTS
[105] Do I have any other rights if I buy a Policy? There are certain other
ownership rights you may exercise under a Policy. You may name one or more
Beneficiaries. You may make that designation "irrevocable," which means it
cannot be changed. If you do not designate the Beneficiary as irrevocable, you
retain the right to change the Beneficiary before the Insured dies. However, all
Beneficiary designations are subject to our acceptance, to the extent permitted
by law. You also may transfer, pledge or assign your Policy, which may trigger a
currently taxable event. You should only transfer, pledge or assign your Policy
after consulting with a competent tax advisor. You may exercise voting rights in
relation to the applicable Portfolios. Some of these rights may be limited
depending on the usage of your Policy, especially if we permit it to be held in
connection with certain retirement plans designed to be "qualified" plans under
the Code.
THE SEPARATE ACCOUNT
[106] What supports American Skandia's obligation to me if I buy a Policy? The
benefits provided by the Policy are our obligations. The assets supporting our
obligations equaling the Account Value allocated to the variable investment
options are held in our Separate Account F. We maintain assets in our general
account to support our obligations: (1) equal to the Account Value allocated to
the fixed option; (2) equal to the Account Value in the Loan Account; (3) for
the portion of the Death Proceeds greater than the Account Value; (4) for any
settlement option; and (5) for any other obligation we may have in relation to a
Policy.
The Separate Account was established under the laws of Connecticut. Assets in
the Separate Account may support obligations created in relation to the Policies
described in this Prospectus or other policies we offer. We are the legal owner
of the assets in the Separate Account. Income, gains and losses, whether or not
realized, are credited or charged to the Separate Account according to the terms
of the Policies and any other policies supported by the assets in the Separate
Account without regard to our other income, gains or losses or to the income,
gains or losses in any other of our separate accounts. We will maintain assets
in the Separate Account with a total market value at least equal to the reserves
and other liabilities we must maintain in relation to the life insurance
policies supported by such assets. These assets may only be charged with
liabilities that arise from such life insurance policies.
Separate Account F is registered with the U.S. Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940 as a unit
investment trust, which is a type of investment company. This does not involve
any supervision by the SEC of the investment policies, management or practices
of the Separate Account or of us. The Separate Account meets the definition of
"separate account" under the federal securities law.
The only Sub-accounts available to you are those offered in this Prospectus.
These Sub-accounts are available as investment options for other policies we
offer. Sub-accounts are permitted to invest in Portfolios we consider suitable.
The Portfolios in which the Sub-accounts invest are available to Sub-accounts of
other separate accounts, including separate accounts we use in relation to a
number of variable annuities. Separate accounts of other insurers and of various
qualified retirement plans may also invest in the Portfolios.
TAXES
[107] What are the taxes connected to the Policy? Federal and state tax laws, as
well as the interpretations of those laws, change. In addition, we do not know
your particular circumstances, which is one of a number of reasons we cannot
give you tax advice. You should consult a professional tax advisor for tax
advice for your particular situation. You should also be sure to read the
"Additional Tax Considerations" section appearing later in this Prospectus,
which includes, but is not limited to, information regarding estate taxes. What
we do provide are some brief summary answers to the following questions about
Federal income taxes.
[108] Will my Beneficiary pay taxes on the Death Proceeds? Under most
circumstances, the Beneficiary does not pay any income tax on the Death
Proceeds.
[109] Is gain in the Policy taxed every year? Generally, any gain in the Policy
is not taxed currently. However, the treatment of gain when a MEC is assigned is
discussed below.
[110] How are amounts that I receive before the Insured's death taxed? If your
Policy is not being treated as a MEC, amounts you receive as a partial
withdrawal or if you surrender the Policy are deemed for income tax purposes to
come first from your basis in the Policy. That means you may withdraw your basis
before you are considered to have withdrawn any gain. Any gain withdrawn is
taxed as ordinary income. Under most circumstances, taking a loan does not
result in any income tax consequences.
[111] Under what circumstances might the Policy or any amounts taken out be
treated differently for income tax purposes? The tax treatment of any life
insurance policy and any distribution while the Insured is alive will be
different if the policy is deemed: (1) not to qualify as life insurance under
the Code; or (2) to be a MEC. The Code defines life insurance in such a way as
to limit the amount of money that can be put into a life insurance policy and
receive the tax preferences provided for life insurance. We expect to administer
the Policies such that the death benefits will always receive the treatment
accorded life insurance death benefits under the Code. However, the Code has a
second, more restrictive limit as to how much money may be contributed if the
taxpayer is to receive all the tax benefits for life insurance policies under
the Code, such as tax-free loans and "first-in/first-out" treatment of
distributions. If the amount contributed violates this second, more restrictive
limit, the Policy will be treated as a MEC and will not receive many of the tax
preferences of life insurance policies. This second limit, sometimes known as
the "7-pay test", is defined as paying more during the first seven years of a
policy than the amount that would be paid if the policy provided for paid up
benefits after seven level annual premiums. Any changes to a Policy which is
considered, for tax purposes, to be a "material" change, including, but not
limited to, a change in the Specified Amount, require us to test the Policy
again for compliance with the 7-pay test based on the changes to the Policy.
[112] How is a "MEC" treated differently from other life insurance policies?
Some of the key ways in which a MEC is treated differently from other life
insurance policies are: (a) amounts you receive as a partial withdrawal, loan,
or if you surrender the Policy are deemed for income tax purposes to come first
from any gain in the tax year received ("last in/first out" treatment); (b)
distributions of gain before the taxpayer's age 59 1/2 are subject to a 10%
penalty unless an exception applies; and (c) assignments or pledges as
collateral for a loan are deemed a distribution. Gain subsequent to an
assignment or pledge may be treated as if it is distributed each year. However,
death benefits paid from a MEC are treated the same as from other life insurance
policies.
AVAILABLE INFORMATION
[113] How can I find out more about this offer? You first should review the rest
of this Prospectus for additional information. This Prospectus is part of the
registration statement we filed with the Securities and Exchange Commission
regarding this offering. Additional information on American Skandia and this
offering is available in that registration statement and accompanying exhibits.
You may obtain copies of these materials at the prescribed rates from the SEC's
Public Reference Section, 450 Fifth Street N.W., Washington, D.C., 20549. You
may inspect and copy the registration statement and the accompanying exhibits at
the SEC's public reference facilities at the above address, Room 1024, and at
the SEC's Regional Offices, 7 World Trade Center, New York, NY, and the Everett
McKinley Dirksen Building, 219 South Dearborn Street, Chicago, IL. These
documents, as well as documents incorporated by reference, may also be obtained
through the SEC's Internet Website (http://www.sec.gov) for this registration
statement as well as for other registrants that file electronically with the
SEC.
MISCELLANEOUS PROVISIONS AND ADDITIONAL DETAILS
The following sections provide additional information you should consider before
purchasing a Policy.
PROVIDING SERVICES TO YOU
You can reach us by telephone at 1-888-554-3348 or through our Internet Website
at http://www.americanskandia.com. We may require that you provide us with
proper identification before we release information about your Policy or accept
instructions received over the phone, the Internet or via any other electronic
means. We may require that you provide your Social Security or tax
identification number. We also may require you to present the personal
identification number ("PIN") we provide you after we issue a Policy. To the
extent permitted by law or regulation, neither we nor any person authorized by
us will be responsible for any claim, loss, liability or expense in connection
with a transaction, including but not limited to a transfer between investment
options, over the phone, the Internet or via any other electronic means.
However, this will only be the case if we or such authorized person acted: (a)
in good faith reliance that you authorized the transaction; and (b) on
reasonable procedures to identify you or your designee though a number of
verification methods. These methods may include recording phone conversations,
requesting Social Security or tax identification numbers, PINs, confirming
electronic mail addresses, or similar means. We may be liable for losses due to
unauthorized or fraudulent instructions should we not follow such reasonable
procedures.
We may require that you submit forms In Writing for certain transactions. We
require the written consent of all joint Owners for any transaction for which we
require the Owner's written consent.
DESIGNATIONS
Certain designations apply to a Policy - the Owner, the Insured and the
Beneficiary. All designations are subject to our rules and our acceptance. We
assume all designations, other than the Insured, are revocable unless you tell
us otherwise. You should consult with a competent tax advisor on the income tax,
estate and inheritance tax implications of various designations. You should also
consult with a competent legal advisor as to the implications of certain
designations in relation to an estate, bankruptcy and community property, where
applicable, as well as other matters.
We assume the Insured(s) is/are the Owner(s) unless you tell us otherwise. If
you name more than one Owner, all rights reserved to Owners are then held as
joint tenants with rights of survivorship unless you provide alternative
instructions. Naming someone to be the Owner other than the payor of the Premium
may have gift, estate or other tax implications.
We assume the Beneficiary is you or your estate unless you tell us otherwise.
You may name more than one primary and more than one contingent Beneficiary.
NET INVESTMENT FACTOR
For each Sub-account the initial Unit Price was $10.00. The Unit Price for each
subsequent Valuation Period is the net investment factor for that Valuation
Period, multiplied by the Unit Price for the immediately preceding Valuation
Period. The net investment factor is (1) divided by (2), less (3), where:
(1) is the net result of:
(a) the net asset value per share of the underlying Portfolio at
the end of the current Valuation Period plus the per share
amount of any dividend or capital gain distribution declared
and unpaid (accrued) by the Portfolio; plus or minus
(b) any per share charge or credit during the Valuation Period as
a provision for taxes attributable to the operation or
maintenance of that Sub-account.
(2) is the net result of:
(a) the net asset value per share of the underlying Portfolio at
the end of the preceding Valuation Period plus the per share
amount of any dividend or capital gain distribution declared and
unpaid (accrued) by the Portfolio; plus or minus
(b) any per share charge or credit during the preceding Valuation
Period as a provision for taxes attributable to the operation or
maintenance of the Sub-account.
(3) is the mortality and expense risk charges and the administration charge.
ALLOCATION PROGRAMS
We may provide administrative support for various programs that automatically
transfer Account Value between certain investment options at scheduled times.
These include dollar cost averaging and static rebalancing (periodic rebalancing
of Account Values between investment options to conform to preset percentages).
However, we only offer to support such allocation programs according to our
rules. While we are offering to support these programs as of the date of this
Prospectus, we do not guarantee to support these programs at all times.
We may also provide administrative support for various allocation programs that
may be made available by your financial professional. These may include various
asset allocation and market timing programs. We only offer to support such
programs according to our rules. These rules may include, but are not limited
to, receipt of your authorization In Writing permitting a financial professional
to make transfers between investment options on your behalf, or to enroll your
Policy in one of the allocation programs for which we provide administrative
support. We permit the agent of record to make transfers on your behalf unless
you give us other instructions.
Any financial professional you authorize may or may not be appointed by us as
our agent for the sale of Policies. However, we do not engage any agent of
record or any third parties to offer investment allocation services of any type,
so that persons or firms offering such services do so independent from any
agency relationship they may have with us for the sale of Policies. We therefore
take no responsibility for the investment allocations and transfers transacted
on your behalf by such third parties, in accordance with any allocation programs
employed by such third parties or any investment allocation recommendations made
by such third parties. While we offer support for a number of these programs as
of the date of this Prospectus, we do not support all such programs and do not
guarantee to always continue support for those programs we currently support or
may support in the future. We do not charge you for the administrative support
we provide to these third parties.
LIMITATIONS ON TRANSFERS
We retain the right to refuse transfers, either for one Owner or a group of
Owners, if we believe that: (a) excessive trading or a specific transfer request
or group of transfer requests may have a detrimental effect on Unit Prices or
the share prices of the Portfolios; or (b) we are informed by one or more of the
Portfolios that the purchase or redemption of shares is to be restricted because
of excessive trading or a specific transfer or group of transfers is deemed to
have a detrimental effect on the share prices of affected Portfolios. Without
limiting the above, the most likely scenario where either of the above could
occur would be if the aggregate amount of a trade or trades represented a
relatively large proportion of the total assets of a particular Portfolio. Under
such a circumstance, we will process transfers according to our rules then in
effect and provide notice if your transfer request was denied. If a transfer
request is denied, a new transfer request may be required.
DEATH DURING THE GRACE PERIOD
We deduct the unpaid charges from the Death Benefit when calculating the Death
Proceeds if the Insured dies during a grace period.
REINSTATEMENT
You may apply for reinstatement of the Policy if it lapses. We must receive this
application In Writing at our Office within five years of the date the lapse
occurred as measured from the end of the grace period. We may require evidence
of insurability satisfactory to us. In order to reinstate your Policy, you also
must pay us a reinstatement amount, including any applicable charges and any
Debt.
MATURITY
We currently do not require that the Cash Value of the Policy be paid out as of
any "maturity date". There is an assumed maturity date for purposes of
compliance with various state insurance requirements and for purposes of meeting
certain tests under the Code. Should we come to believe that the Cash Value must
be paid out as of the assumed maturity date in order to comply with state or
Federal requirements, then a Policy will mature as of the Policy Anniversary on
which the Insured is Age 100. If there are two Insureds, a Policy "matures" as
of the Policy Anniversary on which the younger Insured is Age 100 or would have
been Age 100 if the younger Insured is then deceased. If we must implement a
maturity date, we will pay out the Cash Value once the Policy matures. The
Policy will then end, and we will not have any more obligations under the
Policy. Certain rights and benefits under the Policy may be restricted after Age
100.
PRICING TRANSACTIONS
We "price" charges, transfers, distributions and payments on the date indicated
below. If such transactions are scheduled to occur on other than a Valuation
Day, we price such transactions as of the following Valuation Period:
(1) "Scheduled" transactions such as monthly deductions, transfers and
distributions are "priced" according to the Unit Price next computed
after the date such transactions are scheduled to occur. However, if a
transaction is "scheduled" to occur on a day other than a Valuation
Day, such transaction will be processed and priced on the next
Valuation Day following the scheduled transaction. "Scheduled"
transactions include, but are not limited to, all charges deducted on a
Monthly Processing Date, equalization of Debt and the Account Value in
the Loan Account on a Policy Anniversary, transfers under a dollar cost
averaging program or transfers previously scheduled with us at our
Office as part of any rebalancing, asset allocation or similar program,
or any program of scheduled distributions. However, we price scheduled
periodic payments which you authorize to be transferred from an account
at another financial institution for additional Premiums or loan
repayments as "unscheduled" transactions, because we cannot control the
administrative processing of the other financial institution.
(2) "Unscheduled" transactions such as transfers, loans or partial
withdrawals that are not subject to any medical waiver are "priced"
according to the Unit Price next computed after we receive the request
for such transactions at our Office. "Unscheduled" transfers include
any transfers processed in conjunction with any market timing program,
or transfers not previously scheduled with us at our Office pursuant to
any rebalancing, asset allocation or similar program which you employ
or you authorize to be employed on your behalf. "Unscheduled" transfers
received pursuant to an authorization to accept transfer instructions
using voice or data transmission over the phone are priced as of the
Valuation Period we receive the request at our Office for such
transactions. We price unscheduled payments sent to us as of the date
we receive such amounts at our Office. These include additional
Premiums, loan repayments, and payments to keep a Policy in effect
during a grace period or a reinstatement payment.
(3) We price surrenders, withdrawals subject to a medical waiver,
accelerated death benefit payments and payment of Death Proceeds as of
the date we receive at our Office all materials we require for such
transactions and such materials are satisfactory to us.
<PAGE>
DELAYING TRANSACTIONS
We may defer any distribution or transfer from a Fixed Allocation or any payment
under a fixed settlement option for a period not to exceed the lesser of six (6)
months or the period permitted by law. If we defer a distribution or transfer
from any Fixed Allocation or any payment under a settlement option for more than
thirty days, or less where required by law, we pay interest at the minimum rate
required by law but not less than 3% per year on the amount deferred. We may
defer payment of proceeds of any distribution from any Sub-account or any
transfer from a Sub-account for a period not to exceed seven (7) calendar days
from the date the transaction is effected. This is a delay in payment only, and
is not a delay in the pricing of any such distribution or transfer. Any deferral
period begins on the date such distribution or transfer would otherwise have
been transacted.
All procedures, including distributions, based on the valuation of the
Sub-accounts may be postponed during the period: (1) the New York Stock Exchange
is closed (other than customary holidays or weekends) or trading on the New York
Stock Exchange is restricted as determined by the SEC; (2) the SEC permits
postponement and so orders; or (3) the SEC determines that an emergency exists
making valuation or disposal of securities not reasonably practical.
VOTING
You have voting rights in relation to Account Value maintained in the
Sub-accounts. You do not have voting rights in relation to Account Value
maintained in any Fixed Allocations, in the Loan Account or in relation to fixed
payments under a settlement option.
We will vote shares of the Portfolios in which the Sub-accounts invest in the
manner directed by Owners, unless we, in our sole discretion, determine that we
are required by law or regulation to vote otherwise. Owners have voting rights
equal to the number of shares represented by the Sub-account Units attributable
to their Policy.
We will vote the shares attributable to assets held in the Sub-accounts solely
for us rather than on behalf of Owners, or any share as to which we have not
received instructions, in the same manner and proportion as the shares for which
we have received instructions. We will do so separately for each Sub-account
from various classes that may invest in the same underlying mutual fund
portfolio.
The number of votes for a Portfolio will be determined as of the record date for
such Portfolio as chosen by its board of trustees or board of directors, as
applicable. We will furnish Owners with proper forms and proxies to enable them
to instruct us how to vote.
You may instruct us how to vote on the following matters: (a) changes to the
board of trustees or board of directors, as applicable; (b) changing the
independent accountant; (c) approval of changes to the investment advisory
agreement or adoption of a new investment advisory agreement; (d) any change in
the fundamental investment policy; and (e) any other matter requiring a vote of
the shareholders.
With respect to approval of changes to the investment advisory agreement,
approval of a new investment advisory agreement or any change in fundamental
investment policy, only Owners maintaining Account Value as of the record date
in a Sub-account investing in the applicable Portfolio will instruct us how to
vote on the matter, pursuant to the requirements of Rule 18f-2 under the
Investment Company Act of 1940.
TRANSFERS, ASSIGNMENTS, PLEDGES
Generally, your rights in a Policy may be transferred, assigned or pledged at
any time. These transactions may be subject to income taxes and certain penalty
taxes, depending in part on whether your Policy is treated as a MEC. You may
transfer, assign or pledge your rights to another person at any time, prior to
the death upon which the Death Benefit is payable. You must request a transfer
or provide us a copy of the assignment In Writing. A transfer or assignment is
subject to our acceptance. We will not be deemed to know of or be obligated
under any assignment prior to our receipt and acceptance thereof. We assume no
responsibility for the validity or sufficiency of any assignment.
REPORTS
We send any statements and reports required by applicable law or regulation to
you at your last known address of record. You should therefore give us prompt
notice of any address change. We reserve the right, to the extent permitted by
law and subject to your consent, to provide any prospectus, prospectus
supplements, confirmations, statements and reports required by applicable law or
regulation to you through our Internet Website at http://www.americanskandia.com
or any other electronic means. We send a confirmation statement to you each time
an unscheduled transaction is made affecting Account Value. Such transactions
will generally include changes in investment allocation or transfers among
investment options, loans and loan repayments, partial surrenders or
withdrawals, and any charges associated with such unscheduled transactions. We
also send quarterly statements detailing the activity affecting your Policy
during the prior quarter, including all scheduled and unscheduled transactions.
To the extent permitted by law, some types of scheduled transactions will only
be confirmed on a quarterly basis. Such transactions will generally include
those pre-authorized charges deducted on the Monthly Processing Date. You may
request additional reports. We reserve the right to charge up to $50 for each
such additional report. You should review the information in these statements
carefully. You must report all errors or corrections to us at our Office
immediately to assure proper crediting to your Policy. For transactions that are
confirmed immediately, we assume all transactions are accurate unless you notify
us otherwise within 10 days after the date of the transaction. For transactions
that are only confirmed on the quarterly statement, we assume all transactions
are accurate unless you notify us within 10 days of the end of the calendar
quarter. We may also send you or make available electronically through our
Internet Website an annual report and a semi-annual report containing financial
statements for the applicable Sub-accounts, as of December 31 and June 30,
respectively.
INCONTESTABILITY
We may not contest the validity of a Policy after it has been in effect during
the Insured's lifetime for two years from the Issue Date. If there are two
Insureds, this applies to the lifetime of either Insured. If the Policy is
reinstated, to the extent permitted by law, we may not contest the validity of a
Policy after it has been in effect for two years from the date of the
reinstatement.
SUICIDE
If an Insured commits suicide within two years of the Policy Date (or whatever
maximum period is permitted under law) or the date of a reinstatement if allowed
by law, the Death Benefit will be the greater of: (a) Premium paid less any
outstanding Debt and any partial withdrawals; or (b) the Cash Value. All other
requirements as to calculation and payment of Death Proceeds will apply.
MISSTATEMENT
We will adjust the amount of the Death Proceeds to conform to the facts if the
age or gender of an Insured is incorrectly stated. We will do so as specified in
the Policy and as permitted by law.
BACKDATING
We do not currently permit backdating the Policy Date to a date earlier than the
Issue Date. However, we reserve the right to permit backdating in the future.
POLICY LOANS ON EXCHANGES
Subject to our rules, we will establish a loan on a Policy that you purchase as
part of an exchange that is not subject to current taxation in accordance with
Section 1035 of the Code. However, we will charge the premium tax and DAC tax on
the amount of this "inherited" loan as if it was received as Premium. For
purposes of determining the Assessable Premium, the amount of the inherited loan
will not be treated as commissionable Premium.
The amount of this inherited loan in your Policy when established will be equal
to the loan that was in effect before you surrendered your prior policy. As of
the Policy Date, your Account Value will reflect any transferred "Premium" plus
the amount of the inherited loan. That portion of your Account Value equal to
the inherited loan amount will be allocated to the Loan Account as collateral
for the loan. By reflecting the inherited loan amount in the Account Value, the
sum of the Specified Amount and the Account Value initially will be more under
Option B than it would be without the loan. Also, there will be a corresponding
increase in the Minimum Required Death Benefit. In addition, for purposes of
determining the Guaranteed Minimum Death Benefit, we will deem the "Premium" to
be the amounts paid plus the loan amount as of the Policy Date. All charges that
are calculated as a percentage of your Account Value will increase because the
Account Value will reflect the amount of the loan allocated to the Loan Account.
Withdrawals of amounts to pay loans transferred to an Exchange Policy from any
prior policy may have adverse taxable consequences. You should consult your tax
advisor before purchasing an Exchange Policy with the intention to make such a
withdrawal or before requesting such a withdrawal.
RESOLVING MATERIAL CONFLICTS
The Portfolios may be available to registered separate accounts offering either
or both life and annuity contracts of insurance companies not affiliated with
us. We also may offer life insurance policies and/or annuity contracts that
offer different variable investment options from those offered under this
Policy, but which invest in the same Portfolios. It is possible that differences
might arise between our Separate Account F and one or more accounts of other
insurance companies which offer a Portfolio as a Sub-account. It is also
possible that differences might arise between a Sub-account offered under this
Policy and variable investment options offered under different life insurance
policies or annuities we offer, even though such different variable investment
options invest in the same Portfolio. In some cases, it is possible that the
differences could be considered "material conflicts." Such a "material conflict"
could also arise due to changes in the law (such as state insurance law or
Federal tax law) which affect either these different life and annuity separate
accounts or differing life insurance policies and annuities. It could also arise
by reason of differences in voting instructions of persons with voting rights
under our policies and/or annuities and those of other companies, persons with
voting rights under annuities and those with rights under life policies, or
persons with voting rights under one of our life policies or annuities with
those under other life policies or annuities we offer. It could also arise for
other reasons. We will monitor events so we can identify how to respond to such
conflicts. If such a conflict occurs, we will take the necessary action to
protect persons with voting rights under our life policies or annuities
vis-a-vis those with rights under life policies or annuities offered by other
insurance companies. We will also take the necessary action to treat equitably
persons with voting rights under this Policy and any persons with voting rights
under any other life policy or annuity we offer.
MODIFICATION OF THE SEPARATE ACCOUNT
We reserve the right to do any or all of the following: (a) combine any
Sub-account(s) with any other Sub-account(s); (b) combine Separate Account F or
a portion thereof with other separate accounts; (c) deregister Separate Account
F under the Investment Company Act of 1940; (d) operate Separate Account F as a
management investment company under the Investment Company Act of 1940 or in any
other form permitted by law; (e) make changes required by any change in the
Securities Act of 1933, the Securities Exchange Act of 1934 or the Investment
Company Act of 1940; (f) make changes that are necessary to maintain the tax
status of your Policy under the Code; and (g) make changes required by any
change in other Federal or state laws relating to life insurance policies in
general or variable life insurance policies in particular.
We also may make additional Sub-accounts available to you from time to time.
These Sub-accounts will invest in Portfolios we believe to be suitable for the
Policy. We may or may not make a new Sub-account available to invest in any new
portfolio of one of the current underlying mutual funds should such a portfolio
be made available to Separate Account F.
We may eliminate Sub-accounts, combine two or more Sub-accounts or substitute
one or more new underlying mutual funds or portfolios for the one in which a
Sub-account is invested. Substitutions may be necessary if we believe a
Portfolio no longer suits the purpose of the Policy. This may happen due to a
change in laws or regulations, or a change in the investment objectives or
restrictions of a Portfolio, or because the Portfolio is no longer available for
investment, or for some other reason. We would obtain prior approval from the
insurance department of our state of domicile, if so required by law, before
making such a substitution, combination, deletion or addition. We also would
obtain prior approval from the SEC so long as required by law, and any other
required approvals before making such a substitution, combination, deletion or
addition.
ENTIRE CONTRACT
For any Policy issued, the entire contract between you and us includes the
Policy form and any of the following which may be attached to the Policy: riders
or endorsements, the copy of any Application and endorsements. All statements
made in any Application are deemed to be representations and not warranties. No
statement is used to void a Policy or defend a claim unless it is contained in
any Application attached to the Policy.
Only our President, one of our Vice Presidents or our Secretary may change or
waive any provisions of a Policy. Any change or waiver must be In Writing. To
the extent permitted by law, we are not bound by any promises or representations
made by or to any other person.
ADDITIONAL TAX CONSIDERATIONS
The following is a brief summary of certain Federal tax laws as they are
currently interpreted. No one can be certain that the laws or interpretations
will remain unchanged or that agencies or courts will always agree as to how the
tax law or regulations are to be interpreted. This discussion is not intended as
tax advice. You may wish to consult a professional tax advisor for tax advice as
to your particular situation.
Our Taxation: We are taxed as a life insurance company under Part I, subchapter
L, of the Code.
Treatment as "life insurance": The Policy was designed to qualify as a life
insurance contract under the Code. All terms and provisions of the Policy shall
be construed in a manner which is consistent with that design. In order to
qualify as a life insurance contract for federal income tax purposes and to
receive the tax treatment normally accorded life insurance under federal tax
law, a policy must satisfy certain requirements established by the Code. We
believe the Policy satisfies the applicable requirements. If we determine that a
Policy does not satisfy the applicable requirements we may take appropriate
action to conform the Policy to the applicable requirements. This action may
require making certain changes to your Policy. We will notify you before making
any such changes.
As life insurance, under most circumstances, the Beneficiary does not pay any
Federal income tax on the Death Proceeds. As a non-MEC, under most
circumstances: (a) any gain in the Policy is not taxed currently; and (b) any
amounts you receive as a partial withdrawal or if you surrender the Policy are
deemed for income tax purposes to come first from your basis in the Policy, with
any gain withdrawn taxed as ordinary income; and (c) if you assign or pledge any
portion of the Policy, the transaction is not treated as a distribution subject
to taxation.
Treatment as a "modified endowment contract": The tax treatment of the Policy
and any distribution while the Insured is alive will be different if the Policy
is deemed to be a MEC. Some of the key ways in which a MEC is treated
differently from other life insurance Policies are: (a) amounts your receive as
a partial withdrawal, loan, or if you surrender the Policy are deemed for income
tax purposes to come first from any gain in the tax year received; (b)
distributions of gain before the taxpayer's age 59 1/2 are subject to a 10%
penalty unless an exception applies; and (c) assignments or pledges as
collateral for a loan are deemed a taxable distribution to the extent of any
gain.
Exchanges: Section 1035 of the Code permits certain income tax-free exchanges of
life insurance policies. You must comply with various requirements for such
exchanges to be treated as tax-free, which include, but are not limited to: (a)
the need for the insured to be the same individual or individuals before and
after the exchange; (b) the need for the owner(s) to be the same before and
after the exchange; and (c) the need to have the Debt on a Policy as of the date
all premium is received equal to any outstanding indebtedness on the life
insurance exchanged for the Policy.
Transfers between investment options: Transfers between investment options are
not subject to taxation. The Treasury Department may promulgate guidelines under
which a variable life insurance policy will not be treated as life insurance for
tax purposes if persons with ownership rights have excessive control over the
investments underlying such a policy. Such guidelines may or may not address the
number of investment options or the number of transfers between investment
options offered. It is not known whether such guidelines, if in fact
promulgated, would have retroactive effect. It is also not known what effect, if
any, such guidelines may have on transfers between the investment options of the
Policy offered pursuant to this Prospectus. We will take any action, including
modifications to your Policy or the Sub-accounts, required to comply with such
guidelines if promulgated.
Generation skipping transfers: Under the Code certain taxes may be due when all
or part of a life insurance policy is transferred to or a death benefit is paid
to an individual two or more generations younger than the policy holder. These
generation-skipping transfers generally include those subject to federal estate
or gift tax rules. There is an aggregate $1 million exemption from tax on all
such transfers. We may be required to determine whether a transaction is a
direct skip as defined in the Code and the amount of the resulting tax. We will
deduct from your Policy or from any applicable payment treated as a direct skip
any amount of tax we are required to pay. You should consult with competent tax
counsel for more information on generation skipping transfers.
Diversification: Section 817(h) of the Code provides that a variable life
insurance policy, in order to qualify as life insurance, must have an
"adequately diversified" segregated asset account (including investments in a
mutual fund by the segregated asset account of insurance companies). The
Treasury Department's regulations prescribe the diversification requirements for
variable life insurance policy. We believe the underlying mutual fund portfolios
should comply with the terms of these regulations.
Withholding: Section 3405 of the Code provides for Federal income tax
withholding on the portion of a distribution which is includible in the gross
income of the recipient. Amounts to be withheld depend upon the nature of the
distribution. However, under most circumstances a recipient may elect not to
have income taxes withheld or have income taxes withheld at a different rate by
filing a completed election form with us. A withholding form may be required.
Accelerated Death Benefits: Payments of amounts that otherwise would be payable
to the Beneficiary as a result of an Insured's death can qualify for the same
tax-free treatment as death benefits if certain requirements are met. These
include requirements regarding the terminal illness of the Insured. We believe
payments under the provisions of the accelerated death benefit of the Policy
will meet the requirements of the Code and the regulations in order to qualify
as tax-free payments.
Continuing the Policy Beyond the Implied Maturity Date: We believe that a Policy
will continue to be treated as life insurance and, if applicable, as a MEC, if
it remains in force beyond the Policy's assumed maturity date. However, this tax
treatment is not certain, so you should consult your tax advisor before taking
this step. If the Policy is not treated as life insurance after such date, gain
in the Policy may no longer be taxed deferred, and all or a portion of the Death
Proceeds may be taxable to the Beneficiary.
Survivorship Policies: The Code does not directly address how certain features
of a policy paying on the death of a surviving insured should be treated. We
believe such a Policy should be treated as other life insurance policies, but
there is some uncertainty as to whether that is the case. If the surviving
Insured is an Owner, the Death Proceeds payable as a result of the death of the
last surviving Insured generally will be treated as part of the Owner's estate
for purposes of the Federal estate tax. If the surviving Insured was not an
Owner, the replacement cost of the Policy would be included in the estate of the
Owner upon his or her death and Death Proceeds payable as a result of the death
of the surviving Insured are includible in the person's estate if the proceeds
are payable to or for the benefit of that person's estate or if the surviving
Insured held incidents of ownership in the Policy within three years prior to
death.
Substandard Risk Classes: The Code provides limited guidance on the proper tax
treatment of policies issued on a substandard basis (i.e. those in a substandard
risk class). The Code limits the amount we can charge for mortality costs and
other expenses we use when we calculate whether your Policy qualifies as life
insurance under the Code. We are required to base our calculations on reasonable
mortality and other charges reasonably expected to be paid. We believe that the
charges used for your Policy should meet the current requirement for
"reasonableness." However, we reserve the right to make changes to the current
and guaranteed mortality charges and net single premium factors if new
regulations are issued that require a change to ensure that your Policy
qualifies as life insurance under the Code. This could result in a change in
your Death Benefit.
Other Taxes: Amounts received or deemed received from a Policy that may be
subject to Federal income tax also may be subject to state income taxes. The
fair market value of a Policy or the Death Proceeds may be included under
certain circumstances in an estate for purposes of state inheritance taxes or
Federal estate taxes. Federal estate and gift taxes are integrated for various
purposes. An unlimited marital deduction may apply for purposes of Federal
estate and gift taxes, which would allow deferral of taxes until the death of
the surviving spouse.
SAFEKEEPING OF THE ASSETS
We maintain the assets of the Separate Account and those in our general account.
The assets of the Separate Account are segregated from those in our general
account.
REGULATION
We are organized as a Connecticut stock life insurance company, and are subject
to Connecticut law governing insurance companies. We are regulated and
supervised by the Connecticut Commissioner of Insurance. By March 1 of every
year, we must prepare and file an annual statement, in a form prescribed by the
Connecticut Insurance Department, which covers our operations for the preceding
calendar year, and must prepare and file our statement of financial condition as
of December 31 of such year. The Commissioner and his or her agents have the
right at all times to review or examine our books and assets. A full examination
of our operations will be conducted periodically according to the rules and
practices of the National Association of Insurance Commissioners ("NAIC"). We
are subject to the insurance laws and various Federal and state securities laws
and regulations and to regulatory agencies, such as the Securities and Exchange
Commission and the Connecticut Banking Department, which administer those laws
and regulations.
We can be assessed up to prescribed limits for policyholder losses incurred by
insolvent insurers under the insurance guaranty fund laws of most states. We
cannot predict or estimate the amount any such future assessments we may have to
pay. However, the insurance guaranty laws of most states provide for deferring
payment or exempting a company from paying such an assessment if it would
threaten such insurer's financial strength.
Several states, including Connecticut, regulate insurers and their affiliates
under insurance holding company laws and regulations. This applies to us and our
affiliates. Under such laws, inter-company transactions, such as dividend
payments to parent companies and transfers of assets, may be subject to prior
notice and approval, depending on factors such as the size of the transaction in
relation to the financial position of the companies.
Currently, the federal government does not directly regulate the business of
insurance. However, federal legislative, regulatory and judicial decisions and
initiatives often have significant effects on our business. Types of changes
that are most likely to affect our business include changes to: (a) the taxation
of life insurance companies; (b) the tax treatment of insurance products; (c)
the securities laws, particularly as they relate to insurance and annuity
products; (d) the "business of insurance" exemption from many of the provisions
of the anti-trust laws; (e) the barriers preventing most banks from selling or
underwriting insurance: and (f) any initiatives directed toward improving the
solvency of insurance companies. We would also be affected by federal
initiatives that have impact on the ownership of or investment in United States
companies by foreign companies or investors.
LEGAL MATTERS
The law firm of Werner & Kennedy has passed on the legal matters relating to the
offering of these Policies.
LEGAL PROCEEDINGS
As of the date of this Prospectus, neither we nor American Skandia Marketing,
Incorporated were involved in any litigation outside of the ordinary course of
business, and know of no material claims.
EXPERTS
The consolidated financial statements of American Skandia Life Assurance
Corporation at December 31, 1998 and 1997, and for the years then ended, and the
financial statements of American Skandia Life Assurance Corporation Variable
Account F at December 31, 1998 and for the period June 26, 1998 through December
31, 1998, appearing in this Prospectus and Registration Statement have been
audited by Ernst & Young LLP, independent auditors. The consolidated financial
statements of American Skandia Life Assurance Corporation for the year ended
December 31, 1996 has been audited by Deloitte & Touche LLP, independent
auditors. The audits, as set forth in their respective reports thereon appearing
elsewhere herein, are included in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
William H. Strong, Vice President, FSA, MAAA, has approved the hypothetical
illustration included in this Prospectus and Registration Statement. We have
included them relying on his opinion that they are reasonable.
DISTRIBUTION OF THIS OFFERING
American Skandia Marketing, Incorporated ("ASM, Inc."), a wholly-owned
subsidiary of American Skandia Investment Holding Corporation, acts as the
principal underwriter of the Policies. ASM was incorporated under the laws of
the State of Delaware on September 8, 1987. ASM, Inc.'s principal business
address is One Corporate Drive, Shelton, Connecticut 06484. ASM, Inc. is a
broker-dealer registered with the SEC under the 1934 Act and a member of the
National Association of Securities Dealers, Inc.
("NASD").
ASM, Inc. will enter into distribution agreements with certain broker-dealers
registered under the Securities and Exchange Act of 1934 or with entities which
may otherwise offer the Policies that are exempt from such registration. In
addition, ASM, Inc. may offer Policies directly to potential purchasers. The
maximum initial commission to be paid on premiums received is 7.0% and a portion
of compensation may be paid from time to time based on all or a portion of
either the Account Value or the Cash Value. We reserve the right to base
commissions from time-to-time on the investment options chosen by Owners,
including investment options that may be deemed our "affiliates" or "affiliates"
of ASM, Inc. under the Investment Company Act of 1940.
As of the date of this Prospectus, we expect to pay an on-going service fee in
relation to providing certain statistical information upon request by Owners
about the investment options and the Portfolios. We may make the fee payable to
the service providers based on either the Account Value or Cash Value of
Policies. Under most circumstances, we will engage the broker-dealer of record
for your Policy, or the entity of record if such entity could offer Policies
without registration as a broker-dealer (i.e. certain banks), to be your
resource for the statistical information, and to be available upon your request
to both provide and explain such information to you. The broker-dealer of record
or the entity of record is the firm which sold you the Policy, unless later
changed. Some portion of the fee we pay for this service may be payable to your
representative.
We may structure on-going sales compensation and the on-going service fees such
that no fee is payable based on the value in Fixed Allocations. If that were to
occur, it is possible that your representative may receive on-going service fee
compensation, but only in relation to value maintained in variable investment
options.
From time to time we may promote the sale of our products such as the Policies
offered pursuant to this Prospectus through programs of non-cash rewards to
registered representatives of participating broker-dealers. We may withdraw or
alter such promotions at any time.
To the extent permitted, we may advertise certain information regarding the
performance of the investment options that does not take into consideration the
effect of the deductions for taxes, the cost of insurance charges or the
contingent deferred sales charge. This performance information may help you
review the performance of the investment options and provide a basis for
comparison between the Policy's investment options. This information may be less
useful when comparing the performance of the investment options with the
performance of investment options provided in other variable life policies
because each plan of life insurance will have its own applicable charges. This
information is even less useful in comparing performance to that of any savings
or investment vehicle, rather than variable life insurance.
Performance information on the Sub-accounts is based on past performance only
and is no indication of future performance. Actual performance will depend on
the type, quality and, for some of the Sub-accounts, the maturities of the
investments held by the Portfolios and upon prevailing market conditions and the
response of the Portfolios to such conditions. Actual performance will also
depend on changes in the expenses of the Portfolios. Such changes are reflected,
in turn, in the Sub-accounts which invest in such Portfolios. In addition, the
charges deducted from your Account Value and those assessed against each
Sub-account will affect performance.
Certain of the Portfolios existed prior to the inception of the Sub-accounts
available under the Policy. To the extent permitted by applicable law,
performance quoted in advertising regarding such Sub-accounts may indicate
periods during which the Portfolios have been in existence but prior to the
inception of the Sub-account(s) or the initial offering of the Policies. Such
performance is considered hypothetical historical performance because the
Sub-accounts did not exist during the period the performance was achieved. Such
hypothetical historical performance is calculated using the same assumptions
employed in calculating historical performance since inception of the
Sub-accounts. Any such historical performance will be based on assumptions.
These include assumptions regarding: (a) the Age, tobacco usage class, risk
class and gender, where applicable, of an Insured or Insureds; (b) the amount
and timing of Premium payments, the Specified Amount, the Death Benefit option
and the Policy Date; and (c) assumptions about a lack of transfers, loans, loan
repayments and withdrawals as well as no changes to the Specified Amount and
Death Benefit option during the period for which performance is quoted.
American Skandia Life Assurance Corporation may advertise its rankings and/or
ratings by independent financial ratings services. Such rankings may help you in
evaluating our ability to meet our obligations in relation to Fixed Allocations,
pay Death Proceeds, make payments under any settlement options or administer
Policies. Such rankings and ratings do not reflect or relate to the performance
of Separate Account F or the underlying Portfolios.
ILLUSTRATIONS
In Appendix A we provide examples of the kind of hypothetical illustrations
available to help you better understand how a Policy works. In that Appendix, we
also provide information on how you may obtain additional hypothetical
illustrations. In Appendix H, we provide hypothetical illustrations of how
exercise of the accelerated death benefit provision affects the values of a
Policy.
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS AND DIRECTORS
Our executive officers, directors and certain significant employees, their ages,
positions with us and principal occupations are indicated below. The immediately
preceding work experience is provided for officers that have not been employed
by us or an affiliate for at least five years as of the date of this Prospectus.
<S> <C> <C> <C>
Name/ Position with American Skandia
Age Life Assurance Corporation Principal Occupation
Robert M. Arena Vice President, Vice President,
30 Director of Product Director of Product Management:
Management American Skandia Life
Assurance Corporation
Mr. Arena joined us in 1995. He previously held an internship position with KPMG
Peat Marwick in 1994 and the position of Group Sales Representative with Paul
Revere Insurance from October, 1990 to August, 1993.
Gordon C. Boronow* President and President and
45 Deputy Chief Executive Officer Deputy Chief Executive Officer:
Director (since July, 1991) American Skandia Life
Assurance Corporation
Nancy F. Brunetti Executive Vice President Executive Vice President,
36 Director (since February, 1996) Chief Logistics Officer:
American Skandia Life
Assurance Corporation
Malcolm M. Campbell Director (since July, 1991) Director of Operations and
42 Chief Actuary, Assurance and
Financial Services Division:
Skandia Insurance Company Ltd.
Jan R. Carendi* Chief Executive Senior Executive Vice President and
53 Officer and Member of Executive Management Group:
Chairman of the Skandia Insurance Company Ltd.
Board of Directors
Director (since May, 1988)
Y.K. Chan Senior Vice President and Senior Vice President and
41 Chief Information Officer Chief Information Officer:
American Skandia Life
Assurance Corporation
Mr. Chan joined us in 1999. He previously held the position of Chief Information
Officer with E.M. Warburg Pincus from January 1995 until April 1999 and the
position of Vice President, Client Server Application Development from January
1991 until January 1995.
Lincoln R. Collins Executive Vice President Executive Vice President,
37 Director (since February, 1996) Chief Operating Officer
American Skandia Life
Assurance Corporation
Henrik Danckwardt Director (since July, 1991) Director of Finance
44 and Administration,
Assurance and Financial
Services Division:
Skandia Insurance Company Ltd.
Wade A. Dokken Director (since July, 1991) President and Deputy
38 Chief Executive Officer:
American Skandia Marketing, Incorporated
Larisa Gromyko Director of Compliance Director of Compliance:
52 American Skandia Life
Assurance Corporation
Brian L. Hirst Vice President, Vice President,
50 Corporate Actuary Corporate Actuary:
American Skandia Life
Assurance Corporation
Mr. Hirst joined us in 1996. He previously held the positions of Vice President
from 1993 to 1996 and Second Vice President from 1987 to 1992 at Allmerica
Financial.
N. David Kuperstock Vice President, Vice President,
46 Product Development Product Development:
American Skandia Life
Assurance Corporation
Thomas M. Mazzaferro Executive Vice President and Executive Vice President and
45 Chief Financial Officer, Chief Financial Officer:
Director (since September, 1994) American Skandia Life
Assurance Corporation
Gunnar J. Moberg Director (since October, 1994) Director - Marketing and Sales,
43 Assurances and Financial
Services Division:
Skandia Insurance Company Ltd.
David R. Monroe Senior Vice President, Senior Vice President,
36 Treasurer and Treasurer and
Corporate Controller Corporate Controller:
American Skandia Life
Assurance Corporation
Mr. Monroe joined us in 1996. He previously held positions of Assistant Vice
President and Director at Allmerica Financial from August, 1994 to July, 1996
and Senior Manager at KPMG Peat Marwick from July, 1983 to July, 1994.
Polly Rae Vice President Vice President,
36 Key Account Operations Key Account Operations:
American Skandia Life
Assurance Corporation
Rodney D. Runestad Vice President Vice President:
48 American Skandia Life
Assurance Corporation
Anders O. Soderstrom Executive Vice President Executive Vice President:
38 Director (since September, 1994) American Skandia Life
Assurance Corporation
William H. Strong Vice President, Vice President,
55 Product Innovation Product Innovation
American Skandia Life
Assurance Corporation
Mr. Strong joined us in 1997. He previously held the position of Vice President
with American Financial Systems from June 1994 to October 1997 and the position
of Actuary with Connecticut Mutual Life from June 1965 to June 1994.
Amanda C. Sutyak Executive Vice President Vice President:
40 Director (since July, 1991) American Skandia
Marketing, Incorporated
C. Ake Svensson Director (since December, 1994) Vice President,
47 Business Development:
American Skandia Investment
Holding Corporation
Mr. Svensson joined us in 1994. He previously held the position of Senior Vice
President with Nordenbanken.
Mary Toumpas Director of Advertising Compliance Vice President and
47 Compliance Director:
American Skandia
Marketing, Incorporated
Ms. Toumpas joined us in 1997. She previously held the position of Assistant
Vice President with Chubb Life/Chubb Securities.
Bayard F. Tracy Director (since September, 1994) Senior Vice President,
50 National Sales Manager:
American Skandia
Marketing, Incorporated
Jeffrey M. Ulness Vice President, Vice President,
37 Product Management Product Management:
American Skandia Life
Assurance Corporation
Mr. Ulness joined us in 1994. He previously held the positions of Counsel at
North American Security Life Insurance Company from March, 1991 to July, 1994
and Associate at LeBoeuf, Lamb, Leiby, Green and MacRae from January, 1990 to
March 1991.
- --------
* Trustees of American Skandia Trust, one of the underlying mutual funds in
which the Sub-accounts offered pursuant to this Prospectus invest.
</TABLE>
<PAGE>
AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholder of
American Skandia Life Assurance Corporation
Shelton, Connecticut
We have audited the consolidated statements of financial condition of American
Skandia Life Assurance Corporation (the "Company" which is a wholly-owned
subsidiary of Skandia Insurance Company Ltd.) as of December 31, 1998 and 1997,
and the related consolidated statements of income, shareholder's equity, and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
American Skandia Life Assurance Corporation at December 31, 1998 and 1997, and
the consolidated results of its operations and cash flows for the years then
ended in conformity with generally accepted accounting principles.
/s/ Ernst & Young, LLP
- ----------------------
Hartford, Connecticut
February 20, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
American Skandia Life Assurance Corporation
Shelton, Connecticut
We have audited the accompanying consolidated statements of operations,
shareholder's equity, and cash flows of American Skandia Life Assurance
Corporation and subsidiary (a wholly-owned subsidiary of Skandia Insurance
Company Ltd.) for the year ended December 31, 1996. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated results of operations and cash flows of
American Skandia Life Assurance Corporation and subsidiary for the year ended
December 31, 1996 in conformity with generally accepted accounting principles.
/s/Deloitte & Touche LLP
- ------------------------
New York, New York
March 10, 1997
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE
CORPORATION (a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands)
AS OF DECEMBER 31,
1998 1997
---------- ----------
ASSETS
Investments:
Fixed maturities - at amortized cost $ 8,289 $ 9,367
Fixed maturities - at fair value 141,195 108,323
Investment in mutual funds - at fair value 8,210 6,711
Policy loans 569 687
---------- -----------
Total investments 158,263 125,088
Cash and cash equivalents 77,525 81,974
Accrued investment income 2,880 2,442
Fixed assets 328 356
Deferred acquisition costs 721,507 546,703
Reinsurance receivable 4,191 6,343
Receivable from affiliates 1,161 1,911
Income tax receivable - current - 1,048
Income tax receivable - deferred 38,861 26,174
State insurance licenses 4,413 4,563
Other assets 3,744 2,524
Separate account assets 17,835,400 12,095,164
---------- ----------
Total assets $18,848,273 $12,894,290
=========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities:
Reserve for future contractowner benefits $ 37,508 $ 43,204
Policy reserves 25,545 24,415
Drafts outstanding 28,941 19,278
Accounts payable and accrued expenses 91,827 71,190
Income tax payable 6,657 -
Payable to affiliates - 584
Future fees payable to parent 368,978 233,034
Short-term borrowing 10,000 10,000
Surplus notes 193,000 213,000
Separate account liabilities 17,835,400 12,095,164
---------- ----------
Total liabilities 18,597,856 12,709,869
---------- ----------
Shareholders Equity:
Common stock, $80 par, 25,000 shares
authorized, issued and outstanding 2,000 2,000
Additional paid-in capital 179,889 151,527
Retained earnings 64,993 30,226
Accumulated other comprehensive income 3,535 668
---------- ----------
Total shareholder's equity 250,417 184,421
---------- ----------
Total liabilities and shareholder's equity $18,848,273 $12,894,290
=========== ===========
See notes to consolidated financial statements.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
CONSOLIDATED STATEMENTS OF INCOME
(in thousands)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
<S> <C> <C> <C>
1998 1997 1996
------------ ------------- ------------
REVENUES
Annuity and life insurance charges and fees $186,211 $121,158 $69,780
Fee income 50,839 27,593 16,420
Net investment income 11,130 8,181 1,586
Premium income 874 920 125
Net realized capital gains 99 87 134
Other 387 75 6
------------ ------------- ------------
Total revenues 249,540 158,014 88,051
------------ ------------- ------------
BENEFITS AND EXPENSES
Benefits:
Annuity benefits 558 2,033 613
Change in annuity policy reserves 1,053 37 635
Cost of minimum death benefit reinsurance 5,144 4,545 2,867
Return credited to contractowners (8,930) (2,018) 673
------------ ------------- ------------
(2,175) 4,597 4,788
------------ ------------- ------------
Expenses:
Underwriting, acquisition and
other insurance expenses 167,640 90,346 49,737
Amortization of state insurance licenses 150 150 150
Interest expense 41,004 24,895 10,791
------------ ------------- ------------
208,794 115,391 60,678
------------ ------------- ------------
Total benefits and expenses 206,619 119,988 65,466
------------ ------------- ------------
Income from operations before income taxes 42,921 38,026 22,585
Income tax expense (benefit) 8,154 10,478 (4,038)
------------ ------------- ------------
Net income $34,767 $27,548 $26,623
============ ============= ============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(in thousands)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
<S> <C> <C> <C>
1998 1997 1996
----------- ----------- -----------
Common stock:
Beginning and ending balance $2,000 $ 2,000 $ 2,000
Additional paid in capital:
Beginning balance 151,527 122,250 81,875
Additional contributions 28,362 29,277 40,375
----------- ----------- ----------
Ending balance 179,889 151,527 122,250
Retained earnings (deficit):
Beginning balance 30,226 2,678 (23,945)
Net income 34,767 27,548 26,623
----------- ----------- ----------
Ending balance 64,993 30,226 2,678
Accumulated other comprehensive income:
Beginning balance 668 (584) (217)
Other comprehensive income 2,867 1,252 (367)
----------- ----------- -----------
Ending balance 3,535 668 (584)
----------- ----------- -----------
Total shareholder's equity $250,417 $184,421 $126,345
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
<S> <C> <C> <C>
1998 1997 1996
------------ ------------ ------------
Cash flow from operating activities:
Net income $ 34,767 $ 27,548 $ 26,623
Adjustments to reconcile net income to net cash
used in operating activities:
Increase in policy reserves 1,130 3,176 1,852
Amortization of bond discount 101 73 27
Amortization of insurance licenses 150 150 150
Change in receivable from/payable to affiliates 166 (1,321) 540
Change in income tax receivable/payable 7,704 (2,172) 1,688
Increase in other assets (1,191) (604) (661)
Increase in accrued investment income (438) (483) (1,764)
Decrease/(increase) in reinsurance receivable 2,152 (268) (676)
Increase in deferred acquisition costs, net (174,804) (190,969) (153,918)
Increase in income tax receivable - deferred (14,242) (9,631) (16,903)
Increase in accounts payable and accrued expenses 20,637 5,719 32,323
Increase in drafts outstanding 9,663 6,245 13,032
Change in foreign currency translation, net (22) (34) (77)
Realized gain on sale of investments (99) (87) (134)
------------ ------------ ------------
Net cash used in operating activities (114,326) (162,658) (97,898)
------------ ------------ ------------
Cash flow from investing activities:
Purchase of fixed maturity investments (31,828) (28,905) (96,813)
Proceeds from sale and maturity of fixed maturity investments 4,049 10,755 8,947
Purchase of shares in mutual funds (7,158) (5,595) (2,160)
Proceeds from sale of shares in mutual funds 6,086 1,415 1,274
Decrease/(increase) in policy loans 118 (528) (104)
------------ ------------ ------------
Net cash used in investing activities (28,733) (22,858) (88,856)
------------ ------------ ------------
Cash flow from financing activities:
Capital contributions from parent 8,362 29,277 40,375
Surplus notes - - 110,000
Increase in future fees payable to Parent 135,944 185,922 47,112
Net (withdrawals from)/deposits to contractowner accounts (5,696) 6,959 5,753
------------ ------------ ------------
Net cash provided by financing activities 138,610 222,158 203,240
------------ ------------ ------------
Net increase/(decrease) in cash and cash equivalents (4,449) 36,642 16,486
------------ ------------ ------------
Cash and cash equivalents at beginning of year 81,974 45,332 28,846
------------ ------------ ------------
Cash and cash equivalents at end of year $ 77,525 $ 81,974 $ 45,332
============ ============ ============
Supplemental cash flow disclosure:
Income taxes paid $ 14,651 $ 22,308 $ 11,177
============ ============ ============
Interest paid $ 35,588 $ 16,916 $ 7,095
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements
December 31, 1998
1. ORGANIZATION AND OPERATION
American Skandia Life Assurance Corporation (the "Company") is a
wholly-owned subsidiary of American Skandia Investment Holding
Corporation (the "Parent"); whose ultimate parent is Skandia Insurance
Company Ltd., a Swedish corporation.
The Company develops long-term savings and retirement products which
are distributed through its affiliated broker/dealer company, American
Skandia Marketing, Incorporated ("ASM"). The Company currently issues
variable life insurance and variable, fixed, market value adjusted and
immediate annuities for individuals, groups and qualified pension
plans.
The Company has 99.9% ownership in Skandia Vida, S.A. de C.V. which is
a life insurance company domiciled in Mexico. This Mexican life
insurer is a start up company with expectations of selling long-term
savings products within Mexico. Skandia Vida, S.A. de C.V. had total
shareholder's equity of $4,724,000 and $1,509,000 as of December 31,
1998, and 1997, respectively, and has generated net losses of
$2,514,000, $1,438,000 and $781,000 for the years ended December 31,
1998, 1997 and 1996, respectively.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Reporting
The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles. Intercompany transactions and balances have been
eliminated in consolidation.
Certain reclassifications have been made to prior year amounts
to conform with the current year presentation.
B. New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standard
("SFAS") 133, "Accounting for Derivative Instruments and
Hedging Activities," which establishes accounting and
reporting standards for derivative instruments and hedging
activities. The standard requires that all derivatives be
carried on the balance sheets at fair value. The Company is
currently not involved in derivatives or hedging instruments
as part of its investment strategy. The Company is evaluating
the potential impact of a change in accounting for derivative
instruments embedded in certain products it issues. This
standard is effective for years beginning after June 15, 1999.
In March 1998, the American Institute of Certified Public
Accountants issued Statement of Position ("SOP") 98-1,
"Accounting for the Costs of Software Developed or Obtained
for Internal Use," which provides guidance for determining
when computer software developed or obtained for internal use
should be capitalized. It also provides guidance on the
amortization of capitalized costs and the recognition of
impairment. The Company is evaluating the potential impact of
adopting this SOP, which is effective for fiscal years
beginning after December 15, 1998.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
C. Investments
The Company has classified its fixed maturity investments as
either held-to-maturity or available-for-sale. Investments
classified as held-to-maturity are investments that the
Company has the ability and intent to hold to maturity. Such
investments are carried at amortized cost. Those investments
which are classified as available-for-sale, are carried at
fair value and changes in unrealized gains and losses are
reported as a component of other comprehensive income.
The Company has classified its mutual fund investments as
available-for-sale. Such investments are carried at fair value
and changes in unrealized gains and losses are reported as a
component of other comprehensive income.
Policy loans are carried at their unpaid principal balances.
Realized gains and losses on disposal of investments are
determined by the specific identification method and are
included in revenues.
D. Cash Equivalents
The Company considers all highly liquid time deposits,
commercial paper and money market mutual funds purchased with
a maturity of three months or less to be cash equivalents.
E. State Insurance Licenses
Licenses to do business in all states have been capitalized
and reflected at the purchase price of $6,000,000 less
accumulated amortization. The cost of the licenses is being
amortized over 40 years.
F. Fixed Assets
Fixed assets consisting of furniture, equipment and leasehold
improvements are carried at cost and depreciated on a
straight-line basis over a period of three to five years.
Accumulated depreciation amounted to $142,000 and $96,000 at
December 31, 1998 and 1997, respectively. Depreciation expense
for the years ended December 31, 1998, 1997 and 1996 was
$46,000 and $63,000 and $29,000, respectively.
G. Income Taxes
The Company is included in the consolidated federal income tax
return of Skandia U.S. Investment Holding Corporation and its
subsidiaries. In accordance with the tax sharing agreement,
the federal and state income tax provision is computed on a
separate return basis, as adjusted for consolidated items,
such as net operating loss carryforwards.
Income taxes are provided in accordance with SFAS 109,
"Accounting for Income Taxes", which requires the asset and
liability method of accounting for deferred taxes. The object
of this method is to recognize an asset and liability for the
expected future tax effects due to temporary differences
between the financial reporting and the tax basis of assets
and liabilities, based on enacted tax rates and other
provisions of the tax law.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
H. Recognition of Revenue and Contract Benefits
Revenues for variable annuity contracts consist of charges
against contractowner account values for mortality and expense
risks, administration fees, surrender charges and an annual
maintenance fee per contract. Benefit reserves for variable
annuity contracts represent the account value of the contracts
and are included in the separate account liabilities.
Revenues for market value adjusted annuity contracts consist
of separate account investment income reduced by benefit
payments and changes in reserves in support of contractowner
obligations, all of which are included in return credited to
contractowners. Benefit reserves for these contracts represent
the account value of the contracts, and are included in the
general account liability for future contractowner benefits to
the extent in excess of the separate account liabilities.
Revenues for immediate annuity contracts without life
contingencies consist of net investment income. Revenues for
immediate annuity contracts with life contingencies consist of
single premium payments recognized as annuity considerations
when received. Benefit reserves for these contracts are based
on the Society of Actuaries 1983 Table-a with assumed interest
rates that vary by issue year. Assumed interest rates ranged
from 6.25% to 8.25% and 6.5% to 8.25% at December 31, 1998 and
December 31, 1997, respectively.
Revenues for variable life insurance contracts consist of
charges against contractowner account values for the
maintenance and expense fees, cost of insurance fees and
surrender charges. Benefit reserves for variable life
insurance contracts represent the account value of the
contracts and are included in the separate account
liabilities.
I. Deferred Acquisition Costs
The costs of acquiring new business, which vary with and are
primarily related to the production of new business, are being
deferred net of reinsurance. These costs include commissions,
costs of contract issuance, and certain selling expenses that
vary with production. These costs are being amortized
generally in proportion to expected gross profits from
surrender charges, policy and asset based fees and mortality
and expense margins. This amortization is adjusted
retrospectively and prospectively when estimates of current
and future gross profits to be realized from a group of
products are revised.
Details of the deferred acquisition costs and related
amortization for the years ended December 31, are as follows:
(in thousands) 1998 1997 1996
---- ---- ----
Balance at beginning of year $546,703 $355,734 $201,816
Acquisition costs deferred
during the year 261,432 243,476 171,253
Acquisition costs amortized
during the year (86,628) (52,507) (17,335)
--------- --------- ---------
Balance at end of year $721,507 $546,703 $355,734
======== ======== ========
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
J. Reinsurance
The Company cedes reinsurance under modified co-insurance
arrangements. The reinsurance arrangements provide additional
capacity for growth in supporting the cash flow strain from
the Company's variable annuity and variable life insurance
business. The reinsurance is effected under quota share
contracts.
The company reinsures certain mortality risks relating to the
variable life insurance product, as well as, the guaranteed
minimum death benefit feature in the variable annuity product.
At December 31, 1998 and 1997, in accordance with the
provisions of a modified coinsurance agreement, the Company
accrued $1,976,000 and $0, respectively, for amounts
receivable from favorable reinsurance experience on a block of
variable annuity business.
K. Translation of Foreign Currency
The financial position and results of operations of the
Company's Mexican subsidiary are measured using local currency
as the functional currency. Assets and liabilities of the
subsidiary are translated at the exchange rate in effect at
each year-end. Statements of income and shareholder's equity
accounts are translated at the average rate prevailing during
the year. Translation adjustments arising from the use of
differing exchange rates from period to period are reported as
a component of other comprehensive income.
L. Fair Values of Financial Instruments
The methods and assumptions used to determine the fair value
of financial instruments are as follows:
Fair values of fixed maturities with active markets are based
on quoted market prices. For fixed maturities that trade in
less active markets, fair values are obtained from an
independent pricing service.
Fair values of investments in mutual funds are based on quoted
market prices.
The carrying value of cash and cash equivalents approximates
fair value due to the short-term nature of these investments.
The carrying value of short-term borrowing approximates fair
value due to the short-term nature of these liabilities.
Fair values of certain financial instruments, such as future
fees payable to parent and surplus notes are not readily
determinable and are excluded from fair value disclosure
requirements.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
M. Separate Accounts
Assets and liabilities in Separate Accounts are included as
separate captions in the consolidated statements of financial
condition. Separate Account assets consist principally of long
term bonds, investments in mutual funds, short-term securities
and cash and cash equivalents, all of which are carried at
fair value. The investments are managed predominately through
the Company's investment advisory affiliate, American Skandia
Investment Services, Inc. ("ASISI"), utilizing various fund
managers as sub-advisors. The remaining investments are
managed by independent investment firms. The contractowner has
the option of directing funds to a wide variety of mutual
funds. The investment risk on the variable portion of a
contract is borne by the contractowner. A fixed option with a
minimum guaranteed interest rate is also available. The
Company is responsible for the credit risk associated with
these investments.
Included in Separate Account liabilities are $771,195,000 and
$773,067,000 at December 31, 1998 and 1997, respectively,
relating to annuity contracts for which the contractowner is
guaranteed a fixed rate of return. Separate Account assets of
$771,195,000 and $773,067,000 at December 31, 1998 and 1997,
respectively, consisting of long term bonds, short term
securities, transfers due from general account and cash and
cash equivalents are held in support of these annuity
contracts, pursuant to state regulation.
N. Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires that
management make estimates and assumptions that affect the
reported amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. The more significant
estimates and assumptions are related to deferred acquisition
costs and involve policy lapses, investment return and
maintenance expenses. Actual results could differ from those
estimates.
3. COMPREHENSIVE INCOME
As of January 1, 1998 the Company adopted SFAS 130, "Reporting
Comprehensive Income," which sets standards for the reporting and
display of comprehensive income and its components; however, the
adoption of this Statement had no impact on the Company's financial
position or net income. SFAS 130 requires unrealized gains and losses
on the Company's available-for-sale securities and foreign currency
translation adjustments, which prior to adoption were reported
separately in shareholder's equity, to be included in other
comprehensive income. Prior year financial statements have been
reclassified to conform to the requirements of SFAS 130.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
The components of comprehensive income, net of tax, for the years ended
December 31, 1998, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(in thousands) 1998 1997 1996
---- ---- ----
Net income $34,767 $27,548 $26,623
Other comprehensive income:
Unrealized investment gains/(losses) on
available for sale securities 2,751 1,288 (331)
Reclassification adjustment for realized
losses/(gains) included in investment income 138 (14) (99)
--------- --------- ----------
Net unrealized gains/(losses) on securities 2,889 1,274 (430)
Foreign currency translation (22) (22) 64
---------- ---------- ----------
Other comprehensive income 2,867 1,252 (367)
-------- -------- ----------
Comprehensive income $37,634 $28,800 $26,257
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
The components of accumulated other comprehensive income, net of tax,
as of December 31, 1998 and 1997 were as follows:
<S> <C> <C>
(in thousands) 1998 1997
---- ----
Unrealized investment gains $3,843 $954
Foreign currency translation (308) (286)
-------- -----
Accumulated other comprehensive income $3,535 $668
====== ====
</TABLE>
4. INVESTMENTS
The amortized cost, gross unrealized gains/losses and estimated fair
value of available-for-sale and held-to-maturity fixed maturities and
investments in mutual funds as of December 31, 1998 and 1997 are shown
below. All securities held at December 31, 1998 are publicly traded.
Investments in fixed maturities as of December 31, 1998 consisted of
the following:
<TABLE>
<CAPTION>
(in thousands) Held-to-Maturity
<S> <C> <C> <C> <C>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U.S. Government
obligations $3,774 $57 $ - $3,831
Corporate securities 4,515 34 - 4,549
------- ---- ----- -------
Totals $8,289 $91 $ - $8,380
====== === ==== ======
</TABLE>
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
<TABLE>
<CAPTION>
(in thousands) Available-for-Sale
<S> <C> <C> <C> <C>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U.S. Government
obligations $ 17,399 $ 678 $ - $ 18,077
Obligations of
state and political
subdivisions 253 7 - 260
Corporate securities 117,774 5,160 76 122,858
--------- ------- ---- -----------
Totals $135,426 $5,845 $76 $141,195
======== ====== === ========
</TABLE>
The amortized cost and fair value of fixed maturities, by contractual
maturity, at December 31, 1998 are shown below.
<TABLE>
<CAPTION>
(in thousands) Held-to-Maturity Available-for-Sale
<S> <C> <C> <C> <C>
Amortized Fair Amortized Fair
Cost Value Cost Value
Due in one year or less $4,927 $4,982 $ - $ -
Due after one through five years 3,362 3,398 54,789 56,850
Due after five through ten years - - 80,637 84,345
---------- ---------- ---------- ----------
Total $8,289 $8,380 $135,426 $141,195
====== ====== ======== ========
</TABLE>
Investments in fixed maturities as of December 31, 1997 consisted of
the following:
<TABLE>
<CAPTION>
(in thousands) Held-to-Maturity
<S> <C> <C> <C> <C>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U.S. Government
obligations $3,790 $71 $9 $3,852
Obligations of
state and political
subdivisions 50 - - 50
Corporate
securities 5,527 2 19 5,510
------- ----- ---- -------
Totals $9,367 $73 $28 $9,412
====== === === ======
</TABLE>
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
<TABLE>
<CAPTION>
(in thousands) Available for Sale
------------------
<S> <C> <C> <C> <C>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----
U.S. Government
obligations $ 14,999 $ 202 $ - $ 15,201
Obligations of
state and political
subdivisions 202 - - 202
Corporate
securities 91,470 1,505 55 92,920
---------- ------- ---- ----------
Totals $106,671 $1,707 $55 $108,323
======== ====== === ========
</TABLE>
Proceeds from sales of fixed maturities during 1998, 1997 and 1996 were
$999,000, $5,056,000 and $8,732,000, respectively. Proceeds from
maturities during 1998, 1997 and 1996 were $3,050,000, $5,700,000 and
$215,000, respectively.
The cost, gross unrealized gains/losses and fair value of investments
in mutual funds at December 31, 1998 and 1997 are shown below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(in thousands) Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
------ ---------- ---------- ------
1998 $8,068 $416 $274 $8,210
====== ==== ==== ======
1997 $6,896 $ 43 $228 $6,711
====== ==== ==== ======
</TABLE>
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
Net realized investment gains (losses) were as follows for the years
ended December 31:
<TABLE>
<CAPTION>
(in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Fixed maturities:
Gross gains $ - $ 10 $ -
Gross losses (1) - -
Investment in mutual funds:
Gross gains 281 116 140
Gross losses (181) (39) (6)
------- ------ -----
Totals $ 99 $ 87 $134
====== ===== ====
</TABLE>
5. NET INVESTMENT INCOME
The sources of net investment income for the years ended December 31,
1998, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
(in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Fixed maturities $ 8,534 $6,617 $ 836
Cash and cash equivalents 1,717 1,153 685
Investment in mutual funds 1,013 554 144
Policy loans 45 28 5
----------- --------- ----------
Total investment income 11,309 8,352 1,670
Investment expenses 179 171 84
---------- -------- ---------
Net investment income $11,130 $8,181 $1,586
======= ====== ======
</TABLE>
6. INCOME TAXES
The significant components of income tax expense (benefit) for the
years ended December 31, are as follows:
<TABLE>
<CAPTION>
(in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Current tax expense $22,384 $20,108 $12,865
Deferred tax benefit (14,230) (9,630) (16,903)
-------- --------- --------
Total income tax expense (benefit) $ 8,154 $10,478 ($ 4,038)
======== ======= =======
</TABLE>
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
The tax effects of significant items comprising the Company's deferred
tax balance as of December 31, 1998 and 1997, are as follows:
<TABLE>
<CAPTION>
(in thousands) 1998 1997
---- ----
<S> <C> <C>
Deferred tax liabilities:
Deferred acquisition costs ($210,731) ($159,766)
Payable to reinsurers (25,585) (25,369)
Policy fees (859) (656)
Unrealized investment gains and losses (2,069) (514)
----------- -------------
Total (239,244) (186,305)
--------- ---------
Deferred tax assets:
Net separate account liabilities 225,600 175,872
Reserve for future contractowner benefits 13,128 15,121
Other reserve differences 25,335 10,534
Deferred compensation 9,619 7,187
Surplus notes interest 3,375 2,729
Foreign exchange translation 166 154
Other 882 882
------------ ------------
Total 278,105 212,479
--------- ---------
Income tax receivable - deferred $ 38,861 $ 26,174
========= =========
</TABLE>
Management believes that based on the taxable income produced in the
current year and the continued growth in annuity products, the Company
will produce sufficient taxable income in the future to realize its
deferred tax asset. As such, the Company released the deferred tax
valuation allowance of $9,325,000 in 1996.
The income tax expense was different from the amount computed by
applying the federal statutory tax rate of 35% to pre-tax income from
continuing operations as follows:
<TABLE>
<CAPTION>
(in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Income (loss) before taxes
Domestic $45,435 $39,464 $23,366
Foreign (2,514) (1,438) (781)
--------- --------- ---------
Total 42,921 38,026 22,585
Income tax rate 35% 35% 35%
--------- --------- ---------
Tax expense at federal
statutory income tax rate 15,022 13,309 7,905
Tax effect of:
Change in valuation allowance - - (9,325)
Dividend received deduction (9,085) (4,585) (2,266)
Losses of foreign subsidiary 880 503 273
Meals and entertainment 487 340 43
State income taxes 673 577 356
Other 177 334 (1,024)
-------- ------- ---------
Income tax expense (benefit) $ 8,154 $10,478 ($ 4,038)
======== ======= =========
</TABLE>
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
7. RECEIVABLE FROM/PAYABLE TO AFFILIATES
Certain operating costs (including personnel, rental of office space,
furniture, and equipment) have been charged to the Company at cost by
American Skandia Information Services and Technology Corporation
("ASIST"), an affiliated company; and likewise, the Company has charged
operating costs to ASISI. The total cost to the Company for these items
was $7,722,000, $5,572,000 and $11,581,000 for the years ended December
31, 1998, 1997 and 1996, respectively. Income received for these items
was $1,355,000, $3,225,000 and $1,148,000 for the years ended December
31, 1998, 1997 and 1996, respectively. Amounts receivable from
affiliates under these arrangements were $98,000 and $549,000 as of
December 31, 1998 and 1997, respectively. Amounts payable to affiliates
under these arrangements were $551,000 and $264,000 as of December 31,
1998 and 1997, respectively.
8. FUTURE FEES PAYABLE TO PARENT
In a series of transactions with its Parent, the Company sold certain
rights to receive future fees and contract charges expected to be
realized on variable portions of designated blocks of deferred annuity
contracts. The effective dates and issue periods these transactions
cover are as follows:
Closing Effective Contract Issue
Transaction Date Date Period
----------- -------- --------- -----------------
1996-1 12/16/96 9/1/96 1/1/94 - 6/30/96
1997-1 7/23/97 6/1/97 3/1/96 - 4/30/97
1997-2 12/30/97 12/1/97 5/1/95 - 12/31/96
1997-3 12/30/97 12/1/97 5/1/96 - 10/31/97
1998-1 6/30/98 6/1/98 1/1/97 - 5/31/98
1998-2 11/10/98 10/1/98 5/1/97 - 8/31/98
1998-3 12/30/98 12/1/98 7/1/96 - 10/31/98
In connection with these transactions, the Parent issued collateralized
notes in a private placement which are secured by the rights to receive
future fees and charges purchased from the Company.
Under the terms of the Purchase Agreements, the rights sold provide for
the Parent to receive a percentage of future mortality and expense
charges and contingent deferred sales charges, after reinsurance,
expected to be realized over the remaining surrender charge period of
the designated contracts (6 to 8 years). The percentage is 100% on
transactions 1997-3 and 1998-3 and 80% on all other transactions.
The Company did not sell the right to receive future fees and charges
after the expiration of the surrender charge period.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
The proceeds from the sales have been recorded as a liability and are
being amortized over the remaining surrender charge period of the
designated contracts using the interest method. The present value of
the transactions as of the respective effective date was as follows:
<TABLE>
<CAPTION>
(in thousands)
Present
<S> <C> <C> <C>
Transaction Discount Rate Value
----------- ------------- -------
1996-1 7.5% $50,221
1997-1 7.5% 58,767
1997-2 7.5% 77,552
1997-3 7.5% 58,193
1998-1 7.5% 61,180
1998-2 7.0% 68,573
1998-3 7.0% 40,128
</TABLE>
Payments representing fees and charges in the aggregate amount of
$69,226,000, $22,250,000 and $0, were made by the Company to the Parent
for the years ended December 31, 1998, 1997 and 1996, respectively.
Related interest expense of $22,978,000, $6,842,000 and $42,000 has
been included in the statement of income for the years ended December
31, 1998, 1997 and 1996, respectively.
Expected payments of future fees payable to Parent as of December 31,
1998 are as follows:
Year Ended
(in thousands) December 31, Amount
------------ ----------
1999 $ 64,520
2000 68,403
2001 67,953
2002 64,238
2003 54,382
2004 35,601
2005 12,441
2006 1,440
----------
Total $ 368,978
==========
The Commissioner of the State of Connecticut has approved the sale of
future fees and charges; however, in the event that the Company becomes
subject to an order of liquidation or rehabilitation, the Commissioner
has the ability to stop the payments due to the Parent under the
Purchase Agreement subject to certain terms and conditions.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
9. LEASES
The Company leases office space under a lease agreement established in
1989 with ASIST. The lease expense for 1998, 1997 and 1996 was
$3,588,000, $2,428,000 and $1,583,000, respectively. Future minimum
lease payments per year and in aggregate as of December 31, 1998 are as
follows:
(in thousands) 1999 $ 3,619
2000 5,070
2001 5,070
2002 5,070
2003 5,070
2004 and thereafter 40,271
--------
Total $ 64,170
========
10. RESTRICTED ASSETS
To comply with certain state insurance departments' requirements, the
Company maintains cash, bonds and notes on deposit with various states.
The carrying value of these deposits amounted to $3,747,000 and
$3,757,000 as of December 31, 1998, and 1997, respectively. These
deposits are required to be maintained for the protection of
contractowners within the individual states.
11. RETAINED EARNINGS AND DIVIDEND RESTRICTIONS
Statutory basis shareholder's equity was $285,553,000 and $294,586,000
at December 31, 1998 and 1997, respectively.
The statutory basis net loss was $13,152,000, $8,970,000 and $5,405,000
for the years ended December 31, 1998, 1997 and 1996, respectively.
Under various state insurance laws, the maximum amount of dividends
that can be paid to shareholders without prior approval of the state
insurance department is subject to restrictions relating to statutory
surplus and net gain from operations. At December 31, 1998, no amounts
may be distributed without prior approval.
12. EMPLOYEE BENEFITS
The Company has a 401(k) plan for which substantially all employees are
eligible. Under this plan, the Company contributes 3% of salary for all
participating employees and matches employee contributions at a 50%
level up to an additional 3% Company contribution. Company
contributions to this plan on behalf of the participants were
$2,115,000, $1,220,000 and $850,000 for the years ended December 31,
1998, 1997 and 1996, respectively.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
The Company has a deferred compensation plan, which is available to the
internal field marketing staff and certain officers. Company
contributions to this plan on behalf of the participants were $342,000,
$270,000 and $245,000 for the years ended December 31, 1998, 1997 and
1996, respectively.
The Company and an affiliate cooperatively have a long-term incentive
plan under which units are awarded to executive officers and other
personnel. The program consists of multiple plans, with a new plan
instituted each year. Generally, participants must remain employed by
the Company or its affiliates at the time such units are payable in
order to receive any payments under the plan. The accrued liability
representing the value of these units was $21,372,000 and $15,720,000
as of December 31, 1998 and 1997, respectively. Payments under this
plan were $2,407,000, $1,119,000 and $602,000 for the years ended
December 31, 1998, 1997, and 1996, respectively.
13. REINSURANCE
The effect of reinsurance for the years ended December 31, 1998, 1997
and 1996 is as follows:
<TABLE>
<CAPTION>
(in thousands) 1998
----
Policy Change in Return Credited
Charges and Fees Policy Reserves to Contractowners
---------------- --------------- -----------------
<S> <C> <C> <C>
Gross $215,425 $ 691 ($8,921)
Ceded 29,214 (362) 9
-------- ------- -------
Net $186,211 $ 1,053 ($8,930)
======== ======= =======
1997
----
Policy Change in Return Credited
Charges and Fees Policy Reserves to Contractowners
---------------- --------------- -----------------
Gross $144,417 $955 ($1,972)
Ceded 23,259 918 46
-------- ----- -------
Net $121,158 $ 37 ($2,018)
======== ===== ======
1996
----
Policy Change in Return Credited
Charges and Fees Policy Reserves to Contractowners
---------------- --------------- -----------------
Gross $87,370 $815 $779
Ceded 17,590 180 106
-------- ----- -----
Net $69,780 $635 $673
======= ==== ====
</TABLE>
Such ceded reinsurance does not relieve the Company of its obligations
to policyholders. The Company remains liable to its policyholders for
the portion reinsured to the extent that any reinsurer does not meet
the obligations assumed under the reinsurance agreements.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
14. SURPLUS NOTES
The Company has issued surplus notes to its Parent in exchange for cash.
Surplus notes outstanding as of December 31, 1998 and 1997 were
as follows:
<TABLE>
<CAPTION>
(in thousands)
Interest for the
Interest 1998 1997 Years Ended December 31,
Issue Date Rate Amount Amount 1998 1997 1996
---------- ---- ------ ------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
December 29, 1993 6.84% $ - $ 20,000 $ 1,387 $ 1,387 $ 1,391
February 18, 1994 7.28% 10,000 10,000 738 738 740
March 28, 1994 7.90% 10,000 10,000 801 801 803
September 30, 1994 9.13% 15,000 15,000 1,389 1,389 1,392
December 28, 1994 9.78% 14,000 14,000 1,388 1,388 1,392
December 19, 1995 7.52% 10,000 10,000 762 762 765
December 20, 1995 7.49% 15,000 15,000 1,139 1,139 1,142
December 22, 1995 7.47% 9,000 9,000 682 682 684
June 28, 1996 8.41% 40,000 40,000 3,411 3,411 1,747
December 30, 1996 8.03% 70,000 70,000 5,699 5,699 31
-------- -------- ------- ------- ------- -
Total $193,000 $213,000 $17,396 $17,396 $10,087
======== ======== ======= ======= =======
</TABLE>
The surplus note for $20,000,000 dated December 29, 1993 was converted
to additional paid-in capital on December 31, 1998.
All surplus notes mature seven years from the issue date.
Payment of interest and repayment of principal for these notes is
subject to certain conditions and require approval by the Insurance
Commissioner of the State of Connecticut. At December 31, 1998 and
1997, $9,644,000 and $7,796,000, respectively, of accrued interest on
surplus notes was not approved for payment under these criteria.
15. SHORT-TERM BORROWING
The Company had a $10 million short-term loan payable to the Parent at
December 31, 1998 and 1997. The total interest expense to the Company
was $622,000, $642,000 and $643,000 and for the years ended December
31, 1998, 1997 and 1996, respectively, of which $182,000 and $201,000
was payable as of December 31, 1998 and 1997, respectively.
16. CONTRACT WITHDRAWAL PROVISIONS
Approximately 99% of the Company's separate account liabilities are
subject to discretionary withdrawal by contractowners at market value
or with market value adjustment. Separate account assets which are
carried at fair value are adequate to pay such withdrawals which are
generally subject to surrender charges ranging from 10% to 1% for
contracts held less than 10 years.
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
17. SEGMENT REPORTING
In June 1997, the FASB issued SFAS 131, "Disclosures about Segments of
an Enterprise and Related Information." SFAS 131 establishes standards
for the way that public enterprises report information about operating
segments in annual financial statements and requires that those
enterprises report selected information about operating segments in
interim financial reports issued to shareholders. It also establishes
standards related to disclosures about products and services,
geographic areas and major customers. SFAS 131 is effective for
financial statement periods beginning after December 15, 1997.
During 1998, to complement its annuity products, the Company launched
specific marketing and operational activities towards the release of
variable life insurance and qualified retirement plan annuity products.
As of December 31, 1998, sales were not significant enough to warrant
full segment disclosures. Sales, as measured by premium received, for
the year ended December 31, 1998 and assets under management as of
December 31, 1998, for the respective segments were as follows:
<TABLE>
<CAPTION>
(in thousands) Variable Variable Qualified
Annuity Life Plans Total
------------ -------- --------- -----------
<S> <C> <C> <C> <C>
Sales $ 4,122,272 $1,188 $36,202 $ 4,159,662
=========== ====== ======= ===========
Assets under management $17,809,437 $1,295 $44,029 $17,854,761
=========== ====== ======= ===========
</TABLE>
<PAGE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)
Notes to Consolidated Financial Statements (continued)
18. QUARTERLY FINANCIAL DATA (UNAUDITED)
The following table summarizes information with respect to the
operations of the Company on a quarterly basis:
<TABLE>
<CAPTION>
(in thousands) Three Months Ended
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
1998
----
<S> <C> <C> <C> <C>
Premiums and other insurance
revenues $ 50,593 $ 57,946 $ 62,445 $ 67,327
Net investment income 3,262 2,410 2,469 2,989
Net realized capital gains (losses) 156 13 (46) (24)
-------- -------- -------- --------
Total revenues 54,011 60,369 64,868 70,292
Benefits and expenses 46,764 42,220 48,471 69,164
-------- -------- -------- --------
Pre-tax net income 7,247 18,149 16,397 1,128
Income taxes 1,175 4,174 2,223 582
-------- -------- -------- --------
Net income $ 6,072 $ 13,975 $ 14,174 $ 546
======== ======== ======== ========
1997
----
Premiums and other insurance
revenues $ 30,186 $ 34,056 $ 41,102 $ 44,402
Net investment income 1,369 2,627 2,031 2,154
Net realized capital gains 20 43 21 3
-------- -------- -------- --------
Total revenues 31,575 36,726 43,154 46,559
Benefits and expenses 18,319 30,465 31,179 40,025
-------- -------- -------- --------
Pre-tax net income 13,256 6,261 11,975 6,534
Income taxes 4,260 2,614 3,354 250
-------- -------- -------- --------
Net income $ 8,996 $ 3,647 $ 8,621 $ 6,284
======== ======== ======== ========
1996
----
Premiums and other insurance
revenues $ 16,606 $ 20,453 $ 22,366 $ 26,906
Net investment income 455 283 270 578
Net realized capital gains 92 13 6 23
-------- -------- -------- --------
Total revenues 17,153 20,749 22,642 27,507
Benefits and expenses 12,725 9,430 17,007 26,304
-------- --------- -------- --------
Pre-tax net income 4,428 11,319 5,635 1,203
Income taxes 1,769 3,624 3,096 (12,527)
-------- --------- -------- --------
Net income $ 2,659 $ 7,695 $ 2,539 $ 13,730
======== ========= ======== ========
</TABLE>
As described in Note 6, the valuation allowance relating to deferred
income taxes was released during the three months ended December 31,
1996.
<PAGE>
FINANCIAL STATEMENTS FOR AMERICAN SKANDIA LIFE ASSURANCE CORPORATION SEPARATE
ACCOUNT F
American Skandia Life
Assurance Corporation
Variable Account F
For the period from June 26, 1998
through December 31, 1998
<PAGE>
Independent Auditor's Report
To the Contractowners of
American Skandia Life Assurance Corporation
Variable Account F and the
Board of Directors and Shareholder of
American Skandia Life Assurance Corporation
Shelton, Connecticut
We have audited the accompanying statement of assets and contractowners' equity
of the twenty-six sub-accounts of American Skandia Life Assurance Corporation
Variable Account F, referred to in Note 1, as of December 31, 1998, and the
related statements of operations and changes in net assets for the period from
June 26, 1998 through December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the twenty-six sub-accounts of
American Skandia Life Assurance Corporation Variable Account F, referred to in
Note 1, at December 31, 1998, and the results of their operations and their
changes in net assets for the period June 26, 1998 through December 31, 1998 in
conformity with generally accepted accounting principles.
/s/Ernst & Young LLP
Hartford, Connecticut
February 20, 1999
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARAIBLE ACCOUNT F
STATEMENT OF ASSETS AND CONTRACTOWNERS' EQUITY
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investment in mutual funds at market value ( Note 2 ):
The Alger American Fund ( AAF ):
Growth Portfolio - 33,980 shares ( cost $26,963) $ 33,980
American Skandia Trust ( AST ):
Putnam International Equity Portfolio - 26,727 shares ( cost $22,207) 26,727
Putnam Balanced Portfolio - 4,021 shares ( cost $3,809) 4,021
Putnam Value Growth & Income Portfolio - 8,120 shares ( cost $7,432) 8,120
Lord Abbett Growth & Income Portfolio - 60,973 shares ( cost $55,858) 60,973
Lord Abbett Small Cap Value Portfolio - 11,666 shares ( cost $11,381) 11,666
Jancap Growth Portfolio - 301,846 shares ( cost $253,862) 301,846
Money Market Portfolio - 31,524 shares ( cost $31,524) 31,524
Neuberger & Berman Midcap Value Portfolio - 40,578 shares ( cost $38,967) 40,578
Neuberger & Berman Midcap Growth Portfolio - 39,402 shares ( cost $35,395) 39,402
Federated High Yield Portfolio - 51,210 shares ( cost $50,501) 51,210
T. Rowe Price Asset Allocation Portfolio - 7,736 shares ( cost $7,431) 7,736
T. Rowe Price International Bond Portfolio - 15,385 shares ( cost $14,794) 15,385
T. Rowe Price Natural Resources Portfolio - 12,006 shares ( cost $12,137) 12,006
T. Rowe Price Small Company Value Portfolio - 31,922 shares ( cost $31,292) 31,922
Founders Capital Appreciation Portfolio - 4,022 shares ( cost $3,958) 4,022
PIMCO Total Return Bond Portfolio - 24,671 shares ( cost $24,773) 24,671
PIMCO Limited Maturity Bond Portfolio - 33,883 shares ( cost $33,843) 33,883
INVESCO Equity Income Portfolio - 77,257 shares ( cost $74,478) 77,257
Oppenheimer Large-Cap Growth - 6,473 shares ( cost $5,937) 6,473
Janus Overseas Growth Portfolio - 121,827 shares ( cost $113,101) 121,827
Twentieth Century Strategic Balanced Portfolio - 2,086 shares ( cost $1,977) 2,086
Twentieth Century International Growth Portfolio - 27,908 shares ( cost $27,313) 27,908
Marsico Capital Growth Portfolio - 298,436 shares ( cost $273,152) 298,436
Cohen & Steers Realty Portfolio - 2,095 shares ( cost $2,001) 2,095
Bankers Trust Enhanced 500 Portfolio - 19,256 shares ( cost $17,687) 19,256
-------------
Total Invested Assets $ 1,295,010
=============
Total Assets $ 1,295,010
=============
- -------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Unit
Contractowners' Equity Units Value
<S> <C> <C> <C>
AAF - Growth 2,771 12.26 $ 33,980
AST - Putnam International Equity 2,765 9.67 26,727
AST - Putnam Balanced 390 10.31 4,021
AST - Putnam Value Growth & Income 798 10.17 8,120
AST - Lord Abbett Growth & Income 6,010 10.15 60,973
AST - Lord Abbett Small Cap Value 1,299 8.98 11,666
AST - JanCap Growth 22,655 13.32 301,846
AST - Money Market 3,086 10.21 31,524
AST - Neuberger & Berman Midcap Value 4,156 9.76 40,578
AST - Neuberger & Berman Midcap Growth 3,699 10.65 39,402
AST - Federated High Yield 5,228 9.80 51,210
AST - T. Rowe Price Asset Allocation 723 10.69 7,736
AST - T. Rowe Price International Bond 1,396 11.02 15,385
AST - T. Rowe Price Natural Resources 1,464 8.20 12,006
AST - T. Rowe Price Small Company Value 3,713 8.60 31,922
AST - Founders Capital Appreciation 394 10.20 4,022
AST - PIMCO Total Return Bond 2,341 10.54 24,671
AST - PIMCO Limited Maturity Bond 3,294 10.29 33,883
AST - INVESCO Equity Income 7,576 10.20 77,257
AST - Oppenheimer Large-Cap Growth 573 11.29 6,473
AST - Janus Overseas Growth 13,110 9.29 121,827
AST - Twentieth Century Strategic Balanced 191 10.94 2,086
AST - Twentieth Century International Growth 2,968 9.40 27,908
AST - Marsico Capital Growth 26,845 11.12 298,436
AST - Cohen & Steers Realty 235 8.90 2,095
AST - Bankers Trust Enhanced 1,741 11.06 19,256
-------------
Total Contractowners' Equity $ 1,295,010
=============
Total Contractowners' Equity $ 1,295,010
=============
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT F
STATEMENT OF OPERATIONS
FOR THE PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
AST - Putnam AST - Putnam
AAF International Balanced
Total Growth Equity Portfolio Portfolio
------------------------------------------------------------------------------
Periods Ended June 26 * thru August 11 * thru October 15 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------
INVESTMENT INCOME:
Income
<S> <C> <C> <C> <C>
Dividends $ - $ - $ - $ -
Expenses
Mortality and Expense Risk Charges and Administrative Fees
(Note 6) (180) (92) (82) (6)
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (180) (92) (82) (6)
------------------------------------------------------------------------------
REALIZED GAIN (LOSS) ON INVESTMENTS:
Proceeds from Sales 293 144 137 12
Cost of Securities Sold 293 137 145 11
------------------------------------------------------------------------------
Net Gain (Loss) - 7 (8) 1
Capital Gain Distributions Received - - - -
------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) - 7 (8) 1
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning of Period - - - -
End of Period 11,748 7,016 4,520 212
------------------------------------------------------------------------------
NET UNREALIZED GAIN (LOSS) 11,748 7,016 4,520 212
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATION$ 11,568 $ 6,931 $ 4,430 $ 207
==============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
AST - Putnam Value AST - Lord Abbett AST - Lord Abbett AST
Growth & Income Growth & Income Small Cap Value JanCap Growth
------------------------------------------------------------------------------
August 11 * thru August 11 * thru June 26 * thru June 26 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------
INVESTMENT INCOME:
Income
<S> <C> <C> <C> <C>
Dividends $ - $ - $ - $ -
Expenses
Mortality and Expense Risk Charges and Administrative Fees
(Note 6) (35) (119) (56) (940)
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (35) (119) (56) (940)
------------------------------------------------------------------------------
REALIZED GAIN (LOSS) ON INVESTMENTS:
Proceeds from Sales 61 217 92 14,534
Cost of Securities Sold 61 206 110 14,557
------------------------------------------------------------------------------
Net Gain (Loss) - 11 (18) (23)
Capital Gain Distributions Received - - - -
------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) - 11 (18) (23)
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning of Period - - - -
End of Period 687 5,115 284 47,984
------------------------------------------------------------------------------
NET UNREALIZED GAIN (LOSS) 687 5,115 284 47,984
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 652 $ 5,007 $ 210 $ 47,021
==============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
AST - Neuberger AST - Neuberger
AST & Berman & Berman AST - Federated
Money Market Midcap Value Midcap Growth High Yield
------------------------------------------------------------------------------
November 18 * thru June 26 * thru June 26 * thru October 7 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------
INVESTMENT INCOME:
Income
<S> <C> <C> <C> <C>
Dividends $ 814 $ - $ - $ -
Expenses
Mortality and Expense Risk Charges and Administrative Fees
(Note 6) (211) (93) (44) (61)
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 603 (93) (44) (61)
------------------------------------------------------------------------------
REALIZED GAIN (LOSS) ON INVESTMENTS:
Proceeds from Sales 330,020 156 80 90
Cost of Securities Sold 330,020 166 85 88
------------------------------------------------------------------------------
Net Gain (Loss) - (10) (5) 2
Capital Gain Distributions Received - - - -
------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) - (10) (5) 2
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning of Period - - - -
End of Period - 1,610 4,007 709
------------------------------------------------------------------------------
NET UNREALIZED GAIN (LOSS) - 1,610 4,007 709
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 603 $ 1,507 $ 3,958 $ 650
==============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
AST - T. Rowe Price AST-T. Rowe Price AST-T. Rowe Price AST-T. Rowe Price
Asset Allocation International Bond Natural Resources Small Company Value
------------------------------------------------------------------------------
December 4 * thru October 7 * thru August 11 * thru December 3 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------
INVESTMENT INCOME:
Income
<S> <C> <C> <C> <C>
Dividends $ - $ - $ - $ -
Expenses
Mortality and Expense Risk Charges and Administrative Fees
(Note 6) (7) (41) (53) (29)
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (7) (41) (53) (29)
------------------------------------------------------------------------------
REALIZED GAIN (LOSS) ON INVESTMENTS:
Proceeds from Sales 7 67 95 62
Cost of Securities Sold 7 66 94 62
------------------------------------------------------------------------------
Net Gain (Loss) - 1 1 -
Capital Gain Distributions Received - - - -
------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) - 1 1 -
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning of Period - - - -
End of Period 306 591 (131) 630
------------------------------------------------------------------------------
NET UNREALIZED GAIN (LOSS) 306 591 (131) 630
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 299 $ 551 $ (183) $ 601
==============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
AST - Founders AST - PIMCO AST - PIMCO Limited AST - INVESCO
Capital Appreciation Total Return Bond Maturity Bond Equity Income
------------------------------------------------------------------------------
June 26 * thru October 7 * thru October 7 * thru December 3 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------
INVESTMENT INCOME:
Income
<S> <C> <C> <C> <C>
Dividends $ - $ - $ - $ -
Expenses
Mortality and Expense Risk Charges and Administrative Fees
(Note 6) (22) (50) (53) (55)
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (22) (50) (53) (55)
------------------------------------------------------------------------------
REALIZED GAIN (LOSS) ON INVESTMENTS:
Proceeds from Sales 34 74 79 133
Cost of Securities Sold 39 75 79 132
------------------------------------------------------------------------------
Net Gain (Loss) (5) (1) - 1
Capital Gain Distributions Received - - - -
------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) (5) (1) - 1
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning of Period - - - -
End of Period 64 (102) 40 2,780
------------------------------------------------------------------------------
NET UNREALIZED GAIN (LOSS) 64 (102) 40 2,780
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 37 $ (153) $ (13) $ 2,726
==============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
AST - Oppenheimer
Large - Cap AST - Janus AST-Twentieth Century AST-Twentieth Century
Growth Overseas Growth Strategic Balanced International Growth
------------------------------------------------------------------------------
June 26 * thru August 11 * thru December 3 *, thru August 11 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------
INVESTMENT INCOME:
Income
<S> <C> <C> <C> <C>
Dividends $ - $ - $ - $ 8
Expenses
Mortality and Expense Risk Charges and Administrative Fees
(Note 6) (36) (153) (2) (45)
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (36) (153) (2) (37)
------------------------------------------------------------------------------
REALIZED GAIN (LOSS) ON INVESTMENTS:
Proceeds from Sales 56 287 5 85
Cost of Securities Sold 59 309 5 94
------------------------------------------------------------------------------
Net Gain (Loss) (3) (22) - (9)
Capital Gain Distributions Received - - - -
------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) (3) (22) - (9)
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning of Period - - - -
End of Period 536 8,726 109 595
------------------------------------------------------------------------------
NET UNREALIZED GAIN (LOSS) 536 8,726 109 595
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 497 $ 8,551 $ 107 $ 549
==============================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------
AST - Marsico AST - Cohen & Steer AST - Bankers Trust
Capital Growth Realty Enhanced 500
----------------------------------------------------------
June 26 * thru October 15 * thru October 29 * thru
December 31, 1998 December 31, 1998 December 31, 1998
----------------------------------------------------------
INVESTMENT INCOME:
Income
<S> <C> <C> <C>
Dividends $ - $ - $ -
Expenses
Mortality and Expense Risk Charges and Administrative Fees
(Note 6) (972) (4) (41)
----------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (972) (4) (41)
----------------------------------------------------------
REALIZED GAIN (LOSS) ON INVESTMENTS:
Proceeds from Sales 20,358 8 19,329
Cost of Securities Sold 21,077 8 18,389
----------------------------------------------------------
Net Gain (Loss) (719) - 940
Capital Gain Distributions Received - - -
----------------------------------------------------------
NET REALIZED GAIN (LOSS) (719) - 940
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning of Period - - -
End of Period 25,284 94 1,569
----------------------------------------------------------
NET UNREALIZED GAIN (LOSS) 25,284 94 1,569
----------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 23,593 $ 90 $ 2,468
==========================================================
- -------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT F
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AST - Putnam AST - Putnam
AAF International Balanced
Total Growth Equity Portfolio Portfolio
------------------------------------------------------------------------------------
Periods Ended June 26 * thru August 11 * thru October 15 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ (180) $ (92) $ (82) $ (6)
Net Realized Gain (Loss) - 7 (8) 1
Net Unrealized Gain (Loss) On Investments 11,748 7,016 4,520 212
----------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Operations 11,568 6,931 4,430 207
----------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Transfers of Annuity Fund Deposits 1,188,246 27,123 22,372 1,019
Net Transfers Between Sub-accounts - - - -
Surrenders (4,132) (74) (75) 2,795
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Capital Share Transactions 1,184,114 27,049 22,297 3,814
------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,195,682 33,980 26,727 4,021
------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period - - - -
------------------------------------------------------------------------------------
End of Period $ 1,195,682 $ 33,980 $ 26,727 $ 4,021
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
AST - Putnam Value AST - Lord Abbett AST - Lord Abbett AST
Growth & Income Growth & Income Small Cap Value JanCap Growth
------------------------------------------------------------------------------------
August 11 * thru August 11 * thru June 26 * thru June 26 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ (35) $ (119) $ (56) $ (940)
Net Realized Gain (Loss) - 11 (18) (23)
Net Unrealized Gain (Loss) On Inv 687 5,115 284 47,984
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Operations 652 5,007 210 47,021
------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Transfers of Annuity Fund Deposits 7,500 24,411 11,500 243,116
Net Transfers Between Sub-accounts - - - -
Surrenders (32) 31,555 (44) 11,709
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Capital Share Transactions 7,468 55,966 11,456 254,825
------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 8,120 60,973 11,666 301,846
------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period - - - -
------------------------------------------------------------------------------------
End of Period $ 8,120 $ 60,973 $ 11,666 $ 301,846
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
AST - Neuberger AST - Neuberger
AST & Berman & Berman AST - Federated
Money Market Midcap Value Midcap Growth High Yield
------------------------------------------------------------------------------------
November 18 * thru June 26 * thru June 26 * thru October 7 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ 603 $ (93) $ (44) $ (61)
Net Realized Gain (Loss) - (10) (5) 2
Net Unrealized Gain (Loss) On Investments - 1,610 4,007 709
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Operations 603 1,507 3,958 650
------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Transfers of Annuity Fund Deposits 361,161 19,250 15,580 50,634
Net Transfers Between Sub-accounts - - - -
Surrenders (330,240) 19,821 19,864 (74)
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Capital Share Transactions 30,921 39,071 35,444 50,560
------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 31,524 40,578 39,402 51,210
------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period - - - -
------------------------------------------------------------------------------------
End of Period $ 31,524 $ 40,578 $ 39,402 $ 51,210
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
AST - T. Rowe Price AST - T. Rowe Price AST - T. Rowe Price AST - T. Rowe Price
Asset Allocation International Bond Natural Resources Small Company Value
------------------------------------------------------------------------------------
December 4 * thru October 7 * thru August 11 * thru December 3 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ (7) $ (41) $ (53) $ (29)
Net Realized Gain (Loss) - 1 1 -
Net Unrealized Gain (Loss) On Investments 306 591 (131) 630
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Operations 299 551 (183) 601
------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Transfers of Annuity Fund Deposits 7,500 14,873 12,121 2,500
Net Transfers Between Sub-accounts - - - -
Surrenders (63) (39) 68 28,821
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Capital Share Transactions 7,437 14,834 12,189 31,321
------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 7,736 15,385 12,006 31,922
------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period - - - -
------------------------------------------------------------------------------------
End of Period $ 7,736 $ 15,385 $ 12,006 $ 31,922
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
AST - Founders AST - PIMCO AST - PIMCO Limited AST - INVESCO
Capital Appreciation Total Return Bond Maturity Bond Equity Income
------------------------------------------------------------------------------------
June 26 * thru October 7 * thru October 7 * thru December 3 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ (22) $ (50) $ (53) $ (55)
Net Realized Gain (Loss) (5) (1) - 1
Net Unrealized Gain (Loss) On Investments 64 (102) 40 2,780
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Operations 37 (153) (13) 2,726
------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Transfers of Annuity Fund Deposits 4,000 24,874 33,954 14,357
Net Transfers Between Sub-accounts - - - -
Surrenders (15) (50) (58) 60,174
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Capital Share Transactions 3,985 24,824 33,896 74,531
------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 4,022 24,671 33,883 77,257
------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period - - - -
------------------------------------------------------------------------------------
End of Period $ 4,022 $ 24,671 $ 33,883 $ 77,257
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
AST - Oppenheimer
Large-Cap AST-Janus AST-Twentieth Century AST-Twentieth Century
Growth Overseas Growth Strategic Balanced International Growth
------------------------------------------------------------------------------------
June 26 * thru August 11 * thru December 3 *, thru August 11 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ (36) $ (153) $ (2) $ (37)
Net Realized Gain (Loss) (3) (22) - (9)
Net Unrealized Gain (Loss) On Investments 536 8,726 109 595
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Operations 497 8,551 107 549
------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Transfers of Annuity Fund Deposits 6,000 41,825 1,743 7,500
Net Transfers Between Sub-accounts - - - -
Surrenders (24) 71,451 236 19,859
------------------------------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Capital Share Transactions 5,976 113,276 1,979 27,359
------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 6,473 121,827 2,086 27,908
------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period - - - -
------------------------------------------------------------------------------------
End of Period $ 6,473 $ 121,827 $ 2,086 $ 27,908
====================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------
AST - Marsico AST - Cohen & Steers AST - Bankers Trust
Capital Growth Realty Enhanced 500
---------------------------------------------------------------
June 26 * thru October 15 * thru October 29 * thru
December 31, 1998 December 31, 1998 December 31, 1998
---------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
<S> <C> <C> <C>
Net Investment Income (Loss) $ (972) $ (4) $ (41)
Net Realized Gain (Loss) (719) - 940
Net Unrealized Gain (Loss) On Investments 25,284 94 1,569
---------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Operations 23,593 90 2,468
---------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Transfers of Annuity Fund Deposits 211,055 1,890 20,388
Net Transfers Between Sub-accounts - - -
Surrenders 63,788 115 (3,600)
---------------------------------------------------------------
Net Increase (Decrease) In Net Assets Resulting
From Capital Share Transactions 274,843 2,005 16,788
---------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 298,436 2,095 19,256
---------------------------------------------------------------
NET ASSETS:
Beginning of Period - - -
---------------------------------------------------------------
End of Period $ 298,436 $ 2,095 $ 19,256
===============================================================
- ------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced.
</TABLE>
American Skandia Life Assurance Corporation
Variable Account F
Notes to Financial Statements
December 31, 1998
- --------------------------------------------------------------------------------
1. ORGANIZATION
American Skandia Life Assurance Corporation Variable Account F (the
"Account") is a separate investment account of American Skandia Life
Assurance Corporation ("American Skandia" or "Company"). The Account is
registered with the SEC under the Investment Company Act of 1940 as a
unit investment trust. The Account commenced operations on June 25,
1998.
As of December 31, 1998, the Account consisted of thirty -three
sub-accounts. These financial statements report on twenty-six
sub-accounts which had financial activity during 1998 and are offered
in American Skandia's AS Trophy Single Premium Variable Life Insurance
Product. Each of the twenty-six sub-accounts invests only in a single
corresponding portfolio of either The Alger American Fund, American
Skandia Trust, or Montgomery Variable Series (the "Trusts"). Fred Alger
Management, Inc. is the advisor for The Alger American Fund. American
Skandia Investments Services, Incorporated, an affiliate, is the
investment manager for the American Skandia Trust, while Putnam
Investment Management, Inc., Lord Abbett & Co., Janus Capital
Corporation, J.P. Morgan Inc., Neuberger Berman Management,
Incorporated, Federated Investment Counseling, T. Rowe Price
Associates, Inc., Rowe Price-Fleming International, Inc., Founders
Asset Management, LLC, Pacific Investment Management Company, INVESCO
Funds Group Inc., OpphenheimerFunds, Inc., American Century Investments
Management, Inc., Marsico Capital Management, LLC, Cohen & Steers
Capital Management, Inc., and Bankers Trust Company are the
subadvisors. Montgomery Asset Management L.P. is the investment advisor
for the Montgomery Variable Series.
The investment advisors are paid fees for their services by the
respective Trusts.
American Skandia's AS Trophy Single Premium Variable Life Insurance
Policy is marketed through American Skandia Marketing, Inc., an
affiliate.
2. VALUATION OF INVESTMENTS
The market value of the investments in the sub-accounts is based on the
net asset values of the Trust shares held at the end of the current
period. Transactions are accounted for on the trade date and dividend
income is recognized on an accrual basis. Realized gains and losses on
sales of investments are determined on a first-in first-out basis.
3. ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
4. INCOME TAXES
American Skandia does not expect to incur any federal income tax
liability on earnings, or realized capital gains attributable to the
Account, therefore, no charges for federal income taxes are currently
deducted from the Account. If American Skandia incurs income taxes
attributable to the Account, or determines that such taxes will be
incurred, it may make a charge for such taxes against the Account.
Under current laws, American Skandia may incur state and local income
taxes (in addition to premium tax) in several states. The Company does
not anticipate that these will be significant. However, American
Skandia may make charges to the Account in the event that the amount of
these taxes change.
5. DIVERSIFICATION REQUIREMENTS
Section 817(h) of the Internal Revenue Code provides that a variable
life insurance policy, in order to qualify as life insurance, must have
an "adequately diversified" segregated asset account (including
investments in a mutual fund by the segregated asset account of the
insurance companies). The Treasury Department's regulations prescribe
the diversification requirements for variable life insurance policies.
We believe the underlying mutual fund portfolios complied with the
terms of these regulations.
6. CONTRACT CHARGES
The following contract charges are paid to American Skandia which
provides administrative services to the Account:
Mortality and Expense Risk Charges - Charged daily against the Account
at an annual rate of 0.90% of the net assets.
Administrative Fees - Charged daily against the Account at an annual
rate of 0.15% of the net assets.
Contingent Deferred Sales Charges are computed as set forth in the
American Skandia's AS Trophy Single Premium Variable Life Insurance
Policy Prospectus.
7. YEAR 2000 COMPLIANCE (UNAUDITED)
The Company is continuing its ongoing assessment of the potential
impact of the year 2000 issue on various aspects of its business. The
Company's computer support is provided by its affiliate, American
Skandia Information Services and Technology Corporation, which also
provides such support for the Company's affiliated broker-dealer,
American Skandia Marketing, Incorporated, and the Company's affiliated
investment advisory firm, American Skandia Investment Services,
Incorporated. Because of the nature of the Company's business, any
assessment of the potential impact of the year 2000 issues on the
company must be an assessment of the potential impact of these issues
on all these companies, which are referred to below as "American
Skandia".
Business Partners
Management believes the company is most vulnerable in its interfaces
with computer systems of investment managers, sub-advisors, third party
administrators, vendors and other business partners. The inability to
properly recognize date sensitive electronic information and transfer
data between systems could cause errors or even a complete systems
failure which would result in a temporary inablility to process
transactions correctly or engage in normal business activities.
The American Skandia deferred annuity operational business partners
report that all critical interfaces are Year 2000 compliant. All
investment manager and sub-advisors are required by the Securities and
Exchange Commission to publicly disclose their Year 2000 status is
December 1998 and June 1999.
American Skandia has initiated formal communications with parties that
provide third party administration, record keeping and trust services
in connection with its life insurance and qualified retirement plan
annuities business. Management has already received several written
assurances that these firms will be Year 2000 compliant. The Company
expects to have certifications from all remaining parties by July 1999.
American Skandia is currently developing contingency plans in the event
that these targets are not met.
Information Technology Systems
American Skandia is a relatively young company whose internally
developed systems were designed from the start with the four digit year
codes. The Company engaged an external information technology
specialist to review American Skandia's operating systems and
internally developed software. The assessment was completed in December
1997 and the results were favorable. Specific modifications were
suggested, evaluated, and implemented for the annuity adminsitration
system. This project was completed during 1998 and a ceritificate of
compliance has been received. Other non-critical internally developed
applications in the client/server area have already been or will be
remediated during 1999. The costs associated with this aspect of the
Year 2000 compliance have not had, and are not expected to have, a
significant impact on the Company's results from operations.
Suppliers and Non-Information Technology Systems
Like most companies, American Skandia is reliant on network, and
desktop operating systems and software providers to release compliant
versions of their respective systems. American Skandia's network is
currently at the most compliant level available. The standard desktop
software will be replaced, as fully compliant versions become
available. In addition, the Company is in the process of contacting the
non-information systems vendors and suppliers regarding their Year 2000
compliance status and will factor the results of these assessments into
its contingency plans.
7. YEAR 2000 COMPLIANCE (UNAUDITED)
Management believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. However, should errors or
disruptions in computer service occur, the Company could realize
losses. Given the nature and uncertainty of such losses, the amounts
cannot be reasonably determined.
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
8. CHANGES IN THE UNITS OUTSTANDING
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
AST- Putnam AST-Putnam AST-Putnam Value
AAF-Growth Int'l Equity Balanced Asset Growth & Income
----------------------------------------------------------------------------------------------
June 26 * thru August 11 * thru October 15 * thru August 11 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units Outstanding Beginning of the Period 0 0 0 0
Units Purchased 2,778 2,775 112 803
Units Transferred Between Sub-accounts 0 0 279 0
Units Surrendered (7) (9) (1) (4)
----------------------------------------------------------------------------------------------
Units Outstanding End of the Period 2,771 2,765 390 798
==============================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
AST-Lord Abbett AST-Lord Abbett AST AST
Growth & Income Small Cap Value JanCap Growth Money Market
----------------------------------------------------------------------------------------------
August 11 * thru June 26 * thru June 25 * thru November 18 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units Outstanding Beginning of the Period 0 0 0 0
Units Purchased 2,788 1,305 21,796 35,493
Units Transferred Between Sub-accounts 3,236 0 971 (32,365)
Units Surrendered (13) (6) (112) (42)
----------------------------------------------------------------------------------------------
Units Outstanding End of the Period 6,010 1,299 22,655 3,086
==============================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
AST- Neuberger & AST- Neuberger & AST-Federated AST-T. Rowe Price
Berman Midcap Value Berman Midcap Growth High Yield Asset Allocation
----------------------------------------------------------------------------------------------
June 26 * thru June 26 * thru October 7 * thru December 4 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units Outstanding Beginning of the Period 0 0 0 0
Units Purchased 2,056 1,615 5,236 724
Units Transferred Between Sub-accounts 2,110 2,089 0 0
Units Surrendered (10) (5) (8) (1)
----------------------------------------------------------------------------------------------
Units Outstanding End of the Period 4,156 3,699 5,228 723
==============================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
AST-T. Rowe AST-T. Rowe Price AST-T.Rowe Price AST-Founders
Price International BonNatural Resources Small Company Value Capital Appreciation
----------------------------------------------------------------------------------------------
October 7 * thru August 11 * thru December 3 * thru June 26 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units Outstanding Beginning of the Period 0 0 0 0
Units Purchased 1,399 1,455 295 395
Units Transferred Between Sub-accounts 0 14 3,422 0
Units Surrendered (4) (6) (4) (2)
----------------------------------------------------------------------------------------------
Units Outstanding End of the Period 1,396 1,464 3,713 394
==============================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
AST-PIMCO Total AST-PIMCO AST-INVESCO AST-Oppenheimer
Return Bond Limited Maturity Bond Equity Income Large-Cap Growth
----------------------------------------------------------------------------------------------
October 7 * thru October 7 * thru December 3 * thru June 26 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units Outstanding Beginning of the Period 0 0 0 0
Units Purchased 2,346 3,300 1,448 575
Units Transferred Between Sub-accounts 0 0 6,136 0
Units Surrendered (5) (6) (9) (2)
----------------------------------------------------------------------------------------------
Units Outstanding End of the Period 2,341 3,294 7,576 573
==============================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
* Date Operations Commenced.
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
AST-Janus AST-Twentieth Century AST-Twentieth Century AST-Marsico
Overseas Growth Strategic Balanced International Growth Capital Growth
----------------------------------------------------------------------------------------------
August 11 * thru December 3 * thru August 11 * thru June 25 * thru
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units Outstanding Beginning of the Period 0 0 0 0
Units Purchased 4,987 168 767 20,596
Units Transferred Between Sub-accounts 8,144 23 2,207 6,378
Units Surrendered (21) 0 (6) (129)
----------------------------------------------------------------------------------------------
Units Outstanding End of the Period 13,110 191 2,968 26,845
==============================================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
* Date Operations Commenced.
</TABLE>
-------------------------------------------
AST - Cohen & AST - Bankers
Steers Real Estate Trust 500 Index
-------------------------------------------
October 15 * thru October 29 * thru
December 31, 1998 December 31, 1998
-------------------------------------------
Units Outstanding Beginning of the Period 0 0
Units Purchased 223 2,064
Units Transferred Between Sub-accounts 13 (318)
Units Surrendered (1) (5)
-------------------------------------------
Units Outstanding End of the Period 235 1,741
===========================================
- -------------------------------------------------------------------------------
* Date Operations Commenced.
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT F
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
9. SECURITIES TRANSACTIONS
Purchases and sales of securities, other than short-term securities, for the year ended December 31, 1998
were as follows:
Purchases Sales
---------------------------------------------
<S> <C> <C>
AAF - Growth $27,238 $144
AST - Putnam International Equity 22,499 137
AST - Putnam Balanced 3,831 12
AST - Putnam Value Growth & Income 7,554 61
AST - Lord Abbett Growth & Income 56,270 217
AST - Lord Abbett Small Cap Value 11,601 92
AST - Jancap Growth 282,976 14,534
AST - Money Market 361,844 330,020
AST - Neuberger & Berman Midcap Value 39,299 156
AST - Neuberger & Berman Midcap Growth 35,564 80
AST - Federated High Yield 50,676 90
AST - T. Rowe Price Asset Allocation 7,444 7
AST - T. Rowe Price International Bond 14,927 67
AST - T. Rowe Price Natural Resources 12,325 95
AST - T. Rowe Price Small Company Value 31,417 62
AST - Founders Capital Appreciation 4,036 34
AST - Pimco Total Return Bond 24,924 74
AST - Pimco Limited Maturity Bond 34,000 79
AST - INVESCO Equity Income 74,741 133
AST - Oppenheimer Large-Cap Growth 6,055 56
AST - Janus Overseas Growth 113,718 287
AST - Twentieth Century Strategic Balanced 1,987 5
AST - Twentieth Century International Growth 27,500 85
AST - Marsico Capital Growth 315,306 20,358
AST - Cohen & Steers Realty 2,016 8
AST - Bankers Trust Enhanced 500 41,899 19,329
=============================================
$1,611,647 $386,222
=============================================
</TABLE>
<PAGE>
APPENDIX A
HYPOTHETICAL ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH VALUES
It is impossible to illustrate exactly how a Policy will perform in the future.
However, you may better understand how a Policy works, and may be able to better
compare a Policy with other life insurance plans, using hypothetical
illustrations based on the personal characteristics of the Insured(s) as well as
certain assumptions about the future. You can do this using the hypothetical
illustrations provided in this Appendix A. You can also do this by requesting
from us personalized hypothetical illustrations based on: (a) the Age(s) of the
Insured(s); (b) the tobacco usage class and expected risk class(es) of the
Insured(s); (c) the gender of the Insured(s), where permitted; (d) the Specified
Amount you seek; (e) which Death Benefit option (A or B) is to apply; and (f)
the amount and timing of Premiums you intend to pay. Please forward any such
request to us at our address as shown on the first page of this Prospectus.
As of the date of this Prospectus, we only provide such personalized
hypothetical illustrations on paper. We reserve the right to make such
illustrations available in the future via electronic transmission or as part of
a multi-media presentation. We may also provide personalized hypothetical
illustrations that assume future loans, withdrawals, loan repayments, Premium
payments on other than the Policy Date and Policy Anniversaries, changes after
the Policy Date in the Death Benefit option on in the Specified Amount or
varying assumed rates of return. Certain of these illustrations may not be
available as of the date of this Prospectus. However, we reserve the right to
make such illustrations available in the future.
The hypothetical illustrations that follow show the changes in the Death
Benefit, Account Value and Cash Value over time based on certain assumptions.
All values are provided as of the end of each Policy Year shown. Hypothetical
illustrations are shown for both Death Benefit options. The assumptions used are
as follows:
1. Hypothetical average annual gross rates of return in the
Portfolios of 0%, 6% and 12%. Of course, actual investment
performance is not a constant rate. If the hypothetical gross
rate of return were to fluctuate above or below the 0%, 6% or
12% average over a period of years, the Death Benefit, Account
Value and Cash Value may be different. For hypothetical rates
of return of 0% and 6%, the illustrations will indicate if a
Policy would lapse. HYPOTHETICAL RATES OF RETURN ARE FOR
ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF
PAST OR FUTURE PERFORMANCE.
2. Hypothetical constant expense ratios of 0.98% for the
Portfolios. The total annual expenses for the underlying
mutual funds are shown in the section entitled "Variable
Investment Options." The 0.98% hypothetical expense ratio is
the weighted average of the actual total annual expenses for
all available Portfolios as of December 31, 1998. Certain of
the Portfolios have not been in existence for a full year and,
therefore, the total annual expenses for those Portfolios are
estimated and annualized. The 0.98% hypothetical expense
ratio, when deducted from the hypothetical average annual
gross rates of return equals a hypothetical average annual net
rate of return of -0.98%, 5.02% and 11.02%, respectively.
3. The mortality and expense risk charge assessed against the
assets in the Separate Account at an annualized rate of 0.90%.
The charge for administrative expenses connected with
operating the Separate Account is 0.25% per year. It is also
assumed that there is no tax charge assessed against the
Separate Account.
4. The charges under the Policy, including the current cost of
insurance charges that differ by gender, tobacco usage class,
risk class and attained age. It is assumed that there are no
transfer fees applicable. The hypothetical illustrations are
presented based on both the current and guaranteed cost of
insurance charges.
5. Premium taxes are assessed at the rate of 2.5%
6. There are no loans, loan repayments, withdrawals, accelerated
death benefit payments or amounts paid to maintain the Policy
in effect during a grace period. The hypothetical values will
include Cash Value Credits if applicable.
7. The Age(s) and, where applicable, gender of the Insured(s)
shown in each illustration.
8. The Insured(s) is/are eligible for the "no tobacco usage"
class.
9. The Insured(s) is/are considered to be in the preferred risk
class. If the Insured(s) is/are placed in a substandard risk
class, the values for the Death Benefit, Account Value and
Cash Value will differ because the risk classification impacts
charges under the Policy.
10. The Premium payments and Specified Amount are as shown in each
illustration. It is assumed that Premium payments are
allocated on the first day of the Policy Year shown.
11. Neither the Death Benefit Option nor the Specified Amount is
changed after the Policy Date.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- -----------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ -----------------
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ -----------------
A - Level $100,000 45 Female Single 12% No Usage
(11.02% net)
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ -----------------
- ------------- ---------------- --------------------------------------------------- ------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
------------------------------------------------- --------------------------------------------------
--------------- ------------ ----------- ----------- ------------- ---------- ----------- ----------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash Value
Benefit Value Benefit Value
- ------------- ---------------- --------------- ------------ ---------- ---------- ------------- ---------- ------------ ----------
- ------------- ---------------- --------------- ------------ ---------- ---------- ------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $4,657 $0 $100,000 $4,709 $4,243 $0 $100,000 $4,629 $4,163
- -------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
2 4,657 0 100,000 9,847 9,009 0 100,000 9,678 8,840
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
3 4,657 0 100,000 15,456 14,338 0 100,000 15,189 14,072
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
4 4,657 0 100,000 21,580 20,276 0 100,000 21,208 19,904
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
5 4,657 0 100,000 28,267 26,870 0 100,000 27,784 26,387
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
6 4,657 0 100,658 35,572 34,175 0 100,000 34,973 33,575
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
7 4,657 0 119,425 43,531 42,227 0 117,330 42,767 41,463
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
8 0 0 125,767 47,270 46,292 0 123,181 46,298 45,320
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
9 0 0 132,505 51,341 50,689 0 129,324 50,108 49,456
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
10 0 0 139,662 55,772 55,446 0 135,773 54,219 53,893
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
11 0 0 147,858 60,839 60,839 0 143,117 58,889 58,889
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
12 0 0 156,591 66,379 66,379 0 150,860 63,950 63,950
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
13 0 0 166,719 72,798 72,798 0 159,021 69,437 69,437
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
14 0 0 177,547 79,852 79,852 0 168,464 75,767 75,767
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
15 0 0 189,128 87,604 87,604 0 178,466 82,665 82,665
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------ ----------- ------------ ----------
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
16 0 0 201,528 96,124 96,124 0 189,062 90,178 90,178
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
17 0 0 214,808 105,480 105,480 0 200,286 98,348 98,348
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
18 0 0 229,061 115,754 115,754 0 212,174 107,220 107,220
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
19 0 0 244,395 127,040 127,040 0 224,765 116,836 116,836
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ---------- ------------ ----------
20 0 0 260,911 139,437 139,437 0 238,104 127,248 127,248
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
25 0 0 363,944 222,021 222,021 0 317,683 193,800 193,800
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
30 0 0 512,104 352,596 352,596 0 423,853 291,833 291,833
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
- ------------- ---------------- --------------- ----------- ---------- ----------- ------------- ----------- ----------- -----------
35 0 0 728,008 554,799 554,799 0 565,606 431,036 431,036
- ------------- ---------------- --------------- ----------- ---------- ------------ ------------- ----------- ----------- ----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- -----------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
A - Level $100,000 45 Female Single 6% No Usage
(5.02% net)
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
- ------------- ----------------- ---------------------------------------------------- ----------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
---------------------------------------------------- ----------------------------------------------
--------------- ------------- ----------- ---------- ------------- ------------ ------------ ------
Withdrawal Death Account Cash Withdrawal Death Account Cash
Benefit Value Value Benefit Value Value
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ------------ ------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $4,657 $0 $100,000 $4,451 $3,985 $0 $100,000 $4,373 $3,907
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
2 4,657 0 100,000 9,047 8,209 0 100,000 8,886 8,048
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- --------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
3 4,657 0 100,000 13,794 12,677 0 100,000 13,546 12,428
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- -- ------
4 4,657 0 100,000 18,699 17,395 0 100,000 18,358 17,054
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
5 4,657 0 100,000 23,767 22,370 0 100,000 23,328 21,931
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
6 4,657 0 100,000 29,004 27,607 0 100,000 28,463 27,066
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
7 4,657 0 100,000 34,415 33,111 0 100,000 33,770 32,466
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
8 0 0 100,000 35,328 34,350 0 100,000 34,560 33,582
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
9 0 0 100,000 36,265 35,613 0 100,000 35,352 34,700
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
10 0 0 100,000 37,228 36,902 0 100,000 36,147 35,821
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
11 0 0 100,000 38,372 38,372 0 100,000 37,094 37,094
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
12 0 0 100,000 39,554 39,554 0 100,000 38,052 38,052
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
13 0 0 100,000 40,776 40,776 0 100,000 39,026 39,026
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
14 0 0 100,000 42,039 42,039 0 100,000 40,015 40,015
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
15 0 0 100,000 43,346 43,346 0 100,000 41,018 41,018
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ---------- ---------
16 0 0 100,000 44,698 44,698 0 100,000 42,032 42,032
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
17 0 0 100,000 46,094 46,094 0 100,000 43,049 43,049
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
18 0 0 100,000 47,534 47,534 0 100,000 44,061 44,061
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
19 0 0 100,000 49,022 49,022 0 100,000 45,058 45,058
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
20 0 0 100,000 50,561 50,561 0 100,000 46,032 46,032
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ------------ -------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ ------------ -------
25 0 0 100,000 58,986 58,986 0 100,000 50,487 50,487
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
30 0 0 100,283 69,047 69,047 0 100,000 53,321 53,321
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
35 0 0 107,399 81,847 81,847 0 100,000 50,940 50,940
- ------------- ----------------- --------------- ------------- ----------- ---------- ------------- ------------ --------- ----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- -----------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
A - Level $100,000 45 Female Single 0% No Usage
(-0.98% net)
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- -------------
- ------------- ----------------- ---------------------------------------------------- ----------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
---------------------------------------------------- ----------------------------------------------
--------------- ------------ ----------- ---------- ------------ ----------- ----------- ----------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash Value
Benefit Value Benefit Value
- ------------- ----------------- --------------- ------------ ----------- ---------- ------------ ----------- ----------- ----------
- ------------- ----------------- --------------- ------------ ----------- ---------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $4,657 $0 $100,000 $4,193 $3,727 $0 $100,000 $4,117 $3,652
- ------------- ----------------- --------------- ------------ ----------- ----------- ------------ ---------- ----------- ----------
- ------------- ----------------- --------------- ------------ ----------- ----------- ------------ ---------- ----------- ----------
2 4,657 0 100,000 8,277 7,439 0 100,000 8,125 7,287
- ------------- ----------------- --------------- ------------ ----------- ----------- ------------ ----------- ----------- ---------
- ------------- ----------------- --------------- ------------ ----------- ----------- ------------ ----------- ----------- ---------
3 4,657 0 100,000 12,257 11,139 0 100,000 12,025 10,907
- ------------- ----------------- --------------- ------------ ----------- ---------- ------------ ----------- ----------- ----------
- ------------- ----------------- --------------- ------------ ----------- ----------- ----------- ----------- ----------- ----------
4 4,657 0 100,000 16,133 14,830 0 100,000 15,820 14,516
- ------------- ----------------- --------------- ------------ ----------- ---------- ------------ ----------- ----------- ----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
5 4,657 0 100,000 19,911 18,514 0 100,000 19,513 18,116
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
6 4,657 0 100,000 23,593 22,196 0 100,000 23,105 21,708
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
7 4,657 0 100,000 27,178 25,874 0 100,000 26,599 25,295
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
8 0 0 100,000 26,256 25,278 0 100,000 25,564 24,586
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
9 0 0 100,000 25,348 24,696 0 100,000 24,519 23,867
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
10 0 0 100,000 24,453 24,127 0 100,000 23,462 23,136
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
11 0 0 100,000 23,666 23,666 0 100,000 22,481 22,481
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
12 0 0 100,000 22,886 22,886 0 100,000 21,480 21,480
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
13 0 0 100,000 22,113 22,113 0 100,000 20,457 20,457
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
14 0 0 100,000 21,346 21,346 0 100,000 19,414 19,414
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
15 0 0 100,000 20,585 20,585 0 100,000 18,343 18,343
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
16 0 0 100,000 19,830 19,830 0 100,000 17,237 17,237
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
17 0 0 100,000 19,073 19,073 0 100,000 16,083 16,083
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
18 0 0 100,000 18,315 18,315 0 100,000 14,866 14,866
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
19 0 0 100,000 17,555 17,555 0 100,000 13,565 13,565
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
20 0 0 100,000 16,793 16,793 0 100,000 12,165 12,165
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
25 0 0 100,000 12,727 12,727 0 100,000 3,347 3,347
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
30 0 0 100,000 7,610 7,610
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
35 0
- ------------- ----------------- --------------- ------------ ----------- --------- ------------ ----------- ------------ -----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- --------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ------------------ ----------------- ----------------- ------------------ -----------------
- --------------------- ------------------ ------------------ ----------------- ----------------- ------------------ -----------------
B-Variable $100,000 55 Male Single 12% Tobacco Usage
(11.02% net)
- --------------------- ------------------ ------------------ ----------------- ----------------- ------------------ -----------------
- ------------- ----------------- ------------------------------------------------- --------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
----------------------------------------------- ---------------------------------------------------
---------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
Withdrawal Death Account Cash Value Withdrawal Death Benefit Account Cash
Benefit Value Value Value
- ------------- ----------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- -----
- ------------- ----------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $8,622 $0 $108,276 $8,276 $7,414 $0 $107,470 $7,470 $6,608
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
2 8,622 0 117,264 17,264 15,712 0 115,472 15,472 13,920
- ------------- ----------------------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
3 8,622 0 127,027 27,027 24,958 0 124,044 24,044 21,975
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
4 8,622 0 137,639 37,639 35,224 0 133,231 33,231 30,817
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
5 8,622 0 149,175 49,175 46,589 0 143,076 43,076 40,490
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
6 8,622 0 161,723 61,723 59,136 0 153,619 53,619 51,032
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
7 8,622 0 175,369 75,369 72,955 0 164,896 64,896 62,482
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
8 0 0 181,075 81,075 79,264 0 167,803 67,803 65,992
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
9 0 0 187,250 87,250 86,043 0 170,680 70,680 69,473
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
10 0 0 193,939 93,939 93,336 0 173,495 73,495 72,892
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
11 0 0 201,599 101,599 101,599 0 176,538 76,538 76,538
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
12 0 0 209,868 109,868 109,868 0 179,510 79,510 79,510
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
13 0 0 218,806 118,806 118,806 0 182,389 82,389 82,389
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
14 0 0 228,478 128,478 128,478 0 185,148 85,148 85,148
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
15 0 0 239,657 139,657 139,657 0 187,738 87,738 87,738
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
16 0 0 251,847 151,847 151,847 0 190,098 90,098 90,098
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
17 0 0 265,077 165,077 165,077 0 192,143 92,143 92,143
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
18 0 0 279,451 179,451 179,451 0 193,769 93,769 93,769
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
19 0 0 295,087 195,087 195,087 0 194,865 94,865 94,865
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
20 0 0 312,114 212,114 212,114 0 195,309 95,309 95,309
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- -------------- ------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- -------------- ------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
25 0 0 422,279 322,279 322,279 0 183,916 83,916 83,916
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
30 0 0 587,319 487,319 487,319 0 134,834 34,834 34,834
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
35 0 0 832,188 732,188 732,188 0
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
B - Variable $100,000 55 Male Single 6% Tobacco Usage
(5.02% net)
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
- ------------- ----------------- ------------------------------------------------ ---------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
------------------------------------------------ ---------------------------------------------------
-------------- ----------- ---------- ----------- ------------- -------------- ---------- ----------
Withdrawal Death Account Cash Value Withdrawal Death Benefit Account Cash
Benefit Value Value Value
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $8,622 $0 $107,812 $7,812 $6,950 $0 $107,030 $7,030 $6,168
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
2 8,622 0 115,838 15,838 14,286 0 114,144 14,144 12,592
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
3 8,622 0 124,082 24,082 22,013 0 121,336 21,336 19,267
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
4 8,622 0 132,555 32,555 30,140 0 128,601 28,601 26,187
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
5 8,622 0 141,262 41,262 38,675 0 135,927 35,927 33,341
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
6 8,622 0 150,211 50,211 47,625 0 143,297 43,297 40,710
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
7 8,622 0 159,407 59,407 56,993 0 150,685 50,685 48,271
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
8 0 0 160,207 60,207 58,396 0 149,410 49,410 47,600
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
9 0 0 160,980 60,980 59,773 0 147,804 47,804 46,597
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
10 0 0 161,727 61,727 61,123 0 145,828 45,828 45,224
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
11 0 0 162,699 62,699 62,699 0 143,631 43,631 43,631
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
12 0 0 163,585 63,585 63,585 0 140,998 40,998 40,998
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
13 0 0 164,379 64,379 64,379 0 137,898 37,898 37,898
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
14 0 0 165,079 65,079 65,079 0 134,293 34,293 34,293
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
15 0 0 165,682 65,682 65,682 0 130,130 30,130 30,130
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
16 0 0 166,183 66,183 66,183 0 125,344 25,344 25,344
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
17 0 0 166,506 66,506 66,506 0 119,848 19,848 19,848
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
18 0 0 166,644 66,644 66,644 0 113,546 13,546 13,546
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
19 0 0 166,591 66,591 66,591 0 106,337 6,337 6,337
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
20 0 0 166,339 66,339 66,339
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
25 0 0 160,609 60,609 60,609
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
30 0 0 141,482 41,482 41,482
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
35 0
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- -------------- ----------- ----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- -----------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ ------------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- -------------------- ----------------- ----------------- ----------------- ------------------ ------------------- ------------------
- -------------------- ----------------- ----------------- ----------------- ------------------ ------------------- ------------------
B - Variable $100,000 55 Male Single 0% Tobacco Usage
(-0.98% net)
- -------------------- ----------------- ----------------- ----------------- ------------------ ------------------- ------------------
- ------------ ---------------- -------------------------------------------------- ---------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
------------------------------------------------ ---------------------------------------------------
------------- ------------- ---------- --------- ------------- -------------- ----------- ----------
Withdrawal Death Benefit Account Cash Withdrawal Death Benefit Account Cash
Value Value Value Value
- ------------- ----------------- ------------- ------------- ---------- ---------- ------------ ------------- ----------- ----------
- ------------- ----------------- ------------- ------------- ---------- --------- ------------ -------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $8,622 $0 $107,349 $7,349 $6,487 $0 $106,591 $6,591 $5,729
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
2 8,622 0 114,466 14,466 12,914 0 112,870 12,870 11,318
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
3 8,622 0 121,359 21,359 19,289 0 118,837 18,837 16,768
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
4 8,622 0 128,031 28,031 25,617 0 124,491 24,491 22,077
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
5 8,622 0 134,490 34,490 31,903 0 129,829 29,829 27,242
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
6 8,622 0 140,740 40,740 38,153 0 134,837 34,837 32,250
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
7 8,622 0 146,782 46,782 44,367 0 139,499 39,499 37,084
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
8 0 0 144,459 44,459 42,649 0 135,631 35,631 33,820
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
9 0 0 142,144 42,144 40,937 0 131,580 31,580 30,373
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
10 0 0 139,836 39,836 39,232 0 127,324 27,324 26,720
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
11 0 0 137,688 37,688 37,688 0 122,947 22,947 22,947
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
12 0 0 135,466 35,466 35,466 0 118,320 18,320 18,320
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
13 0 0 133,170 33,170 33,170 0 113,433 13,433 13,433
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
14 0 0 130,802 30,802 30,802 0 108,273 8,273 8,273
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
15 0 0 128,364 28,364 28,364 0 102,813 2,813 2,813
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
16 0 0 125,857 25,857 25,857
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
17 0 0 123,212 23,212 23,212
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
18 0 0 120,432 20,432 20,432
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
19 0 0 117,520 17,520 17,520
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
20 0 0 114,479 14,479 14,479
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
25 0
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
30 0
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
35 0
- ------------- ------------- -------------- -------------- ----------- ---------- ------------- -------------- ----------- ----------
o It is assumed that Premiums are applied at the beginning of the Policy Year
shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------ ------------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
B-Variable $100,000 55 Male Single 12% Tobacco Usage
(11.02% net)
- -------------------- ----------------- ----------------- ----------------- ------------------ ------------------- ------------------
- ------------ -------------- -------------------------------------------------- -----------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
------------------------------------------------ -----------------------------------------------------
-------------- ----------- ---------- ---------- ------------- ----------- ------------ -----------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash Value
Benefit Value Benefit Value
- ------------ -------------- -------------- ----------- ----------- ----------- -------------- ------------ ------------- -----------
- ------------ -------------- -------------- ----------- ----------- ----------- -------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $8,622 $0 $108,276 $8,276 $7,414 $0 $107,470 $7,470 $6,608
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
2 8,622 0 117,264 17,264 15,712 0 115,472 15,472 13,920
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
3 8,622 0 127,027 27,027 24,958 0 124,044 24,044 21,975
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
4 8,622 0 137,639 37,639 35,224 0 133,231 33,231 30,817
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
5 8,622 0 149,175 49,175 46,589 0 143,076 43,076 40,490
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
6 8,622 0 161,723 61,723 59,136 0 153,619 53,619 51,032
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
7 8,622 0 175,369 75,369 72,955 0 164,896 64,896 62,482
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
8 0 0 181,075 81,075 79,264 0 167,803 67,803 65,992
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
9 0 0 187,250 87,250 86,043 0 170,680 70,680 69,473
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
10 0 0 193,939 93,939 93,336 0 173,495 73,495 72,892
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
11 0 5,000 196,090 96,090 96,090 5,000 171,029 71,029 71,029
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
12 0 5,000 198,319 98,319 98,319 5,000 167,960 67,960 67,960
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
13 0 5,000 200,636 100,636 100,636 5,000 164,216 64,216 64,216
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
14 0 5,000 203,048 103,048 103,048 5,000 159,712 59,712 59,712
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
15 0 5,000 205,565 105,565 105,565 5,000 154,339 54,339 54,339
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
16 0 5,000 208,196 108,196 108,196 5,000 147,967 47,967 47,967
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
17 0 5,000 210,879 110,879 110,879 5,000 140,436 40,436 40,436
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
18 0 5,000 213,617 113,617 113,617 5,000 131,561 31,561 31,561
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
19 0 5,000 216,417 116,417 116,417 5,000 121,141 21,141 21,141
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
20 0 5,000 219,284 119,284 119,284 5,000 108,956 8,956 8,956
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
25 0 0 270,534 170,534 170,534
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
30 0 0 340,755 240,755 240,755
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
35 0 0 431,309 331,309 331,309
- ------------- ----------- --------------- ------------ ----------- ----------- -------------- ------------ ------------- -----------
o It is assumed that Premiums are applied at the beginning of the Policy Year
shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- -----------------------------------------------------------------------------------------------------------------------------------
- -------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- -------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
- -------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
B - Variable $100,000 55 Male Single 6% Tobacco Usage
(5.02% net)
- -------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
- ------------- -------------- -------------------------------------------------- ---------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
------------------------------------------------- -----------------------------------------------------
------------- ------------ ---------- ------------ -------------- ------------ ------------- ----------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash Value
Benefit Value Benefit Value
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $8,622 $0 $107,812 $7,812 $6,950 $0 $107,030 $7,030 $6,168
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
2 8,622 0 115,838 15,838 14,286 0 114,144 14,144 12,592
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
3 8,622 0 124,082 24,082 22,013 0 121,336 21,336 19,267
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
4 8,622 0 132,555 32,555 30,140 0 128,601 28,601 26,187
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
5 8,622 0 141,262 41,262 38,675 0 135,927 35,927 33,341
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
6 8,622 0 150,211 50,211 47,625 0 143,297 43,297 40,710
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
7 8,622 0 159,407 59,407 56,993 0 150,685 50,685 48,271
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
8 0 0 160,207 60,207 58,396 0 149,410 49,410 47,600
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
9 0 0 160,980 60,980 59,773 0 147,804 47,804 46,597
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
10 0 0 161,727 61,727 61,123 0 145,828 45,828 45,224
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
11 0 5,000 157,486 57,486 57,486 5,000 138,417 38,417 38,417
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
12 0 5,000 152,961 52,961 52,961 5,000 130,373 30,373 30,373
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
13 0 5,000 148,142 48,142 48,142 5,000 121,657 21,657 21,657
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
14 0 5,000 143,018 43,018 43,018 5,000 112,226 12,226 12,226
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
15 0 5,000 137,577 37,577 37,577 5,000 102,016 2,016 2,016
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
16 0 5,000 131,807 31,807 31,807
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
17 0 5,000 125,623 25,623 25,623
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
18 0 5,000 119,010 19,010 19,010
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
19 0 5,000 111,951 11,951 11,951
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
20 0 5,000 104,429 4,429 4,429
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
25 0
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
30 0
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
35 0
- ------------- ---------- -------------- ------------- ----------- ------------ -------------- ------------ ------------- -----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- -----------------------------------------------------------------------------------------------------------------------------------
- -------------------- ----------------- ----------------- ----------------- ------------------ ------------------- ------------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- --------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- --------------
B - Variable $100,000 55 Male Single 0% Tobacco Usage
(-0.98% net)
- -------------------- ----------------- ------------------ ----------------- ----------------- ------------------- ------------------
- ------------ -------------- ---------------------------------------------------- ---------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
-------------------------------------------------- ---------------------------------------------------
-------------- ----------- ------------ ---------- --------------- ------------ ----------- ----------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash
Benefit Value Benefit Value Value
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $8,622 $0 $107,349 $7,349 $6,487 $0 $106,591 $6,591 $5,729
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
2 8,622 0 114,466 14,466 12,914 0 112,870 12,870 11,318
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
3 8,622 0 121,359 21,359 19,289 0 118,837 18,837 16,768
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
4 8,622 0 128,031 28,031 25,617 0 124,491 24,491 22,077
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
5 8,622 0 134,490 34,490 31,903 0 129,829 29,829 27,242
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
6 8,622 0 140,740 40,740 38,153 0 134,837 34,837 32,250
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
7 8,622 0 146,782 46,782 44,367 0 139,499 39,499 37,084
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
8 0 0 144,459 44,459 42,649 0 135,631 35,631 33,820
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
9 0 0 142,144 42,144 40,937 0 131,580 31,580 30,373
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
10 0 0 139,836 39,836 39,232 0 127,324 27,324 26,720
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
11 0 5,000 132,769 32,769 32,769 5,000 118,028 18,028 18,028
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
12 0 5,000 125,732 25,732 25,732 5,000 108,585 8,585 8,585
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
13 0 5,000 118,723 18,723 18,723
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
14 0 5,000 111,742 11,742 11,742
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
15 0 5,000 104,788 4,788 4,788
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
16 0
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
17 0
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
18 0
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
19 0
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
20 0
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
25 0
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
30 0
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
35 0
- ------------- ----------- --------------- ------------ ------------- ----------- --------------- ------------ ----------- ----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- --------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ ------------------
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ ------------------
A - Level $100,000 65 Male Single 12% No Usage
(11.02% net)
- -------------------- ----------------- ----------------- ----------------- ----------------- ------------------- -------------------
- ------------- --------------- ----------------------------------------------------- ------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
---------------------------------------------------- -------------------------------------------------
-------------- ------------- ------------ ------------ ------------ ------------ ---------- ----------
Withdrawal Death Benefit Account Cash Value Withdrawal Death Account Cash Value
Value Benefit Value
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $10,063 $0 $100,000 $9,982 $8,976 $0 $100,000 $8,535 $7,529
- ------------- ----------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- ---------
- ------------- ----------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- ---------
2 10,063 0 100,000 20,880 19,069 0 100,000 17,857 16,045
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
3 10,063 0 100,000 32,802 30,387 0 100,000 28,093 25,678
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
4 10,063 0 100,000 45,868 43,050 0 100,000 39,397 36,579
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
5 10,063 0 100,000 60,216 57,197 0 100,000 51,954 48,935
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
6 10,063 0 111,655 75,919 72,900 0 100,000 65,994 62,975
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
7 10,063 0 133,903 92,949 90,131 0 116,989 81,208 78,391
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
8 0 0 142,357 100,803 98,689 0 122,826 86,973 84,859
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
9 0 0 151,455 109,304 107,895 0 128,955 93,065 91,656
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
10 0 0 161,263 118,510 117,806 0 135,391 99,497 98,793
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
11 0 0 172,534 129,001 129,001 0 142,724 106,712 106,712
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
12 0 0 184,623 140,335 140,335 0 150,457 114,364 114,364
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
13 0 0 197,598 152,588 152,588 0 158,613 122,483 122,483
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
14 0 0 212,586 166,675 166,675 0 167,215 131,103 131,103
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
15 0 0 228,772 182,010 182,010 0 176,289 140,255 140,255
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
16 0 0 246,281 198,714 198,714 0 185,859 149,962 149,962
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
17 0 0 265,091 216,784 216,784 0 196,932 161,045 161,045
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
18 0 0 285,367 236,351 236,351 0 208,671 172,829 172,829
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
19 0 0 307,284 257,559 257,559 0 221,117 185,336 185,336
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
20 0 0 331,024 280,568 280,568 0 234,315 198,600 198,600
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
25 0 0 482,158 428,407 428,407 0 313,375 278,440 278,440
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
30 0 0 702,446 655,711 655,711 0 419,816 391,885 391,885
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
35 0 0 1,035,967 1,032,586 1,032,586 0 565,720 563,874 563,874
- ------------- ---------- --------------- -------------- ------------ ------------- ------------ ------------ ----------- -----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------- --------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
- --------------------- ----------------- ----------------- ----------------- ----------------- ------------------- ------------------
A - Level $100,000 65 Male Single 6% No Usage
(5.02% net)
- ----------------- ------------------ ------------------ ------------------ ------------------ ------------------- ------------------
- --------------------------- ---------------------------------------------------- ---------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
------------------------------------------------ ---------------------------------------------------
-------------- ----------- ----------- ---------- ------------- ----------- ------------ -----------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash
Benefit Value Benefit Value Value
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $10,063 $0 $100,000 $9,430 $8,423 $0 $100,000 $8,021 $7,015
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
2 10,063 0 100,000 19,167 17,356 0 100,000 16,293 14,482
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
3 10,063 0 100,000 29,240 26,824 0 100,000 24,858 22,442
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
4 10,063 0 100,000 39,677 36,859 0 100,000 33,763 30,946
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
5 10,063 0 100,000 50,510 47,491 0 100,000 43,067 40,048
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
6 10,063 0 100,000 61,773 58,754 0 100,000 52,834 49,815
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
7 10,063 0 105,770 73,420 70,603 0 100,000 63,153 60,335
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
8 0 0 106,376 75,325 73,212 0 100,000 63,563 61,450
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
9 0 0 107,057 77,262 75,853 0 100,000 63,805 62,396
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
10 0 0 107,822 79,237 78,532 0 100,000 63,845 63,140
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
11 0 0 109,109 81,579 81,579 0 100,000 63,916 63,916
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
12 0 0 110,426 83,936 83,936 0 100,000 63,739 63,739
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
13 0 0 111,776 86,315 86,315 0 100,000 63,269 63,269
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
14 0 0 113,162 88,723 88,723 0 100,000 62,449 62,449
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
15 0 0 114,591 91,168 91,168 0 100,000 61,192 61,192
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
16 0 0 116,079 93,659 93,659 0 100,000 59,378 59,378
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
17 0 0 117,566 96,142 96,142 0 100,000 56,836 56,836
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
18 0 0 119,081 98,627 98,627 0 100,000 53,322 53,322
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
19 0 0 120,651 101,127 101,127 0 100,000 48,501 48,501
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
20 0 0 122,290 103,650 103,650 0 100,000 41,916 41,916
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
25 0 0 131,338 116,697 116,697
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
30 0 0 141,087 131,700 131,700
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
35 0 0 155,012 154,506 154,506
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ ------------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ------------------ ----------------- ----------------- ------------------ -----------------
- --------------------- ------------------ ------------------ ----------------- ----------------- ------------------ -----------------
A - Level $100,000 65 Male Single 0% No Usage
(-0.98% net)
- --------------------- ------------------ ------------------ ----------------- ----------------- ------------------ -----------------
- ------------- ---------------- ----------------------------------------------------- -----------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
--------------------------------------------------- -------------------------------------------------
-------------- ----------- ----------- ---------- ------------- -------------- ----------- ----------
Withdrawal Death Account Cash Value Withdrawal Death Benefit Account Cash
Benefit Value Value Value
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $10,063 $0 $100,000 $8,877 $7,871 $0 $100,000 $7,509 $6,502
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
2 10,063 0 100,000 17,520 15,708 0 100,000 14,793 12,982
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
3 10,063 0 100,000 25,945 23,529 0 100,000 21,876 19,461
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
4 10,063 0 100,000 34,168 31,351 0 100,000 28,777 25,959
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
5 10,063 0 100,000 42,207 39,188 0 100,000 35,515 32,496
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
6 10,063 0 100,000 50,076 47,058 0 100,000 42,107 39,088
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
7 10,063 0 100,000 57,759 54,941 0 100,000 48,573 45,755
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
8 0 0 100,000 55,634 53,521 0 100,000 44,964 42,851
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
9 0 0 100,000 53,467 52,059 0 100,000 40,974 39,565
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
10 0 0 100,000 51,253 50,548 0 100,000 36,514 35,809
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
11 0 0 100,000 49,184 49,184 0 100,000 31,625 31,625
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
12 0 0 100,000 46,949 46,949 0 100,000 26,037 26,037
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
13 0 0 100,000 44,533 44,533 0 100,000 19,610 19,610
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
14 0 0 100,000 41,920 41,920 0 100,000 12,166 12,166
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
15 0 0 100,000 39,090 39,090 0 100,000 3,463 3,463
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
16 0 0 100,000 36,021 36,021
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
17 0 0 100,000 32,504 32,504
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
18 0 0 100,000 28,483 28,483
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
19 0 0 100,000 23,897 23,897
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
20 0 0 100,000 18,667 18,667
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
25 0
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
30 0
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
35 0
- ------------- ------------ --------------- ------------ ------------ ----------- ------------- -------------- ----------- ----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ----------------- ------------------ ------------------ ----------------- ------------------ -----------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ ------------------
- --------------------- ----------------- ----------------- ----------------- ------------------ ------------------- -----------------
A - Level $100,000 55 Male Joint 12% No Usage
52 Female (11.02% net)
- ----------------- ------------------ ------------------ ------------------ ------------------ ------------------- ------------------
- ------------- ----------------- ------------------------------------------------ ---------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
------------------------------------------------ ---------------------------------------------------
-------------- ----------- ---------- ----------- ------------- ------------ ------------- ---------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash
Benefit Value Benefit Value Value
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $4,676 $0 $100,000 $4,953 $4,486 $0 $100,000 $4,953 $4,486
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
2 4,676 0 100,000 10,353 9,511 0 100,000 10,353 9,511
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
3 4,676 0 100,000 16,239 15,117 0 100,000 16,239 15,117
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
4 4,676 0 100,000 22,655 21,346 0 100,000 22,655 21,346
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
5 4,676 0 100,000 29,650 28,247 0 100,000 29,650 28,247
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
6 4,676 0 100,000 37,278 35,875 0 100,000 37,278 35,875
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
7 4,676 0 112,784 45,587 44,278 0 112,784 45,587 44,278
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
8 0 0 118,408 49,679 48,697 0 118,408 49,679 48,697
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
9 0 0 124,311 54,118 53,463 0 124,311 54,118 53,463
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
10 0 0 130,509 58,927 58,600 0 130,509 58,927 58,600
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
11 0 0 137,565 64,391 64,391 0 137,565 64,391 64,391
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
12 0 0 145,053 70,348 70,348 0 145,001 70,323 70,323
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
13 0 0 153,821 77,249 77,249 0 153,604 77,140 77,140
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
14 0 0 163,240 84,836 84,836 0 162,717 84,564 84,564
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
15 0 0 173,373 93,178 93,178 0 172,369 92,639 92,639
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
16 0 0 184,286 102,353 102,353 0 182,594 101,413 101,413
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
17 0 0 196,054 112,444 112,444 0 193,426 110,937 110,937
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
18 0 0 208,768 123,548 123,548 0 204,899 121,258 121,258
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
19 0 0 222,533 135,769 135,769 0 217,052 132,425 132,425
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
20 0 0 237,465 149,221 149,221 0 229,926 144,484 144,484
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
25 0 0 334,226 239,453 239,453 0 306,698 219,731 219,731
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
30 0 0 480,194 381,089 381,089 0 409,235 324,775 324,775
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
35 0 0 700,257 598,322 598,322 0 546,484 466,933 466,933
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------- ----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ ------------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ ------------------
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------ ------------------
A - Level $100,000 55 Male Joint 6% No Usage
52 Female (5.02% net)
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------- -----------------
- ------------- ----------------- ---------------------------------------------------- -----------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
--------------------------------------------------- -----------------------------------------------
-------------- ----------- ---------- ---------- ------------- ------------ ------------ -----------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash
Benefit Value Benefit Value Value
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $4,676 $0 $100,000 $4,688 $4,220 $0 $100,000 $4,688 $4,220
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
2 4,676 0 100,000 9,524 8,682 0 100,000 9,524 8,682
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
3 4,676 0 100,000 14,511 13,389 0 100,000 14,511 13,389
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
4 4,676 0 100,000 19,654 18,345 0 100,000 19,654 18,345
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
5 4,676 0 100,000 24,957 23,554 0 100,000 24,957 23,554
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
6 4,676 0 100,000 30,425 29,022 0 100,000 30,425 29,022
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
7 4,676 0 100,000 36,064 34,754 0 100,000 36,064 34,754
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
8 0 0 100,000 37,179 36,197 0 100,000 37,179 36,197
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
9 0 0 100,000 38,310 37,655 0 100,000 38,310 37,655
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
10 0 0 100,000 39,452 39,125 0 100,000 39,452 39,125
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
11 0 0 100,000 40,764 40,764 0 100,000 40,764 40,764
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
12 0 0 100,000 42,087 42,087 0 100,000 42,087 42,087
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
13 0 0 100,000 43,442 43,442 0 100,000 43,417 43,417
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
14 0 0 100,000 44,840 44,840 0 100,000 44,746 44,746
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
15 0 0 100,000 46,284 46,284 0 100,000 46,069 46,069
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
16 0 0 100,000 47,776 47,776 0 100,000 47,377 47,377
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
17 0 0 100,000 49,318 49,318 0 100,000 48,662 48,662
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
18 0 0 100,000 50,915 50,915 0 100,000 49,912 49,912
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
19 0 0 100,000 52,570 52,570 0 100,000 51,113 51,113
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
20 0 0 100,000 54,287 54,287 0 100,000 52,246 52,246
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
25 0 0 100,000 63,757 63,757 0 100,000 56,003 56,003
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
30 0 0 100,000 75,587 75,587 0 100,000 52,722 52,722
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
35 0 0 104,501 89,289 89,289 0 100,000 25,874 25,874
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Flexible Premium Variable Life Insurance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Illustration Assumptions:
Issue State: Connecticut
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------- ------------------ ------------------ ----------------- ----------------- ------------------ -----------------
Death Benefit Option Specified Issue Age(s) Male/Female Single Life/ Hypothetical Rate Tobacco Usage
Amount Joint Life of Return Classification
- --------------------- ------------------ ----------------- ---------------- ----------------- ------------------- ------------------
- --------------------- ------------------ ----------------- ---------------- ----------------- ------------------- ------------------
A - Level $100,000 55 Male Joint 0% No Usage
52 Female (-0.98% net)
- --------------------- ------------------ ----------------- ----------------- ----------------- ------------------- -----------------
- ------------- ----------------- ------------------------------------------------ ---------------------------------------------------
Policy Year Premium Current Charges Guaranteed Charges
Payments*
------------------------------------------------ ---------------------------------------------------
-------------- ----------- ---------- ----------- ------------- ------------ ------------ ----------
Withdrawal Death Account Cash Value Withdrawal Death Account Cash
Benefit Value Benefit Value Value
- ------------- ------------ --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ---------------------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $4,676 $0 $100,000 $4,423 $3,955 $0 $100,000 $4,423 $3,955
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
2 4,676 0 100,000 8,725 7,884 0 100,000 8,725 7,884
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
3 4,676 0 100,000 12,911 11,788 0 100,000 12,911 11,788
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
4 4,676 0 100,000 16,980 15,670 0 100,000 16,980 15,670
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
5 4,676 0 100,000 20,934 19,531 0 100,000 20,934 19,531
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
6 4,676 0 100,000 24,776 23,373 0 100,000 24,776 23,373
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
7 4,676 0 100,000 28,506 27,197 0 100,000 28,506 27,197
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
8 0 0 100,000 27,693 26,711 0 100,000 27,693 26,711
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
9 0 0 100,000 26,873 26,218 0 100,000 26,873 26,218
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
10 0 0 100,000 26,038 25,711 0 100,000 26,038 25,711
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
11 0 0 100,000 25,283 25,283 0 100,000 25,283 25,283
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
12 0 0 100,000 24,518 24,518 0 100,000 24,491 24,491
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
13 0 0 100,000 23,756 23,756 0 100,000 23,650 23,650
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
14 0 0 100,000 22,996 22,996 0 100,000 22,749 22,749
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
15 0 0 100,000 22,238 22,238 0 100,000 21,773 21,773
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
16 0 0 100,000 21,483 21,483 0 100,000 20,708 20,708
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
17 0 0 100,000 20,731 20,731 0 100,000 19,535 19,535
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
18 0 0 100,000 19,983 19,983 0 100,000 18,227 18,227
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
19 0 0 100,000 19,241 19,241 0 100,000 16,753 16,753
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
20 0 0 100,000 18,505 18,505 0 100,000 15,071 15,071
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
25 0 0 100,000 14,624 14,624 0 100,000 1,391 1,391
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
30 0 0 100,000 7,617 7,617
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
35 0
- ------------- ------------- --------------- ------------ ----------- ----------- ------------- ------------ ------------ -----------
* It is assumed that Premiums are applied at the beginning of the Policy Year shown.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS WILL DEPEND ON INVESTMENT
ALLOCATIONS MADE BY THE POLICY OWNER AND MAY BE MORE OR LESS THAN THOSE SHOWN.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY FLUCTUATED
ABOVE OR BELOW THE AVERAGE AMOUNT DURING A PERIOD OF POLICY YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH VALUE FOR A POLICY WOULD ALSO VARY DEPENDING ON
THE TIMING AND AMOUNT OF PREMIUM PAYMENTS, THE INVESTMENT ALLOCATIONS MADE TO
THE SUB-ACCOUNTS AND THE RATES OF RETURN OF THE SUB-ACCOUNTS. NO REPRESENTATION
CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
<TABLE>
<CAPTION>
APPENDIX B
MULTIPLE FACTORS FOR DETERMINATION OF MINIMUM REQUIRED DEATH BENEFITS
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
Attained Male Male Female Female Unisex Unisex
Age No Tobacco Use Tobacco User No Tobacco Use Tobacco User No Tobacco Use Tobacco User
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
0 10.342889 10.342889 12.907301 12.907301 10.762146 10.762146
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
1 10.190317 10.190317 12.688989 12.688989 10.599529 10.599529
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
2 9.889919 9.889919 12.319258 12.319258 10.287454 10.287454
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
3 9.592070 9.592070 11.951280 11.951280 9.977856 9.977856
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
4 9.298905 9.298905 11.588414 11.588414 9.673048 9.673048
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
5 9.009218 9.009218 11.232252 11.232252 9.372522 9.372522
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
6 8.722792 8.722792 10.881891 10.881891 9.075163 9.075163
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
7 8.440163 8.440163 10.537673 10.537673 8.782254 8.782254
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
8 8.161817 8.161817 10.199897 10.199897 8.494209 8.494209
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
9 7.889296 7.889296 9.869720 9.869720 8.212001 8.212001
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
10 7.623823 7.623823 9.547222 9.547222 7.936973 7.936973
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
11 7.366338 7.366338 9.232460 9.232460 7.670163 7.670163
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
12 7.118866 7.118866 8.927638 8.927638 7.413309 7.413309
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
13 6.882900 6.882900 8.633085 8.633085 7.167689 7.167689
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
14 6.659106 6.659106 8.348988 8.348988 6.934195 6.934195
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
15 6.447167 6.447167 8.075417 8.075417 6.712623 6.712623
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
16 7.714038 6.246384 8.883289 7.811801 7.921276 6.501967
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
17 7.490087 6.067088 8.601262 7.562175 7.687332 6.311944
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
18 7.274451 5.895022 8.327973 7.321069 7.461892 6.129616
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
19 7.065283 5.728835 8.063091 7.088069 7.243510 5.953228
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
20 6.861458 5.567128 7.806305 6.861967 7.030541 5.781887
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
21 6.661653 5.408986 7.556813 6.642537 6.822445 5.614310
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
22 6.464794 5.253425 7.314421 6.429210 6.617636 5.449947
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
23 6.270710 5.099656 7.078500 6.222172 6.416275 5.287891
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
24 6.079284 4.947868 6.849350 6.021229 6.218176 5.128299
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
25 5.890750 4.797861 6.626794 5.826195 6.023827 4.971113
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
26 5.705040 4.649678 6.410659 5.636893 5.832763 4.816305
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
27 5.522898 4.504032 6.201109 5.453650 5.645711 4.664576
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
28 5.344683 4.361348 5.997622 5.275991 5.462995 4.516156
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
29 5.170680 4.221963 5.800329 5.103941 5.284868 4.371380
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
30 5.001105 4.086269 5.609297 4.937480 5.111516 4.230639
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
31 4.836116 3.954433 5.424047 4.776558 4.942867 4.093959
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
32 4.675997 3.826566 5.244630 4.620750 4.779217 3.961457
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
33 4.520775 3.702732 5.070836 4.470011 4.620597 3.833199
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
34 4.370595 3.583042 4.902664 4.324416 4.467161 3.709205
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
35 4.225394 3.467465 4.740074 4.183848 4.318842 3.589457
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
36 4.085086 3.356021 4.582997 4.048174 4.175553 3.473994
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
37 3.949567 3.248690 4.431647 3.917840 4.037186 3.362809
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
38 3.818941 3.145553 4.285998 3.792813 3.903851 3.256004
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
39 3.693040 3.046504 4.145845 3.673016 3.775375 3.153477
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
40 3.571693 2.951476 4.010977 3.558241 3.651580 3.055167
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
41 3.454900 2.860428 3.881415 3.448537 3.532470 2.960982
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
42 3.342458 2.773184 3.756910 3.343648 3.417834 2.870806
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
43 3.234168 2.689611 3.637120 3.243173 3.307466 2.784401
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
44 3.129908 2.609564 3.521738 3.146753 3.201166 2.701638
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
45 3.029541 2.532930 3.410485 3.054066 3.098808 2.622372
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
46 2.932983 2.459507 3.303261 2.964942 3.000319 2.546412
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
47 2.840076 2.389067 3.199881 2.879156 2.905488 2.473497
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
48 2.750661 2.321491 3.100233 2.796498 2.814220 2.403491
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
49 2.664621 2.256653 3.004132 2.716869 2.726358 2.336319
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
50 2.581834 2.194449 2.911514 2.640204 2.641788 2.271832
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
Attained Male Male Female Female Unisex Unisex
Age No Tobacco Use Tobacco User No Tobacco Use Tobacco User No Tobacco Use Tobacco User
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
51 2.502245 2.134813 2.822298 2.566383 2.560470 2.209991
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
52 2.425812 2.077736 2.736386 2.495279 2.482337 2.150759
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
53 2.352495 2.023195 2.653757 2.426909 2.407368 2.094123
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
54 2.282258 1.971184 2.574318 2.361224 2.335512 2.040066
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
55 2.215003 1.921607 2.497845 2.298000 2.266657 1.988478
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
56 2.150641 1.874323 2.424204 2.237060 2.200707 1.939204
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
57 2.089041 1.829175 2.353159 2.178160 2.137499 1.892074
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
58 2.030020 1.786005 2.284466 2.121004 2.076846 1.846923
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
59 1.973499 1.744664 2.217941 2.065411 2.018656 1.803579
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
60 1.919419 1.705054 2.153572 2.011322 1.962861 1.761947
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
61 1.867715 1.667166 2.091395 1.958834 1.909430 1.722035
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
62 1.818313 1.631023 2.031522 1.908128 1.858318 1.683884
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
63 1.771222 1.596648 1.974084 1.859457 1.809548 1.647549
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
64 1.726411 1.564046 1.919204 1.812975 1.763101 1.613050
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
65 1.683805 1.533171 1.866818 1.768643 1.718910 1.580343
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
66 1.643300 1.503897 1.816773 1.726291 1.676876 1.549291
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
67 1.604764 1.476075 1.768841 1.685679 1.636838 1.519731
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
68 1.568051 1.449538 1.722783 1.646485 1.598627 1.491460
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
69 1.533054 1.424158 1.678405 1.608508 1.562129 1.464331
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
70 1.499720 1.399895 1.635655 1.571688 1.527284 1.438291
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
71 1.468047 1.376751 1.594581 1.536120 1.494089 1.413350
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
72 1.438063 1.354779 1.555314 1.502053 1.462589 1.389586
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
73 1.409834 1.334059 1.518005 1.469679 1.432868 1.367099
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
74 1.383379 1.314626 1.482760 1.439131 1.404950 1.345937
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
75 1.358636 1.296498 1.449578 1.410430 1.378783 1.326116
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
76 1.335469 1.279631 1.418378 1.383477 1.354239 1.307580
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
77 1.313718 1.263864 1.388992 1.358100 1.331154 1.290152
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
78 1.293201 1.248999 1.361233 1.334088 1.309345 1.273628
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
79 1.273759 1.234861 1.334950 1.311271 1.288648 1.257826
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
80 1.255309 1.221364 1.310065 1.289565 1.268984 1.242660
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
81 1.237839 1.208496 1.286574 1.268966 1.250340 1.228120
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
82 1.221386 1.196307 1.264515 1.249510 1.232759 1.214254
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
83 1.206024 1.184882 1.243944 1.231249 1.216310 1.201144
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
84 1.191790 1.174263 1.224858 1.214302 1.201025 1.188858
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
85 1.178654 1.164403 1.207192 1.198599 1.186864 1.177349
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
86 1.166512 1.155169 1.190822 1.184011 1.173721 1.166496
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
87 1.155226 1.146356 1.175596 1.170379 1.161453 1.156126
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
88 1.144611 1.137856 1.161343 1.157508 1.149880 1.146117
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
89 1.134451 1.129578 1.147875 1.145194 1.138803 1.136350
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
90 1.124540 1.121277 1.134998 1.133196 1.128023 1.126599
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
91 1.114649 1.112675 1.122488 1.121417 1.117328 1.116680
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
92 1.104523 1.103442 1.110106 1.109599 1.106476 1.106325
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
93 1.093858 1.093346 1.097598 1.097460 1.095193 1.095309
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
94 1.082392 1.082252 1.084722 1.084722 1.083237 1.083449
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
95 1.070054 1.070054 1.071362 1.071362 1.070535 1.070696
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
96 1.057074 1.057074 1.057701 1.057701 1.057307 1.057384
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
97 1.044319 1.044319 1.044548 1.044548 1.044405 1.044433
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
98 1.034629 1.034629 1.034629 1.034629 1.034629 1.034629
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
99 1.025648 1.025648 1.025648 1.025648 1.025648 1.025648
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
- ------------------------------------------------------------------------------------------------------------------------------------
The Minimum Required Death Benefit is determined by treating the Account Value as if it were a net single premium. We determine
the Minimum Required Death Benefit by multiplying the Account Value by factors that are determined for your Policy as of the
Policy Date. These factors vary by the attained Age, gender (where permitted), tobacco usage class and risk class of each
Insured. The factors shown above are applicable for Insureds in the preferred risk class. The factors for other risk classes are
available upon request. Factors for joint life cases depend upon a standard
insurance industry method used to derive the applicable factor for both
Insureds.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
APPENDIX C
PREMIUM TAX RATES*
--------------------------- ----------------- -------------------------- ----------------
<S> <C> <C> <C>
STATE TAX RATE STATE TAX RATE
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Alabama 2.70% Nebraska 1.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Alaska 2.70% Nevada 3.50%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Arizona 2.00% New Hampshire 2.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Arkansas 2.50% New Jersey 2.10%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
California 2.35% New Mexico 3.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Colorado 2.15% New York 0.70%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Connecticut 1.75% North Carolina 1.90%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Delaware 2.00% North Dakota 2.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
District of Columbia 2.25% Ohio 2.50%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Florida 1.75% Oklahoma 2.25%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Georgia 2.25% Oregon 2.25%**
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Hawaii 2.75% Pennsylvania 2.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Idaho 2.75% Rhode Island 2.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Illinois 2.00% South Carolina 0.75%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Indiana 2.00% South Dakota 2.50%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Iowa 2.00% Tennessee 1.90%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Kansas 2.00% Texas 1.75%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Kentucky 2.00% Utah 2.25%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Louisiana 2.25% Vermont 2.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Maine 2.00% Virginia 2.25%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Maryland 2.00% Washington 2.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Massachusetts 2.00% West Virginia 3.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Michigan N/A Wisconsin 2.00%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Minnesota 2.00% Wyoming 0.75%
--------------------------- ----------------- ------ -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Mississippi 3.00% Puerto Rico 4.00%
--------------------------- ----------------- -------------------------- ----------------
--------------------------- ----------------- ------ -------------------------- ----------------
Missouri 2.00% Virgin Islands 5.00%
--------------------------- ----------------- -------------------------- ----------------
--------------------------- ----------------- ------
Montana 2.75%
--------------------------- -----------------
* The above Premium Tax rates are current as of the date of this Prospectus. These rates are subject to change.
** Oregon does not allow us to apply the premium tax charge to a contract owner's premium payments. Therefore, the amount of
the premium tax charge is 0.0%.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
APPENDIX D
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE CHARGES
(Per $1,000 of Net Amount at Risk)
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
Male Male Female Female Unisex Unisex
Attained No Tobacco Use Tobacco User No Tobacco Use Tobacco User No Tobacco Use Tobacco User
Age
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
0 N/A 0.21943 N/A 0.15680 N/A 0.20690
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
1 N/A 0.08587 N/A 0.07003 N/A 0.08254
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
2 N/A 0.08254 N/A 0.06669 N/A 0.07920
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
3 N/A 0.08087 N/A 0.06502 N/A 0.07753
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
4 N/A 0.07753 N/A 0.06419 N/A 0.07503
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
5 N/A 0.07336 N/A 0.06252 N/A 0.07086
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
6 N/A 0.06919 N/A 0.06085 N/A 0.06753
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
7 N/A 0.06502 N/A 0.05919 N/A 0.06419
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
8 N/A 0.06252 N/A 0.05835 N/A 0.06169
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
9 N/A 0.06169 N/A 0.05752 N/A 0.06085
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
10 N/A 0.06252 N/A 0.05668 N/A 0.06169
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
11 N/A 0.06753 N/A 0.05835 N/A 0.06586
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
12 N/A 0.07670 N/A 0.06085 N/A 0.07336
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
13 N/A 0.08921 N/A 0.06419 N/A 0.08421
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
14 N/A 0.10339 N/A 0.06836 N/A 0.09672
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
15 N/A 0.11841 N/A 0.07253 N/A 0.10923
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
16 0.12342 0.16348 0.07503 0.08421 0.11340 0.14762
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
17 0.13093 0.17517 0.07753 0.08838 0.12008 0.15847
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
18 0.13593 0.18435 0.08004 0.09255 0.12509 0.16598
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
19 0.13927 0.19020 0.08254 0.09505 0.12759 0.17183
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
20 0.14011 0.19354 0.08421 0.09755 0.12926 0.17433
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
21 0.13844 0.19354 0.08587 0.09922 0.12759 0.17517
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
22 0.13593 0.19020 0.08671 0.10172 0.12592 0.17266
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
23 0.13260 0.18686 0.08838 0.10423 0.12342 0.17016
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
24 0.12926 0.18185 0.09004 0.10673 0.12175 0.16682
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
25 0.12509 0.17600 0.09171 0.10923 0.11841 0.16265
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
26 0.12258 0.17266 0.09422 0.11340 0.11674 0.16098
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
27 0.12091 0.17099 0.09588 0.11674 0.11591 0.16014
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
28 0.12008 0.17099 0.09839 0.12091 0.11591 0.16098
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
29 0.12008 0.17350 0.10172 0.12592 0.11674 0.16432
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
30 0.12091 0.17767 0.10423 0.13176 0.11758 0.16849
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
31 0.12342 0.18352 0.10756 0.13677 0.12008 0.17433
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
32 0.12675 0.19103 0.11090 0.14261 0.12342 0.18185
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
33 0.13176 0.20106 0.11507 0.15012 0.12842 0.19103
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
34 0.13760 0.21275 0.12008 0.15847 0.13427 0.20189
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
35 0.14428 0.22695 0.12592 0.16765 0.14094 0.21525
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
36 0.15179 0.24366 0.13427 0.18185 0.14845 0.23113
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
37 0.16181 0.26455 0.14428 0.19855 0.15847 0.25118
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
38 0.17266 0.28796 0.15513 0.21776 0.16932 0.27375
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
39 0.18435 0.31471 0.16682 0.23865 0.18101 0.29966
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
40 0.19855 0.34566 0.18101 0.26372 0.19521 0.32893
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
41 0.21358 0.37912 0.19604 0.29046 0.21024 0.36155
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
42 0.22946 0.41595 0.21108 0.31722 0.22611 0.39586
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
43 0.24700 0.45614 0.22611 0.34398 0.24282 0.43353
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
44 0.26622 0.50054 0.24115 0.37076 0.26121 0.47457
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
45 0.28796 0.54748 0.25787 0.39921 0.28210 0.51814
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
46 0.31137 0.59612 0.27542 0.42851 0.30384 0.56257
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
47 0.33646 0.64898 0.29464 0.45866 0.32809 0.61038
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
48 0.36406 0.70607 0.31471 0.49133 0.35402 0.66325
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
49 0.39419 0.76824 0.33729 0.52736 0.38247 0.71951
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
50 0.42851 0.83718 0.36239 0.56592 0.41511 0.78253
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
51 0.46787 0.91543 0.39000 0.60702 0.45196 0.85316
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
Male Male Female Female Unisex Unisex
Attained No Tobacco Use Tobacco User No Tobacco Use Tobacco User No Tobacco Use Tobacco User
Age
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
52 0.51311 1.00386 0.42181 0.65401 0.49468 0.93311
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
53 0.56509 1.10418 0.45698 0.70607 0.54329 1.02324
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
54 0.62296 1.21391 0.49300 0.75899 0.59696 1.12105
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
55 0.68759 1.33137 0.53155 0.81363 0.65653 1.22488
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
56 0.75815 1.45577 0.57012 0.86746 0.72035 1.33391
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
57 0.83297 1.58711 0.60786 0.91795 0.78757 1.44815
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
58 0.91627 1.72545 0.64562 0.96763 0.86157 1.56676
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
59 1.00976 1.87420 0.68843 1.02071 0.94405 1.69403
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
60 1.11430 2.04024 0.73883 1.08394 1.03757 1.83678
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
61 1.23080 2.22793 0.80102 1.16325 1.14299 1.99934
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
62 1.36520 2.43998 0.87840 1.26544 1.26544 2.18524
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
63 1.51760 2.67741 0.97353 1.38974 1.40497 2.39462
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
64 1.68724 2.93784 1.08057 1.52862 1.56083 2.62421
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
65 1.87335 3.21456 1.19617 1.67535 1.73224 2.86729
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
66 2.07519 3.50512 1.31615 1.82487 1.91589 3.12050
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
67 2.29201 3.80705 1.43883 1.96953 2.11100 3.37962
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
68 2.52819 4.12480 1.56592 2.11612 2.32278 3.64902
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
69 2.79077 4.47081 1.70761 2.27577 2.55733 3.94098
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
70 3.08860 4.85419 1.87420 2.46481 2.82343 4.26532
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
71 3.42980 5.28689 2.07775 2.70488 3.13085 4.63554
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
72 3.82530 5.77849 2.32791 2.99984 3.49040 5.06103
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
73 4.27493 6.32638 2.62850 3.35194 3.90095 5.53811
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
74 4.77159 6.93068 2.97572 3.75492 4.35708 6.06583
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
75 5.30544 7.58072 3.36491 4.19722 4.84979 6.63341
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
76 5.87269 8.25008 3.78793 4.66976 5.37438 7.21630
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
77 6.46947 8.92720 4.24349 5.16595 5.92694 7.80753
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
78 7.09996 9.61687 4.73909 5.69327 6.51244 8.40997
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
79 7.78482 10.34362 5.29130 6.27100 7.15045 9.04869
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
80 8.54724 11.13283 5.92338 6.92258 7.86386 9.74764
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
81 9.40951 12.00894 6.65582 7.66774 8.67463 10.53068
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
82 10.39222 12.98985 7.50735 8.52252 9.60297 11.41509
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
83 11.49455 14.06239 8.47766 9.51961 10.64779 12.40384
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
84 12.69876 15.19328 9.55943 10.61311 11.79409 13.46162
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
85 13.98063 16.34562 10.74440 11.78935 13.02257 14.56335
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
86 15.32651 17.49176 12.02798 13.04182 14.32180 15.69269
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
87 16.71801 18.68356 13.41230 14.36087 15.68277 16.87966
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
88 18.15089 19.94244 14.90282 15.75618 17.10607 18.14273
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
89 19.64755 21.21198 16.51661 17.23007 18.61283 19.45082
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
90 21.23308 22.51167 18.27329 18.89300 20.23100 20.86977
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
91 22.94951 23.88390 20.22265 20.71856 22.00462 22.41430
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
92 24.87000 25.50217 22.45281 22.78829 24.01446 24.21830
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
93 27.20133 27.62219 25.14857 25.28211 26.46176 26.49647
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
94 30.42888 30.59762 28.73602 28.73602 29.81058 29.68976
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
95 35.49222 35.49222 34.15815 34.15815 34.99881 34.83496
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
96 44.51508 44.51508 43.54279 43.54279 44.15279 44.03236
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
97 62.83141 62.83141 62.19405 62.19405 62.59184 62.51383
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
98 83.33333 83.33333 83.33333 83.33333 83.33333 83.33333
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
99 83.33333 83.33333 83.33333 83.33333 83.33333 83.33333
-------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
We base the guaranteed maximum cost of insurance charges on the sex distinct
1980 Commissioners Standard Ordinary Ultimate Mortality Smoker/Non-Smoker Table,
age last birthday unless unisex charges apply. If unisex charges apply, a unisex
variation of that table is used. The amounts shown are per $1,000 of Net Amount
at Risk. The guaranteed maximum cost of insurance charge depends on the tobacco
usage class and risk class of each Insured. The charges shown above are
applicable for Insureds in the preferred risk class. The guaranteed maximum cost
of insurance charges for other risk classes are available upon request. Charges
for substandard risk classes are based on a multiple of the table rates. Cost of
insurance charges for joint life cases are determined using a standard insurance
industry method used to derive the applicable charge based on the applicable
cost of insurance charge for both Insureds.
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
APPENDIX E
CURRENT MONTHLY COST OF INSURANCE RATES
(per $1,000 of Net Amount at Risk)
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
Male Male Female Female Unisex Unisex
Attained No Tobacco Use Tobacco User No Tobacco Use Tobacco User No Tobacco Use Tobacco User
Age
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
0 0.08329 0.08329 0.04935 0.04935 0.07820 0.07820
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
1 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
2 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
3 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
4 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
5 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
6 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
7 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
8 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
9 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
10 0.02787 0.02787 0.01969 0.01969 0.02664 0.02664
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
11 0.03181 0.03181 0.02044 0.02044 0.03010 0.03010
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
12 0.03575 0.03575 0.02119 0.02119 0.03356 0.03356
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
13 0.03969 0.03969 0.02195 0.02195 0.03703 0.03703
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
14 0.04363 0.04363 0.02270 0.02270 0.04049 0.04049
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
15 0.04757 0.04757 0.02345 0.02345 0.04395 0.04395
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
16 0.05017 0.08451 0.02350 0.03350 0.04600 0.07701
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
17 0.05034 0.08484 0.02367 0.03367 0.04617 0.07734
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
18 0.05050 0.08517 0.02383 0.03383 0.04634 0.07767
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
19 0.05067 0.08551 0.02400 0.03400 0.04650 0.07801
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
20 0.05084 0.08584 0.02417 0.03417 0.04667 0.07834
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
21 0.05100 0.08634 0.02417 0.03417 0.04684 0.07884
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
22 0.05117 0.08684 0.02417 0.03417 0.04700 0.07934
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
23 0.05134 0.08734 0.02417 0.03417 0.04717 0.07984
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
24 0.05150 0.08784 0.02417 0.03417 0.04734 0.08034
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
25 0.05167 0.08834 0.02417 0.03417 0.04750 0.08084
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
26 0.05217 0.08917 0.02433 0.03500 0.04800 0.08151
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
27 0.05267 0.09001 0.02450 0.03583 0.04850 0.08217
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
28 0.05317 0.09084 0.02467 0.03667 0.04900 0.08284
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
29 0.05367 0.09168 0.02483 0.03750 0.04950 0.08351
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
30 0.05417 0.09251 0.02500 0.03833 0.05000 0.08417
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
31 0.05467 0.09351 0.02600 0.04017 0.05050 0.08534
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
32 0.05517 0.09451 0.02700 0.04200 0.05100 0.08651
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
33 0.05567 0.09551 0.02800 0.04384 0.05150 0.08767
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
34 0.05617 0.09651 0.02900 0.04567 0.05200 0.08884
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
35 0.05667 0.09751 0.03000 0.04750 0.05250 0.09001
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
36 0.06017 0.10718 0.03250 0.05350 0.05584 0.09918
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
37 0.06367 0.11685 0.03500 0.05950 0.05917 0.10835
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
38 0.06717 0.12652 0.03750 0.06550 0.06250 0.11751
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
39 0.07067 0.13619 0.04000 0.07151 0.06584 0.12668
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
40 0.07417 0.14585 0.04250 0.07751 0.06917 0.13585
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
41 0.08051 0.16619 0.04700 0.08667 0.07534 0.15436
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
42 0.08684 0.18653 0.05150 0.09584 0.08151 0.17286
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
43 0.09318 0.20688 0.05600 0.10501 0.08767 0.19137
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
44 0.09951 0.22722 0.06050 0.11418 0.09384 0.20988
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
45 0.10584 0.24756 0.06500 0.12335 0.10001 0.22839
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
46 0.11568 0.27458 0.07101 0.13535 0.10918 0.25323
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
47 0.12552 0.30159 0.07701 0.14736 0.11835 0.27808
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
48 0.13535 0.32861 0.08301 0.15936 0.12752 0.30293
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
49 0.14519 0.35563 0.08901 0.17136 0.13669 0.32777
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
50 0.15502 0.38265 0.09501 0.18337 0.14585 0.35262
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
51 0.17036 0.41984 0.10418 0.20087 0.16036 0.38682
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
Male Male Female Female Unisex Unisex
Attained No Tobacco Use Tobacco User No Tobacco Use Tobacco User No Tobacco Use Tobacco User
Age
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
52 0.18570 0.45704 0.11335 0.21838 0.17486 0.42101
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
53 0.20104 0.49424 0.12252 0.23589 0.18937 0.45521
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
54 0.21638 0.53145 0.13168 0.25340 0.20387 0.48941
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
55 0.23172 0.56866 0.14085 0.27091 0.21838 0.52361
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
56 0.25140 0.60837 0.15019 0.28675 0.23656 0.55981
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
57 0.27107 0.64809 0.15953 0.30259 0.25473 0.59602
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
58 0.29075 0.68781 0.16886 0.31843 0.27291 0.63223
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
59 0.31043 0.72753 0.17820 0.33428 0.29108 0.66845
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
60 0.33011 0.76725 0.18754 0.35012 0.30926 0.70466
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
61 0.35880 0.81049 0.20404 0.37898 0.33611 0.74589
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
62 0.38748 0.85373 0.22055 0.40783 0.36297 0.78712
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
63 0.41617 0.89697 0.23706 0.43669 0.38982 0.82835
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
64 0.44486 0.94022 0.25356 0.46555 0.41667 0.86959
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
65 0.47356 0.98347 0.27007 0.49441 0.44353 0.91083
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
66 0.53712 1.08534 0.30776 0.52861 0.50309 1.00234
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
67 0.60069 1.18724 0.34545 0.56282 0.56265 1.09386
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
68 0.66427 1.28916 0.38315 0.59702 0.62222 1.18540
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
69 0.72786 1.39110 0.42084 0.63123 0.68180 1.27696
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
70 0.79146 1.49306 0.45854 0.66544 0.74138 1.36854
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
71 0.92018 1.65457 0.53595 0.76976 0.86241 1.52148
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
72 1.04893 1.81613 0.61338 0.87410 0.98347 1.67447
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
73 1.17772 1.97774 0.69081 0.97846 1.10455 1.82750
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
74 1.30654 2.13940 0.76826 1.08284 1.22567 1.98058
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
75 1.43539 2.30112 0.84571 1.18724 1.34681 2.13371
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
76 1.71862 2.55870 1.10171 1.44041 1.62597 2.39070
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
77 2.00200 2.81641 1.35784 1.69370 1.90529 2.64783
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
78 2.28555 3.07426 1.61410 1.94712 2.18476 2.90508
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
79 2.56925 3.33223 1.87049 2.20067 2.46439 3.16247
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
80 2.85312 3.59034 2.12701 2.45434 2.74418 3.41999
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
81 3.37418 4.14528 2.50727 2.90911 3.24416 3.95978
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
82 3.89578 4.70083 2.88782 3.36428 3.74464 4.50016
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
83 4.41793 5.25699 3.26865 3.81987 4.24562 5.04112
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
84 4.94062 5.81377 3.64977 4.27587 4.74710 5.58266
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
85 5.46386 6.37117 4.03119 4.73229 5.24908 6.12478
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
86 6.12225 7.09296 4.57736 5.16454 5.89049 6.80314
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
87 6.78151 7.81578 5.12412 5.59715 6.53273 7.48240
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
88 7.44164 8.53964 5.67148 6.03014 7.17579 8.16259
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
89 8.10262 9.26454 6.21944 6.46351 7.81967 8.84369
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
90 8.76448 9.99049 6.76800 6.89725 8.46438 9.52572
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
91 9.46270 10.84979 7.39512 7.53637 9.15200 10.35173
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
92 10.16189 11.71055 8.02302 8.17631 9.84056 11.17909
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
93 10.86205 12.57278 8.65171 8.81706 10.53006 12.00781
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
94 11.56318 13.43648 9.28118 9.45863 11.22050 12.83789
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
95 12.26528 14.30165 9.91144 10.10101 11.91189 13.66933
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
96 12.89876 15.04173 10.51321 10.71356 12.54048 14.39014
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
97 13.53303 15.78290 11.11570 11.32686 13.16986 15.11197
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
98 14.16810 16.52514 11.71891 11.94090 13.80001 15.83483
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
99 14.80396 17.26847 12.32284 12.55569 14.43096 16.55873
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The amounts shown above are current rates per $1,000 of Net Amount at Risk as of
the date of this Prospectus. To determine the current monthly cost of insurance
charge we multiply these rates by the Net Amount at Risk. To that product, we
add the current cost of insurance fee. The charges shown above are applicable
for Insureds in the preferred risk class. The current monthly cost of insurance
charges for other risk classes are available upon request. Cost of insurance
charges for joint life cases are determined using a standard insurance industry
method used to derive the applicable charge based on the applicable cost of
insurance charge for both Insureds. Current monthly cost of insurance rates for
specific proposed joint Insureds are also available on request.
- --------------------------------------------------------------------------------
<PAGE>
APPENDIX F
DESCRIPTION OF THE CALCULATION OF CURRENT MONTHLY COST OF INSURANCE CHARGES
We determine the current monthly cost of insurance rate, the currently monthly
cost of insurance fee and any underwriting factor as follows:
1. Current monthly cost of insurance rate: The rate depends on a
number of factors, as follows.
a. For Policies with One Insured: The rates depend on the tobacco
usage class and risk class of the Insured(s), the
Age and, where permissible, gender of the Insured.
b. For Policies with Two Insureds: The rates depend on the
individual current monthly cost of insurance rates for each
Insured.
2. Current monthly cost of insurance fee: The cost of insurance fee is
calculated using a "constant" of $12.00.
3. Underwriting factor: We reserve the right to multiply the current
cost of insurance rate by an underwriting factor. The underwriting
factor for Policies that are fully underwritten would be one, which
results in no change to the rate.
The following is an example of how we calculate the monthly cost of insurance
deduction. Assume for this example that: (1) the Policy is issued using Option A
with a Specified Amount of $80,000; (2) on the applicable Monthly Processing
Day, the Death Benefit equals the Specified Amount; (3) the then current Account
Value is $10,000; (4) there is one male Insured, who is currently Age 55 (gender
specific cost of insurance rates are used); and (5) the Insured is in the "no
tobacco usage" class and is in the preferred risk class.
(a) We look up the current monthly cost of insurance rate for the
Insured. As of the date of this Prospectus, the current monthly
cost of insurance rate for a 55 year old male nonsmoker Insured
is $.23172 per thousand of Net Amount at Risk.
(b) If applicable, we multiply the rate shown in (a) times the
applicable current underwriting factor.
(c) We multiply (a), or, if applicable, the result of (b), times the
Net Amount at Risk*. The result is 16.16.
(d) We add the current "constant" of $12.00 to (c), resulting in
$28.16.
(e) We look up the contractually guaranteed maximum monthly cost of
insurance charge for the Insured. In this case, we look up the
charge for a 55 year old male in the "no tobacco usage" class and
the preferred risk class. That charge is .68759 per $1,000 Net
Amount at Risk.
(f) We multiply the rate shown in (e) times the Net Amount at Risk*.
The result is 47.95.
(g) We compare the result in (d) and (f). The lower of the two
amounts is the current monthly cost of insurance for the Insured.
In this example, the current cost of insurance is, therefore,
$28.16.
* We determine the Net Amount at Risk by subtracting the Account Value from the
Death Benefit discounted to the beginning of the Policy Month at the rate of 4%
per year. In this example, the Amount at Risk is $69,739.
<PAGE>
<TABLE>
<CAPTION>
APPENDIX G
MAXIMUM ANNUAL ASSESSABLE PREMIUMS PER $1,000 OF SPECIFIED AMOUNT
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
Male Male Female Female Unisex Unisex
Issue No Tobacco Use Tobacco User No Tobacco Use Tobacco User No Tobacco Use Tobacco User
Age
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
0 N/A 15.27 N/A 12.22 N/A 14.67
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
1 N/A 15.48 N/A 12.42 N/A 14.88
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
2 N/A 15.94 N/A 12.79 N/A 15.33
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
3 N/A 16.44 N/A 13.19 N/A 15.80
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
4 N/A 16.95 N/A 13.60 N/A 16.30
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
5 N/A 17.50 N/A 14.03 N/A 16.82
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
6 N/A 18.07 N/A 14.48 N/A 17.37
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
7 N/A 18.67 N/A 14.95 N/A 17.95
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
8 N/A 19.31 N/A 15.45 N/A 18.56
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
9 N/A 19.98 N/A 15.97 N/A 19.20
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
10 N/A 20.68 N/A 16.51 N/A 19.87
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
11 N/A 21.41 N/A 17.07 N/A 20.56
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
12 N/A 22.17 N/A 17.66 N/A 21.29
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
13 N/A 22.94 N/A 18.26 N/A 22.03
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
14 N/A 23.73 N/A 18.89 N/A 22.78
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
15 N/A 24.53 N/A 19.53 N/A 23.55
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
16 20.48 25.33 17.75 20.19 19.94 24.32
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
17 21.09 26.09 18.33 20.86 20.55 25.06
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
18 21.72 26.85 18.94 21.55 21.17 25.81
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
19 22.36 27.63 19.56 22.26 21.81 26.58
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
20 23.03 28.44 20.21 23.00 22.47 27.36
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
21 23.72 29.26 20.87 23.76 23.15 28.18
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
22 24.44 30.13 21.57 24.55 23.87 29.03
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
23 25.19 31.03 22.29 25.37 24.61 29.91
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
24 25.98 31.98 23.03 26.22 25.40 30.84
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
25 26.81 32.98 23.81 27.10 26.21 31.82
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
26 27.68 34.03 24.62 28.02 27.07 32.84
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
27 28.60 35.13 25.45 28.96 27.97 33.91
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
28 29.55 36.28 26.32 29.94 28.91 35.03
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
29 30.55 37.49 27.21 30.96 29.88 36.20
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
30 31.59 38.74 28.14 32.01 30.90 37.41
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
31 32.67 40.05 29.11 33.10 31.96 38.67
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
32 33.79 41.40 30.11 34.22 33.06 39.98
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
33 34.96 42.81 31.15 35.39 34.20 41.33
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
34 36.17 44.26 32.23 36.60 35.39 42.74
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
35 37.43 45.77 33.34 37.84 36.61 44.19
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
36 38.73 47.32 34.50 39.14 37.88 45.69
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
37 40.07 48.93 35.69 40.47 39.20 47.24
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
38 41.46 50.58 36.92 41.83 40.55 48.84
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
39 42.89 52.28 38.18 43.23 41.95 50.48
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
40 44.38 54.03 39.49 44.67 43.40 52.16
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
41 45.90 55.83 40.83 46.13 44.89 53.89
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
42 47.48 57.66 42.20 47.62 46.42 55.66
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
43 49.10 59.55 43.62 49.15 48.00 57.47
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
44 50.78 61.48 45.07 50.70 49.63 59.32
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
45 52.50 63.45 46.57 52.29 51.32 61.21
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
46 54.28 65.47 48.12 53.93 53.05 63.14
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
47 56.11 67.54 49.71 55.60 54.83 65.13
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
48 58.00 69.66 51.35 57.31 56.67 67.17
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
49 59.96 71.85 53.04 59.08 58.57 69.26
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
50 61.97 74.09 54.79 60.88 60.53 71.41
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
51 64.05 76.41 56.58 62.74 62.55 73.61
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
52 66.19 78.78 58.43 64.64 64.63 75.88
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
Male Male Female Female Unisex Unisex
Issue No Tobacco Use Tobacco User No Tobacco Use Tobacco User No Tobacco Use Tobacco User
Age
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
53 68.39 81.21 60.32 66.57 66.77 78.19
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
54 70.66 83.69 62.26 68.55 68.96 80.55
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
55 72.99 86.22 64.25 70.56 71.22 82.95
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
56 75.38 88.80 66.30 72.61 73.54 85.40
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
57 77.84 91.45 68.40 74.72 75.92 87.90
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
58 80.38 94.16 70.58 76.90 78.38 90.47
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
59 83.00 96.97 72.84 79.18 80.91 93.13
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
60 85.70 99.88 75.20 81.56 83.54 95.88
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
61 88.50 102.91 77.66 84.05 86.26 98.74
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
62 91.40 106.03 80.21 86.65 89.07 101.70
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
63 94.38 109.25 82.85 89.33 91.96 104.73
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
64 97.46 112.56 85.55 92.06 94.95 107.83
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
65 100.63 115.93 88.32 94.84 98.01 110.99
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
66 103.90 119.40 91.15 97.66 101.17 114.21
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
67 107.30 122.98 94.07 100.57 104.43 117.53
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
68 110.85 126.72 97.12 103.62 107.84 120.98
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
69 114.60 130.67 100.34 106.85 111.43 124.62
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
70 118.55 134.87 103.76 110.32 115.22 128.48
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
71 122.74 139.33 107.40 114.06 119.24 132.59
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
72 127.16 144.06 111.27 118.05 123.48 136.93
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
73 131.80 149.01 115.36 122.26 127.92 141.47
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
74 136.63 154.15 119.65 126.66 132.55 146.18
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
75 141.64 156.53 124.15 131.24 137.35 151.01
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
76 146.86 156.00 128.86 136.01 142.36 155.77
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
77 149.50 155.48 133.84 141.01 147.63 154.88
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
78 148.62 155.07 139.18 146.34 148.31 154.06
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
79 147.95 154.86 143.80 146.45 147.44 153.38
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
80 147.53 154.81 142.69 145.54 146.79 152.84
-------------- ---------------- ----------------- ---------------- ---------------- ---------------- ----------------
</TABLE>
<PAGE>
APPENDIX H
HYPOTHETICAL ILLUSTRATION OF ACCELERATED DEATH BENEFIT
The following are hypothetical illustrations of the impact of payments made to
the Insured under the accelerated death benefit provision of the Policy. The
first hypothetical illustration assumes the Insured is a female, age 45 as of
the Policy Date. The second hypothetical illustration assumes the Insured is a
male, age 65 as of the Policy Date. The following other assumptions apply to
both hypothetical illustrations:
1. Premiums of $5,000 per year were paid as of the first day of
each Policy Year, and the premium tax charged on each Premium
was 1.75%. DAC tax also was charged in relation to each
Premium.
2. Each Policy was issued in the no tobacco usage class and
preferred risk class. Cost of insurance rates differ by gender
and there is no change to the current cost of insurance rates
during the period covered by the example.
3. The Death Benefit option in effect throughout the life of the
Policy is Option A.
4. The Specified Amount is $100,000 and has remained constant
since the Policy Date.
5. The provision is exercised as of the day preceding the 10th
Policy Anniversary.
6. The investment options in which Account Value was allocated
have grown on a constant basis since the Policy Date at an
annualized rate of 8% per year.
7. There have been no loans or loan repayments and no amounts
have been withdrawn.
8. 50% of the maximum available amount is taken pursuant to the
accelerated death benefit provision.
9. The 12-month interest rate discount used in the calculation of
the benefit assumes interest at 6% per year, compounded
yearly.
<TABLE>
<CAPTION>
------------------------- -------------------------
Female Age 45 Male Age 65
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
<S> <C> <C>
Account Value Before the Accelerated Death Benefit is $62,103 $54,697
Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Cash Value Before the Accelerated Death Benefit is Paid $61,638 $54,197
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Maximum Amount Available For a Loan Before the $55,474 $48,777
Accelerated Death Benefit is Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Specified Amount Before the Accelerated Death Benefit $100,000 $100,000
is Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Minimum Required Death Benefit Before the Accelerated $155,517 $74,430
Death Benefit is Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Guaranteed Minimum Death Benefit Before the $59,267 $52,795
Accelerated Death Benefit is Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Death Benefit Before the Accelerated Death Benefit is $155,517 $100,000
Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Maximum Amount Available as the Accelerated Death $77,759 $50,000
Benefit
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Amount of Accelerated Death Benefit $38,879 $25,000
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Amount Paid as the Accelerated Death Benefit $36,679 $23,585
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Account Value After the Accelerated Death Benefit is $46,577 $41,023
Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Cash Value After the Accelerated Death Benefit is Paid $46,229 $40,648
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Maximum Amount Available For a Loan After the $41,606 $36,583
Accelerated Death Benefit is Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Specified Amount After the Accelerated Death Benefit $75,000 $75,000
is Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Minimum Required Death Benefit After the Accelerated $116,637 $55,822
Death Benefit is Paid
-------------------------------------------------------- ------------------------- -------------------------
-------------------------------------------------------- ------------------------- -------------------------
Guaranteed Minimum Death Benefit After the Accelerated $44,450 $39,596
Death Benefit is Paid
-------------------------------------------------------- ------------------------- -------------------------
</TABLE>
<PAGE>
ADDITIONAL INFORMATION: Inquiries will be answered by calling your
representative or by writing to:
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
at
P.O. Box 883
Shelton, Connecticut 06484
or
[email protected]
Issued by: Serviced at:
AMERICAN SKANDIA LIFE AMERICAN SKANDIA LIFE
ASSURANCE CORPORATION ASSURANCE CORPORATION
One Corporate Drive P.O. Box 883
Shelton, Connecticut 06484 Shelton, Connecticut 06484
Telephone: 1-800-752-6342 Telephone: 1-800-752-6342
http://www.AmericanSkandia.com http://www.AmericanSkandia.com
Distributed by:
AMERICAN SKANDIA MARKETING, INCORPORATED
One Corporate Drive
Shelton, Connecticut 06484
Telephone: 203-926-1888
http://www.AmericanSkandia.com
