Registration No. 333-______
As filed with the Securities and Exchange Commission on December 18, 1997
-------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURIITES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
AMERICAN GENERAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL-R
(Exact Name of Trust)
AMERICAN GENERAL LIFE INSURANCE COMPANY
(Exact Name of Depositor)
2727-A Allen Parkway
Houston, Texas 77019-2191
(Complete Address of Depositor's Principal Executive Offices)
Steven A, Glover, Esq.
Associate General Counsel and Assistant Secretary
American General Life Insurance Company
2727-A Allen Parkway
Houston, Texas 77019-2191
(Name and Complete Address of Agent for Service)
Please send copies of all communications
to:
Gary O. Cohen, Esq. and Thomas C. Lauerman, Esq.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Suite 825
Washington, D.C. 20036
Title and Amount of Securities Being Registered:
An Indefinite Amount of Units of Interest in
American General Life Insurance Company
Separate Account VL-R
Under Variable Life Insurance Policies
<PAGE>
Amount of Filing Fee: None required.
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940.
Registrant elects to be governed by Rule 6e-3(T)(b)(13)(I)(A) under the
Investment Company Act of 1940, with respect to the Variable Life Insurance
Policies described in the Prospectus.
ii
<PAGE>
<TABLE>
AMERICAN GENERAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL-R
RECONCILIATION AND TIE BETWEEN ITEMS IN FORM
N-8B-2 AND THE PROSPECTUS
(PURSUANT TO INSTRUCTION 4 OF FORM S-6)
<CAPTION>
ITEMS OF FORM N-8B-2* CAPTIONS IN PROSPECTUS
<S> <C>
1 Additional Information: Separate Account VL-R.
2 Additional Information: AGL.
3 Inapplicable.
4 Additional Information: Distribution of
Policies.
5, 6 Additional Information: Separate Account VL-R.
7 Inapplicable.**
8 Inapplicable.**
9 Additional information: Legal Matters.
10(a) Additional Information: Your Beneficiary,
Assigning Your Policy.
10(b) Basic Questions You May Have: How will the
value of my investment in a Policy change over
time?
10(c), 10(d) Basic Questions You May Have: How can I change
my Policy's insurance coverage? How can I
access my investment in a Policy? Can I choose
the form in which AGL pays out any proceeds
from my Policy?
</TABLE>
<TABLE>
<CAPTION>
ITEMS OF FORM N-8B-2 CAPTIONS IN PROSPECTUS
<S> <C>
10(e) Basic Questions You May Have: Must I invest
any minimum amount in a Policy?
10(f) Additional Information: Voting Privileges.
10(g)(1), 10(g)(4), Basic Questions You May Have: To what extent
10(h)(3), 10(h)(2) will AGL vary the terms and conditions of the
Policies in particular cases? Additional
Information: Voting Privileges; Additional
Rights That We Have.
iii
<PAGE>
10(g)(3), 10(g)(4), Inapplicable.**
10(h)(3), 10(h)(4)
10(i) Additional information: Separate Account VL-R;
Tax Effects.
11 Basic Questions You May Have: How will the
value of my investments change over time?
12(a) Additional Information: Separate Account VL-R;
Front Cover.
12(b) Inapplicable.
12(c), 12(d) Inapplicable.**
12(e) Inapplicable, because the Separate Account has
not yet commenced operations.
13(a) Basic Questions You May Have: What charges
will AGL deduct from my investment in a
Policy? What charges and expenses will the
mutual Funds deduct from the amount I invest
through my Policy? Additional Information:
More About Policy Charges.
13(b) Illustrations of Hypothetical Policy Benefits.
13(c) Inapplicable.**
13(d) Basic Questions You May Have: To what extent
will AGL vary the terms and conditions of the
Policies in particular cases?
13(e), 13(f) None.
14 Basic Questions You May Have: How can I invest
money in a Policy?
15 Basic Questions You May Have: How can I invest
money in a Policy? How do I communicate with
AGL?
16 Basic Questions You May Have: How will the
value of my investment in a Policy change over
time? Additional Information: Separate Account
VL-R.
17(a), 17(b) Captions referenced under Items 10(c), 10(d),
and 10(e).
iv
<PAGE>
17(c) Inapplicable.
18(a) Captions referred to under Item 16.
18(b), 18(d) Inapplicable.
18(c) Additional Information: Separate Account VL-R.
19 Additional Information: Voting Privileges; Our
Reports to Policy Owners.
20(a) Captions referenced under Items 10(g)(1),
10(g)(2), 10(h)(1), and 10(h)(2).
20(b), 20(c), 20(d), Inapplicable.
20(e), 20(f)
21(a), 21(b) Basic Questions You May Have: How can I
access my investment in a Policy? Additional
Information: Payment of Policy Proceeds.
21(c) Inapplicable.**
22 Additional Information: Payment of Policy
Proceeds--Delay to Challenge Coverage.
23 Inapplicable.**
24 Basic Questions You May Have; Additional
Information.
25 Additional Information: American General Life
Insurance Company.
26 Inapplicable, because the Separate Account has
not yet commenced operations.
27 Additional Information: American General Life
Insurance Company.
28 Additional Information: AGL; AGL's Management.
29 Additional Information: AGL.
v
<PAGE>
30, 31, 32, 33, 34 Inapplicable, because the Separate Account has
not yet commenced operations.
35 Inapplicable.**
36 Inapplicable.**
37 None.
38, 39 Additional Information: Distribution of the
Policies.
40 Inapplicable, because the Separate Account has
not yet commenced operations.
41(a) Additional Information: Distribution of the
Policies.
41(b), 41(c) Inapplicable.**
42, 43 Inapplicable, because the Separate Account has
not yet commenced operations or issued any
securities.
44(a)(1), 44(a)(2), Basic Questions You May Have: How will the
44(a)(3) value of my investment in a Policy change over
time?
44(a)(4) Additional Information: Tax Effects--Our
Taxes.
44(a)(5), 44(a)(6) Basic Questions You May Have: What charges
will AGL deduct from my investment in a
Policy?
44(b) Inapplicable.**
44(c) Caption referenced in 13(d) above.
45 Inapplicable, because the Separate Account has
not yet commenced operations.
46(a) Captions referenced in 44(a) above.
46(b) Inapplicable.**
47, 48, 49 None.
50 Additional Information: Separate Account VL-R.
vi
<PAGE>
51 Inapplicable.
52(a), 52(c) Basic Questions You May Have: To what extent
will AGL vary the terms and conditions of the
Policies in particular cases? Additional
Information: Additional Rights That We Have
52(b), 52(d) None.
53(a) Additional Information: Tax Effects--Our
Taxes.
53(b), 54 Inapplicable.
55 Illustrations of Hypothetical Policy Benefits.
56-59 Inapplicable.**
<FN>
* Registrant includes this Reconciliation and Tie in its Registration
Statement in compliance with Instruction 4 as to the Prospectus as set out in
Form S-6. Separate Account VL-R has, simultaneously herewith, filed a notice
of registration as an investment company on Form N-8A under the Investment
Company Act of 1940, and it intends to file a Form N-8B-2 Registration
Statement within the next several weeks. Pursuant to Sections 8 and 30(b)(1)
of the Investment Company Act of 1940, Rule 30a-1 under the Act, and Forms
N-8B-2 and N-SAR under that Act, the Account will keep its Form N-8B-2
Registration Statement current through the filing of periodic reports required
by the Securities and Exchange Commission.
** Not required pursuant to either Instruction 1(a) as to the Prospectus as
set out in Form S-6 or the administrative practice of the Commission and its
staff of adapting the disclosure requirements of the Commission's registration
statement forms in recognition of the differences between variable life
insurance policies and other periodic payment plan certificates issued by
investment companies and between separate accounts organized as management
companies and unit investment trusts.
</FN>
</TABLE>
vii
<PAGE>
PLATINUM INVESTOR I (SM) AND
PLATINUM INVESTOR II (SM)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES (THE "POLICIES")
Issued by
AMERICAN GENERAL LIFE INSURANCE COMPANY ("AGL")
HOME OFFICE:
(Express Delivery) (US Mail)
2727-A Allen Parkway Variable Universal Life
Houston, Texas 77019-2191 Administration
PHONE: 1-888-325-9315 P.O. Box 4880
or 1-713-831-3443 Houston, Texas 77210-4880
FAX: 1-713-620-3857
INVESTMENT OPTIONS. The AGL Declared Fixed Interest Account is the fixed
investment option for these policies. You can also invest in the
following variable investment options. You may change your selections
from time to time:
<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AIM VARIABLE INSURANCE AMERICAN GENERAL SERIES DREYFUS VARIABLE MFS VARIABLE INSURANCE
FUNDS, INC. PORTFOLIO COMPANY INVESTMENT FUND TRUST
o AIM V.I. International o International Equities o Quality Bond Portfolio o MFS Emerging Growth
Equity Fund Fund (1) o Small Cap Portfolio Series
o AIM V.I. Value Fund o MidCap Index Fund (1,2)
o Money Market Fund (1)
o Stock Index Fund (1,2)
(1) Variable Annuity Life
Insurance Company * Massachusetts Financial
AIM Advisors, Inc.* (2) Bankers Trust Company(+) The Dreyfus Corporation* Services Company*
--------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY PUTNAM VARIABLE TRUST SAFECO RESOURCE VAN KAMPEN AMERICAN
UNIVERSAL FUNDS, INC. o Putnam VT Diversified SERIES TRUST CAPITAL LIFE INVESTMENT
o Equity Growth Portfolio (1) Income Fund o Equity Portfolio TRUST
o High Yield Portfolio (2) o Putnam VT Growth o Growth Portfolio o Strategic Stock Portfolio
o Putnam VT Growth
and Income Fund
o Putnam VT International
Growth and Income Fund
(1) Morgan Stanley Asset Mgmt,
Inc.* SAFECO Asset Management Van Kampen American Capital
(2) Miller Anderson Sherrerd, LLP* Putnam Management, Inc.* Company* Asset Management, Inc.*
--------------------------------------------------------------------------------------------------------------------------------
<FN>
* The Investment Adviser of the investment option
(+) The Investment Sub-Adviser of the investment option
</FN>
</TABLE>
<PAGE>
SEPARATE PROSPECTUSES CONTAIN MORE INFORMATION ABOUT THE MUTUAL FUNDS
("FUNDS" OR "MUTUAL FUNDS") IN WHICH WE INVEST THE ACCUMULATION VALUE THAT YOU
ALLOCATE TO ANY OF THE ABOVE-LISTED INVESTMENT OPTIONS (OTHER THAN OUR
DECLARED FIXED INTEREST ACCOUNT OPTION). THE FORMAL NAME OF EACH SUCH FUND IS
SET FORTH IN THE CHART THAT APPEARS ON PAGE 1, ABOVE. YOUR INVESTMENT RESULTS
IN ANY SUCH OPTION WILL DEPEND ON THOSE OF THE RELATED FUND. THEREFORE, YOU
SHOULD BE SURE YOU ALSO READ THE PROSPECTUS OF THE MUTUAL FUND FOR ANY SUCH
INVESTMENT OPTION YOU MAY BE INTERESTED IN. YOU CAN REQUEST FREE COPIES OF ANY
OR ALL OF THE MUTUAL FUND PROSPECTUSES FROM YOUR AGL REPRESENTATIVE OR FROM US
AT OUR HOME OFFICE LISTED ABOVE.
OTHER CHOICES YOU HAVE. During the insured person's lifetime, you can
also (1) change the amount of insurance, (2) borrow or withdraw amounts you
have invested, (3) choose, within limits, when and how much you invest, and
(4) choose whether the amount you have invested under your Policy, upon the
insured person's death, will be added to the insurance proceeds we otherwise
will pay to the beneficiary.
CHARGES AND EXPENSES. We deduct charges and expenses from the amounts
you invest. These are described beginning on page 8, below.
RIGHT TO RETURN. If for any reason you are not satisfied with your
Policy, you may return it to us for a full refund. (In some states, we will
adjust this amount for any investment performance you have earned.) To
exercise your right to return your Policy, you must mail it directly to the
Home Office address shown on the cover of this prospectus or return it to the
AGL representative through whom you purchased the Policy within 10 days after
you receive it. In a few states, this period may be longer. Because you have
this right, we will invest your initial premium payment in the money market
investment option from the date your investment performance begins until the
first business day that is at least 15 days later. Then we will automatically
allocate your investment among the above-listed investment options as you have
chosen. Any additional premium we receive during the 15-day period will also
be invested in the money market division and allocated to the investment
options at the same time as your initial premium.
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE.
THIS PROSPECTUS CONTAINS INFORMATION THAT YOU SHOULD KNOW BEFORE INVESTING IN
A POLICY. THE POLICIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION ("SEC"). NOR HAS THE SEC PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS BOOKLET IS CALLED A "PROSPECTUS." ITS DATE IS _____________, 1998
2
<PAGE>
GUIDE TO THIS PROSPECTUS
This booklet (which we call a prospectus) contains information that you
should know before you purchase a Platinum InvestorSM variable life policy
("Policy") or exercise any of your rights or privileges under a Policy.
This prospectus describes two versions of the Platinum Investor
Policies: the Platinum Investor I and the Platinum Investor II Policies. Your
AGL representative can advise you which version of the Policy he or she offers
or whether he or she offers both. You cannot change to a different version
once your coverage takes effect. The Platinum Investor I and Platinum Investor
II Policies are identical, except for the differences that are discussed
beginning on page 13, below.
BASIC INFORMATION. Here are the page numbers in this prospectus where
you may find answers to most of your questions:
<TABLE>
<CAPTION>
PAGE TO SEE
BASIC QUESTIONS YOU MAY HAVE IN THIS PROSPECTUS
<S> <C>
o What are the Policies?.............................................. Front Cover
Page
o How can I invest money in a Policy?.................................
o How will the value of my investment in a Policy change over time?...
o What is the basic amount of insurance ("death benefit") that AGL
pays if the insured person dies?....................................
o What charges will AGL deduct from my investment in a Policy?........
o What charges and expenses will the Mutual Funds deduct from the
amount I invest through my Policy?..................................
o Must I invest any minimum amount in a Policy?.......................
o What are the differences between Platinum Investor I and Platinum
Investor II?........................................................
o How can I change my Policy's investment options?....................
o How can I change my Policy's insurance coverage?....................
o What additional rider benefits might I select?......................
3
<PAGE>
o How can I access my investment in a Policy?.........................
o Can I choose the form in which AGL pays out any proceeds from my
Policy?.............................................................
o To what extent will AGL vary the terms and conditions of the
Policies in particular cases?.......................................
o How will my Policy be treated for income tax purposes?..............
o How do I communicate with AGL?......................................
</TABLE>
ILLUSTRATIONS OF A HYPOTHETICAL POLICY. Starting on page 22, below, we
have included some illustrations of how the values of a hypothetical Policy
would change over time, based on certain assumptions we have made. Because
your circumstances may vary considerably from our assumptions, your AGL
representative will also provide you with a similar hypothetical illustration
that is more tailored to your own circumstances and wishes.
ADDITIONAL INFORMATION. You may find the answers to any other questions
you have under "Additional Information" beginning on page 24, below or in the
forms of our Policy and riders. A table of contents for the "Additional
Information" portion of this prospectus also appears on page 24, below. You
can obtain copies of our Policy and rider forms from (and direct any other
questions to) your AGL representative or our Home Office (shown on the cover
of this Prospectus).
AGL'S FINANCIAL STATEMENTS. We have included our financial statements in
this prospectus. These begin on page 40, below.
SPECIAL WORDS AND PHRASES. If you want more information about any words
or phrases that you read in this prospectus, you may wish to refer to the
Index of Words and Phrases that appears on the inside of the back cover of
this prospectus. That index will tell you on what page you can read more about
many of the words and phrases that we use.
4
<PAGE>
BASIC QUESTIONS YOU MAY HAVE
HOW CAN I INVEST MONEY IN A POLICY?
PREMIUM PAYMENTS. We call the investments you make in a Policy
"premiums" or "premium payments." The amount we require as your first premium
varies depending on the specifics of your Policy and the insured person. We
can refuse to accept a subsequent premium payment that is less than $50.
(Policies issued in some states or automatic premium payment plans may have
different minimums.) Otherwise, with a few exceptions mentioned below, you can
make premium payments at any time and in any amount.
LIMITS ON PREMIUM PAYMENTS. Federal tax law limits your ability to make
certain very large amounts of premium payments (relative to the amount of your
Policy's insurance coverage) and may impose penalties on amounts you take out
of your Policy if you do not observe certain additional requirements. These
tax law requirements are summarized further under "Tax Effects" beginning on
page 25, below. We will monitor your premium payments, however, to
be sure that you do not exceed permitted amounts or inadvertently incur any
tax penalties. Also, in certain limited circumstances, we may refuse to accept
an additional premium if the insured person does not provide us with adequate
evidence that he/she continues to meet our requirements for issuing insurance.
CHECKS AND MONEY ORDERS. Premiums must be by check or money order drawn
on a U.S. bank in U.S. dollars and made payable to "American General Life
Insurance Company," or "AGL." Premiums after the first premium must be sent
directly to our Home Office at the appropriate address shown on the front
cover of this prospectus.
OTHER WAYS TO PAY PREMIUMS. We also accept premium payments by bank
draft, wire, or by exchange from another insurance company. You may obtain
further information about how to make premium payments by any of these methods
from your AGL representative or from our Home Office shown on the front cover
of this prospectus. Premium payments from salary deduction plans may be made
only if we agree.
DOLLAR COST AVERAGING. Dollar cost averaging is an investment strategy
designed to reduce the risks that result from market fluctuations. The
strategy spreads the allocation of your accumulation value over a period of
time. This allows you to reduce the risk of investing most of your funds at a
time when prices are high. The success of this strategy depends on market
trends and is not guaranteed.
Under dollar cost averaging, we automatically make transfers of your
accumulation value from the money market investment option to one or more of
the other investment options that you choose (but not to our declared fixed
interest account option). You tell us whether you want these transfers to be
made monthly, quarterly, semi-annually or annually; and we make the transfers
as of the end of the valuation period that contains the day of the month that
you select. You must have at least $5,000 of accumulation value to start
dollar cost averaging and each transfer under the program must be at least
5
<PAGE>
$100. You cannot participate in dollar cost averaging while also using
automatic portfolio rebalancing (discussed below). Dollar cost averaging
ceases upon your request, or if your accumulation value in the money market
option becomes exhausted.
AUTOMATIC PORTFOLIO REBALANCING. This feature automatically rebalances
the proportion of your accumulation value in each investment option under your
Policy (other than our declared fixed interest account option) to correspond
to your then current premium allocation designation. You tell us whether you
want us to do the rebalancing quarterly, semi-annually or annually; and we
make transfers to rebalance your accumulation value on the first business day
in the appropriate Policy months. You must have a total accumulation value of
at least $5,000 to begin automatic rebalancing. You cannot participate in this
program while also participating in dollar cost averaging (discussed above).
Rebalancing terminates upon your request.
HOW WILL THE VALUE OF MY INVESTMENT IN A POLICY CHANGE OVER TIME?
YOUR ACCUMULATION VALUE. From each premium payment you make, we deduct
the charges that we describe on page 8 below under "Deductions from each
premium payment." We invest the rest in one or more of the investment options
listed on the front cover of this prospectus. We call the amount that is at
any time invested under your Policy your "accumulation value."
YOUR INVESTMENT OPTIONS. We invest the accumulation value that you have
allocated to any investment option (except our declared fixed interest account
option) in shares of a mutual Fund that follows investment practices, policies
and objectives that are appropriate to that option. Over time, your
accumulation value in any investment option will increase or decrease by the
same amount as if you had invested in the related Fund's shares directly (and
reinvested all dividends and distributions from the Fund in additional Fund
shares); EXCEPT that your accumulation value will be reduced by certain
charges that we deduct. We describe these charges beginning on page 8 below
under "What charges will AGL deduct from my investment in a Policy?"
Other important information about the Mutual Funds that you can choose
is included in the separate prospectuses for those Funds. This includes
information about the investment performance that each Fund's investment
manager has achieved. Additional free copies of these prospectuses are
available from your AGL representative or from our Home Office shown on the
front cover of this prospectus.
We invest any accumulation value you have allocated to our declared
fixed interest account option as part of our general assets. We credit a fixed
rate of interest on that accumulation value, which we declare from time to
time. We guarantee that this will be at an effective annual rate of at least
4%. Although this interest increases the amount of any accumulation value that
you have in our declared fixed interest account option, such accumulation
value will also be reduced by any charges that are allocated to this option
under the procedures described under "Allocation of Charges" on page 10 below.
6
<PAGE>
The "daily charge" described below on page 8 and the charges and expenses of
the Mutual Funds discussed on pages 10-12 below do NOT apply to our declared
fixed interest account option.
POLICIES ARE "NON-PARTICIPATING." The Policies are NOT "participating."
Therefore, you will not be entitled to any dividends from AGL.
WHAT IS THE BASIC AMOUNT OF INSURANCE ("DEATH BENEFIT") THAT AGL PAYS
WHEN THE INSURED PERSON DIES?
YOUR SPECIFIED AMOUNT OF INSURANCE. In your application to buy a
Platinum Investor Policy, you will tell us how much life insurance coverage
you want on the life of the insured person. We call this the "specified
amount" of insurance.
YOUR DEATH BENEFIT. You also choose whether the basic death benefit we
will pay is
o Option 1 - The specified amount on the date of the insured
person's death
- or -
o Option 2 - The specified amount plus the Policy's
accumulation value on the date of death.
Under Option 2, your death benefit will tend to be higher than under Option 1.
However, the monthly insurance charge we deduct will also be higher to
compensate us for our additional risk. Because of this, your accumulation
value will tend to be higher under Option 1 than under Option 2.
If higher than the basic Option 1 or Option 2 death benefit (whichever
you have selected), we will automatically pay an alternative basic death
benefit computed by multiplying your Policy's accumulation value on the
insured person's date of death by the following percentages:
<TABLE>
TABLE OF ALTERNATIVE BASIC DEATH BENEFITS AS A PERCENTAGE
MULTIPLE OF POLICY ACCUMULATION VALUE
<CAPTION>
INSURED
PERSON'S 40 or
AGE*: Under 45 50 55 60 65 70 75 to 95 100
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
%: 250% 215% 185% 150% 130% 120% 115% 105% 100%
<FN>
* Nearest birthday at the beginning of the Policy year in which the insured
person dies. The percentages are interpolated for ages that are not shown
here.
</FN>
</TABLE>
7
<PAGE>
WHAT CHARGES WILL AGL DEDUCT FROM MY INVESTMENT IN A POLICY?
DEDUCTIONS FROM EACH PREMIUM PAYMENT. We deduct from each premium a
charge for the tax that is then applicable to us in your state or other
jurisdiction. These taxes currently range from 2% to 3.5%. Please let us know
if you move to another jurisdiction, so we can adjust this charge if required.
You are not permitted to deduct the amount of these taxes on your income tax
return. We also currently deduct an additional 2.5% from each after-tax
premium payment. We have the right at any time to increase this additional
charge to not more than 5% on all future premium payments.
DAILY CHARGE. We make a daily deduction at an annual effective rate of
.75% of your accumulation value that is then being invested in any of the
investment options (other than our declared fixed interest option). After a
Policy has been in effect for a certain number of years, we intend to reduce
the rate of this charge by .25%. The number of years depends on whether you
have version I or version II of the Policy and is discussed on page 13, below,
under "What are the differences between the Platinum Investor I and Platinum
Investor II Policies." Because the Policies were first offered in 1998,
however, this decrease has not yet occurred for any outstanding Policy.
Neither this decrease nor the current rate of .75% are guaranteed. Rather, we
have the right at any time to raise this charge under your Policy to not more
than .90%; except that in Texas and Oregon, until a Policy has been in effect
for a certain number of years, this maximum is .25% higher.
FLAT MONTHLY CHARGE. We will deduct $6 per month from your accumulation
value. Also, we have the right to raise this charge at any time to not more
than $12 per month.
MONTHLY INSURANCE CHARGE. Every month we will deduct from your
accumulation value a charge based on the cost of insurance rates applicable to
your Policy on the date of the deduction and our "amount at risk" on that
date. Our amount at risk is the difference between (a) the death benefit that
would be payable if the insured person died on that date and (b) the then
total accumulation value under the Policy. For otherwise identical Policies, a
greater amount at risk results in a higher monthly insurance charge. The cost
of insurance rates are generally lower under the Platinum Investor II Policy
than under the Platinum Investor I Policy.
For otherwise identical Policies, a higher cost of insurance rate also
results in a higher monthly insurance charge. Our cost of insurance rates are
guaranteed not to exceed those that will be specified in your Policy. Our
current rates are lower, although we have the right at any time to raise them
to not more than the guaranteed maximum.
In general, our cost of insurance rates increase with the insured
person's age. Therefore, the longer you own your Policy, the higher the cost
of insurance rate will be. Also our cost of insurance rates will generally be
lower (except in Montana) if the insured person is a female than if a male.
8
<PAGE>
Similarly, our current cost of insurance rates are lower for non-smokers
than smokers, and lower for persons that have other highly favorable health
characteristics, as compared to those that do not. On the other hand, insured
persons who present particular health, occupational or avocational risks may
be charged higher cost of insurance rates and other additional charges based
on the specified amount of insurance coverage under their Policy.
Finally, our current cost of insurance rates are lower for Policies
having a specified amount of at least $1,000,000 on the day the charge is
deducted. This means that if your specified amount for any reason decreases
from $1,000,000 or more to less than $1,000,000, your future cost of insurance
rates will be higher under your Policy than they otherwise would be. The
reverse is also true. Our cost of insurance rates also are generally higher
under a Policy that has been in force for some period of time than they would
be under an otherwise identical Policy purchased more recently on the same
insured person.
MONTHLY CHARGES FOR ADDITIONAL BENEFIT RIDERS. We will deduct charges
monthly from your accumulation value, if you select certain additional benefit
riders. These are described beginning on page 15, below, under "What
additional rider benefits can I elect?"
ADDITIONAL MONTHLY CHARGE FOR PLATINUM INVESTOR II POLICIES DURING THE
FIRST TWO YEARS. This charge is described on page 13 below under "What are the
differences between the Platinum Investor I and Platinum Investor II
Policies?"
SURRENDER CHARGE FOR PLATINUM INVESTOR I POLICIES. The Platinum Investor
I Policies have a surrender charge that applies for the first 10 Policy years
(and the first 10 years after any requested increase in the Policy's specified
amount). The amount of the surrender charge depends on the age and other
insurance characteristics of the insured person. The maximum amount of the
surrender charge will be shown on pages [23 and 24] of the Policy. It may
initially be as high as $________ per $1,000 of specified amount or as low as
$__________ per $1,000 of specified amount (or increase therein). Any amount
of surrender charge decreases automatically by a constant amount each year
beginning in the fourth year of its 10 year period referred to above until, in
the eleventh year, it is zero.
We will deduct the entire amount of any then applicable surrender charge
from the accumulation value at the time of a full surrender of a Platinum
Investor I Policy. Upon a requested decrease in such a Policy's specified
amount of coverage, we will deduct any remaining amount of the surrender
charge that was associated with the specified amount that is cancelled. This
includes any specified amount decrease that, as described under "Partial
surrender" on page 17, below, results from any requested partial surrender.
For this purpose, we deem the most recent increases of specified amount to
have been cancelled first.
TRANSACTION FEE. We will also charge a $25 transaction fee for each
partial surrender you make.
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CHARGE FOR TAXES. We can make a charge in the future for taxes we incur
or reserves we set aside for taxes in connection with the Policies. This would
reduce the investment experience of your accumulation value.
ALLOCATION OF CHARGES. You may choose from which of your investment
options we deduct all monthly charges. If you do not have enough accumulation
value in any investment option to comply with your selection, we will deduct
these charges proportionately to the amount of accumulation value you then
have in each investment option. Any surrender charge upon a decrease in
specified amount that is requested under a Platinum Investor I Policy will be
allocated in the same manner as if it were a monthly deduction.
WHAT CHARGES AND EXPENSES WILL THE MUTUAL FUNDS DEDUCT FROM AMOUNTS I
INVEST THROUGH MY POLICY?
Each Mutual Fund pays its investment management fees and other operating
expenses. Because they reduce the investment return of a Fund, these fees and
expenses also will reduce indirectly the return you will earn on any
accumulation value that you have invested in that Fund. These charges and
expenses currently are as follows:
<TABLE>
THE MUTUAL FUNDS' ANNUAL EXPENSES (1) (as a percentage of average net
assets)
<CAPTION>
Other Fund Total
Fund Management Operation Expenses Fund
Fees After Expense After Expense Operating
Name Of Fund Reimbursement(2) Reimbursement(2) Expenses(2)
------------ ------------------ ------------------ -----------
<S> <C> <C> <C>
The following funds of AMERICAN GENERAL
SERIES PORTFOLIO COMPANY ("AGSPC"):
Money Market Fund
International Equities Fund
MidCap Index Fund
Stock Index Fund
The following funds of AIM VARIABLE
INSURANCE FUNDS, INC.:
V.I. International Equity Fund
V.I. Value Fund
The following funds of DREYFUS VARIABLE
INVESTMENT FUND:
Small Cap Portfolio
Quality Bond Portfolio
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<PAGE>
The following series of MFS VARIABLE
INSURANCE TRUST:
MFS Emerging Growth Series
The following portfolios of MORGAN
STANLEY UNIVERSAL FUNDS, INC.:
Equity Growth Portfolio
High Yield Portfolio
The following portfolios of PUTNAM
VARIABLE TRUST:
Putnam VT Growth and Income Fund
Putnam VT Diversified Income Fund
Putnam VT International Growth
and Income Fund
The following portfolios of SAFECO
RESOURCES SERIES TRUST:
Equity Portfolio
Growth Portfolio
The following portfolio of VAN KAMPEN
AMERICAN CAPITAL LIFE INVESTMENT TRUST:
Strategic Stock Portfolio
<FN>
(1) The annual expenses are estimated for the current fiscal year for the
______________, __________ and __________ Funds, because none of these
Funds has financial statements covering a period of at least ten months.
(2) If certain voluntary expense reimbursements from the investment adviser
were terminated, management fees and other expenses would have been as
set out in the following table. Information about annual expenses
excluding voluntary expense reimbursements is not available for the other
Funds since none of the other Funds has financial statements covering a
period of at least ten months.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Total
Other Fund Fund
Fund Management Operating Operating
Name Of Fund Fees Expenses Expenses
------------ --------------- ----------- ---------
<S> <C> <C> <C>
[copy to come]
</TABLE>
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<PAGE>
MUST I INVEST ANY MINIMUM AMOUNT IN A POLICY?
PLANNED PERIODIC PREMIUMS. Page 3 of your Policy will specify a "Planned
Periodic Premium." This is the amount that you (within limits) choose to have
us bill you. Our current practice is to bill quarterly, semi-annually or
annually. Payment of these or any other specific amounts of premiums is not
mandatory, however. Rather, you need only invest enough to ensure either that
your Policy's cash surrender value stays above zero or that your 5 year
no-lapse guarantee (discussed below) remains in effect. ("Cash surrender
value" is explained under "Full surrender" on page 17, below.) The less you
invest, the more likely it is that your Policy's cash surrender value could
fall to zero, as a result of the deductions we periodically make from your
accumulation value.
POLICY LAPSE AND REINSTATEMENT. If your Policy's cash surrender value
does fall to zero, we will notify you and give you a grace period to pay at
least the amount we estimate is necessary to keep your Policy in force for a
reasonable time. If we don't receive your payment by the end of the grace
period, your Policy and all riders will terminate without value and all
coverage under your Policy will cease. Although you can apply to have your
Policy "reinstated," you must do this within 5 years (or, if earlier, before
the Policy's maturity date), and you must present evidence that the insured
person still meets our requirements for issuing coverage. Also, you would have
to pay certain extra amounts that we require. In the Policy form itself, you
will find additional information about the values and terms of a Policy after
it is reinstated.
MONTHLY GUARANTEE PREMIUMS UNDER THE PLATINUM INVESTOR I POLICIES. Page
3 of a Platinum Investor I Policy will specify a "Monthly Guarantee Premium."
On the first day of each Policy month that the cash surrender value is not
sufficient to pay the monthly deduction, we check to see if the cumulative
amount of premiums paid under such a Policy is at least equal to the sum of
the monthly guarantee premiums for all Policy months to date, including the
Policy month then starting. (Policy months are measured from the "Date of
Issue" that will also be shown on page 3 of the Policy.) So long as at least
this amount of premium payments has been paid by the beginning of that Policy
month, a Platinum Investor I Policy will not enter a grace period or terminate
(I.E., lapse) because of insufficient cash surrender value during the first 5
Policy years. If this test is not met on the monthly deduction day at the
beginning of any Policy month, the Policy enters the grace period. If a
sufficient premium is not paid before the end of the grace period, the Policy
and the 5-year no-lapse guarantee terminate. If the Policy is later
reinstated, the 5-year no-lapse guarantee may also be reinstated if sufficient
Premiums are paid, although the reinvested guarantee will in no case extend
beyond the date that originally marked the end of the maximum 5-year duration.
The amount of premiums that must be paid to maintain the 5 year no-lapse
guarantee will be increased by the cumulative amount of any loans (including
any loan increases to pay interest) and partial surrenders you have taken from
your Policy. Such monthly guarantee premiums also will be higher following any
requested increase in the specified amount of insurance coverage, or following
a requested addition of (or increase in) certain rider benefits. On the other
hand, the monthly guaranteed premium will be lower following any requested
decrease in the specified amount of insurance coverage, or following a
requested cancellation of (or decrease in) certain riders. If your Policy is
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<PAGE>
the Platinum Investor I version, we will send you an endorsement to your
Policy that will tell you what your new monthly guarantee premium is. However,
none of the above-mentioned changes extends the no-lapse period beyond 5 years
or establishes a new no lapse guarantee.
Although we will bill you for planned premiums, we will not send any
specific bills for the amount of any monthly guarantee premium that is due.
WHAT ARE THE DIFFERENCES BETWEEN THE PLATINUM INVESTOR I AND THE
PLATINUM INVESTOR II POLICIES?
Depending on your own financial circumstances and goals, and the uses to
which you intend to put a Platinum Investor Policy, either version of the
Policy may be appropriate for you. You should consult carefully with your AGL
representative about this. Relevant factors may include how much accumulation
value you intend to maintain in the Policy relative to the amount of the
Policy's death benefit and how likely it is that you may choose to surrender
your Policy or otherwise reduce your Policy's specified amount in the
foreseeable future.
The differences between the two versions of Platinum Investor are:
Platinum Investor II is available only for specified amounts of $500,000
or more. You may not request a specified amount decrease (or a partial
surrender) under a Platinum Investor II Policy that would reduce the specified
amount to less than $500,000.
o Platinum Investor II is not available for insured persons who are
below age 18.
o The Platinum Investor II version of the Policy DOES not have a
surrender charge.
o The Platinum Investor II version of the Policy DOES not have a 5
year no-lapse guarantee.
o The planned reduction in the current daily charge by .25% per
annum of separate account accumulation value is scheduled to occur
after year 10 for Platinum Investor II and after year 20 for
Platinum Investor I. These are also the same periods after which
the guaranteed maximum daily charge under Policies sold in Texas
and Oregon will decrease by .25% per annum.
o The two versions of Platinum Investor have different current cost
of insurance rates. Since this difference results in differing
accumulation values, you should carefully review the Policy
illustrations that are available to you.
o The Platinum Investor II version of the Policy has a monthly
expense charge during the first two Policy years (and the first
two years after any requested increase in the Policy's specified
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<PAGE>
amount). The amount of this charge depends on the age and other
insurance characteristics of the insured person. The amount of
this charge will be shown on page __ of a Platinum Investor II
Policy. It may initially be as much as $_______ per $1,000 of
specified amount (or increase therein), or as low as $_______ per
$1,000 of specified amount (or increase therein). (After the
two-year periods mentioned above, this charge is zero.) This
additional monthly charge does not apply to the Platinum Investor
I version of the Policies.
HOW CAN I CHANGE MY POLICY'S INVESTMENT OPTIONS?
FUTURE PREMIUM PAYMENTS. You may at any time change the investment
options in which future premiums you pay will be invested. Your allocation
must, however, be in whole percentages that total 100%.
TRANSFERS OF EXISTING ACCUMULATION VALUE. You may also transfer your
existing accumulation value from one investment option under the Policy to
another. Unless you are transferring the entire amount you have in an
investment option, each transfer must be at least $500. See "Additional rights
that we have," beginning on page 37, below. Also, you may not in any one
Policy year make transfers out of our declared fixed interest account option
that aggregate more than 25% of the accumulation value you had invested in
that option at the beginning of that Policy year.
You may make transfers at any time, except that transfers out of our
declared fixed interest account option must be made within 60 days after a
Policy anniversary. We will not honor any request received outside that
period.
MAXIMUM NUMBER OF INVESTMENT OPTIONS. We can at any time limit the
number of investment options you may use. Our current rule is that you cannot
use more than 18 different options over the life of your Policy.
HOW CAN I CHANGE MY INSURANCE COVERAGE?
INCREASE IN COVERAGE. You may at any time request an increase in the
specified amount of coverage under your Policy. You must, however, provide us
with satisfactory evidence that the insured person continues to meet our
requirements for issuing insurance coverage.
We treat an increase in specified amount in many respects as if it were
the issuance of a new Policy. For example, the monthly insurance charge for
the increase will be based on the age and risk class of the insured person at
the time of the increase. Also, if you have the Platinum Investor I version of
the Policy, a new amount of surrender charge and monthly guarantee premium
apply to the specified amount increase; and these amounts are the same as they
would be if we were instead issuing the same amount of additional coverage as
a new Platinum Investor I Policy. On the other hand, if you have the Platinum
Investor II version of the Policy, an additional monthly expense charge
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<PAGE>
applies for the first two years following the request for an increase in
specified amount. This amount is also the same as it would be if we were
instead issuing the same amount of additional coverage as a new Platinum
Investor II Policy.
DECREASE IN COVERAGE. After the first Policy year, you may request a
reduction in the specified amount of coverage, but not below certain minimums.
The minimum for a Platinum Investor I Policy is $100,000 (or, if greater, the
minimum amount that the tax law requires relative to the amount of premium
payments you have made). At the time of a decrease under such a Policy, we
will deduct from the Policy's accumulation value an amount of any remaining
surrender charge. We compute the amount we deduct in the manner described on
page 32, below, "Decreases in the specified amount of a Platinum Investor I
Policy."
CHANGE OF DEATH BENEFIT OPTION. You may at any time request us to change
your coverage from death benefit Option 1 to 2 or vice-versa. If you change
from Option 1 to 2, we also automatically reduce your Policy's specified
amount of insurance by the amount of your Policy's accumulation value (but not
below zero) at the time of the change. If you change from Option 2 to 1, we
also automatically increase your Policy's specified amount by the amount of
your Policy's accumulation value.
TAX CONSEQUENCES OF CHANGES IN INSURANCE COVERAGE. Please read "Tax
Effects" starting on page 26 of this prospectus to learn about possible tax
consequences of changing your insurance coverage under your Policy.
WHAT ADDITIONAL RIDER BENEFITS MIGHT I SELECT?
You can request that your Policy include the additional rider benefits
described below. For most of the riders that you choose, a charge, which will
be shown on page 3 of your Policy, will be deducted from your accumulation
value on each monthly deduction date. Eligibility for and changes in these
benefits are subject to our rules and procedures as in effect from time to
time. More details are included in the form of each rider, which we suggest
that you review if you choose any of these benefits.
o ACCIDENTAL DEATH BENEFIT RIDER, which pays an additional death
benefit if the insured person dies from certain accidental causes.
o AUTOMATIC INCREASE RIDER, which provides for automatic increases
in your Policy's specified amount of insurance at certain
specified dates and based on a specified index. These increases do
not require that evidence be provided to us about whether the
insured person continues to meet our requirements for insurance
coverage. These automatic increases are on the same terms
(including additional charges) as any other specified amount
increase you request (as described under "Increase in coverage" on
page 14, above). There is no additional charge for the rider
15
<PAGE>
itself, although the automatic increases in the specified amount
will increase the monthly insurance charge deducted from your
accumulation value, to compensate us for the additional coverage.
o CHILDREN'S INSURANCE BENEFIT RIDER, which provides term life
insurance coverage on the eligible children of the person insured
under Policy. This rider is convertible into any other insurance
(except for term coverage) available for conversions, under our
published rules at the time of conversion.
o MATURITY EXTENSION RIDER, which permits you to extend the Policy's
maturity date beyond what it otherwise would be, has two versions
from which to choose.
One version provides for a death benefit after the original
maturity date that is equal to the accumulation value on the date
of death. With this version, all accumulation value that is in the
separate account can remain there. There is no charge for this
version.
The other version provides for a death benefit after the original
maturity date equal to the base policy death benefit on the
original maturity date. With this version, if you elect to extend
your maturity date, all accumulation value that is in the separate
account will be automatically transferred to the declared fixed
interest option. There is a monthly charge for this version of the
rider during the first nine Policy years immediately preceding the
Policy's original maturity date. Therefore, this rider may not be
added to a Policy during that 9 year period.
In both versions, any other riders associated with the base policy
will expire at the original maturity date. No additional premium
payments, new loans, monthly insurance charge, or changes in
specified amount will be allowed after the original maturity date.
There is a flat monthly charge of no more than $10 each month
after the original maturity date. Extension of the maturity date
beyond the insured person's age 100 may cause your Policy to cease
to be taxed as a life insurance policy. You should consult a
qualified tax adviser before making such an extension.
o RETURN OF PREMIUM DEATH BENEFIT RIDER, which provides additional
term life insurance coverage on the person insured under the
Policy. The amount of additional insurance varies so that it
always equals the cumulative amount of premiums paid under the
Policy (subject to certain adjustments).
o SPOUSE TERM RIDER, which provides term life insurance on the life
of the spouse of the Policy's insured person. This rider is
convertible into any other insurance (except for term coverage)
available for conversions, under our published rules at the time
of conversion.
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<PAGE>
o TERMINAL ILLNESS RIDER, which provides for a benefit to be
requested if the Policy's insured person is diagnosed as having a
terminal illness (as defined in the rider) and less than 12 months
to live. This rider is not available in all states. The maximum
amount you may receive under this rider prior to the insured
person's death is 50% of the death benefit payable under the
Policy (excluding any rider benefits) or, if less, $250,000. The
amount of benefits paid under the rider, plus an administrative
fee (not to exceed $250), plus interest on these amounts to the
next Policy anniversary becomes a "lien" against all future Policy
benefits. We will continue to charge interest in advance on the
total amount of the lien and will add any unpaid interest to the
total amount of the lien each year. Any time the total lien, plus
any other Policy loans, exceed the Policy's then current death
benefit, the Policy will terminate without further value. The cash
surrender value of the Policy also will be reduced by the amount
of the lien.
o WAIVER OF MONTHLY DEDUCTION RIDER, under which we will waive all
monthly charges under your Policy and riders that we otherwise
would deduct from your accumulation value, so long as the insured
person is totally disabled (as defined in the rider). While we are
paying benefits under this rider we will not permit you to request
any increase in the specified amount of your Policy's coverage.
However, loan interest will not be paid for you under this rider,
and the Policy could, under certain circumstances, lapse for
nonpayment of loan interest.
TAX CONSEQUENCES OF ADDITIONAL RIDER BENEFITS. Adding or deleting
riders, or increasing or decreasing coverage under existing riders can have
tax consequences. See "Tax Effects" starting on page 26, below. You should
consult a qualified tax adviser.
HOW CAN I ACCESS MY INVESTMENT IN A POLICY?
FULL SURRENDER. You may at any time surrender your Policy in full. If
you do, we will pay you the accumulation value, less any Policy loans, and, if
you have the Platinum Investor I version of the Policy, less any surrender
charge that then applies. We call this your "cash surrender value." Because of
the surrender charge, it is unlikely that a Platinum Investor I Policy will
have any cash surrender value during at least the first year unless you pay
significantly more than the monthly guarantee premiums.
PARTIAL SURRENDER. You may, at any time after the first Policy year,
make a partial surrender of your Policy's cash surrender value. A partial
surrender must be at least $500. If the Option 1 death benefit is then in
effect, we will also automatically reduce your Policy's specified amount of
insurance by the amount of your withdrawal and any related charges. If you
have the Platinum Investor I version of the Policy, and we reduce your
Policy's specified amount because you have requested a partial withdrawal
while the Option 1 death benefit is in effect, we will deduct the same amount
of surrender charge, if any, that would have applied if you had requested such
17
<PAGE>
face amount decrease directly. See "Decrease in the specified amount of a
Platinum Investor I Policy," on page 32, below. We will not permit a partial
surrender if it would cause your Policy to fail to qualify as life insurance
under the tax laws or if it would cause your specified amount to fall below
the minimum allowed.
You may choose the investment option or options from which money that
you withdraw will be taken. Otherwise, we will allocate the withdrawal in the
same proportions as then apply for deducting monthly charges under your Policy
or, if that is not possible, proportionally to the amount of accumulation
value you then have in each investment option.
POLICY LOANS. You may at any time borrow from us an amount equal to your
Policy's cash surrender value (less our estimate of three months' charges and
less the interest that will be payable on your loan through your next Policy
anniversary). The minimum amount of each loan is $500 or, if less, the entire
remaining borrowable amount under your Policy.
We remove from your investment options an amount equal to your loan and
hold that amount as additional collateral for the loan. We will credit your
Policy with interest on this collateral amount at an effective annual rate of
4% (rather than any amount you could otherwise earn in one of our investment
options), and we will charge you interest on your loan at an effective annual
rate of 4.75%. Loan interest is payable annually, on the Policy anniversary,
in advance, at a rate of 4.51%. Any amount not paid by its due date will
automatically be added to the loan balance as an additional loan. Interest you
pay on Policy loans will not in most cases be deductible on your tax returns.
You may choose which of your investment options the loan will be taken
from. If you do not so specify, we will allocate the loan in the same way that
charges under your Policy are being allocated. If this is not possible, we
will make the loan pro-rata from each investment option that you then are
using.
You may repay all or part (but not less than $100) of your loan at any
time. You must designate any loan repayment as such. Otherwise, we will treat
it as a premium payment instead. Any loan repayments go first to repay all
loans that were taken from our declared fixed interest account investment
option. We will invest any additional loan repayments you make in the
investment options you request. In the absence of such a request we will
invest the repayment in the same proportion as you then have selected for
premium payments that we receive from you. Any unpaid loan will be deducted
from the proceeds we pay following the insured person's death.
PREFERRED LOAN INTEREST RATE. We will credit a higher interest rate on
an amount of the collateral securing Policy loans taken out after the first 10
Policy years. The maximum amount of new loans that will receive this preferred
loan interest rate for any year is (a) 10% of your Policy's accumulation value
(including any loan collateral we are holding for your Policy loans) at the
beginning of the Policy year or (b) if less, your Policy's maximum remaining
loan value at that anniversary. We intend to set the rate of interest we
credit to your preferred collateral amount equal to the loan interest rate you
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<PAGE>
are paying, resulting in a zero net cost of borrowing for that amount. We have
full discretion to vary the preferred rate, however, provided that it will
always be greater than the rate we are then crediting in connection with
regular Policy loans. Because we first offered the Policies in 1998, we have
not yet applied the preferred loan interest rate to any Policy loan amounts.
MATURITY OF YOUR POLICY. If the insured person is still living on the
"Maturity Date" shown on page 3 of your Policy, we will automatically pay you
the cash surrender value of the Policy, and the Policy will terminate. The
maturity date is the Policy anniversary nearest the insured person's 95th
birthday.
CAN I CHOOSE THE FORM IN WHICH AGL PAYS OUT THE PROCEEDS FROM MY POLICY?
CHOOSING A PAYMENT OPTION. You may choose to receive the full proceeds
from the Policy (and any riders) as a single sum. This includes proceeds that
become payable upon the death of the insured person, full surrender or the
maturity date. Alternatively, you may elect that all or part of such proceeds
be applied to one or more of the following payment options:
o Option 1 - Equal monthly payments for a specified period of time.
o Option 2 - Equal monthly payments of a specified amount until all
amounts are paid out.
o Option 3 - Equal monthly payments for the payee's life, but with
payments guaranteed for a specified number of years.
These payments are based on annuity rates that are set
forth in the Policy or, at the payee's request, the
annuity rates that we then are using.
o Option 4 - Proceeds left to accumulate with interest.
Additional payment options may also be available with our consent. We have the
right to veto any payment option, if the payee is a corporation or other
entity. You can read more about each of these options in our Policy form and
in the separate form of payment contract that we issue when any such option
takes effect.
Within 60 days after the insured person's death, any payee entitled to
receive proceeds as a single sum may elect one or more payment options.
Interest rates that we credit under each option will be at least 3%.
CHANGE OF PAYMENT OPTION. You may change any payment option you have
elected at any time while the Policy is in force.
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<PAGE>
TAX IMPACT. If a payment option is chosen, you or your beneficiary may
have tax consequences. You therefore should consult with a qualified tax
adviser before deciding whether to elect one or more payment options.
TO WHAT EXTENT CAN AGL VARY THE TERMS AND CONDITIONS OF THE POLICIES IN
PARTICULAR CASES?
Listed below are some variations we may make in the terms of a Policy.
Any variations will be made only in accordance with uniform rules that we
establish.
POLICIES PURCHASED THROUGH "INTERNAL ROLLOVERS." We maintain published
rules that describe the procedures necessary to replace the other life
insurance we issue with one of the Policies. Not all types of other insurance
we issue is eligible to be replaced with one of the Policies. Our published
rules may be changed from time to time, but are evenly applied to all our
customers.
POLICIES PURCHASED THROUGH TERM LIFE CONVERSIONS. Also, we maintain
rules about how to make a premium payment to a Policy by what is referred to
as a term conversion. Term conversions are available to owners of term life
insurance we have issued. Any right to a term conversion is stated in the term
life insurance policy. Again, our published rules about term conversions may
be changed from time to time, but are evenly applied to all our customers.
STATE LAW REQUIREMENTS. AGL is subject to the insurance laws and
regulations in every jurisdiction in which Platinum Investor is sold. As a
result, various time periods and other terms and conditions described in this
prospectus may vary depending on where you reside. These variations will be
reflected in your Policy and riders, or related endorsements.
VARIATIONS IN EXPENSES OR RISKS. AGL may vary the charges and other
terms of the Policies where special circumstances result in sales or
administrative expenses or mortality risks that are different from those
normally associated with the Policies.
HOW WILL MY POLICY BE TREATED FOR INCOME TAX PURPOSES?
Generally, death benefits paid under a Policy are not subject to income
tax, and earnings on your accumulation value are not subject to income tax as
long as we do not pay them out to you. If we do pay any amount of your
Policy's accumulation value upon surrender, partial surrender, or maturity of
your Policy, all or part of that distribution may be treated as a return of
the premiums you paid, and therefore not subject to income tax.
Amounts you receive as Policy loans are not taxable to you, unless you
have paid such a large amount of premiums that your Policy becomes what the
tax law calls a "modified endowment contract." In that case, the loan will be
taxed as if it were a partial surrender. Furthermore, loans, partial
surrenders and other distributions from a modified endowment contract may
require you to pay additional taxes and penalties that otherwise would not
apply.
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For further information about the tax consequences of owning a Policy,
please read "Tax Effects" starting on page 26, below.
HOW DO I COMMUNICATE WITH AGL?
When we refer to "you," we mean the person who is duly authorized to
take any contemplated action with respect to a Policy. Generally, this is the
owner named in the Policy. Where a Policy has more than one owner, each owner
generally must join in any requested action, except for transfers and changes
in the allocation of future premiums or charges among the investment options.
GENERAL. You should mail or express checks and money orders for premium
payments and loan repayments directly to our Home Office at the appropriate
address shown on the cover of this prospectus.
The following requests must be made in writing signed and dated by you:
transfer of accumulation value; loan; full surrender; partial surrender;
change of beneficiary or contingent beneficiary; change of allocation
percentages for premium payments, loan repayments or charges; change of death
benefit option or manner of death benefit payment; increase or decrease in
specified insurance amount; addition or cancellation of, or other action with
respect to, any rider benefits; election of a payment option for Policy
proceeds; tax withholding elections; and telephone transaction privileges. You
should mail or express these requests to our Home Office at the appropriate
address shown on the cover of this prospectus. You should also communicate
notice of the insured person's death, and related documentation, to our Home
Office.
We have special forms which should be used for loans, assignments,
partial and full surrenders, changes of owner or beneficiary, and all other
contractual changes. A Service Request form covering many of these
transactions is attached to the back of this prospectus. You will be asked to
return your Policy when you request a full surrender. You may also obtain
these forms from our Home Office or from your AGL representative. Each
communication must include your name, Policy number and, if you are not the
insured person, that person's name. We cannot process any requested action
that does not include all required information.
TELEPHONE TRANSACTIONS. If you have a completed telephone authorization
form on file with us, you may make transfers, or change the allocation of
future premium payments or deduction of charges, by telephone, subject to the
terms of the form. We will honor telephone instructions from any person who
provides the correct information, so there is a risk of possible loss to you
if unauthorized persons use this service in your name. Our current procedure
is that only the owner or your AGL representative may make a transfer request
by phone. We are not liable for any acts or omissions based upon instructions
that we reasonably believe to be genuine. Our procedures include verification
of the Policy number, the identity of the caller, both the insured person's
and owner's names, and a form of personal identification from the caller. We
will mail you a prompt written confirmation of the transaction. If many people
seek to make telephone requests at or about the same time, or if our recording
equipment malfunctions, it may be impossible for you to make a telephone
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request at the time you wish. If this occurs, you should submit a written
request. Also, if, due to malfunction or other circumstances, the recording of
your telephone request is incomplete or not fully comprehensible, we will not
process the transaction. The phone number for telephone requests is
1-888-325-9315.
The Policies are not designed for professional market timing
organizations or other entities utilizing programmed and frequent transfers.
We reserve the right at any time and without prior notice to any party to
terminate, suspend, or modify our policies or procedures regarding telephone
requests or to cease permitting telephone requests altogether.
ILLUSTRATIONS OF HYPOTHETICAL POLICY BENEFITS
To help clarify how our Policies work, we have prepared the
following tables:
<TABLE>
<CAPTION>
Page to see in this
Prospectus
----------
Table Platinum Platinum
----- Investor I Investor II
---------- -----------
<S> <C> <C>
Death Benefit Option 1 - Current Charges...................
Maximum Charges..................
</TABLE>
The tables show how death benefits, accumulation values, and cash
surrender values ("Policy benefits") under hypothetical Platinum Investor
Policies would vary over time if the investment options had constant
hypothetical gross annual investment returns of 0%, 6% or 12% over the years
covered by each table. The tables are for a __ year-old male non-tobacco user
and who is a better-than-average mortality risk in other respects as well.
Planned premium payments of $_______ for an initial $_______ of specified
amount coverage are assumed to be paid at the beginning of each Policy year.
The illustrations assume no Policy loan has been taken. The differences
between the accumulation values and the cash surrender values for the first 10
years in the tables for the Platinum Investor I version are that version's
surrender charges.
Although the tables below do not include illustrations of a Policy with
an Option 2 death benefit, such a Policy would have higher death benefits,
lower cash values, and a greater risk of lapse.
Separate tables are included to illustrate both current and guaranteed
maximum charges for both Platinum Investor I and Platinum Investor II. The
charges assumed in the current charge tables include a daily charge at an
annual rate of .75% for the first 20 Policy years (for Platinum Investor I) or
10 years (for Platinum Investor II), and .50% thereafter, and a flat monthly
charge of $6. The guaranteed maximum charge tables assume that these charges
will be .90% and $12, respectively, in all years. In Texas and Oregon, the
guaranteed maximum daily charge is .25% per annum higher for certain periods
of time than the daily charges assumed in the maximum charge tables below.
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Therefore, an identical Policy sold in those states would have values less
than those illustrated if we deducted the maximum charges.
The charges assumed by both the current and guaranteed maximum charge
tables also include __% for expenses of the Mutual Funds, which is the
unweighted average of the advisory fees payable with respect to each Mutual
Fund, after all reimbursements, as reflected on pages 11 and 12, above, plus
the weighted average of all other operating expenses of each such Fund after
all reimbursements, as reflected on pages 11 and 12, above. The total assumed
tax charges for all of the tables are 2.5% of premiums.
The second column of each table shows the effect of an amount equal to
the premiums invested to earn interest, after taxes, of 5% compounded
annually.
INDIVIDUAL ILLUSTRATIONS. On request, we will furnish you with a
comparable illustration based on your Policy's characteristics. If you request
illustrations more than once in any Policy year, we may charge for the
illustration.
<TABLE>
PLATINUM INVESTOR I POLICY ILLUSTRATION
PLANNED PREMIUM $_________ INITIAL SPECIFIED
AMOUNT $_______ DEATH BENEFIT OPTION 1
MALE AGE __
PREFERRED RISK NON-TOBACCO USER
ASSUMING CURRENT CHARGES
<CAPTION>
DEATH BENEFIT ACCUMULATION VALUE CASH SURRENDER VALUE
ASSUMING ASSUMING ASSUMING
HYPOTHETICAL GROSS HYPOTHETICAL GROSS HYPOTHETICAL GROSS
ANNUAL INVESTMENT ANNUAL INVESTMENT ANNUAL INVESTMENT
RETURN OF RETURN OF RETURN OF
END OF
POLICY ACCUMULATED
YEAR PREMIUMS 0% 6% 12% 0% 6% 12% 0% 6% 12%
(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
<FN>
(1) Assumes net interest of 5% compounded annually.
</FN>
</TABLE>
THE VALUES WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES. THE MONTHLY GUARANTEE PREMIUM FOR THIS POLICY WOULD BE $________.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN.
[Comparable tables for other configurations
are to be inserted.]
23
<PAGE>
ADDITIONAL INFORMATION
A general overview of the Policies appears at pages 1 to 23, above. The
additional information that follows gives more details, but generally does NOT
repeat what is set forth above.
<TABLE>
<CAPTION>
Contents of Additional Information Page to see in this
Prospectus
<S> <C>
AGL...................................................................................
Separate Account VL-R.................................................................
Tax Effects...........................................................................
Voting Privileges.....................................................................
Your Beneficiary......................................................................
Assigning Your Policy.................................................................
More About Policy Charges.............................................................
Effective Date of Policy and Transactions Thereunder..................................
More About Our Declared Interest Option...............................................
Distribution of the Policies..........................................................
Payment of Policy Proceeds............................................................
Adjustments to Death Benefit..........................................................
Additional Rights That We Have........................................................
Our Reports to Policy Owners..........................................................
AGL's Management......................................................................
Legal Matters.........................................................................
Accounting and Actuarial Experts......................................................
Certain Potential Conflicts...........................................................
</TABLE>
SPECIAL WORDS AND PHRASES. If you want more information about any words
or phrases that you read in this prospectus, you may wish to refer to the
Index of Words and Phrases that appears on the inside of the back cover of
this prospectus. That index will tell you on what page you can read more about
many of the words and phrases that we use.
AGL
We are American General Life Insurance Company ("AGL"). AGL is a stock
life insurance company organized under the laws of Texas. AGL is a successor
in interest to a company originally organized under the laws of Delaware in
1917. AGL is a indirect, wholly-owned subsidiary of American General
Corporation (formerly American General Insurance Company), a diversified
financial services holding company engaged primarily in the insurance
business. The commitments under the Contracts are AGL's, and American General
Corporation has no legal obligation to back those commitments.
24
<PAGE>
SEPARATE ACCOUNT VL-R
We hold the mutual Fund shares in which any of your accumulation value
is invested in our Separate Account VL-R. Separate Account VL-R is a "separate
account," as defined by the SEC and is registered as a unit investment trust
with the SEC under the Investment Company Act of 1940. We created the separate
account on May 6, 1997.
For recordkeeping and financial reporting purposes, Separate Account
VL-R is divided into 17 separate "divisions" each corresponding to one of the
17 available investment options (other than our declared fixed interest
option). We hold the mutual Fund shares in which we invest your accumulation
value for an investment option in the division that corresponds to that
investment option.
The assets in the separate account are our property. Nevertheless, the
assets in the separate account would be available only to satisfy the claims
of owners of the Policies, to the extent they have allocated their
accumulation value to the separate account. Our other creditors could reach
only those separate account assets (if any) that are in excess of the amount
of our reserves and liabilities under the Policies with respect to the
separate account.
AGL also issues variable annuity contracts through its Separate Accounts
A and D, which also are registered investment companies.
TAX EFFECTS
This discussion is based on current federal income tax law and
interpretations. It assumes that the Policy owner is a natural person who is a
U.S. citizen and resident. The tax effects on corporate taxpayers, non-U.S.
residents or non-U.S. citizens, may be different. This discussion is general
in nature, and should not be considered tax advice, for which you should
consult a qualified tax adviser.
GENERAL. A Platinum Investor Policy will be treated as "life insurance"
for federal income tax purposes (a) if it meets the definition of life
insurance under Section 7702 of the Internal Revenue Code of 1986 ("the Code")
and (b) for as long as the investments made by the underlying Mutual Funds
satisfy certain investment diversification requirements under Section 817(h)
of the Code. We believe that the Policies will meet these requirements and
that:
o the death benefit received by the beneficiary under your Policy
will not be subject to federal income tax; and
o increases in your Policy's accumulation value as a result of
interest or investment experience will not be subject to federal
income tax unless and until there is a distribution from your
Policy, such as a surrender or a partial surrender.
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<PAGE>
The federal income tax consequences of a distribution from your Policy can be
affected by whether your Policy is determined to be a "modified endowment
contract" (which is discussed below). In all cases, however, the character of
all income that is described below as taxable to the payee will be ordinary
income (as opposed to capital gain).
TESTING FOR MODIFIED ENDOWMENT CONTRACT STATUS. Your Policy will be a
"modified endowment contract" if, at any time during the first seven Policy
years, you have paid a cumulative amount of premiums that exceeds the premiums
that would have been paid by that time under a similar fixed-benefit insurance
policy that was designed (based on certain assumptions mandated under the
Code) to provide for paid-up future benefits after the payment of seven level
annual premiums. This is called the "seven-pay" test.
Whenever there is a "material change" under a Policy, the Policy will
generally be (a) treated as a new contract for purposes of determining whether
the Policy is a modified endowment contract and (b) subjected to a new
seven-pay period and a new seven-pay limit. The new seven-pay limit would be
determined taking into account, under a prescribed formula, the accumulation
value of the Policy at the time of such change. A materially changed Policy
would be considered a modified endowment if it failed to satisfy the new
seven-pay limit. A material change for these purposes could occur as a result
of a change in death benefit option, the selection of additional rider
benefits, an increase in your Policy's specified amount of coverage, and
certain other changes.
If your Policy's benefits are reduced during the first seven Policy
years (or within seven years after a material change), the calculated
seven-pay premium limit will be redetermined based on the reduced level of
benefits and applied retroactively for purposes of the seven-pay test. (Such a
reduction in benefits could include, for example, a decrease in specified
amount you request or, in some cases, a partial surrender or termination of
additional benefits under a rider.) If the premiums previously paid are
greater than the recalculated seven-payment premium level limit, the Policy
will become a modified endowment contract. A life insurance policy that is
received in exchange for a modified endowment contract will also be considered
a modified endowment contract.
OTHER EFFECTS OF POLICY CHANGES. Changes made to your Policy (for
example, a decrease in benefits or a lapse or reinstatement of your Policy)
may also have other effects on your Policy. Such effects may include impacting
the maximum amount of premiums that can be paid under your Policy, as well as
the maximum amount of accumulation value that may be maintained under your
Policy.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS NOT A MODIFIED
ENDOWMENT CONTRACT. As long as your Policy remains in force during the insured
person's lifetime, as a non-modified endowment contract, a Policy loan will be
treated as indebtedness, and no part of the loan proceeds will be subject to
current federal income tax. Interest on the loan generally will not be tax
deductible.
26
<PAGE>
After the first 15 Policy years, the proceeds from a partial surrender
will not be subject to federal income tax except to the extent such proceeds
exceed your "basis" in your Policy. (Your basis generally will equal the
premiums you have paid, less the amount of any previous distributions from
your Policy that were not taxable.) During the first 15 Policy years, the
proceeds from a partial surrender could be subject to federal income tax,
under a complex formula, to the extent that your accumulation value exceeds
your basis in your Policy.
On the maturity date or upon full surrender, any excess in the amount of
proceeds we pay (including amounts we use to discharge any Policy loan) over
your basis in the Policy, will be subject to federal income tax. In addition,
if a Policy terminates after a grace period while there is a policy Loan, the
cancellation of such loan and accrued loan interest will be treated as a
distribution and could be subject to tax under the above rules. Finally, if
you make an assignment of rights or benefits under your Policy you may be
deemed to have received a distribution from your Policy, all or part of which
may be taxable.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS A MODIFIED
ENDOWMENT CONTRACT. If your Policy is a modified endowment contract, any
distribution from your Policy during the insured person's lifetime will be
taxed on an "income-first" basis. Distributions for this purpose include a
loan (including any increase in the loan amount to pay interest on an existing
loan or an assignment or a pledge to secure a loan) or partial surrender. Any
such distributions will be considered taxable income to you to the extent your
accumulation value exceeds your basis in the Policy. (For modified endowment
contracts, your basis is similar to the basis described above for other
Policies, except that it also would be increased by the amount of any prior
loan under your Policy that was considered taxable income to you.) For
purposes of determining the taxable portion of any distribution, all modified
endowment contracts issued by the same insurer (or its affiliate) to the same
owner (excluding certain qualified plans) during any calendar year are
aggregated. The U.S. Treasury Department has authority to prescribe additional
rules to prevent avoidance of "income-first" taxation on distributions from
modified endowment contracts.
A 10% penalty tax also will apply to the taxable portion of most
distributions from a Policy that is a modified endowment contract. The penalty
tax will not, however, apply to distributions (i) to taxpayers 59 1/2 years of
age or older, (ii) in the case of a disability (as defined in the Code) or
(iii) received as part of a series of substantially equal periodic annuity
payments for the life (or life expectancy) of the taxpayer or the joint lives
(or joint life expectancies) of the taxpayer and his or her beneficiary. If
your Policy terminates after a grace period while there is a Policy loan, the
cancellation of such loan will be treated as a distribution to the extent not
previously treated as such and could be subject to tax, including the 10%
penalty tax, as described above. In addition, on the maturity date and upon a
full surrender, any excess of the proceeds we pay (including any amounts we
use to discharge any loan) over your basis in the Policy, will be subject to
federal income tax and, unless an exception applies, the 10% penalty tax.
Distributions that occur during a Policy year in which your Policy
becomes a modified endowment contract, and during any subsequent Policy years,
will be taxed as described in the two preceding paragraphs. In addition,
27
<PAGE>
distributions from a Policy within two years before it becomes a modified
endowment contract also will be subject to tax in this manner. This means that
a distribution made from a Policy that is not a modified endowment contract
could later become taxable as a distribution from a modified endowment
contract. The Treasury Department has been authorized to prescribe rules which
would treat similarly other distributions made in anticipation of a policy
becoming a modified endowment contract.
POLICY LAPSES AND REINSTATEMENTS. A Policy which has lapsed may have the
tax consequences described above, even though you may be able to reinstate
that Policy. For tax purposes, some reinstatements may be treated as the
purchase of a new insurance contract.
TERMINAL ILLNESS RIDER. Amounts received under an insurance policy on
the life of an individual who is terminally ill, as defined by the tax law,
are generally excludable from the payee's gross income. We believe that the
benefits provided under our terminal illness rider meet the law's definition
of terminally ill and can qualify for this income tax exclusion. This
exclusion does not apply, however, to amounts paid to someone other than the
insured person, if the payee has an insurable interest in the insured person's
life because the insured is a director, officer or employee of the payee or by
reason of the insured person being financially interested in any trade or
business carried on by the payee.
DIVERSIFICATION. Under Section 817(h) of the Code, the Treasury
Department has issued regulations that implement investment diversification
requirements. Failure by us to comply with these regulations would disqualify
your Policy as a life insurance policy under Section 7702 of the Code. If this
were to occur, you would be subject to federal income tax on the income under
the Policy for the period of the disqualification and for subsequent periods.
Our separate account, through the Mutual Funds, intends to comply with these
requirements.
In connection with the issuance of then temporary diversification
regulations, the Treasury Department stated that it anticipated the issuance
of guidelines prescribing the circumstances in which the ability of a policy
owner to direct his or her investment to particular Mutual Funds within a
separate account may cause the policy owner, rather than the insurance
company, to be treated as the owner of the assets in the account. If you were
considered the owner of the assets of the separate account, income and gains
from the account would be included in your gross income for federal income tax
purposes. Under current law, however, we believe that AGL, and not the owner
of a Policy, would be considered the owner of the assets of our separate
account.
ESTATE AND GENERATION SKIPPING TAXES. If the insured person is the
Policy's owner, the death benefit under a Platinum Investor Policy will
generally be includable in the owner's estate for purposes of federal estate
tax. If the owner is not the insured person, under certain conditions, only an
amount approximately equal to the cash surrender value of the Policy would be
includable. Federal estate tax is integrated with federal gift tax under a
unified rate schedule. In general, estates less than $625,000 (or larger
amounts specified in the Code to commence in certain future years) will not
28
<PAGE>
incur a federal estate tax liability. In addition, an unlimited marital
deduction may be available for federal estate tax purposes.
As a general rule, if a "transfer" is made to a person two or more
generations younger than the Policy's owner, a generation skipping tax may be
payable at rates similar to the maximum estate tax rate in effect at the time.
The generation skipping tax provisions generally apply to "transfers" that
would be subject to the gift and estate tax rules. Individuals are generally
allowed an aggregate generation skipping tax exemption of $1 million. Because
these rules are complex, you should consult with a qualified tax adviser for
specific information, especially where benefits are passing to younger
generations.
The particular situation of each Policy owner, insured person or
beneficiary will determine how ownership or receipt of Policy proceeds will be
treated for purposes of federal estate and generation skipping taxes, as well
as state and local estate, inheritance and other taxes.
PENSION AND PROFIT-SHARING PLANS. If Platinum Investor Policies are
purchased by a trust or other entity that forms part of a pension or
profit-sharing plan qualified under Section 401(a) of the Code for the benefit
of participants covered under the plan, the federal income tax treatment of
such Policies will be somewhat different from that described above.
If purchased as part of a pension or profit-sharing plan, the reasonable
net premium cost for such amount of insurance is required to be included
annually in the plan participant's gross income. This cost (generally referred
to as the "P.S. 58" cost) is reported to the participant annually. If the plan
participant dies while covered by the plan and the Policy proceeds are paid to
the participant's beneficiary, then the excess of the death benefit over the
Policy's accumulation value will not be subject to federal income tax.
However, the Policy's accumulation value will generally be taxable to the
extent it exceeds the participant's cost basis in the Policy. The
participant's cost basis will generally include the costs of insurance
previously reported as income to the participant. Special rules may apply if
the participant had borrowed from the Policy or was an owner-employee under
the plan.
There are limits on the amounts of life insurance that may be purchased
on behalf of a participant in a pension or profit-sharing plan. Complex rules,
in addition to those discussed above, apply whenever life insurance is
purchased by a tax qualified plan. You should consult a qualified tax adviser.
OTHER EMPLOYEE BENEFIT PROGRAMS. Complex rules may also apply when a
Policy is held by an employer or a trust, or acquired by an employee, in
connection with the provision of other employee benefits. These Policy owners
must consider whether the Policy was applied for by or issued to a person
having an insurable interest under applicable state law and with the insured
person's consent. The lack of an insurable interest or consent may, among
other things, affect the qualification of the Policy as life insurance for
federal income tax purposes and the right of the beneficiary to receive a
death benefit.
29
<PAGE>
ERISA. Employers and employer-created trusts may be subject to
reporting, disclosure and fiduciary obligations under the Employee Retirement
Income Security Act of 1974. You should consult a qualified legal adviser.
OUR TAXES. The operations of our Separate Account VL-R are reported in
our federal income tax return, but we currently pay no income tax on the
separate account's investment income and capital gains, because these items
are, for tax purposes, reflected in our variable life insurance policy
reserves. Therefore, no charge is currently being made to any separate account
division for taxes. We reserve the right to make a charge in the future for
taxes incurred; for example, a charge to the separate account for income taxes
incurred by us that are allocable to the Policies.
We may have to pay state, local or other taxes in addition to applicable
taxes based on premiums. At present, these taxes are not substantial. If they
increase, charges may be made for such taxes when they are attributable to our
separate account or allocable to the Policies.
Certain Mutual Funds in which your accumulation value is invested may
elect to pass through to AGL taxes withheld by foreign taxing jurisdictions on
foreign source income. Such an election will result in additional taxable
income and income tax to AGL. The amount of additional income tax, however,
may be more than offset by credits for the foreign taxes withheld which are
also passed through. These credits may provide a benefit to AGL.
WHEN WE WITHHOLD INCOME TAXES. Generally, unless you provide us with an
election to the contrary before we make the distribution, we are required to
withhold income tax from any proceeds we distribute as part of a taxable
transaction under your Policy. In some cases, where generation skipping taxes
may apply, we may also be required to withhold for such taxes unless we are
provided satisfactory written notification that no such taxes are due.
TAX CHANGES. The U.S. Congress frequently considers legislation that, if
enacted, could change the tax treatment of life insurance policies. In
addition, the Treasury Department may amend existing regulations, issue
regulations on the qualification of life insurance and modified endowment
contracts, or adopt new interpretations of existing law. State and local tax
law or, if you are not a U.S. citizen and resident, foreign tax law, may also
affect the tax consequences to you, the insured person or your beneficiary,
and are subject to change. Any changes in federal, state, local or foreign tax
law or interpretation could have a retroactive effect. We suggest you consult
a qualified tax adviser.
VOTING PRIVILEGES
You will be entitled to instruct us how to vote mutual Fund shares held
in the divisions of Separate Account VL-R and attributable to your Policy at
meetings of shareholders of the Funds. The number of votes for which you may
give directions will be determined as of the record date for the meeting. The
number of votes you are entitled to direct with respect to a particular Mutual
Fund is equal to (a) your accumulation value invested in that Fund divided by
(b) the net asset value of one share of that Fund. Fractional votes will be
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<PAGE>
recognized. Separate Account VL-R will vote all shares of each Fund that it
holds of record in the same proportions as those shares for which we have
received instructions from owners participating in that Fund through the
separate account.
If you are entitled to give us voting instructions, we will send you
proxy material and a form for providing such instructions. In certain cases,
we may disregard instructions relating to changes in a Fund's investment
manager or its investment policies. We will advise you if we do and detail the
reasons in our next report to Policy owners.
AGL reserves the right to modify these procedures in any manner
consistent with applicable legal requirements and interpretations as in effect
from time to time.
YOUR BENEFICIARY
You name your beneficiary when you apply for a Policy. The beneficiary
is entitled to the insurance benefits of the Policy. You may change the
beneficiary during the insured person's lifetime. We also require the consent
of any irrevocably named beneficiary. A new beneficiary designation is
effective as of the date you sign it, but will not affect any payments we may
make before we receive it. If no beneficiary is living when the insured person
dies, we will pay the insurance proceeds to the owner or the owner's estate.
ASSIGNING YOUR POLICY
You may assign (transfer) your rights in a Policy to someone else as
collateral for a loan or for some other reason, if we agree. Two copies of the
assignment must be forwarded to us. We are not responsible for any payment we
make or any action taken before we receive due and complete notice of the
assignment in good order. Nor are we responsible for the validity of the
assignment. An absolute assignment is a change of ownership. All collateral
assignees of record must consent to any full surrender, partial surrender,
loan or payment from a Policy under a terminal illness rider. Because there
may be unfavorable tax consequences, including recognition of taxable income
and the loss of income tax-free treatment for any death benefit payable to the
beneficiary, you should consult a qualified tax adviser prior to making an
assignment.
MORE ABOUT POLICY CHARGES
PURPOSE OF OUR CHARGES. The charges under the Policies are designed to
cover, in the aggregate, our direct and indirect costs of selling,
administering and providing benefits under the Policies. They are also
designed, in the aggregate, to compensate us for the risks we assume and
services that we provide under the Policies. These include mortality risks
(such as the risk that insured persons will, on average, die before we expect,
thereby increasing the amount of claims we must pay); investment risks (such
as the risk that adverse investment performance will make it more costly for
us to provide the 5-year no-lapse guarantee under the Platinum Investor I
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<PAGE>
Policies or reduce the amount of our daily charge fee revenues below what we
anticipate); sales risks (such as the risk that the number of Policies we sell
and the premiums we receive (net of withdrawals) are less than we expect,
thereby depriving us of expected economies of scale); regulatory risks (such
as the risk that tax or other regulations may be changed in ways adverse to
issuers of variable life insurance policies); and expense risks (such as the
risk that the costs of administrative services that the Policies require us to
provide will exceed what we currently project).
If the charges that we collect from the Policies exceed our total costs
in connection with the Policies, we will earn a profit. Otherwise we will
incur a loss.
CHANGE OF TOBACCO USE. If the person insured under your Policy is a
tobacco user, you may apply to us for an improved risk class if the insured
person meets our then applicable requirements for demonstrating that he or she
has ceased tobacco use for a sufficient period.
GENDER NEUTRAL POLICIES. Our cost of insurance charge rates in Montana
will not be greater than the comparable male rates illustrated in this
prospectus.
Congress and the legislatures of various states have from time to time
considered legislation that would require insurance rates to be the same for
males and females of the same age, rating class and tobacco user status. In
addition, employers and employee organizations should consider, in
consultation with counsel, the impact of Title VII of the Civil Rights Act of
1964 on the purchase of Platinum Investor Policies in connection with an
employment-related insurance or benefit plan. In a 1983 decision, the United
States Supreme Court held that, under Title VII, optional annuity benefits
under a deferred compensation plan could not vary on the basis of sex.
COST OF INSURANCE RATES. Because of specified amount increases,
different cost of insurance rates may apply to different increments of
specified amount under your Policy. If so, we attribute your accumulation
value first to the oldest increments of specified amount in order to compute
our net amount at risk at each cost of insurance rate. See "Monthly Insurance
Charge" beginning on page 8, above.
DECREASES IN THE SPECIFIED AMOUNT OF A PLATINUM INVESTOR I POLICY. An
amount of any remaining surrender charge will be deducted upon a decrease in
specified amount under a Platinum Investor I Policy. If there have been no
previous specified amount increases, the amount we deduct will bear the same
proportion to the total surrender charge then applicable as the amount of the
specified amount decrease bears to the Policy's total specified amount. The
remaining amount of surrender charge that we could impose at a future time,
however, will also be reduced proportionally. If there have been increases in
specified amount, we decrease first those portions of specified amount that
were most recently established. We also deduct any remaining amount of the
surrender charge that was established with that portion of specified amount
(which we pro-rate if less than that entire portion of specified amount is
being cancelled).
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EFFECTIVE DATE OF POLICY AND TRANSACTIONS THEREUNDER
VALUATION DATES, TIMES, AND PERIODS. We generally compute values under
Policies on each day that we are open for business except, with respect to any
investment option, days on which the related mutual Fund does not value its
shares. We call each such day a "valuation date."
We compute policy values as of 3:00 p.m., Central time, on each
valuation date. We call this our "close of business." We call the time from
the close of business on one valuation date to the close of business of the
next valuation date a "valuation period."
DATE OF RECEIPT. Generally we consider that we have received a premium
payment or another communication from you on the day we actually receive it in
full and proper order at our Home Office (shown on the cover page of this
prospectus). If we receive it after the close of business on any valuation
date, however, we consider that we have received it on the day following that
valuation date.
COMMENCEMENT OF INSURANCE COVERAGE. After you apply for a Policy, it can
sometimes take up to several weeks for us to gather and evaluate all the
information we need to decide whether to issue a Policy to you and, if so,
what the insured person's insurance rate class should be. We will not pay a
death benefit under a Policy unless (a) it has been delivered to the owner and
at least the minimum first premium has been paid, and (b) at the time of such
delivery and payment, there have been no adverse developments in the insured
person's health or risk of death. However, if you pay at least the minimum
first premium payment with your application for a Policy, we will provide
temporary coverage of up to $300,000 if the insured person meets certain
medical and risk requirements. The terms and conditions of this coverage are
described in our "Limited Temporary Life Insurance Agreement." You can obtain
a copy from our Home Office by writing to the address shown on the cover of
this prospectus or from your AGL representative.
DATE OF ISSUE; POLICY MONTHS AND YEARS. After we approve an application
for a Policy and assign an appropriate insurance rate class, we prepare the
Policy. The day we begin to deduct charges will appear on page 3 of your
Policy and is called the "date of issue." Policy months and years are measured
from the date of issue. In order to preserve a younger age at issue for the
insured person, we may assign a date of issue to a Policy that is up to 6
months earlier than otherwise would apply.
MONTHLY DEDUCTION DAYS. Each charge that we deduct monthly is assessed
against your accumulation value at the close of business on the date of issue
and at the end of each subsequent valuation period that includes the first day
of a Policy month. We call these "monthly deduction days."
COMMENCEMENT OF INVESTMENT PERFORMANCE. We begin to credit an investment
return to the accumulation value resulting from your initial premium payment
on the later of (a) the date of issue, the date we receive your full minimum
33
<PAGE>
first premium at our Home Office, or, (c) in the case of a back-dated policy,
the date we approve the Policy for insurance.
EFFECTIVE DATE OF OTHER PREMIUM PAYMENTS AND REQUESTS THAT YOU MAKE.
Premium payments (after the first) and transactions implemented in response to
requests and elections made by you are generally effected at the end of the
valuation period in which we receive the payment, request or election and
based on prices and values computed as of that same time. Exceptions to this
general rule are as follows:
o Increases or decreases you request in the specified amount of
insurance, and reinstatements of Policies that have lapsed take
effect on the Policy's monthly deduction day on or next following
our approval of the transaction.
o We may return premium payments if we determine that such premiums
would cause your Policy to become a modified endowment contract or
to cease to qualify as life insurance under federal income tax
law.
o If you exercise the right to return your Policy described on the
cover of this prospectus, your coverage will end when you mail us
your Policy or deliver it to your AGL representative.
o If you pay a premium in connection with a request which requires
our approval, your payment will be applied when received rather
than following the effective date of the change requested so long
as your coverage is in force and the amount paid will not cause
you to exceed premium limitations under the Code. If we do not
approve your request, no premium will be refunded to you except to
the extent necessary to cure any violation of the maximum premium
limitations under the Code. This procedure will not apply to
premiums remitted in connection with reinstatement requests.
MORE ABOUT OUR DECLARED FIXED INTEREST ACCOUNT OPTION
OUR GENERAL ACCOUNT. Our general account assets are all of our assets
that we do not hold in legally segregated separate accounts. Our general
account supports our obligations to you under your Policy's declared fixed
interest account investment option. Because of applicable exemptive
provisions, no interest in this option has been registered under the
Securities Act of 1933; nor is our general account or our declared fixed
interest account an investment company under the Investment Company Act of
1940. We have been advised that the staff of the SEC has not reviewed the
disclosures that are included in this prospectus for your information about
our general account or our declared fixed interest account option. Those
disclosures, however, may be subject to certain generally applicable
provisions of the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
34
<PAGE>
HOW WE DECLARE INTEREST. We can at any time change the rate of interest
we are paying on any accumulation value allocated to our declared fixed
interest account option, but it will always be at an effective annual rate of
at least 4%.
Under these procedures, it is likely that at any time different interest
rates will apply to different portions of your accumulation value, depending
on when each portion was allocated to our declared fixed interest account
option. Any charges, partial surrenders, or loans that we take from any
accumulation value that you have in our declared fixed interest account option
will be taken from each portion in reverse chronological order based on the
date that accumulation value was allocated to this option.
DISTRIBUTION OF THE POLICIES
American General Securities Incorporated ("AGSI") is the principal
underwriter of the Policies. AGSI is a wholly-owned subsidiary of AGL, and its
principal office is the same as AGL's Home Office. AGSI is registered with the
SEC as a broker-dealer under the Securities Exchange Act of 1934 (1934 Act)
and is a member of the National Associated of Securities Dealers, Inc.
("NASD"). AGSI is also the principal underwriter for AGL's Separate Accounts A
and D, and Separate Account E of American General Life Insurance Company of
New York, which is a wholly-owned subsidiary of AGL. These separate accounts
are registered investment companies.
We sell our Policies through agents who are licensed by state insurance
officials to sell our variable life policies. These agents are also registered
representatives of AGSI or another firm that is registered with the SEC as a
broker-dealer and is an NASD member. The agent who sells you this Policy
receives sales commissions. We pay these commissions from our own resources
and they do not result in any additional charge to you that is not described
on pages 7-10, above.
The commission we pay for selling the Platinum Investor I Policies is up
to 95% of the premiums paid in the first Policy year up to a "target" amount,
4% of the premiums not in excess of the target amount paid in each of Policy
years 2 through 10, 2.5% of all premiums in excess of the target amount
received in any of Policy years 1 through 10, and .25% annually of the
Policy's accumulation value in our investment options thereafter. (The target
amount is an amount of level annual premium that would be necessary to support
the benefits under your Policy, based on certain assumptions that we believe
are reasonable.) The commission for the Platinum Investor II Policies is up to
25% of premiums paid in the first Policy year up to the target amount, 12% of
the premiums not in excess of the target amount paid in each of Policy years 2
through 7, 2.5% on all premiums in excess of the target amount received in any
of Policy years 1 through 7, and .25% of the Policy's accumulation value in
our investment options thereafter.
We pay a comparable amount of commissions with respect to any increase
in the specified amount of coverage that you request. Commissions must be
returned for any premium that we refund to you for any reason.
35
<PAGE>
We pay the commissions directly to AGSI or any other selling
broker-dealer firm.
PAYMENT OF POLICY PROCEEDS
GENERAL. We will pay any death benefit, maturity benefit, cash surrender
value or loan proceeds within seven days after we receive the last required
form or request (and any other documents that may be required for payment of
death benefit). If we do not have information about the desired manner of
payment within 60 days after the date of the insured person's death, we will
pay the proceeds as a single sum, normally within seven days thereafter.
DELAY OF DECLARED FIXED INTEREST ACCOUNT OPTION PROCEEDS. We have the
right, however, to defer payment or transfers of amounts out of our declared
fixed interest account option for up to six months. If we delay more than 30
days in paying you such amounts, we will pay interest of at least 3% a year
from the date we receive all items we require to make the payment.
DELAY FOR CHECK CLEARANCE. Also, we reserve the right to defer payment
of that portion of your accumulation value that is attributable to a premium
payment made by check for a reasonable period of time (not to exceed 15 days)
to allow the check to clear the banking system.
DELAY OF SEPARATE ACCOUNT PROCEEDS. Finally, we reserve the right to
defer payment of any death benefit, loan or other distribution that is derived
from that portion of your accumulation value that is allocated to Separate
Account VL-R, if (a) the New York Stock Exchange is closed other than
customary weekend and holiday closings, or trading on the New York Stock
Exchange is restricted; (b) an emergency exists, as a result of which disposal
of securities is not reasonably practicable or it is not reasonably
practicable to fairly determine the accumulation value; or (c) the SEC by
order permits the delay for the protection of owners. Transfers and
allocations of accumulation value among the investment options may also be
postponed under these circumstances. If we need to defer calculation of
separate account values for any of the foregoing reasons, all delayed
transactions will be processed at the next values that we do compute.
DELAY TO CHALLENGE COVERAGE. We may challenge the validity of your
insurance Policy based on any material misstatements in your application and
any application for a change in coverage. However,
o We cannot challenge the Policy after it has been in effect, during
the insured person's lifetime, for two years from the date the
Policy was issued or restored after termination. (Some states may
require that we measure this time in some other way.)
36
<PAGE>
o We cannot challenge any Policy change that requires evidence of
insurability (such as an increase in specified amount) after the
change has been in effect for two years during the insured
person's lifetime.
o We cannot challenge an additional benefit rider that provides
benefits in the event that the insured person becomes totally
disabled, after two years from the later of the Policy's date of
issue or the date as of which the additional benefit rider becomes
effective.
ADJUSTMENTS TO DEATH BENEFIT
SUICIDE. If the insured person commits suicide within two years after
the date on which the Policy was issued, the death benefit will be limited to
the total of all premiums that have been paid to the time of death minus any
outstanding Policy loan and any partial surrenders. If the insured person
commits suicide within two years after the effective date of an increase in
specified amount that you requested, we will pay the death benefit based on
the specified amount which was in effect before the increase, plus the monthly
insurance deductions for the increase. Some states require that we compute
differently these periods for non-contestability following a suicide.
WRONG AGE OR SEX. If the age or gender of the insured person was
misstated on your application for a Policy (or for any increase in benefits),
we will adjust any death benefit to be what the monthly insurance charge
deducted for the current month would have purchased based on the correct
information.
DEATH DURING GRACE PERIOD. If the insured person dies during the
Policy's grace period, we will deduct any overdue monthly charges from the
insurance proceeds.
ADDITIONAL RIGHTS THAT WE HAVE
We have the right at any time to
o transfer the entire balance in an investment option in accordance
with any transfer request you make that would reduce your
accumulation value for that option to below $500;
o transfer the entire balance proportionately to any other
investment options you then are using, if the accumulation value
in an investment option is below $500 for any other reason;
o terminate the automatic rebalancing feature if your accumulation
value falls below $5,000;
37
<PAGE>
o change the underlying mutual Fund that any investment option uses;
o add or delete investment options, combine two or more investment
options, or withdraw assets relating to Platinum Investor from one
investment option and put them into another;
o operate Separate Account VL-R under the direction of a committee
or discharge such a committee at any time;
o operate the separate account, or one or more investment options,
in any other form the law allows, including a form that allows us
to make direct investments. Our separate account may be charged an
advisory fee if its investments are made directly rather than
through another investment company. In that case, we may make any
legal investments we wish;
o do any of the following, if in our judgment necessary or
appropriate to ensure that the Policies continue to qualify for
tax treatment as life insurance: decline to change death benefit
options or the specified amount of insurance, refuse a partial
surrender request, require you to pay additional premiums, make
distributions from your Policy (which could require payment of
taxes and penalties), or make any other changes in your Policy; or
o make other changes in the Policies that do not reduce any cash
surrender value, death benefit, accumulation value, or other
accrued rights or benefits.
If there are any material changes in the underlying investments of an
investment option that you are using, you will be notified as required by law.
We intend to comply with applicable law in making any changes and, if
necessary, we will seek policy owner approval.
OUR REPORTS TO POLICY OWNERS
Shortly after the end of each Policy year, we will mail you a report
that includes information about your Policy's current death benefit,
accumulation value, cash surrender value and policy loans. Notices will be
sent to you to confirm premium payments, transfers and certain other Policy
transactions. We will mail to you at your last known address of record, these
and any other reports and communications required by law. You should therefore
give us prompt written notice of any address change.
AGL'S MANAGEMENT
The directors, executive officers, and (to the extent responsible for
variable life operations) the other principal officers of AGL are listed
below.
38
<PAGE>
<TABLE>
<CAPTION>
Name Positions and Offices with AGL
---- ------------------------------
<S> <C>
Robert M. Devlin Chairman
Jon P. Newton Vice Chairman
Rodney O. Martin, Jr. Director, President & Chief
Executive Officer
David A. Fravel Director & Senior Vice President,
Insurance Operations
Robert F. Herbert, Jr. Director, Senior Vice President
Chief Financial Officer,
Treasurer & Controller
Royce G. Imhoff, II Director, Senior Vice President &
Chief Marketing Officer
John V. LaGrasse Director, Senior Vice President &
Chief Systems Officer
Peter V. Tuters Director, Vice President &
Chief Investment Officer
Philip K. Polkinghorn Director
Wayne A. Barnard Vice President & Chief Actuary
</TABLE>
The principal business address of each person listed above is our Home
Office; except that the street number for Messrs. Devlin, Newton, and
Tuters is 2929 Allen Parkway.
LEGAL MATTERS
We are not involved in any legal proceedings that would be considered
material with respect to a Policy owner's interest in Separate Account VL-R.
Steven A. Glover, Esquire, Associate General Counsel of AGL, has opined as to
the validity of the Policies. Freedman, Levy, Kroll & Simonds, Washington,
D.C., has advised AGL about certain federal securities and tax law matters in
connection with the Policies.
39
<PAGE>
ACCOUNTING AND ACTUARIAL EXPERTS
The financial statements of AGL included in this prospectus have been audited
by __________ LLP, as stated in their reports. The financial statements of AGL
have been included in reliance on the reports of __________ LLP, independent
accountants, given on the authority of such firm as experts in accounting and
auditing.
Actuarial matters in this prospectus have been examined by __________,
__________, who is _______ of AGL. [His/Her] opinion on actuarial matters is
filed as an exhibit to the registration statement we have filed with the SEC
in connection with the Policies.
CERTAIN POTENTIAL CONFLICTS
The Mutual Funds sell shares to separate accounts of insurance
companies, both affiliated and not affiliated with AGL. We currently do not
foresee any disadvantages to you arising out of this. Nevertheless,
differences in treatment under tax and other laws, as well as other
considerations, could cause the interests of various owners to conflict. For
example, violation of the federal tax laws by one separate account investing
in the Funds could cause the contracts funded through another separate account
to lose their tax-deferred status, unless remedial action were taken. However,
each mutual Fund has advised us that its board of trustees (or directors)
intends to monitor events in order to identify any material irreconcilable
conflicts that possibly may arise and to determine what action, if any, should
be taken in response. If we believe that a Fund's response to any such event
insufficiently protects our Policy owners, we will see to it that appropriate
action is taken to do so. If it becomes necessary for any separate account to
replace shares of any mutual Fund in which it invests, that Fund may have to
liquidate securities in its portfolio on a disadvantageous basis.
FINANCIAL STATEMENTS
The financial statements of AGL contained in this prospectus should be
considered to bear only upon the ability of AGL to meet its obligations under
Platinum Investor Policies. They should not be considered as bearing upon the
investment experience of the separate account. No financial statements of
Separate Account VL-R are included because, at the date of this prospectus,
the separate account had not yet commenced operations and had no assets or
liabilities.
<TABLE>
<CAPTION>
Consolidated Financial Statements Of Page to see in
American General Life Insurance Company this Prospectus
--------------------------------------- ---------------
<S> <C>
Report of __________ LLP, Independent Auditors
Consolidated Balance Sheets as of December 31, 1996 and 1995
40
<PAGE>
Consolidated Statements of Income for the years ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Shareholders' Equity for the years
ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows for the years, ended
December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
[Financial Statements to be filed by pre-effective amendment]
</TABLE>
41
<PAGE>
[NOTE: The following information is to appear on the inside of the back cover
of the prospectus.]
<TABLE>
INDEX OF WORDS AND PHRASES
This index should help you to locate more information about some of the
terms and phrases used in this prospectus.
<CAPTION>
PAGE TO SEE PAGE TO SEE
DEFINED TERM IN DEFINED TERM IN
THIS THIS
PROSPECTUS PROSPECTUS
<S> <C> <C> <C>
accumulation value Option 1, 2
AGL our
AGSPC owner
amount at risk partial surrender
automatic rebalancing payment option
basis planned periodic premium
beneficiary Platinum Accumulator
cash surrender value Platinum Investor
close of business Platinum Provider
code Policy
cost of insurance rate Policy anniversary
daily charge Policy loan
date of issue Policy month, year
death benefit preferred loan interest
declared interest option premiums
division premium payments
dollar cost averaging prospectus
5 year no-lapse guarantee reinstate, reinstatement
Fund rider
full surrender SEC
grace period separate account
guarantee premiums Separate Account VL-R
insured person seven payment test
investment option specified amount
lapse surrender
loan, loan interest surrender charge
maturity, maturity date target telephone transfers
modified endowment transfers
monthly deduction day valuation date, period
monthly guarantee premiums we
monthly insurance charge you, your
Mutual Fund
</TABLE>
42
<PAGE>
We have filed a registration statement relating to Separate Account VL-R
and the Policies with the SEC. The registration statement, which is required
by the Securities Act of 1933, includes additional information that is not
required in this prospectus. If you would like the additional information, you
may obtain it from the SEC's main office in Washington, D.C. You will have to
pay a fee for the material.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS (OR ANY SALES
LITERATURE APPROVED BY AGL) IN CONNECTION WITH THE OFFER OF THE POLICIES
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THE POLICIES ARE NOT AVAILABLE
IN ALL JURISDICTIONS, AND THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY
JURISDICTION TO ANY PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL THEREIN.
43
<PAGE>
PART II
(INFORMATION NOT REQUIRED TO BE FILED IN A PROSPECTUS)
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file
with the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
UNDERTAKING PURSUANT TO RULE 484(b)(i)
UNDER THE SECURITIES ACT OF 1933
Article VII, section 1, of the AGL's By-laws provides, in part, that AGL
shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any proceeding (other than an action by or in
the right of AGL) by reason of the fact that such person is or was serving at
the request of AGL, against expenses, judgments, fines, settlements, and other
amounts actually and reasonably incurred in connection with such proceeding if
such person acted in good faith and in a manner such person reasonably
believed to be in the best interest of AGL and, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct of such person was
unlawful.
Article VII, section 1 (in part), section 2 a, and section 3, provide
that AGL shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action
by or in the right of AGL to procure a judgment in its favor by reason of the
fact that such person is or was acting in behalf of AGL, against expenses
actually and reasonably incurred by such person in connection with the defense
or settlement of such action if such person acted in good faith, in a manner
such person believed to be in the best interests of AGL, and with such care,
including reasonable inquiry, as an ordinarily prudent person in a like
position would use under similar circumstances. No indemnification shall be
made under section 1: (a) in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable to AGL, unless and
only to the extent that the court in which such action was brought shall
determine upon application that, in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnify for the expenses
which such court shall determine; (b) of amounts paid in settling or otherwise
disposing of a threatened or pending action with or without court approval; or
(c) of expenses incurred in defending a threatened or pending action which is
settled or otherwise disposed of without court approval.
S-1
<PAGE>
Article VII, section 3, provides that, with certain exceptions, any
indemnification under Article VII shall be made by AGL only if authorized in
the specific case, upon a determination that indemnification of the person is
proper in the circumstances because the person has met the applicable standard
of conduct set forth in section 1 of Article VII by (a) a majority vote of a
quorum consisting of directors who are not parties to such proceeding; (b)
approval of the shareholders, with the shares owned by the person to be
indemnified not being entitled to vote thereon; or (c) the court in which such
proceeding is or was pending upon application made by AGL or the indemnified
person or the attorney or other persons rendering services in connection with
the defense, whether or not such application by the attorney or indemnified
person is opposed by AGL.
Article VII, section 7, provides that for purposes of Article VII, those
persons subject to indemnification include any person who is or was a
director, officer, or employee of AGL, or is or was serving at the request of
AGL as a director, officer, or employee of another foreign or domestic
corporation which was a predecessor corporation of AGL or of another
enterprise at the request of such predecessor corporation.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
REPRESENTATION REGARDING THE REASONABLENESS OF AGGREGATE FEES AND CHARGES
DEDUCTED UNDER THE POLICIES PURSUANT TO SECTION 26(e)(2)(A) OF THE INVESTMENT
COMPANY ACT OF 1940
AGL represents that the fees and charges deducted under the Policies, in
the aggregate, are reasonable in relation to the services rendered, the
expenses expected to be incurred, and the risks assumed by AGL under the
Policies. AGL bases its representation on its assessment of all of the facts
and circumstances, including such relevant factors, as: the nature and extent
of such services, expenses and risks; the need for AGL to earn a profit; the
degree to which the Policies include innovative features; and the regulatory
standards for exemptive relief under the Investment Company Act of 1940 used
S-2
<PAGE>
prior to October 1996, including the range of industry practice. This
representation applies to all Policies sold pursuant to this Registration
Statement, including those sold on the terms specifically described in the
prospectus contained herein, or any variations therein, based on supplements,
endorsements, or riders to any Policies or prospectus, or otherwise.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following papers and documents:
The facing sheet.
Cross-Reference Table.
Prospectus, consisting of _____ pages.
Undertaking to file reports.
Undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933.
Representation with respect to fees and charges.
The signatures.
Written Consents of the following persons:
Steven A. Glover,
Associate General Counsel and Assistant Security of AGL (see Exhibit
2(a)). (To be filed by pre-effective amendment.)
AGL's actuary (see Exhibit 2(b)). (To be filed by pre-effective
amendment.)
Independent Auditors (see Exhibit 6). (To be filed by pre-effective
amendment.)
The following exhibits:
1. Exhibits required by Article IX, paragraph A of Form N-8B-2:
<TABLE>
<S> <C>
(1)(a) Resolutions of Board of Directors of AGL authorizing
the establishment of Separate Account VL-R. (Filed
herewith.)
(1)(b) Resolutions of Board of Directors of AGL authorizing
the establishment of variable life insurance standards
of suitability and conduct. (Filed herewith.)
S-3
<PAGE>
(2) Inapplicable.
(3)(a) Form of Distribution Agreement. (To be filed by
pre-effective amendment.)
(3)(b) Form of Selling Group Agreement. (To be filed by
pre-effective amendment.)
(3)(c) Schedule of Commissions (included under the heading
"Distribution of the Policies" in the prospectus that
is filed as part of this Registration Statement).
(4) Inapplicable.
(5)(a)(i) Specimen form of the "Platinum Investor I" Variable
Universal Life Insurance Policy (Policy Form No.
97600). (Filed herewith.)
5(a)(ii) Specimen form of the "Platinum Investor II" Variable
Universal Life Insurance Policy (Policy Form No.
97610). (Filed herewith.)
(5)(b)(i) Specimen form of application for life insurance issued
by AGL. (Filed herewith.)
(5)(b)(ii) Specimen form of supplemental application for variable
life insurance issued by AGL on Policy Form No. 97600
and Policy Form No. 97610. (Filed herewith.)
(6)(a) Amended and Restated Articles of Incorporation of
American General Life Insurance Company, effective
December 31, 1991. (1)
(6)(b) Bylaws of American General Life Insurance Company,
adopted January 22, 1992. (2)
(7) Inapplicable.
(8)(a) Form of Participation Agreement with Adviser for AIM
Variable Insurance Funds, Inc. (To be filed by
pre-effective amendment.)
(8)(b) Form of Participation Agreement with Adviser for
American General Series Portfolio Company. (To be
filed by pre-effective amendment.)
(8)(c) Form of Participation Agreement with Adviser for
Dreyfus Variable Investment Fund. (To be filed by
pre-effective amendment.)
S-4
<PAGE>
(8)(d) Form of Participation Agreement with Adviser for MFS
Variable Insurance Trust. (To be filed by
pre-effective amendment.)
(8)(e) Amended Form of Participation Agreement with Adviser
for Morgan Stanley Series Universal Funds., Inc. (To
be filed by pre-effective amendment.)
(8)(f) Form of Participation Agreement with Adviser for
Putnam. (To be filed by pre-effective amendment.)
(8)(g) Form of Participation Agreement with Adviser for
Safeco Resources Series Trust. (To be filed by
pre-effective amendment.)
(8)(h) Amended Form of Participation Agreement with Adviser
for Van Kampen American Capital Life Investment Trust.
(To be filed by pre-effective amendment.)
(10) Specimen Form of Application (filed herewith).
Other Exhibits
2(a) Opinion and Consent of Steven A. Glover, Associate
General Counsel and Assistant Secretary of AGL. (To be
filed by pre-effective amendment.)
2(b) Opinion and Consent of AGL's actuary. (To be filed by
pre-effective amendment.)
3 Inapplicable.
4 Inapplicable.
5 Financial Data Schedule. (See Exhibit 27 below.)
6 Consent of Independent Auditors. (To be filed by
pre-effective amendment.)
7 Powers of Attorney. (Filed herewith.)
S-5
<PAGE>
27 Financial Data Schedule. (Inapplicable, because no
financial statements of the Separate Account are being
filed herewith)
<FN>
(1) Incorporated herein by reference to the initial filing of the Form N-4
Registration Statement (File No. 33-43390) of Separate Account D of AGL
on October 16, 1991.
(2) Incorporated herein by reference to the Post-Effective Amendment No. 1
of the Form N-4 Registration Statement (File No. 33-43390) of Separate
Account D of AGL on April 30, 1992.
</FN>
</TABLE>
S-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, American General Life Insurance Company Separate Account
VL-R, has duly caused this registration statement to be signed on its
behalf by the undersigned thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Houston, and State of
Texas, on the 12th day of December, 1997.
AMERICAN GENERAL LIFE INSURANCE
COMPANY SEPARATE ACCOUNT VL-R
(Registrant)
BY: AMERICAN GENERAL LIFE
INSURANCE COMPANY
(On behalf of the Registrant and itself)
/s/ROBERT F. HERBERT, JR.
BY:----------------------------
Robert F. Herbert, Jr.
Senior Vice President
[SEAL]
/s/STEVEN A. GLOVER
ATTEST: ----------------------
Steven A. Glover
Associate General Counsel
and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title
RODNEY O. MARTIN, JR.*
-------------------------- Principal Executive Officer
(Rodney O. Martin, Jr.)
ROBERT F. HERBERT, JR.*
-------------------------- Principal Financial and
(Robert F. Herbert, Jr.) Accounting Officer
<PAGE>
Directors
JOHN V. LaGRASSE*
-------------------------- --------------------------
(Robert M. Devlin) (John V. LaGrasse)
JAMES S. D'AGOSTINO, JR.* RODNEY O. MARTIN, JR.*
-------------------------- --------------------------
(James S. D'Agostino, Jr.) (Rodney O. Martin, Jr.)
DAVID A. FRAVEL* JON P. NEWTON*
-------------------------- --------------------------
(David A. Fravel) (Jon P. Newton)
ROBERT F. HERBERT, JR.* PHILIP K. POLKINGHORN*
-------------------------- --------------------------
(Robert F. Herbert, Jr.) (Philip K. Polkinghorn)
ROYCE G. IMHOFF, II* PETER V. TUTERS*
-------------------------- --------------------------
(Royce G. Imhoff, II) (Peter V. Tuters)
/s/ Steven A. Glover
--------------------------
* By Steven A. Glover, Attorney-in-Fact December 12, 1997
<PAGE>
EXHIBIT 1.(1)(a)
RESOLUTIONS FOR THE ESTABLISHMENT OF A
VARIABLE LIFE REGISTERED SEPARATE ACCOUNT May 6, 1997
WHEREAS, the management of the Company has determined that the
Company shall take the necessary steps to (i) develop a variable life
insurance marketing program, (ii) obtain variable life certificate of
authority in every state in which the Company is authorized to transact
business, and (iii) enable the Company to issue variable life contracts;
NOW THEREFORE BE IT RESOLVED, that the Company, pursuant to the
provisions of TEX. INS. CODE art. 3.75 (1996) and TEX. ADMIN. CODE tit.
28, ss. 3.806 (1996), hereby establishes a variable life registered
separate account to be designated "American General Life Insurance
Company Separate Account VL-R," (hereinafter "the Separate Account") for
the following use and purposes, and subject to such conditions as
hereinafter set forth; and
BE IT FURTHER RESOLVED, that the Separate Account is established
for the purpose of providing for the issuance by the Company of such
variable life or such other contracts ("Contracts") as the Chief
Executive Officer or his designated representative may designate for
such purpose and shall constitute a Separate Account into which are
allocated amounts paid to or held by the Company under such Contracts;
and
BE IT FURTHER RESOLVED, that pursuant to TEX. INS. CODE art. 3.75
ss. 1(c) (1996) and except as provided by the next paragraph, amounts
allocated to the Separate Account and accumulations on those amounts may
be invested and reinvested without regard to any requirements or
limitations prescribed by the laws of the State of Texas governing the
investments of life insurance companies, and the investments in the
Separate Account will not be taken into account in applying the
investment limitations otherwise applicable to the investments of the
Company; and
BE IT FURTHER RESOLVED, that pursuant to TEX. INS. CODE art. 3.75
ss. 1(d) (1996), reserves for benefits guaranteed as to dollar amount
and duration and funds guaranteed as to principal amount or stated rate
of interest will not be maintained in the Separate Account except with
the approval of the Texas Commissioner of Insurance and under conditions
for investments, and other matters, that recognize the guaranteed nature
of the benefits provided and that are prescribed by the Texas State
Board of Insurance; and
BE IT FURTHER RESOLVED, that pursuant to TEX. INS. CODE art. 3.75
ss. 1(f) (1996) and to the extent provided under the Contracts, the
portion of the assets of the Separate Account equal to the reserves and
other Contract liabilities with respect to the Separate Account are not
chargeable with liabilities arising out of any other business the
Company may conduct; and
BE IT FURTHER RESOLVED, that pursuant to TEX. ADMIN. CODE tit. 28,
ss. 3.806(2) (1996), the Company shall maintain assets in the Separate
Account with a value at least equal to the greater of the valuation
reserves for the variable portion of the Contracts or the benefit base
for such Contracts; and
<PAGE>
BE IT FURTHER RESOLVED, that the income, gains and losses, whether
or not realized, from assets allocated to the Separate Account shall be
credited to or charged against the Separate Account, in accordance with
the Contracts, without regard to other income, gains, or losses of the
Company; and
BE IT FURTHER RESOLVED, that the fundamental investment policy of
the Separate Account shall be to invest or reinvest the assets of the
Separate Account in securities issued by investment companies registered
under the Investment Company Act of 1940, as amended, as the Company
designates pursuant to the provisions of the Contracts; and
BE IT FURTHER RESOLVED, that multiple investment divisions be, and
hereby are, established within the Separate Account to which net
payments under the Contracts will be allocated in accordance with
instructions received from contract holders, and that the Chief
Executive Officer or his designated representative be, and hereby is,
subject to applicable state insurance regulatory approval, authorized to
increase or decrease the number of investment divisions in the Separate
Account as deemed necessary or appropriate; and
BE IT FURTHER RESOLVED, that each such investment division shall
invest only in the shares of a single mutual fund or a single mutual
fund portfolio of an investment Corporation organized as a series fund
pursuant to the Investment Company Act of 1940; and
BE IT FURTHER RESOLVED, that the Chief Executive Officer,
President and Treasurer be, and they hereby are, authorized, subject to
applicable state insurance regulatory approval, to deposit such amount
in the Separate Account or in each investment division thereof as may be
necessary or appropriate to facilitate the commencement of the Separate
Account's operations; and
BE IT FURTHER RESOLVED, that the Chief Executive Officer of the
Company or his designated representative be, and hereby is, authorized
to change the designation of the Separate Account to such other
designation as the Chief Executive Offer may deem necessary or
appropriate; and
BE IT FURTHER RESOLVED, that the appropriate officers of the
Company, with such assistance from the Company's auditors, legal counsel
and independent consultants or others as they may require, be, and they
hereby are, authorized and directed to take all action necessary to: (i)
register the Separate Account as a unit investment trust under the
Investment Company Act of 1940, as amended; (ii) register the Contracts
in such amounts, which may be an indefinite amount, as the officers of
the Company shall from time to time deem appropriate under the
Securities Act of 1933; and (iii) take all other actions which are
necessary in connection with the offering of said Contracts for sale and
the operation of the Separate Account in order to comply with the
Investment Company
2
<PAGE>
Act of 1940, the Securities Exchange Act of 1934, the Securities Act of
1933, and other applicable federal laws, including the filings of any
amendments to registration statements, any undertakings, and any
applications for exemptions from the Investment Company Act of 1940 or
other applicable federal laws as the officers of the Company shall deem
necessary or appropriate; and
BE IT FURTHER RESOLVED, that the appropriate officers of the
Company be, and they hereby are, authorized on behalf of the Separate
Account and on behalf of the Company to take any and all action that
they may deem necessary or advisable in order to sell the Contracts,
including any registrations, filings and qualifications of the Company,
its officers, agents and employees, and the entering into contracts
under the insurance and securities laws of any of the states of the
United States of America or other jurisdictions, and in connection
therewith, to prepare, execute, deliver and file all such applications,
reports, covenants, resolutions, applications for exemptions, consents
to service of process and other papers and instruments as may be
required under such laws, and to take any and all further action which
said officers or counsel of the Company may deem necessary or desirable
(including entering into whatever agreements and contracts may be
necessary) in order to maintain such registrations or qualifications for
as long as said officers or counsel deem them to be in the best
interests of the Separate Account and the Company; and
BE IT FURTHER RESOLVED, that the Chief Executive Officer of the
Company or his designated representative be, and hereby is, authorized
to establish criteria by which the Company shall institute procedures to
provide for a pass-through of voting rights to the owners of such
Contracts as required by the applicable laws with respect to securities
owned by the Separate Account; and
BE IT FURTHER RESOLVED, that the General Counsel for the Company
be, and hereby is, authorized in the names of and on behalf of the
Separate Account and the Company to execute and file irrevocable written
consents on the part of the Separate Account and of the Company to be
used in such states wherein such consents to service of process may be
requisite under the laws therein in connection with said Contracts and
to appoint the appropriate state official, or such other person as may
be allowed by said laws, agent of the Separate Account and of the
Company for the purpose of receiving and accepting process; and
BE IT FURTHER RESOLVED, that the Chief Executive Officer of the
Company or his designated representative be, and hereby is, authorized,
subject to applicable state insurance regulatory approval, to execute
such agreement or agreements on such terms and subject to such
modifications as deemed necessary or appropriate (i) with a qualified
entity that will be appointed principal underwriter and distributor for
the Contracts, and (ii) with one or more qualified banks or other
qualified entities to provide administrative and/or custodial services
in connection with the establishment and maintenance of the Separate
Account and the design, issuance, and administration of the Contracts;
and
BE IT FURTHER RESOLVED, that the appropriate officers of the
Company are hereby authorized to execute whatever agreement or
agreements as may be necessary or appropriate to enable such investments
on behalf of the Separate Account to be made; and
3
<PAGE>
BE IT FURTHER RESOLVED, that the Chief Executive of the Company or
his designated representative be, and hereby is, subject to applicable
state insurance regulatory approval, authorized to establish and
designate additional variable life registered separate accounts, in
accordance with the provisions (statutory and otherwise) set forth in
these resolutions, as the Chief Executive Officer of the Company or his
designated representative may deem necessary or appropriate in order to
accommodate and provide for alternative investment strategies and
policies for variable life registered contracts that cannot be
accommodated by or provided for through Separate Account VL-R; and
BE IT FURTHER RESOLVED, that the appropriate officers of the
Company, and each of them, are hereby authorized to execute and deliver
all such documents and papers and to do or cause to be done all such
acts and things as they may deem necessary or desirable to carry out the
foregoing resolutions and the intent and purposes thereof.
4
EXHIBIT 1.(1)(b)
RESOLUTIONS FOR THE ESTABLISHMENT OF
VARIABLE LIFE STANDARDS OF SUITABILITY AND CONDUCT May 6, 1997
WHEREAS, the management of the Company has determined that the Company
shall take the necessary steps to enable it to write variable life contracts;
NOW THEREFORE BE IT RESOLVED, that pursuant to TEX. ADMIN. CODE tit. 28,
ss. 3.803(3) (1996), the Company hereby adopts the standards of suitability
with respect to the issuance of variable life insurance contracts as follows:
No recommendation shall be made to an applicant to purchase a
variable life contract and no variable life insurance policy shall
be issued in the absence of reasonable grounds to believe that the
purchase of such contract and issuance of such policy is not
unsuitable for such applicant on the basis of information
furnished after reasonable inquiry of such applicant concerning
the applicant's insurance and investment objectives, financial
situation and needs, and any other information known to the
insurer or the agent making the recommendation; and
BE IT FURTHER RESOLVED, That pursuant to TEX. ADMIN. CODE tit. 28, ss.
3.806(8) (1996), the Company hereby adopts standards of conduct which are
applicable to the Company, its officers, directors, employees, and affiliates
with respect to the purchase or sale of investments in separate accounts. Such
standards of conduct shall satisfy the requirements set forth in 15 U.S.C.A.
ss. 80a-17 (1997) (attached hereto as Exhibit "A") and applicable rules and
regulations thereunder.
EXHIBIT 1.(5)(a)(i)
AMERICAN GENERAL LIFE
Insurance Company
Home Office:
Houston, Texas
2727-A Allen Parkway JOHN DOE American
P.O. Box 1931 POLICY NUMBER: 000000000 General
Houston, Texas 77251 [Graphic Omitted]
A STOCK COMPANY
(713) 522-1111 A Subsidiary of American
General Corporation
WE WILL PAY THE DEATH BENEFIT PROCEEDS to the Beneficiary if the Insured dies
prior to the Maturity Date and while this policy is in force. Payment will be
made after We receive due proof of the Insured's death, and will be subject to
the terms of this policy.
WE WILL PAY THE CASH SURRENDER VALUE of this policy to the Owner on the
Maturity Date if the Insured is living on that date.
THE AMOUNT OR DURATION OF THE DEATH BENEFIT PROCEEDS AND THE CASH VALUES
PROVIDED BY THIS POLICY WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE
ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
The consideration for this contract is the application and payment of the
first premium. The first premium must be paid on or before delivery of this
policy.
This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An adjustable Death
Benefit is payable upon the Insured's death prior to the Maturity Date.
Investment results are reflected in policy benefits. ACCUMULATION VALUES and
CASH VALUES are flexible and will be based on the amount and frequency of
premiums paid and the investment results of the Separate Account.
NONPARTICIPATING-NOT ELIGIBLE FOR DIVIDENDS.
Notice of Ten Day Right to Examine Policy
YOU MAY RETURN THIS POLICY WITHIN 10 DAYS AFTER DELIVERY IF YOU ARE NOT
SATISFIED WITH IT FOR ANY REASON. THE POLICY MAY BE RETURNED TO US OR TO THE
REGISTERED REPRESENTATIVE THROUGH WHOM IT WAS PURCHASED. UPON SURRENDER OF
THIS POLICY WITHIN THE 10 DAY PERIOD, IT WILL BE DEEMED VOID FROM THE DATE OF
ISSUE, AND WE WILL REFUND ANY PREMIUMS PAID ADJUSTED TO REFLECT INVESTMENT
EXPERIENCE.
SIGNED AT THE HOME OFFICE ON THE DATE OF ISSUE.
_____________ _____________
Secretary President
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
READ YOUR POLICY CAREFULLY
97600
<PAGE>
<TABLE>
INDEX
<CAPTION>
<S> <C>
Allocation of Policy Deductions 4
Allocation of Net Premiums 4
Annual Report 19
Automatic Rebalancing 14
Beneficiary and Proceeds 16
Cash Surrender Value 10
Cash Value 10
Changing Your Insurance Policy 7
Change of Ownership or Beneficiary 16
Changing the Death Benefit Option 7
Changing the Specified Amount 7
Contract 5
Cost of Insurance Rate Table 21
Date of Issue 3,5
Death Benefit and Death Benefit Options 6
Dollar Cost Averaging 14
Expense Charges
Monthly Administration Fee 3A,11
Premium Expense Charge 3A
Premium Tax 3
General Account 9
General Provisions 18
Grace Period 12
Incontestability 18
Investment Advisor, Change of 9
Investments of the Separate Account 8
Maturity Date 3
Monthly Guarantee Premium 12
Owner 5
Payment Options 17
Changing the Specified Amount 7
Policy Loans 15
Policy Values 9
Premium Class 2
Premium Payments 5
Separate Account 7
Surrender, Full and Partial 12
Transfer Provision 13
Valuation of Assets 8
Valuation Dates 8
Valuation Units 8
</TABLE>
COMPANY REFERENCE. We, Our, Us, or Company means American General Life
Insurance Company.
YOU, YOUR. The words You or Your mean the Owner of this policy. HOME OFFICE.
Our office at 2727-A Allen Parkway, Houston, Texas 77019; Mailing Address P.O.
Box 4880, Houston, Texas 77210-4880.
WRITTEN, IN WRITING. A written request or notice in acceptable form and
content, which is signed and dated, and received at Our Home Office.
PREMIUM CLASS. The Premium Class of this policy is shown on Page 3 as one or a
combination of the following terms:
SELECT. The term "Select" means the Insured qualifies as a better than average
mortality risk.
PREFERRED. The term "Preferred" means the cost of insurance is based on the
Insured being a nonuser of tobacco.
STANDARD. The term "Standard" means the cost of insurance is based on the
Insured being a tobacco user.
JUVENILE. All policies issued to Insureds at issue age 17 or less are
designated as "Juvenile". This means that cost of insurance rates stated in
the policy for insurance ages 18 and above are Standard rates. (Rates are not
classified on the basis of the Insured being a user or non-user of tobacco at
ages 0 through 17.)
SPECIAL. The term "Special" means an extra premium is being charged due to the
Insured's health, occupation or avocation.
RATES ON POLICY ANNIVERSARY NEAREST INSURED'S 18TH BIRTHDAY (FOR INSURED'S AGE
17 OR LESS ON DATE OF ISSUE). If the Insured's age, nearest birthday, is 17 or
less on the Date of Issue of this policy, Standard rates will be used starting
on the policy anniversary nearest the Insured's 18th birthday, except as
follows. Prior to the anniversary nearest the Insured's 18th birthday, a
written statement, signed by the Insured, may be submitted to the Company
requesting that Preferred rates be made effective. The statement must include
the date the Insured last used tobacco, or state that the Insured as never
used tobacco, whichever applies. If the request is approved, Preferred rates
will be made effective on the policy anniversary nearest the Insured's 18th
birthday. Otherwise, Standard rates will apply. We will send a notice to the
Owner at lest 30 days prior to the policy anniversary nearest the Insured's
18th birthday that an application for Preferred rates may be submitted.
NOTICE
This Policy Is A Legal Contract Between
The Policy Owner And The Company.
97600 Page 2
<PAGE>
POLICY SCHEDULE
BASIC POLICY MONTHLY COST YEARS PAYABLE
VARIABLE LIFE SEE PAGE 21 60
ADDITIONAL BENEFITS PROVIDED BY RIDERS
NONE
PREMIUM CLASS: SELECT PREFERRED
INITIAL PREMIUM: $1,504.60
PLANNED PERIODIC PREMIUM: $1,504.60 PAYABLE ANNUALLY
MONTHLY DEDUCTION DAY: 1ST DAY OF EACH MONTH
MINIMUM DEATH BENEFIT AMOUNT (AFTER
A DECREASE IN SPECIFIED AMOUNT) $100,000
MONTHLY GUARANTEE PREMIUM $ 37.00
MINIMUM PARTIAL SURRENDER $ 500.00
MINIMUM VALUE THAT MAY BE RETAINED IN A
DIVISION AFTER A PARTIAL SURRENDER $ 500.00
COVERAGE MAY EXPIRE PRIOR TO THE MATURITY DATE SHOWN WHERE EITHER NO PREMIUMS
ARE PAID FOLLOWING PAYMENT OF THE INITIAL PREMIUM, OR SUBSEQUENT PREMIUMS ARE
INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE.
INSURED: JOHN DOE POLICY NUMBER: 0000000000
INSURANCE AGE: 35 DATE OF ISSUE: NOVEMBER 1, 1997
INITIAL SPECIFIED AMOUNT: $100,000 MATURITY DATE: NOVEMBER 1, 2057
DEATH BENEFIT OPTION: 1 THIS IS A (SEX DISTINCT) POLICY
THIS IS A (STATE NAME) POLICY
97600 Page 3
<PAGE>
POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000
CHARGES DEDUCTED FROM THE SEPARATE ACCOUNT
MORTALITY AND EXPENSE CHARGE. DEDUCTIONS FROM THE SEPARATE ACCOUNT WILL
BE MADE AT AN ANNUAL RATE NOT TO EXCEED .90%. AFTER THE 20TH POLICY
YEAR, THE CURRENT MORTALITY AND EXPENSE CHARGES WILL BE REDUCED BY
.25% IN EACH POLICY YEAR THAT THE CURRENT MORTALITY AND EXPENSE
CHARGE ANNUAL RATE WITHOUT THE REDUCTION IS LESS THAN .90%. THE
CURRENT RATE ON THE DATE OF ISSUE IS [.75%]. THE ACTUAL DEDUCTION
WILL BE MADE ON A DAILY BASIS. THE CURRENT RATE ON A DAILY BASIS IS
[.002055%].
EXPENSE CHARGES
PREMIUM EXPENSE CHARGE: CURRENT GUARANTEED
(ADJUSTABLE PREMIUM EXPENSE CHARGE
PERCENTAGE) [2.5%] 5.0%
PREMIUM TAX (IF APPLICABLE). DEPENDING ON THE LAWS OF THE JURISDICTION IN
WHICH THIS POLICY WAS ISSUED, A PERCENTAGE OF EACH PREMIUM MAY BE
DEDUCTED FOR PREMIUM TAX. THE PREMIUM TAX RATE FOR THIS POLICY IS
[0%].
MONTHLY ADMINISTRATION FEE: CURRENT GUARANTEED
[$6.00] $12.00
BASIC POLICY CHARGES AND FEES
COST OF INSURANCE CHARGES. GUARANTEED MAXIMUM COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK ARE SHOWN ON PAGE 21.
SURRENDER CHARGES. A SURRENDER CHARGE WILL BE SUBTRACTED FROM YOUR
ACCUMULATION VALUE IF THE POLICY IS SURRENDERED OR THE INITIAL
SPECIFIED AMOUNT IS REDUCED DURING THE FIRST TEN POLICY YEARS, OR
DURING THE FIRST TEN YEARS FOLLOWING AN INCREASE IN SPECIFIED
AMOUNT. THE TABLE OF SURRENDER CHARGES WILL BE FOUND ON PAGES 23
AND 24.
TABLE OF MONTHLY GUARANTEE PREMIUM RATES
PER $1,000 OF SPECIFIED AMOUNT
AGE RATE AGE RATE
35 $0.37 38 $0.43
36 0.39 39 0.44
37 0.41 40 0.46
FOR A SPECIAL (RATED) PREMIUM CLASS, WE WILL ADJUST THE RATES TO REFLECT THE
MORTALITY RISK.
97600 Page 3A
<PAGE>
POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000
<TABLE>
INITIAL ALLOCATION OF NET PREMIUMS AND POLICY DEDUCTIONS
<CAPTION>
INVESTMENT OPTIONS INITIAL ALLOCATION INITIAL ALLOCATIONS
OF NET PREMIUMS OF POLICY DEDUCTIONS
<S> <C> <C>
GENERAL ACCOUNT:
(125) AGL Declared Fixed Interest Account 100% 100%
SEPARATE ACCOUNT: VL-R
[(126) AIM V.I. International Equity Fund 0% 0%
(127) AIM V.I. Value Fund 0% 0%
(128) International Equities Fund 0% 0%
(129) MidCap Index Fund 0% 0%
(130) Money Market Fund 0% 0%
(131) Stock Index Fund 0% 0%
(132) Quality Bond Portfolio 0% 0%
(133) Small Cap Portfolio 0% 0%
(134) MFS Emerging Growth Series 0% 0%
(135) Equity Growth Portfolio 0% 0%
(136) High Yield Portfolio 0% 0%
(137) Putnam VT Diversified Income Fund 0% 0%
(138) Putnam VT Growth and Income Fund 0% 0%
(139) Putnam VT International Growth and Income Fund 0% 0%
(140) Equity Portfolio 0% 0%
(141) Growth Portfolio 0% 0%
(142) Strategic Stock Portfolio 0% 0%]
</TABLE>
97600 Page 4
<PAGE>
CONTRACT. Your policy is a legal contract that You have entered into with Us.
You have paid the first premium and have submitted an application, a copy of
which is attached. In return, We promise to provide the insurance coverage
described in this policy.
The entire contract consists of:
1. The basic policy;
2. The riders that add benefits to the basic policy, if any;
3. Endorsements, if any; and
4. The attached copy of Your application, and any amendments or
supplemental applications.
DATE OF ISSUE. The Date of Issue of this policy is the date on which the first
premium is due. The Date of Issue is also the date from which all policy
years, anniversaries, and monthly deduction dates are determined.
OWNER. The Owner is as stated in the application unless later changed. During
the Insured's lifetime, the Owner may exercise every right the policy confers
or we allow (subject to the rights of any assignee of record, and to any
endorsement on this policy limiting such rights). You can have Joint Owners of
the policy. In that case, the authorization of both Joint Owners is required
for all policy changes except for transfers, premium allocations and deduction
allocations. We will accept the authorization of either Joint Owner for
transfers and changes in premium and deduction allocations. The Owner and the
Insured can be the same person but do not have to be. If the Owner dies while
the policy is in force and the Insured is living, ownership rights pass on to
a successor owner, if any, or to the estate of the Owner.
PREMIUM PAYMENTS
All premiums after the first are payable in advance. Premium payments are
flexible. This means You may choose the amount and frequency of payments.
The actual amount and frequency of premium payments will affect the Cash
Values and the amount and duration of insurance. Please refer to the Policy
Values Provision for a detailed explanation.
PLANNED PERIODIC PREMIUMS. The amount and frequency of the Planned Periodic
Premiums You selected are shown on page 3. You may request a change in the
amount and frequency. We may limit the amount of any increase. (See Maximum
Premium).
UNSCHEDULED ADDITIONAL PREMIUMS. You may pay additional premiums at any time
before the Maturity Date shown on page 3. We may limit the number and amount
of additional premiums. (See Maximum Premium).
MAXIMUM PREMIUM. The sum of the premiums paid under this policy may not exceed
the guideline premium limitation as defined by Section 7702, Internal Revenue
Code of 1986 (or as later amended). Any portion of any premium paid which is
determined to be in excess of the limit will be refunded.
PREMIUM EXPENSE CHARGE. The Premium Expense Charge is calculated by
multiplying the premium paid (after the deduction of any state premium tax) by
the Premium Expense Charge Percentage. The Premium Expense Charge Percentage
is adjustable, but will never be more than the guaranteed Premium Expense
Charge Percentage shown on the Policy Schedule.
NET PREMIUM. The Net Premium is the premium paid, less any applicable state
premium tax and the Premium Expense charge.
ALLOCATION OF PREMIUMS. The initial allocation of Net Premiums is shown on the
Policy Schedule and will remain in effect until changed by Written notice from
the Owner. The percentage allocation for future Net Premiums may be changed at
any time by Written notice.
97600 Page 5
<PAGE>
The initial Net Premium will be allocated to the Money Market Division on the
later of the following dates:
1. The Date of Issue; or
2. The date all requirements needed to place the policy in force have been
satisfied, including underwriting approval and receipt in the Home
Office of the necessary premium.
The initial Net Premium will remain in the Money Market Division until the
first Valuation Date following the 15th day after it was applied. Any
additional Net Premiums received prior to the first Valuation date which
follows the 15th day after the initial Net Premium was applied will be
allocated to the Money Market Division until such Valuation Date. At that
time, We will transfer the Accumulation Value to the selected Investment
Option(s). Each premium received after such Valuation date will be reduced by
any applicable state premium tax and the Premium Expense Charge and applied
directly to the selected Investment Option(s) as of the Business Day received.
Changes in the allocation will be effective on the date we receive the Owner's
notice. The allocation may be 100% to any available Division or may be divided
among these options in whole percentage points totaling 100%. We reserve the
right to limit the number of Divisions which you may select.
WHERE TO PAY. You may make your payments to Us at our Home Office or to an
authorized agent. A receipt signed by an officer of the Company will be
furnished upon request.
DEATH BENEFIT AND DEATH BENEFIT OPTIONS
DEATH BENEFIT PROCEEDS. If the Insured dies prior to the Maturity Date and
while this policy is in force, We will pay the Death Benefit Proceeds to the
Beneficiary. The Death Benefit Proceeds will be subject to:
1. The Death Benefit Option in effect on the date of death; and
2. Any increases or decreases made to the Specified Amount. The Initial
Specified Amount is shown on page 3.
Guidelines for changing the Death Benefit Option or the Specified Amount will
be found in the section entitled "Changing Your Insurance Policy."
The Death Benefit Proceeds will be the Death Benefit Amount reduced by any
outstanding policy loan and will be subject to the other provisions of the
"Beneficiary and Proceeds" section.
DEATH BENEFIT OPTION. The Death Benefit Option which You have chosen is shown
on page 3 as either Option 1 or Option 2.
OPTION 1. If you have chosen Option 1 the Death Benefit Amount will be the
greater of:
1. The Specified Amount on the date of death; or
2. The Accumulation Value on the date of death multiplied by the Death
Benefit Percentage Factor for the Insured's age nearest birthday as
shown in the table that follows.
OPTION 2. If you have chosen Option 2, the Death Benefit Amount will be the
greater of:
1. The Specified Amount plus the Accumulation Value on the date of death;
or
2. The Accumulation Value on the date of death multiplied by the Death
Benefit Percentage Factor for the Insured's age nearest birthday as
shown in the table that follows.
<TABLE>
TABLE OF DEATH BENEFIT PERCENTAGE FACTORS
<CAPTION>
Att'd Percentage Att'd Percentage Att'd Percentage Att'd Percentage
Age Factor Age Factor Age Factor Age Factor
<S> <C> <C> <C> <C> <C> <C> <C>
0-40 250% 50 185% 60 130% 70 115%
41 243 51 178 61 128 71 113
42 236 52 171 62 126 72 111
43 229 53 164 63 124 73 109
44 222 54 157 64 122 74 107
45 215 55 150 65 120 75-90 105
46 209 56 146 66 119 91 104
47 203 57 142 67 118 92 103
48 197 58 138 68 117 93 102
49 191 59 134 69 116 94 101
95+ 100
</TABLE>
97600 Page 6
<PAGE>
CHANGING YOUR INSURANCE POLICY
You may request a change in the Specified Amount or Death Benefit Option at
any time except that a decrease in the Specified Amount may not become
effective prior to the end of the first policy year. Your request must be
submitted to Our Home Office in writing in a form acceptable to Us.
INCREASING THE SPECIFIED AMOUNT. We will require a supplemental application
and evidence of insurability satisfactory to Us for any increase in the
Specified Amount. An increase will be effective on the monthly deduction day
on or next following the date the application for increase is approved by Us.
The effective date will appear in an endorsement to this policy.
DECREASING THE SPECIFIED AMOUNT. Any decrease will go into effect on the
monthly deduction day following the day We receive the request. The Death
Benefit Amount remaining in effect after any decrease cannot be less than the
greater of:
1. The Minimum Death Benefit Amount shown on page 3; or
2. Any Death Benefit Amount which, upon comparing such amount to the sum of
premiums already paid, would result in an excess of premium payments.
(See the "Maximum Premium" provision.)
Any such decrease will be applied in the following order:
1. Against the Specified Amount provided by the most recent increase;
2. Against the next most recent increases successively;
3. Against the Specified Amount provided under the original application.
Any reduction in Specified Amount will be subject to any applicable Surrender
Charges on a pro-rata basis, and the remaining Surrender Charge will be
reduced proportionately.
Surrender Charges will apply to each $1,000 of decrease in Specified Amount.
The Accumulation Value will be reduced by the amount of any Surrender Charge.
However, if such charge would result in a negative Cash Value, the Specified
Amount decrease will not be allowed.
CHANGING THE DEATH BENEFIT OPTION. You may request a change in the Death
Benefit Option you have chosen.
1. If You request a change from Option 1 to Option 2: The new Specified
Amount will be the Specified Amount, prior to change, less the
Accumulation Value as of the effective date of the change, but not less
than zero.
2. If You request a change from Option 2 to Option 1: The new Specified
Amount will be the Death Benefit Amount as of the effective date of the
change.
We will not require evidence of insurability for a change in the Death Benefit
Option. The change will go into effect on the monthly deduction day following
the date We receive Your request for change.
CHANGING THE TERMS OF YOUR POLICY. Any change in Your policy must be approved
by one of Our officers. No agent has the authority to make any changes or
waive any of the terms of Your policy.
SEPARATE ACCOUNT PROVISIONS
SEPARATE ACCOUNT. Separate Account VL-R is a segregated investment account
established by the Company under Texas law to separate the assets funding the
variable benefits for the class of policies to which this policy belongs from
the other assets of the Company. That portion of the assets of the Separate
Account equal to the reserves and other policy liabilities with respect to the
Separate Account shall not be chargeable with liabilities arising out of any
other business We may conduct . Income, gains and losses, whether or not
realized from assets allocable to the Separate Account, are credited to or
charged against such Account without regard to Our other income, gains or
losses.
97600 Page 7
<PAGE>
INVESTMENTS OF THE SEPARATE ACCOUNT. The Separate Account is segmented into
Divisions. Each Division invests in a single Investment Option. Net Premiums
will be applied to the Separate Account and allocated to one or more
Divisions. The assets of the Separate Account are invested in the Investment
Options listed on the Policy Schedule Pages. From time to time, We may add
additional Divisions to those shown on the Policy Schedule pages. We may also
discontinue offering one or more Divisions. Any change in Divisions available
or selected are shown on the Policy Schedule or on an amended Policy Schedule.
Any change in investment selection shall be pursuant to a duly executed change
form filed with Our Home Office. Transfers may be made to the additional
Divisions subject to the rules stated in the Transfer Provision and any new
rules or limitations tied to such additional Divisions.
If shares of any of the Investment Options become unavailable for investment
by the Separate Account, or the Company's Board of Directors deems further
investment in these shares inappropriate, the Company may limit further
investment in the shares or may substitute shares of another Investment Option
for shares already purchased under this policy.
VALUATION OF ASSETS. The assets of the Separate Account are valued as of each
Valuation Date at their fair market value in accordance with Our established
procedures. The Separate Account Value as of any Valuation Date prior to the
Maturity Date is the sum of Your account values in each Division of the
Separate Account as of that date.
VALUATION UNITS. In order to determine policy values in the Divisions We use
Valuation Units which are calculated separately for each Division. The
Valuation Unit value for each Division will vary to reflect the investment
experience of the applicable Investment Option. The Valuation Unit for a
Division will be determined on each Valuation Date for the Division by
multiplying the Valuation Unit value for the Division on the preceding
Valuation Date by the Net Investment Factor for that Division for the current
Valuation Date.
The Net Investment Factor for each Division is determined by dividing (1) by
(2) and subtracting (3), where:
(1) is the net asset value per share of the applicable Investment Option as
of the current Valuation Date (plus any per share amount of any dividend
or capital gains distribution paid by the Investment Option since the
last Valuation Date); and
(2) is the net asset value per share of the shares held in the Division as
determined at the end of the previous valuation period; and
(3) is a factor representing the Mortality and Expense Charge.
The net asset value of an investment company's shares held in each investment
division shall be the value reported by Us by that investment company.
VALUATION DATES. Valuation of the various Divisions will occur on each
Business Day during each month. If the underlying Investment Option is unable
to value or determine the Divisions investment in an Investment Option due to
any of the reasons stated in the "Suspension and Deferral of Payments
Provision", the Valuation Date for the Division with respect to the unvalued
portion shall be the first Business Day that the assets can be valued or
determined.
BUSINESS DAY. A business day is each day that the New York Stock Exchange and
the Company are open for business. A business day immediately preceded by one
or more non-business calendar days will include those non-business days as
part of that business day. For example, a business day which falls on a Monday
will consist of a Monday and the immediately preceding Saturday and Sunday.
MINIMUM BALANCE. If a partial surrender causes the balance in any Division to
drop below $500, the Company reserves the right to transfer the remaining
balance to the Money Market Division. If a transfer causes the balance in any
Division to drop below $500, the Company reserves the right to transfer the
remaining balance in proportion to the transfer request.
97600 Page 8
<PAGE>
CHANGE OF INVESTMENT ADVISOR OR INVESTMENT POLICY. Unless otherwise required
by law or regulation, the investment advisor or any investment policy may not
be changed without Our consent. If required, approval of or change of any
investment objective will be filed with the Insurance Department of the state
where this policy is being is delivered.
RIGHTS RESERVED BY US. Upon notice to You, this policy may be modified by Us,
but only if such modification is necessary to:
1. Operate the Separate Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law;
2. Transfer any assets in any Division to another Division, or to one or
more other separate accounts;
3. Add, combine or remove Divisions in the Separate Account, or combine the
Separate Account with another Separate Account;
4. Make any new Division available to You on a basis to be determined by
Us;
5. Substitute for the shares held in any Division the shares of another
Division or the shares of another investment company or any other
investment permitted by law;
6. Make any changes as required by the Internal Revenue Code, or by any
other applicable law, regulation or interpretation in order to continue
treatment of this policy as life insurance; or
7. Make any changes required to comply with rules of any Division.
When required by law, We will obtain Your approval of changes and We will gain
approval from any appropriate regulatory authority.
GENERAL ACCOUNT. The General Account is a Fixed Account within Our general
assets which We have established for:
1. Any amounts transferred from the Divisions as a result of a loan; or
2. Any amounts allocated by the Owner to such Account.
The General Account is credited with interest at an annual rate of not less
than 4%, and is not based on the investment experience of any Division of the
Separate Account. Interest applied to that portion of the General Account
equal to a policy loan will be at an annual effective rate of not less than 4%
nor more than 4.75%.
POLICY VALUES PROVISION
ACCUMULATION VALUE. The Accumulation Value of Your policy is the total of all
values in the General Account and in the Divisions of the Separate Account.
The Accumulation Value reflects:
1. Premiums paid;
2. Deductions for Expense Charges;
3. Monthly deductions;
4. The investment experience of the Divisions selected;
5. The value of amounts allocated to the General Account, including
interest earned on amounts allocated to the General Account;
6. Deductions due to partial withdrawals; and
7. Deductions, if any, resulting from decreases in Specified Amount.
Net Premiums are allocated, in accordance with your instructions, to the
General Account or allocated to the selected Divisions of the Separate Account
and converted to Valuation Units.
On each Monthly Deduction day, a Monthly Deduction will be made by reducing
the unloaned portion of the General Account or redeeming Valuation Units from
each applicable Division in the same ratio as the Allocation of Policy
Deductions in effect on the Monthly Deduction day. If the number of Valuation
Units in any Division, or in the unloaned portion of the General Account is
insufficient to make a Monthly Deduction in this manner, We will cancel
Valuation Units from each applicable Division and reduce the unloaned portion
of the General Account in the same ratio the Monthly Deduction bears to the
97600 Page 9
<PAGE>
unloaned Accumulation Value of your policy. You must state In Writing in
advance how Monthly Deductions should be made if other than this method is to
be used.
The Accumulation Value in any Division is determined by multiplying the value
of a Valuation Unit by the number of Valuation Units held under the policy in
that Division.
The value of Valuation Units equal to the amount being borrowed from the
Separate Account will be transferred to the General Account as of the Business
Day that the loan request is received In Writing.
Valuation Units are surrendered to reflect a partial surrender as of the
Business Day that the request for partial surrender is received In Writing.
ON THE DATE OF ISSUE. The Accumulation Value on the Date of Issue will be
determined as follows:
1. The Net Premium received; less
2. The Monthly Deduction for the first policy month; (See "How We Calculate
a Monthly Deduction.")
The first deduction day is the Date of Issue. The Monthly Deduction day is
shown on page 3.
ON EACH DEDUCTION DAY. On each deduction day after the Date of Issue, we will
determine the Accumulation Value as follows:
1. First, we will take the Accumulation Value as of the last deduction day;
and
2. Add the interest earned for the month on the excess of the General
Account value on the last deduction day over any withdrawals and
transfers made from the General Account since the last deduction day;
and
3. Add any investment gain (or subtract any investment loss) on the
Divisions of the Separate Account since the last deduction day as
measured by the change in the value of the Valuation Units; and
4. Add all Net Premiums received since the last deduction day; and
5. Subtract any partial surrender made since the last deduction day; and
6. Subtract the Monthly Deduction for the policy month following the
monthly deduction day. (See "How We Calculate a Monthly Deduction.")
ON ANY VALUATION DATE OTHER THAN A DEDUCTION DAY. The Accumulation Value on
any Valuation Date other than a deduction day will be the sum of:
1. The value of the General Account as of the last deduction day;
2. Less any withdrawals since the last deduction day;
3. Plus all Net Premiums received since the last deduction day;
4. Plus the sum of the values of the Divisions of the Separate Account as
of the last deduction day, plus the amount of any investment gain (or
minus any investment loss) on the Divisions since the last deduction day
as measured by the change in value of the Valuation Units.
CASH VALUE. The Cash Value of this policy will be equal to the Accumulation
Value less the Surrender Charge, if any.
CASH SURRENDER VALUE. The Cash Surrender Value of this policy will be equal to
the Cash Value less any indebtedness.
MONTHLY DEDUCTIONS MAY BE MADE ONLY IF THERE IS SUFFICIENT CASH SURRENDER
VALUE. (UNLESS POLICY IS BEING CONTINUED UNDER THE MONTHLY GUARANTEE PREMIUM
PROVISION). Unless this policy is being continued in force under the Monthly
Guarantee Premium provision, a monthly deduction from the Accumulation Value
may be made only if the Cash Surrender Value is equal to or greater than the
Monthly Deduction. The Accumulation Value will be reduced by the amount of
each Monthly Deduction which will cause an equal reduction in the Cash
Surrender Value. If the Cash Surrender Value on a deduction day is not
sufficient to meet the Monthly Deduction for the current month, this policy
will be subject to the "Grace Period" and "Monthly Guarantee Premium"
provisions.
97600 Page 10
<PAGE>
SURRENDER CHARGE. Surrender Charges for the Initial Specified Amount will
apply if You surrender this policy or if the Initial Specified Amount is
reduced during the first 10 policy years. Surrender Charges for any increases
in Specified Amount will apply if such increases are surrendered or reduced
during the first 10 years of each increase. The table on pages 23 and 24 lists
the Surrender Charge rates per $1,000 of Specified Amount at all issue ages.
You may make a request for surrender at any time during the Insured's lifetime
before the Maturity Date. The amount being surrendered or reduced will
terminate on the Valuation Date on or next following the
date We receive the request for surrender or reduction.
HOW WE CALCULATE A MONTHLY DEDUCTION. Each Monthly Deduction includes:
1. The cost of insurance provided by the basic policy; and
2. The cost of insurance for benefits provided by riders; and
3. The Monthly Administration Fee.
HOW WE CALCULATE THE COST OF INSURANCE FOR THE BASIC POLICY. We calculate the
cost of insurance at the beginning of each policy month on the deduction day.
The cost of insurance is determined as follows:
1. Reduce the Death Benefit Amount by the amount of Accumulation Value on
the deduction day before the cost of insurance deduction is taken, and
after the Monthly Administration Fee and Cost of Insurance for riders
are deducted;
2. Multiply the difference by the cost of insurance rate per $1,000 of net
risk amount as provided in the Cost of Insurance Rate provision; and
3. Divide the result by 1000.
If Option 1 is in effect, and there have been increases in the Specified
Amount, the Accumulation Value will first be considered part of the Initial
Specified Amount. If the Accumulation Value exceeds the Initial Specified
Amount, the excess will be considered part of prior Specified Amount increases
in the order of the increases.
COST OF INSURANCE FOR BENEFITS PROVIDED BY RIDERS. The cost of insurance for
benefits provided by riders will be as stated on the Policy Schedule or in an
endorsement to this policy.
MONTHLY ADMINISTRATION FEE. An administration fee will be deducted monthly.
The amount of the monthly fee may be adjusted, but will never be greater than
the guaranteed Monthly Administration Fee.
COST OF INSURANCE RATE. The cost of insurance rate for the Initial Specified
Amount, and for each Specified Amount increase, is based on the Insured's:
1. Sex (if issued on a Sex Distinct basis);
2. Age nearest birthday on each policy anniversary; and
3. Premium class shown on the Policy Schedule, associated with the Initial
Specified Amount and each increase in the Specified Amount.
The guaranteed monthly cost of insurance rates are shown in the table on page
21. We can use cost of insurance rates that are lower than the guaranteed
rates. Any change in rates will apply to all policies in the same rate class
as this policy. The rate class of this policy is determined on its Date of
Issue according to:
1. The calendar year of issue and policy year;
2. The plan of insurance;
3. The amount of insurance; and
4. The age, sex and premium class of the Insured if issued on a Sex
Distinct basis. The age and premium class if issued on a Unisex basis.
CHANGES IN RATES, CHARGES AND FEES. This policy does not participate in Our
profits or surplus. Any redetermination of the cost of insurance rates,
interest rates, mortality and expense charges, percentage of premium charges
or the Monthly Administration Fee will be based on Our expectations as to
investment earnings, mortality, persistency and expenses. We will not change
these charges in order to recoup any prior losses.
97600 Page 11
<PAGE>
INTEREST RATE. The guaranteed interest rate used in calculating Accumulation
Values of amounts allocated to the General Account is .3274% per month
compounded monthly. This is equivalent to 4.0% per year, compounded annually.
We can use interest rates greater than the guaranteed rates to calculate
Accumulation Values.
GRACE PERIOD. If the Cash Surrender Value on a deduction day is not enough to
meet the Monthly Deduction for the current month, this policy will remain in
force during the 61-day period that follows. If the Cash Surrender Value on a
policy anniversary is not enough to pay any loan interest due, this policy
will remain in force during the 61-day period that follows. Such 61-day period
is referred to in this policy as the "Grace Period." There is no Grace Period
for the initial Monthly Deduction.
If the required premium is not paid by the end of the Grace Period, this
policy will terminate without value. However, we will give you at least 31
days notice prior to termination that your policy is in the Grace Period and
advise you of the amount of premium required to keep your policy in force.
Such 31 days prior notice will be sent to you at your last known address, and
to the assignee of record, if any. If death occurs during the Grace Period,
Monthly Deductions through the policy month in which death occurred will be
deducted from the proceeds. If a surrender request is received within 31 days
after the Grace Period commences, the Cash Surrender Value payable will not be
less than the Cash Surrender Value on the Monthly Deduction day the Grace
Period commenced. The Monthly Deduction for the policy month following such
Monthly Deduction day will not be subtracted in the calculation of such Cash
Surrender Value.
MONTHLY GUARANTEE PREMIUM. The Monthly Guarantee Premium for the Initial
Specified Amount and any benefit riders in force on the Date of Issue is shown
on page 3. This policy will not terminate within the 5 year period after the
Date of Issue, if on each Monthly Deduction Day during that period, the sum of
premiums paid equals or exceeds:
1. The sum of the Monthly Guarantee Premiums from the Date of Issue,
including the current month; plus
2. Any partial surrenders and any increase in the loan amount since the
start of the period.
If the Specified Amount is increased, during the first 5 policy years, a new
Monthly Guarantee Premium will be calculated as follows: We will use rates for
the Insured's attained age for the amount of the increase, and add the Monthly
Guarantee Premium (s) previously calculated for the Initial specified Amount
and each prior increase, plus the cost of any benefit riders. If the Specified
Amount is decreased, the Monthly Guarantee Premium will be decreased.
If a benefit rider is added or increased, the Monthly Guarantee Premium will
be increased. If a benefit rider is removed or decreased, the Monthly
Guarantee Premium will be decreased.
If a policy is reinstated with no change in the Specified Amount, Premium
Class or benefit riders, the Monthly Guarantee Premium upon reinstatement will
be the same as it was when the policy lapsed.
The Monthly Guarantee Premium period ends on the fifth policy anniversary. It
will not be extended or otherwise changed by changes in the Specified Amount,
the addition, deletion or change in benefit riders, or by reinstatement of the
policy.
The policy value at the end of the 5 year period may be insufficient to keep
the policy in force unless an additional payment is made at that time.
FULL SURRENDER. Subject to the Beneficiary and Proceeds section, You may
return Your policy to Us and request its Cash Surrender Value at any time
during the Insured's lifetime before the Maturity Date. The Cash Surrender
Value will be determined as of the Business Day the policy and the signed
request for surrender are received In Writing in the Home Office. The Company
may delay payment if the Suspension and Deferral of Payments Provision is in
effect.
PARTIAL SURRENDER. At any time after the first policy year, you may request
withdrawal of a portion of the Cash Surrender Value of the policy. Your
request must be made in writing prior to the Maturity Date during the
Insured's lifetime. The minimum partial surrender is $500.00.
97600 Page 12
<PAGE>
Valuation Units are surrendered to reflect a partial surrender as of the
Business Day the request for partial surrender is received In Writing in the
Home Office.
A partial surrender will result in a reduction of the Accumulation Value, Cash
Value and the Death Benefit Amount. The Accumulation and Cash Values will be
reduced by the amount of partial surrender benefit. The reduced Death Benefit
Amount will be determined in accordance with the Death Benefit Option
provision. If your Death Benefit Option is Option 1, the Specified Amount will
be reduced by the amount of the partial surrender. (The reduced amount will
not be less than zero.) The Death Benefit Amount remaining after this
reduction must be no less than the Minimum Death Benefit Amount shown on page
3.
A partial surrender will result in the cancellation of Valuation Units from
each applicable Division and reduction of the unloaned portion of the General
Account in the same ratio as the Allocation of Policy Deductions in effect on
the date of each partial surrender. If the number of Valuation Units in any
Division or in the unloaned portion of the General Account is insufficient to
make a partial surrender in this manner, We will cancel Valuation Units from
each applicable Division and reduce the unloaned portion of the General
Account in the ratio the partial surrender request bears to the unloaned
Accumulation Value of your policy. You must state In Writing in advance how
partial surrenders should be made if other than this method is to be used.
There will be a $25.00 charge for each partial surrender in addition to the
amounts shown in the Table of Surrender Charges.
Any partial surrender that causes a reduction in Specified Amount will be
subject to any applicable surrender charges on a pro-rata basis, and the
remaining surrender charge will be reduced proportionately.
The Company may delay payment if the Suspension and Deferral of Payments
Provision is in effect.
PERIOD OF INSURANCE COVERAGE IF AMOUNT OR FREQUENCY OF PREMIUM PAYMENTS IS
REDUCED OR IF PREMIUM PAYMENTS ARE DISCONTINUED. If You reduce the amount or
frequency of premium payments, or if You discontinue payment of premiums and
do not surrender this policy, We will continue making Monthly Deductions (as
long as there is sufficient Cash Surrender Value to make such deductions)
until the Maturity Date. This policy will remain in force until the earlier of
the following dates:
1. The Maturity Date (if there is sufficient Cash Surrender Value to make
Monthly Deductions to that date); or
2. The end of the Grace Period.
TRANSFER PROVISION
TRANSFER OF ACCUMULATION VALUE. You may transfer all or part of Your interest
in a Division of the Separate Account or the General Account subject to the
following:
1. Transfers will be made as of the Business Day that the transfer request
is received in good order.
2. The minimum which may be transferred is $500.00.
3. A transfer from the General Account to a Separate Account Division may
only be made during the 60 day period that begins on a policy
anniversary. The total amount transferred during the 60 day period is
limited in any policy year to 25% of the unloaned portion of the General
Account as of the policy anniversary.
4. We reserve the right to terminate, suspend or modify the transfer
privilege described above.
If You elect to use the transfer privilege, We will not be liable for a
transfer made in accordance with Your instructions.
Transfers between Separate Account Divisions result in the redemption of
Valuation Units in one Division and the purchase of Valuation Units in the
Division to which the transfer is made.
97600 Page 13
<PAGE>
TRANSFER PROVISION (CONT'D)
DOLLAR COST AVERAGING. Dollar Cost Averaging is an automatic transfer of funds
made periodically prior to the Maturity Date in accordance with the Transfers
provision, except as provided below, and instructions from the Owner. Dollar
Cost Averaging (DCA) is subject to the following guidelines:
1. DCA transfers may be made:
(a) On any day of the month except the 29th, 30th or 31st;
(b) On a monthly, quarterly, semi-annual or annual basis;
(c) From the Money Market Division to one or more of the other
Separate Account Divisions. (The General Account is not eligible
for DCA)
2. DCA may be elected only if the Accumulation Value at the time of
election is $5,000, or more.
3. The minimum amount of each DCA transfer is $100, or the remaining amount
in the Money Market Division, if less.
4. DCA may not begin prior to the first Valuation Date following the 15th
day after the initial Net Premium is applied.
5. DCA will end when there is no longer any value in the Money Market
Division, or when You request that DCA end. (You will be notified if the
value of Your Money Market Division reaches zero).
6. Amounts applied to the Money Market Division while DCA is active will be
available for future Dollar Cost Averaging in accordance with the
current DCA request.
7. There is no charge for DCA.
8. DCA is not available if Automatic Rebalancing is active.
AUTOMATIC REBALANCING. Automatic Rebalancing occurs when funds are transferred
by the Company between the Separate Account Divisions so that the values in
each Division match the premium allocation percentages then in effect. You may
choose Automatic Rebalancing on a quarterly, semi-annual or annual basis if
your Accumulation Value is $5,000 or more. The date Automatic Rebalancing
occurs will be based on the Date of Issue of Your policy. For example, if Your
policy is dated January 17, and You have requested Automatic Rebalancing on a
quarterly basis, Automatic Rebalancing will start on April 17, and will occur
quarterly thereafter. After Automatic Rebalancing is elected, it will continue
until We are notified In Writing that it is to be discontinued. There is no
charge for Automatic Rebalancing. Automatic Rebalancing is not available if
Dollar Cost Averaging is active.
SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION
We may suspend the calculation and payment of the policy's Cash Surrender
Value in the following circumstances:
1. If there is a failure in any of the means normally employed in
ascertaining the prices or values of investments, properties or assets;
or
2. If, for any reason the prices or values of investments, properties or
assets in the Separate Account cannot be reasonably ascertained; or
3. If circumstances exist as a result of which it is not reasonably
practicable to realize any of the Separate Account's investment or to
determine fairly the net asset value of the Separate Account; or
4. If the remittance of funds involved in the realization of, or in the
payment for investment or payment due under this policy cannot be
carried out without undue delay and at normal rates of exchange; or
97600 Page 14
<PAGE>
SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION (CONT'D)
5. The U.S. Securities and Exchange Commission (SEC) determines that a
state of emergency exists; or
6. An order of the SEC permits a delay for the protection of policyholders.
As to amounts allocated to the General Account, We may defer payment of any
Cash Surrender Value withdrawal or loan amount for up to six months after We
receive a request for it.
Written notice of both the imposition and termination of any such suspension
will be given to the Owners, assignees of record and any irrevocable
Beneficiaries.
Payments which were due to have been made and which were deferred following
the suspension of the calculation of the Cash Surrender Value will be made
within thirty (30) days of the lifting of the suspension, and will be
calculated based on the Valuation Date which immediately follows termination
of the suspension.
POLICY LOANS
You may borrow from Us at any time while this policy is in force, an amount
which is equal to or less than the policy's loan value. The loan value will be
the Cash Surrender Value less an amount equal to 3 Monthly Deductions, and
less interest on the amount to be borrowed to the next policy anniversary.
The value of Valuation Units equal to the amount being borrowed from the
Separate Account will be transferred to the General Account as of the Business
Day that the loan request is received in good order.
LOAN INTEREST. Loan interest will accrue daily at an annual effective rate of
4.54% payable in advance. (This is equivalent to an annual effective rate of
4.75% paid in arrears.) On each policy anniversary, loan interest for the next
year is due in advance. Unpaid loan interest will be deducted from the various
accounts according to the deduction percentages then in effect, and added to
the loaned portion of the General Account. If the number of Valuation Units in
any Division, or in the unloaned portion of the General Account is
insufficient to deduct unpaid loan interest in this manner, We will cancel
Valuation Units from each applicable division and reduce the unloaned portion
of the General Account in the same ratio the unpaid loan inteest bears to the
unloaned Accumulation Value of your policy. You must state In Writing in
advance how unpaid loan interst should be deducted if other than this method
is to be used.
HOW YOU MAY REPAY A POLICY LOAN. You may repay all or part of a policy loan at
any time, except that:
1. Repayment may be made only while this policy is in force and prior to
the death of the Insured; and,
2. A partial repayment must be at least $100.00.
At any time Your policy loan exceeds the Cash Surrender Value, this policy
will lapse. However, at least 31 days prior notice must be mailed by Us to
Your last known address and to the assignee of record, if any.
WE CAN DELAY PAYMENT. We can delay lending You money for up to 6 months, or
the period allowed by law, whichever is less. However, We cannot delay lending
You money if the amount is to be used to pay a premium to Us.
OBTAINING A LOAN. You may obtain a policy loan by Written request and
assignment of the policy as sole security for the loan. The Company may delay
a loan if the Suspension and Deferral of Payments Provision is in effect.
97600 Page 15
<PAGE>
EFFECT OF A LOAN. When a loan is made, an amount equal to the amount being
borrowed from the Separate Account will be transferred to the General Account.
A loan will result in the cancellation of Units from each applicable Division
and reduction of the unloaned portion of the General Account in the ratio that
the loan bears to the unloaned Accumulation Value of Your policy. You must
state In Writing in advance which Division units are to be canceled if a
different method is to be used.
Repayment of a loan will first be allocated to the General Account until you
have repaid any loaned amounts that were allocated to the General Account. You
may tell Us how to allocate repayments above that amount. If you do not tell
us, an amount equal to the loan repayment will be transferred from the General
Account to the Divisions in the same ratio currently in effect for the
allocation of Net Premiums.
A loan, whether or not repaid, will have a permanent effect on the Cash
Surrender values and on the death benefits. If not repaid, any indebtedness
will reduce the amount of Death Benefit Proceeds and the amount available upon
surrender of the policy.
PREFERRED LOANS. A "Preferred Loan" is a policy loan that is made at a net
cost to the Owner that is less than the net cost of other policy loans.
Starting on the tenth policy anniversary, this policy will be eligible for
"Preferred Loans" subject to the following guidelines:
1. The maximum amount eligible for Preferred Loans during a policy year is
restricted to the lesser of the following values on the first day of
such policy year:
a. The policy loan value; or
b. 10% of the Accumulation Value.
2. When a Preferred Loan is made, interest to the next policy anniversary
will be charged at the rate shown in the Loan Interest provision.
3. Interest credited to the amount of the Accumulation Value offset by a
Preferred Loan:
a. Will be at an annual effective rate that is equal to or less than
the Policy Loan annual effective interest rate; and
b. Will be at a higher rate than the rate used to credit interest to
values offset by any other policy loan.
BENEFICIARY AND PROCEEDS
BENEFICIARY. The Beneficiary as named in the application, or later changed by
You, will receive the proceeds upon the death of the Insured. Unless You have
stated otherwise, proceeds will be paid as follows:
1. If any Beneficiary dies before the Insured, that Beneficiary's interest
will pass to any other Beneficiaries according to their respective
interests.
2. If no Beneficiary survives the Insured, proceeds will be paid to You, as
Owner, if You are then living; otherwise proceeds will be paid to Your
estate.
CHANGE OF OWNERSHIP OR BENEFICIARY. You may change the Owner or the
Beneficiary at any time during the lifetime of the Insured unless the previous
designation provides otherwise. To do so, send a Written request to Our Home
Office in a form acceptable to Us. The change will go into effect when We have
recorded the change. However, after the change is recorded, it will be deemed
effective as of the date of Your Written request for change. The change will
be subject to any payment made or action taken by Us before the request is
recorded.
COMMON DISASTER. If We cannot determine whether a Beneficiary or the Insured
died first in a common disaster, We will assume that the Beneficiary died
first. Proceeds will be paid on this basis unless an endorsement to this
policy provides otherwise.
PROCEEDS. Proceeds means the amount payable on:
1. The Maturity Date;
2. Exercise of the full surrender benefit; or
3. The Insured's death.
The proceeds on the Maturity Date will be the Cash Surrender Value. The
proceeds on the Insured's death will be the Death Benefit Amount less any
outstanding policy loan.
All proceeds and partial surrender benefits are subject to the provisions of
the Payment Options section and the other provisions of this policy.
97600 Page 16
<PAGE>
PAYMENT OPTIONS
Instead of being paid in one sum, all or part of the proceeds may be applied
under any of the Payment Options described below. In addition to these
options, other methods of payment may be chosen with Our
consent.
PAYMENT CONTRACT. When proceeds become payable under a Payment Option, a
Payment Contract will be issued to each payee. The Payment Contract will state
the rights and benefits of the payee. It will also name those who are to
receive any balance unpaid at the death of the payee.
ELECTION OF OPTIONS. The Owner may elect or change any Payment Option while
the Insured is living, subject to the provisions of this policy. This election
or change must be In Writing. Within 60 days after the Insured's death, a
payee entitled to proceeds in one sum may elect to receive proceeds under any
option.
OPTION 1. PAYMENTS FOR A SPECIFIED PERIOD: Equal monthly payments will be made
for a specified period. The Option 1 Table in this policy shows the monthly
income for each $1,000 of proceeds applied.
OPTION 2. PAYMENTS OF A SPECIFIED AMOUNT: Equal monthly payments of a
specified amount will be made. Each payment must be at least $60 a year for
each $ 1,000 of proceeds applied. Payments will continue until the amount
applied, with interest, has been paid in full.
OPTION 3. MONTHLY PAYMENTS FOR LIFE: Equal monthly payments will be made for a
specified period, and will continue after that period for as long as the payee
lives. The specified period may be 10, 15 or 20 years. The Option 3 Table in
this policy shows the monthly income for each $1,000 of proceeds applied. If
issued on a Sex Distinct basis, tables are based on the 1983a Male or Female
Mortality Tables adjusted by projection scale G for 9 years, interest at the
rate of 3% per year, and a 2% load. If issued on a Unisex basis, tables are
based on the 1983a Male or Female Tables, adjusted by projection scale G for 9
years, with unisex rates based on 60% female and 40% male, and interest at the
rate of 3% per year, and a 2% load.
At the time payments are to begin under this option, the payee may choose one
of the following:
1. Monthly payments based on the Option 3 Table; or
2. Monthly payments equal to a monthly annuity based on our single premium
immediate annuity rates then in use.
OPTION 4. PROCEEDS LEFT AT INTEREST: Proceeds may be left on deposit with us
for any period up to 30 years. Interest earned on the proceeds may be:
1. Left on deposit to accumulate at the rate of 3% compounded annually; or
2. Paid in installments at the rate for each $1,000 of proceeds of $30
annually, $14.89 semiannually, $7.42 quarterly or $2.47 monthly.
Upon the death of the payee, or at the end of the specified period, any
balance left on deposit will be paid in a lump sum or under Options 1, 2 or 3.
INTEREST RATES. The guaranteed rate of interest for proceeds held under
Payment Options 1, 2, 3 and 4 is 3% compounded annually. We may credit
interest at a higher rate. The amount of any increase will be determined by
Us.
PAYMENTS. The first payment under Options 1, 2 and 3 will be made when the
claim for settlement has been approved. Payments after the first will be made
according to the manner of payment chosen. Interest under Option 4 will be
credited from the date of death and paid or added to the proceeds as provided
in the Payment Contract.
AVAILABILITY OF OPTIONS. If the proposed payee is not a natural person,
payment options may be chosen only with Our consent.
If this policy is assigned, We will have the right to pay the assignee in one
sum the amount to which the assignee is entitled. Any balance will be applied
according to the option chosen.
97600 Page 17
<PAGE>
The amount to be applied under any one option must be at least $2,000. The
payment elected under any one option must be at least $25.
EVIDENCE THAT PAYEE IS ALIVE. Before making any payment under a Payment
Option, We may ask for proof that the payee is alive. If proof is requested,
no payment will be made or considered due until We receive proof.
DEATH OF A PAYEE. If a payee dies, any unpaid balance will be paid as stated
in the Payment Contract. If there is no surviving payee named in the Payment
Contract, We will pay the estate of the payee:
1. Under Options 1 and 3, the value as of the date of death of the
remaining payments for the specified period, discounted at the rate of
interest, compounded annually, that was used in determining the amount
of the monthly payment;
2. Under Options 2 and 4, the balance of any proceeds remaining unpaid with
accrued interest, if any.
WITHDRAWAL OF PROCEEDS UNDER OPTIONS 1 OR 2. If provided in the Payment
Contract, a payee will have the right to withdraw the entire unpaid balance
under Options 1 or 2. Under Option 1, the amount will be the value of the
remaining payments for the specified period discounted at the rate of interest
used in determining monthly income. Under Option 2, the amount will be the
entire unpaid balance.
WITHDRAWAL OF PROCEEDS UNDER OPTION 4. A payee will have the right to withdraw
proceeds left under Option 4 subject to the following rules:
1. The amount to be withdrawn must be $500 or more;
2. A partial withdrawal must leave a balance on deposit of $1,000 or more.
WITHDRAWALS MAY BE DEFERRED. We may defer payment of any withdrawal for up to
6 months from the date We receive a withdrawal request.
ASSIGNMENT. Payment Contracts may not be assigned.
CHANGE IN PAYMENT. The right to make any change in payment is available only
if it is provided in the Payment Contract.
CLAIMS OF CREDITORS. To the extent permitted by law, proceeds will not be
subject to any claims of a Beneficiary's creditors.
GENERAL PROVISIONS
ASSIGNING YOUR POLICY. During the lifetime of the Insured, You may assign this
policy as security of an obligation. We will not be bound by an assignment
unless it is received In Writing at Our Home Office. Two copies of the
assignment must be submitted. We will retain one copy and return the other. We
will not be responsible for the validity of any assignment.
INCONTESTABILITY. We rely on the statements made in the application for the
policy and applications for any reinstatements or increases in Specified
Amount. These statements, in the absence of fraud, are considered
representations and not warranties. No statement may be used in defense of a
claim under the policy unless it is in such applications.
Except as stated below, We cannot contest this policy after it has been in
force during the Insured's lifetime for 2 years from the Date of Issue.
97600 Page 18
<PAGE>
Exceptions: We cannot contest any claim related to an increase in Specified
Amount after such increase has been in effect during the Insured's lifetime
for 2 years.
If this policy is reinstated, We cannot contest this policy after it has been
in force during the Insured's lifetime for 2 years from the date of
reinstatement.
We can contest a reinstatement or an increase in Specified Amount only on the
basis of the information furnished in the application for such reinstatement
or increase.
This 2-year limitation does not apply to any Disability or Accidental Death
Benefit, or to the nonpayment of premium.
SUICIDE EXCLUSION. If the Insured takes his or her own life, while sane or
insane, within 2 years from the Date of Issue, We will limit the Death Benefit
Proceeds to the premiums paid less any policy loans and less any partial cash
surrenders paid.
If there are any increases in the Specified Amount (See the section entitled
"Changing Your Insurance Policy") a new 2 year period shall apply to each
increase beginning on the date of each increase. The Death Benefit Proceeds
will be the costs of insurance associated with each increase.
When the laws of the state in which this policy is delivered require less than
this 2 year period, the period will be as stated in such laws.
AGE OR SEX INCORRECTLY STATED (AGE INCORRECTLY STATED IF ISSUED ON A UNISEX
BASIS). If the (1) age or sex of the Insured (if this policy was issued on a
Sex Distinct Basis) or (2) age of the Insured (if this policy was issued on a
Unisex basis) has been misstated to Us, We will adjust the excess of the Death
Benefit Amount over the Accumulation Value on the date of death to that which
would have been purchased by the Monthly Deduction for the policy month of
death at the correct cost of insurance rate. By age We mean age nearest
birthday as of the Date of Issue.
STATUTORY BASIS OF POLICY VALUES. The Cash Values of the policy are not less
than the minimum values required by the law of the state where this policy is
delivered. The calculation of the Cash Values includes a charge for the cost
of insurance, as shown in the Table of Guaranteed Monthly Cost of Insurance
Rates. Calculation of minimum Cash Values, nonforfeiture benefits and
Guaranteed Cost of Insurance Rates are based on the Composite 1980
Commissioners Standard Ordinary Male/Female/Unisex (Table B) Mortality Table
for the appropriate sex and age nearest birthday. A detailed statement of the
method of computing values has been filed with the state insurance department
where required.
NO DIVIDENDS. This policy will not pay dividends. It will not participate in
any of our surplus or earnings.
ANNUAL REPORT. We will send You at least once a year an annual report which
will show a summary of all transactions since the last report, including:
1. Premiums paid since the last report;
2. Transfers since the last report;
3. Expense charges deducted since the last report;
4. The cost of insurance deducted since the last report;
5. Partial surrender benefits paid to You since the last report;
6. The amount of any outstanding policy loan;
7. Separate Account Unit Values;
8. The current Cash Surrender and Accumulation Values; and
9. The Death Benefit Amount.
97600 Page 19
<PAGE>
WHEN THIS POLICY TERMINATES. This policy will terminate if:
1. You request that this policy be terminated;
2. The Insured dies;
3. The policy matures; or
4. The Grace Period ends and there is not sufficient Cash Surrender Value
to cover a Monthly Deduction.
REINSTATEMENT. "Reinstating" means placing Your policy in force after it has
terminated at the end of the Grace Period. We will reinstate this policy if We
receive:
1. Your Written request within five years after the end of the Grace Period
and before the Maturity Date; and
2. Evidence of insurability satisfactory to Us; and
3. Payment of enough premium to keep the policy in force for two months;
and
4. Payment or reinstatement of any indebtedness.
The reinstated policy will be in force from the Monthly Deduction day on or
following the date We approve the reinstatement application.
The original surrender charge schedule will apply to a reinstated policy. The
Accumulation Value at the time of reinstatement will be:
1. The Surrender Charge deducted at the time of lapse (such charge not
being greater than the Accumulation Value at the time of lapse before
the Surrender Charge was applied); plus
2. The Net Premium allocated in accordance with the premium allocation
percentages at time of lapse unless the reinstatement application
provides otherwise, using Unit Values as of the date of reinstatement;
plus
3. Any loan repaid or reinstated; less
4. The monthly deduction for one month.
The dollar amount of any Surrender Charge reinstated will be the same as the
dollar amount of Surrender Charge at the time of lapse, and will be reinstated
into the funds from which they were deducted at the time of lapse using Unit
Values as of the date of reinstatement.
If a person other than the Insured is covered by a rider attached to this
policy, coverage will be reinstated according to that rider.
97600 Page 20
<PAGE>
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
<TABLE>
<CAPTION>
ATTAINED AGE ATTAINED AGE
Nearest Birthday MALE Nearest Birthday MALE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
<S> <C> <C> <C>
0 0.35 50 0.56
1 0.09 51 0.61
2 0.08 52 0.67
3 0.08 53 0.73
4 0.08 54 0.80
5 0.08 55 0.88
6 0.07 56 0.96
7 0.07 57 1.05
8 0.06 58 1.14
9 0.06 59 1.24
10 0.06 60 1.35
11 0.06 61 1.48
12 0.07 62 1.62
13 0.08 63 1.78
14 0.10 64 1.95
15 0.11 65 2.15
16 0.13 66 2.36
17 0.14 67 2.58
18 0.15 68 2.82
19 0.16 69 3.07
20 0.16 70 3.36
21 0.16 71 3.70
22 0.16 72 4.08
23 0.16 73 4.52
24 0.15 74 5.01
25 0.15 75 5.54
26 0.14 76 6.11
27 0.14 77 6.71
28 0.14 78 7.33
29 0.14 79 7.99
30 0.14 80 8.71
31 0.15 81 9.52
32 0.15 82 10.45
33 0.16 83 11.50
34 0.17 84 12.67
35 0.18 85 13.93
36 0.19 86 15.25
37 0.20 87 16.63
38 0.22 88 18.06
39 0.23 89 19.55
40 0.25 90 21.11
41 0.27 91 22.80
42 0.30 92 24.66
43 0.32 93 26.82
44 0.35 94 29.67
45 0.38
46 0.41
47 0.44
48 0.48
49 0.52
</TABLE>
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly
cost will be calculated as shown on page 3.
97600M Page 21
<PAGE>
TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
<TABLE>
<CAPTION>
OPTION 1 TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
Number Amount of Number Amount of Number Amount of Number Amount of
of Years Monthly of Years Monthly of Years Monthly of Years Monthly
Payable Installments Payable Installments Payable Installments Payable Installments
<S> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 15 $6.87 25 $4.71 35 $3.82
6 15.14 16 6.53 26 4.59 36 3.76
7 13.16 17 6.23 27 4.47 37 3.70
8 11.68 18 5.96 28 4.37 38 3.65
9 10.53 19 5.73 29 4.27 39 3.60
10 9.61 20 5.51 30 4.18 40 3.55
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
</TABLE>
<TABLE>
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
<CAPTION>
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
Male
<S> <C> <C> <C> <C> <C> <C> <C>
20* $2.95 $2.94 $2.94 50 $4.05 $4.00 $3.93
21 2.97 2.96 2.96 51 4.11 4.06 3.99
22 2.98 2.98 2.98 52 4.18 4.13 4.04
23 3.00 3.00 3.00 53 4.26 4.19 4.10
24 3.02 3.02 3.02 54 4.34 4.27 4.16
25 3.05 3.04 3.04 55 4.42 4.34 4.22
26 3.07 3.06 3.06 56 4.51 4.42 4.28
27 3.09 3.09 3.08 57 4.60 4.50 4.35
28 3.12 3.11 3.11 58 4.69 4.58 4.41
29 3.14 3.14 3.13 59 4.79 4.66 4.47
30 3.17 3.16 3.16 60 4.90 4.75 4.54
31 3.20 3.19 3.18 61 5.01 4.84 4.60
32 3.22 3.22 3.21 62 5.13 4.94 4.67
33 3.25 3.25 3.24 63 5.26 5.03 4.73
34 3.29 3.28 3.27 64 5.39 5.13 4.79
35 3.32 3.31 3.00 65 5.52 5.23 4.85
36 3.35 3.35 3.33 66 5.66 5.33 4.91
37 3.39 3.38 3.36 67 5.81 5.43 4.97
38 3.43 3.42 3.40 68 5.96 5.53 5.02
39 3.47 3.46 3.44 69 6.12 5.63 5.07
40 3.51 3.50 3.47 70 6.28 5.73 5.11
41 3.55 3.54 3.51 71 6.44 5.82 5.15
42 3.60 3.58 3.55 72 6.61 5.91 5.19
43 3.65 3.63 3.59 73 6.78 6.00 5.23
44 3.70 3.67 3.64 74 6.96 6.08 5.26
45 3.75 3.72 3.68 75 7.13 6.16 5.28
46 3.80 3.77 3.73 76 7.30 6.24 5.31
47 3.86 3.83 3.78 77 7.47 6.31 5.33
48 3.92 3.88 3.83 78 7.64 6.37 5.34
49 3.98 3.94 3.88 79 7.81 6.42 5.36
80** 7.97 6.48 5.37
</TABLE>
Payments are based upon the age, nearest birthday, of the Payee on the date
the first payment is due. If monthly installments for two or more specified
periods for a given age are the same, the specified period of longer duration
will apply.
*Also applies to younger ages.
**Also applies to older ages.
97600M Page 22
<PAGE>
TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT
The following charges apply to each $1,000 of Initial Specified Amount
surrendered during the first 10 policy years. The charges also apply to each
$1,000 of increase in Specified Amount surrendered during the first 10 years
of such increase. The word "surrender" as used in this provision means Full
Surrender, or a reduction in Specified Amount at the request of the Owner, or
due to a Partial Surrender. The charge for the surrender of all or any portion
of the Initial Specified Amount will be equal to the rate shown below for the
age at issue and the year of surrender, multiplied by the number of thousands
of Initial Specified Amount being surrendered. The charges for surrender of
all or any portion of an increase in Specified Amount will be equal to the
rates shown below for the age at issue of such increase and year of surrender,
multiplied by the number of thousands of such increase being surrendered. In
addition, there will be a charge not to exceed $25.00 for each partial
surrender.
<TABLE>
<CAPTION>
ISSUE
AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
MALE 1 2 3 4 5 6 7 8 9 10 11
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 2.28 2.28 2.28 2.00 1.71 1.43 1.14 0.86 0.57 0.29 0.00
1 2.28 2.28 2.28 2.00 1.71 1.43 1.14 0.86 0.57 0.29 0.00
2 2.40 2.40 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00
3 2.40 2.40 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00
4 2.52 2.52 2.52 2.21 1.89 1.58 1.26 0.95 0.63 0.32 0.00
5 2.64 2.64 2.64 2.31 1.98 1.65 1.32 0.99 0.66 0.33 0.00
6 2.76 2.76 2.76 2.42 2.07 1.73 1.38 1.04 0.69 0.35 0.00
7 2.88 2.88 2.88 2.52 2.16 1.80 1.44 1.08 0.72 0.36 0.00
8 2.88 2.88 2.88 2.52 2.16 1.80 1.44 1.08 0.72 0.36 0.00
9 3.00 3.00 3.00 2.63 2.25 1.88 1.50 1.13 0.75 0.38 0.00
10 3.12 3.12 3.12 2.73 2.34 1.95 1.56 1.17 0.78 0.39 0.00
11 3.24 3.24 3.24 2.84 2.43 2.03 1.62 1.22 0.81 0.41 0.00
12 3.36 3.36 3.36 2.94 2.52 2.10 1.68 1.26 0.84 0.42 0.00
13 3.60 3.60 3.60 3.15 2.70 2.25 1.80 1.35 0.90 0.45 0.00
14 3.72 3.72 3.72 3.26 2.79 2.33 1.86 1.40 0.93 0.47 0.00
15 3.84 3.84 3.84 3.36 2.88 2.40 1.92 1.44 0.96 0.48 0.00
16 3.96 3.96 3.96 3.47 2.97 2.48 1.98 1.49 0.99 0.50 0.00
17 4.08 4.08 4.08 3.57 3.06 2.55 2.04 1.53 1.02 0.51 0.00
18 4.20 4.20 4.20 3.68 3.15 2.63 2.10 1.58 1.05 0.53 0.00
19 4.44 4.44 4.44 3.89 3.33 2.78 2.22 1.67 1.11 0.56 0.00
20 4.56 4.56 4.56 3.99 3.42 2.85 2.28 1.71 1.14 0.57 0.00
21 4.68 4.68 4.68 4.10 3.51 2.93 2.34 1.76 1.17 0.59 0.00
22 4.92 4.92 4.92 4.31 3.69 3.08 2.46 1.85 1.23 0.62 0.00
23 5.04 5.04 5.04 4.41 3.78 3.15 2.52 1.89 1.26 0.63 0.00
24 5.28 5.28 5.28 4.62 3.96 3.30 2.64 1.98 1.32 0.66 0.00
25 5.52 5.52 5.52 4.83 4.14 3.45 2.76 2.07 1.38 0.69 0.00
26 5.76 5.76 5.76 5.04 4.32 3.60 2.88 2.16 1.44 0.72 0.00
27 6.00 6.00 6.00 5.25 4.50 3.75 3.00 2.25 1.50 0.75 0.00
28 6.24 6.24 6.24 5.46 4.68 3.90 3.12 2.34 1.56 0.78 0.00
29 6.48 6.48 6.48 5.67 4.86 4.05 3.24 2.43 1.62 0.81 0.00
30 6.72 6.72 6.72 5.88 5.04 4.20 3.36 2.52 1.68 0.84 0.00
31 7.20 7.20 7.20 6.30 5.40 4.50 3.60 2.70 1.80 0.90 0.00
32 7.44 7.44 7.44 6.51 5.58 4.65 3.72 2.79 1.86 0.93 0.00
33 7.80 7.80 7.80 6.83 5.85 4.88 3.90 2.93 1.95 0.98 0.00
34 8.16 8.16 8.16 7.14 6.12 5.10 4.08 3.06 2.04 1.02 0.00
35 8.52 8.52 8.52 7.46 6.39 5.33 4.26 3.20 2.13 1.07 0.00
36 8.88 8.88 8.88 7.77 6.66 5.55 4.44 3.33 2.22 1.11 0.00
37 9.36 9.36 9.36 8.19 7.02 5.85 4.68 3.51 2.34 1.17 0.00
38 9.72 9.72 9.72 8.51 7.29 6.08 4.86 3.65 2.43 1.22 0.00
39 10.20 10.20 10.20 8.93 7.65 6.38 5.10 3.83 2.55 1.28 0.00
</TABLE>
97600M Page 23
<PAGE>
TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT
The following charges apply to each $1,000 of Initial Specified Amount
surrendered during the first 10 policy years. The charges also apply to each
$1,000 of increase in Specified Amount surrendered during the first 10 years
of such increase. The word "surrender" as used in this provision means Full
Surrender, or a reduction in Specified Amount at the request of the Owner, or
due to a Partial Surrender. The charge for the surrender of all or any portion
of the Initial Specified Amount will be equal to the rate shown below for the
age at issue and the year of surrender, multiplied by the number of thousands
of Initial Specified Amount being surrendered. The charges for surrender of
all or any portion of an increase in Specified Amount will be equal to the
rates shown below for the age at issue of such increase and year of surrender,
multiplied by the number of thousands of such increase being surrendered. In
addition, there will be a charge not to exceed $25.00 for each partial
surrender.
<TABLE>
<CAPTION>
ISSUE
AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
MALE 1 2 3 4 5 6 7 8 9 10 11
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 10.68 10.68 10.68 9.35 8.01 6.68 5.34 4.01 2.67 1.34 0.00
41 11.28 11.28 11.28 9.87 8.46 7.05 5.64 4.23 2.82 1.41 0.00
42 11.88 11.88 11.88 10.40 8.91 7.43 5.94 4.46 2.97 1.49 0.00
43 12.36 12.36 12.36 10.82 9.27 7.73 6.18 4.64 3.09 1.55 0.00
44 13.08 13.08 13.08 11.45 9.81 8.18 6.54 4.91 3.27 1.64 0.00
45 13.68 13.68 13.68 11.97 10.26 8.55 6.84 5.13 3.42 1.71 0.00
46 14.40 14.40 14.40 12.60 10.80 9.00 7.20 5.40 3.60 1.80 0.00
47 15.12 15.12 15.12 13.23 11.34 9.45 7.56 5.67 3.78 1.89 0.00
48 15.84 15.84 15.84 13.86 11.88 9.90 7.92 5.94 3.96 1.98 0.00
49 16.68 16.68 16.68 14.60 12.51 10.43 8.34 6.26 4.17 2.09 0.00
50 17.52 17.52 17.52 15.33 13.14 10.95 8.76 6.57 4.38 2.19 0.00
51 18.48 18.48 18.48 16.17 13.86 11.55 9.24 6.93 4.62 2.31 0.00
52 19.44 19.44 19.44 17.01 14.58 12.15 9.72 7.29 4.86 2.43 0.00
53 20.40 20.40 20.40 17.85 15.30 12.75 10.20 7.65 5.10 2.55 0.00
54 21.48 21.48 21.48 18.80 16.11 13.43 10.74 8.06 5.37 2.69 0.00
55 22.68 22.68 22.68 19.85 17.01 14.18 11.34 8.51 5.67 2.84 0.00
56 23.88 23.88 23.88 20.90 17.91 14.93 11.94 8.96 5.97 2.99 0.00
57 25.20 25.20 25.20 22.05 18.90 15.75 12.60 9.45 6.30 3.15 0.00
58 26.64 26.64 26.64 23.31 19.98 16.65 13.32 9.99 6.66 3.33 0.00
59 27.96 27.96 27.96 24.47 20.97 17.48 13.98 10.49 6.99 3.50 0.00
60 29.64 29.64 29.64 25.94 22.23 18.53 14.82 11.12 7.41 3.71 0.00
61 31.32 31.32 31.32 27.41 23.49 19.58 15.66 11.75 7.83 3.92 0.00
62 33.12 33.12 33.12 28.98 24.84 20.70 16.56 12.42 8.28 4.14 0.00
63 34.92 34.92 34.92 30.56 26.19 21.83 17.46 13.10 8.73 4.37 0.00
64 36.96 36.96 36.96 32.34 27.72 23.10 18.48 13.86 9.24 4.62 0.00
65 39.12 39.12 39.12 34.23 29.34 24.45 19.56 14.67 9.78 4.89 0.00
66 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
67 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
68 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
69 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
70 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
71 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
72 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
73 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
74 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
75 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
76 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
77 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
78 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
79 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
80 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
</TABLE>
97600M Page 24
<PAGE>
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
<TABLE>
<CAPTION>
ATTAINED AGE ATTAINED AGE
Nearest Birthday FEMALE Nearest Birthday FEMALE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
<S> <C> <C> <C>
0 0.24 50 0.41
1 0.07 51 0.44
2 0.07 52 0.48
3 0.07 53 0.51
4 0.06 54 0.55
5 0.06 55 0.59
6 0.06 56 0.63
7 0.06 57 0.67
8 0.06 58 0.71
9 0.06 59 0.75
10 0.06 60 0.79
11 0.06 61 0.85
12 0.06 62 0.92
13 0.06 63 1.01
14 0.07 64 1.11
15 0.07 65 1.23
16 0.08 66 1.35
17 0.08 67 1.47
18 0.08 68 1.59
19 0.09 69 1.72
20 0.09 70 1.86
21 0.09 71 2.05
22 0.09 72 2.27
23 0.09 73 2.55
24 0.10 74 2.88
25 0.10 75 3.25
26 0.10 76 3.67
27 0.10 77 4.11
28 0.11 78 4.59
29 0.11 79 5.11
30 0.11 80 5.71
31 0.12 81 6.39
32 0.12 82 7.19
33 0.13 83 8.12
34 0.13 84 9.18
35 0.14 85 10.34
36 0.15 86 11.60
37 0.16 87 12.97
38 0.17 88 14.45
39 0.19 89 16.05
40 0.20 90 17.79
41 0.22 91 19.72
42 0.24 92 21.89
43 0.26 93 24.44
44 0.28 94 27.67
45 0.30
46 0.32
47 0.34
48 0.36
49 0.39
</TABLE>
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly cost will be
calculated as shown on page 3.
97600F Page 21
<PAGE>
TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
<TABLE>
<CAPTION>
OPTION 1 TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
Number Amount of Number Amount of Number Amount of Number Amount of
of Years Monthly of Years Monthly of Years Monthly of Years Monthly
Payable Installments Payable Installments Payable Installments Payable Installments
<S> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 15 $6.87 25 $4.71 35 $3.82
6 15.14 16 6.53 26 4.59 36 3.76
7 13.16 17 6.23 27 4.47 37 3.70
8 11.68 18 5.96 28 4.37 38 3.65
9 10.53 19 5.73 29 4.27 39 3.60
10 9.61 20 5.51 30 4.18 40 3.55
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
</TABLE>
<TABLE>
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
<CAPTION>
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
Female
<S> <C> <C> <C> <C> <C> <C> <C>
20* $2.85 $2.85 $2.85 50 $3.75 $3.73 $3.69
21 2.87 2.87 2.87 51 3.80 3.78 3.74
22 2.89 2.88 2.88 52 3.86 3.84 3.79
23 2.90 2.90 2.90 53 3.92 3.89 3.85
24 2.92 2.92 2.91 54 3.99 3.96 3.90
25 2.94 2.93 2.93 55 4.06 4.02 3.96
26 2.95 2.95 2.95 56 4.13 4.09 4.02
27 2.97 2.97 2.97 57 4.21 4.16 4.08
28 2.99 2.99 2.99 58 4.29 4.23 4.15
29 3.01 3.01 3.01 59 4.37 4.31 4.21
30 3.03 3.03 3.03 60 4.46 4.39 4.28
31 3.06 3.05 3.05 61 4.56 4.47 4.35
32 3.08 3.08 3.07 62 4.66 4.56 4.42
33 3.10 3.10 3.10 63 4.76 4.65 4.49
34 3.13 3.13 3.12 64 4.88 4.75 4.56
35 3.16 3.15 3.15 65 4.99 4.85 4.63
36 3.19 3.18 3.17 66 5.12 4.95 4.70
37 3.21 3.21 3.20 67 5.25 5.05 4.77
38 3.24 3.24 3.23 68 5.39 5.16 4.83
39 3.28 3.27 3.26 69 5.53 5.27 4.90
40 3.31 3.30 3.29 70 5.69 5.38 4.96
41 3.35 3.34 3.33 71 5.85 5.49 5.02
42 3.38 3.37 3.36 72 6.02 5.60 5.08
43 3.42 3.41 3.40 73 6.19 5.71 5.13
44 3.46 3.45 3.43 74 6.37 5.82 5.17
45 3.50 3.49 3.47 75 6.56 5.92 5.21
46 3.55 3.53 3.51 76 6.75 6.02 5.25
47 3.59 3.58 3.56 77 6.95 6.11 5.28
48 3.64 3.63 3.60 78 7.14 6.20 5.30
49 3.69 3.67 3.65 79 7.34 6.28 5.32
80** 7.54 6.35 5.34
</TABLE>
Payments are based upon the age, nearest birthday, of the Payee on the date
the first payment is due. If monthly installments for two or more specified
periods for a given age are the same, the specified period of longer duration
will apply.
* Also applies to younger ages.
** Also applies to older ages.
97600F Page 22
<PAGE>
TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT
The following charges apply to each $1,000 of Initial Specified Amount
surrendered during the first 10 policy years. The charges also apply to each
$1,000 of increase in Specified Amount surrendered during the first 10 years
of such increase. The word "surrender" as used in this provision means Full
Surrender, or a reduction in Specified Amount at the request of the Owner, or
due to a Partial Surrender. The charge for the surrender of all or any portion
of the Initial Specified Amount will be equal to the rate shown below for the
age at issue and the year of surrender, multiplied by the number of thousands
of Initial Specified Amount being surrendered. The charges for surrender of
all or any portion of an increase in Specified Amount will be equal to the
rates shown below for the age at issue of such increase and year of surrender,
multiplied by the number of thousands of such increase being surrendered. In
addition, there will be a charge not to exceed $25.00 for each partial
surrender.
<TABLE>
<CAPTION>
ISSUE
AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
FEMALE 1 2 3 4 5 6 7 8 9 10 11
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 1.80 1.80 1.80 1.58 1.35 1.13 0.90 0.68 0.45 0.23 0.00
1 1.92 1.92 1.92 1.68 1.44 1.20 0.96 0.72 0.48 0.24 0.00
2 1.92 1.92 1.92 1.68 1.44 1.20 0.96 0.72 0.48 0.24 0.00
3 1.92 1.92 1.92 1.68 1.44 1.20 0.96 0.72 0.48 0.24 0.00
4 2.04 2.04 2.04 1.79 1.53 1.28 1.02 0.77 0.51 0.26 0.00
5 2.04 2.04 2.04 1.79 1.53 1.28 1.02 0.77 0.51 0.26 0.00
6 2.16 2.16 2.16 1.89 1.62 1.35 1.08 0.81 0.54 0.27 0.00
7 2.28 2.28 2.28 2.00 1.71 1.43 1.14 0.86 0.57 0.29 0.00
8 2.40 2.40 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00
9 2.40 2.40 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00
10 2.52 2.52 2.52 2.21 1.89 1.58 1.26 0.95 0.63 0.32 0.00
11 2.64 2.64 2.64 2.31 1.98 1.65 1.32 0.99 0.66 0.33 0.00
12 2.76 2.76 2.76 2.42 2.07 1.73 1.38 1.04 0.69 0.35 0.00
13 2.88 2.88 2.88 2.52 2.16 1.80 1.44 1.08 0.72 0.36 0.00
14 2.88 2.88 2.88 2.52 2.16 1.80 1.44 1.08 0.72 0.36 0.00
15 3.00 3.00 3.00 2.63 2.25 1.88 1.50 1.13 0.75 0.38 0.00
16 3.24 3.24 3.24 2.84 2.43 2.03 1.62 1.22 0.81 0.41 0.00
17 3.24 3.24 3.24 2.84 2.43 2.03 1.62 1.22 0.81 0.41 0.00
18 3.36 3.36 3.36 2.94 2.52 2.10 1.68 1.26 0.84 0.42 0.00
19 3.60 3.60 3.60 3.15 2.70 2.25 1.80 1.35 0.90 0.45 0.00
20 3.72 3.72 3.72 3.26 2.79 2.33 1.86 1.40 0.93 0.47 0.00
21 3.84 3.84 3.84 3.36 2.88 2.40 1.92 1.44 0.96 0.48 0.00
22 3.96 3.96 3.96 3.47 2.97 2.48 1.98 1.49 0.99 0.50 0.00
23 4.08 4.08 4.08 3.57 3.06 2.55 2.04 1.53 1.02 0.51 0.00
24 4.32 4.32 4.32 3.78 3.24 2.70 2.16 1.62 1.08 0.54 0.00
25 4.56 4.56 4.56 3.99 3.42 2.85 2.28 1.71 1.14 0.57 0.00
26 4.68 4.68 4.68 4.10 3.51 2.93 2.34 1.76 1.17 0.59 0.00
27 4.92 4.92 4.92 4.31 3.69 3.08 2.46 1.85 1.23 0.62 0.00
28 5.04 5.04 5.04 4.41 3.78 3.15 2.52 1.89 1.26 0.63 0.00
29 5.28 5.28 5.28 4.62 3.96 3.30 2.64 1.98 1.32 0.66 0.00
30 5.52 5.52 5.52 4.83 4.14 3.45 2.76 2.07 1.38 0.69 0.00
31 5.88 5.88 5.88 5.15 4.41 3.68 2.94 2.21 1.47 0.74 0.00
32 6.00 6.00 6.00 5.25 4.50 3.75 3.00 2.25 1.50 0.75 0.00
33 6.24 6.24 6.24 5.46 4.68 3.90 3.12 2.34 1.56 0.78 0.00
34 6.60 6.60 6.60 5.78 4.95 4.13 3.30 2.48 1.65 0.83 0.00
35 6.84 6.84 6.84 5.99 5.13 4.28 3.42 2.57 1.71 0.86 0.00
36 7.20 7.20 7.20 6.30 5.40 4.50 3.60 2.70 1.80 0.90 0.00
37 7.56 7.56 7.56 6.62 5.67 4.73 3.78 2.84 1.89 0.95 0.00
38 7.92 7.92 7.92 6.93 5.94 4.95 3.96 2.97 1.98 0.99 0.00
39 8.28 8.28 8.28 7.25 6.21 5.18 4.14 3.11 2.07 1.04 0.00
</TABLE>
97600F Page 23
<PAGE>
TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT
The following charges apply to each $1,000 of Initial Specified Amount
surrendered during the first 10 policy years. The charges also apply to each
$1,000 of increase in Specified Amount surrendered during the first 10 years
of such increase. The word "surrender" as used in this provision means Full
Surrender, or a reduction in Specified Amount at the request of the Owner, or
due to a Partial Surrender. The charge for the surrender of all or any portion
of the Initial Specified Amount will be equal to the rate shown below for the
age at issue and the year of surrender, multiplied by the number of thousands
of Initial Specified Amount being surrendered. The charges for surrender of
all or any portion of an increase in Specified Amount will be equal to the
rates shown below for the age at issue of such increase and year of surrender,
multiplied by the number of thousands of such increase being surrendered. In
addition, there will be a charge not to exceed $25.00 for each partial
surrender.
<TABLE>
<CAPTION>
ISSUE
AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
FEMALE 1 2 3 4 5 6 7 8 9 10 11
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 8.64 8.64 8.64 7.56 6.48 5.40 4.32 3.24 2.16 1.08 0.00
41 9.00 9.00 9.00 7.88 6.75 5.63 4.50 3.38 2.25 1.13 0.00
42 9.36 9.36 9.36 8.19 7.02 5.85 4.68 3.51 2.34 1.17 0.00
43 9.84 9.84 9.84 8.61 7.38 6.15 4.92 3.69 2.46 1.23 0.00
44 10.32 10.32 10.32 9.03 7.74 6.45 5.16 3.87 2.58 1.29 0.00
45 10.80 10.80 10.80 9.45 8.10 6.75 5.40 4.05 2.70 1.35 0.00
46 11.28 11.28 11.28 9.87 8.46 7.05 5.64 4.23 2.82 1.41 0.00
47 11.88 11.88 11.88 10.40 8.91 7.43 5.94 4.46 2.97 1.49 0.00
48 12.36 12.36 12.36 10.82 9.27 7.73 6.18 4.64 3.09 1.55 0.00
49 12.96 12.96 12.96 11.34 9.72 8.10 6.48 4.86 3.24 1.62 0.00
50 13.68 13.68 13.68 11.97 10.26 8.55 6.84 5.13 3.42 1.71 0.00
51 14.28 14.28 14.28 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00
52 15.00 15.00 15.00 13.13 11.25 9.38 7.50 5.63 3.75 1.88 0.00
53 15.72 15.72 15.72 13.76 11.79 9.83 7.86 5.90 3.93 1.97 0.00
54 16.56 16.56 16.56 14.49 12.42 10.35 8.28 6.21 4.14 2.07 0.00
55 17.28 17.28 17.28 15.12 12.96 10.80 8.64 6.48 4.32 2.16 0.00
56 18.24 18.24 18.24 15.96 13.68 11.40 9.12 6.84 4.56 2.28 0.00
57 19.20 19.20 19.20 16.80 14.40 12.00 9.60 7.20 4.80 2.40 0.00
58 20.16 20.16 20.16 17.64 15.12 12.60 10.08 7.56 5.04 2.52 0.00
59 21.24 21.24 21.24 18.59 15.93 13.28 10.62 7.97 5.31 2.66 0.00
60 22.32 22.32 22.32 19.53 16.74 13.95 11.16 8.37 5.58 2.79 0.00
61 23.64 23.64 23.64 20.69 17.73 14.78 11.82 8.87 5.91 2.96 0.00
62 24.96 24.96 24.96 21.84 18.72 15.60 12.48 9.36 6.24 3.12 0.00
63 26.52 26.52 26.52 23.21 19.89 16.58 13.26 9.95 6.63 3.32 0.00
64 27.96 27.96 27.96 24.47 20.97 17.48 13.98 10.49 6.99 3.50 0.00
65 29.64 29.64 29.64 25.94 22.23 18.53 14.82 11.12 7.41 3.71 0.00
66 30.72 30.72 30.72 26.88 23.04 19.20 15.36 11.52 7.68 3.84 0.00
67 31.92 31.92 31.92 27.93 23.94 19.95 15.96 11.97 7.98 3.99 0.00
68 33.24 33.24 33.24 29.09 24.93 20.78 16.62 12.47 8.31 4.16 0.00
69 34.56 34.56 34.56 30.24 25.92 21.60 17.28 12.96 8.64 4.32 0.00
70 36.00 36.00 36.00 31.50 27.00 22.50 18.00 13.50 9.00 4.50 0.00
71 37.56 37.56 37.56 32.87 28.17 23.48 18.78 14.09 9.39 4.70 0.00
72 38.00 38.00 38.00 33.25 28.50 23.75 19.00 14.25 9.50 4.75 0.00
73 38.50 38.50 38.50 33.69 28.88 24.06 19.25 14.44 9.63 4.81 0.00
74 39.00 39.00 39.00 34.13 29.25 24.38 19.50 14.63 9.75 4.88 0.00
75 39.50 39.50 39.50 34.56 29.63 24.69 19.75 14.81 9.88 4.94 0.00
76 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
77 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
78 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
79 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
80 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
</TABLE>
97600F Page 24
<PAGE>
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
<TABLE>
<CAPTION>
ATTAINED AGE ATTAINED AGE
Nearest Birthday RATE Nearest Birthday RATE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
<S> <C> <C> <C>
0 0.33 50 0.53
1 0.09 51 0.58
2 0.08 52 0.63
3 0.08 53 0.69
4 0.08 54 0.75
5 0.07 55 0.82
6 0.07 56 0.89
7 0.07 57 0.97
8 0.06 58 1.05
9 0.06 59 1.14
10 0.06 60 1.24
11 0.06 61 1.35
12 0.07 62 1.47
13 0.08 63 1.61
14 0.09 64 1.77
15 0.10 65 1.95
16 0.12 66 2.14
17 0.13 67 2.34
18 0.14 68 2.54
19 0.14 69 2.77
20 0.15 70 3.02
21 0.15 71 3.32
22 0.14 72 3.66
23 0.14 73 4.05
24 0.14 74 4.49
25 0.14 75 4.98
26 0.14 76 5.50
27 0.13 77 6.04
28 0.13 78 6.60
29 0.14 79 7.21
30 0.14 80 7.87
31 0.14 81 8.63
32 0.15 82 9.49
33 0.15 83 10.49
34 0.16 84 11.59
35 0.17 85 12.78
36 0.18 86 14.05
37 0.19 87 15.39
38 0.21 88 16.80
39 0.22 89 18.30
40 0.24 90 19.89
41 0.26 91 21.63
42 0.29 92 23.60
43 0.31 93 25.88
44 0.33 94 28.87
45 0.36
46 0.39
47 0.42
48 0.46
49 0.49
</TABLE>
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly cost will be
calculated as shown on page 3.
97600U Page 21
<PAGE>
TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
<TABLE>
<CAPTION>
OPTION 1 TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
Number Amount of Number Amount of Number Amount of Number Amount of
of Years Monthly of Years Monthly of Years Monthly of Years Monthly
Payable Installments Payable Installments Payable Installments Payable Installments
<S> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 15 $6.87 25 $4.71 35 $3.82
6 15.14 16 6.53 26 4.59 36 3.76
7 13.16 17 6.23 27 4.47 37 3.70
8 11.68 18 5.96 28 4.37 38 3.65
9 10.53 19 5.73 29 4.27 39 3.60
10 9.61 20 5.51 30 4.18 40 3.55
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
</TABLE>
<TABLE>
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
<CAPTION>
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
<S> <C> <C> <C> <C> <C> <C> <C>
20* $2.89 $2.89 $2.89 50 $3.87 $3.84 $3.79
21 2.91 2.91 2.90 51 3.93 3.90 3.85
22 2.93 2.92 2.92 52 3.99 3.96 3.90
23 2.94 2.94 2.94 53 4.06 4.02 3.95
24 2.96 2.96 2.96 54 4.13 4.08 4.01
25 2.98 2.98 2.98 55 4.21 4.15 4.07
26 3.00 3.00 3.00 56 4.28 4.22 4.13
27 3.02 3.02 3.02 57 4.37 4.30 4.19
28 3.04 3.04 3.04 58 4.45 4.38 4.26
29 3.07 3.06 3.06 59 4.55 4.46 4.32
30 3.09 3.09 3.08 60 4.64 4.54 4.39
31 3.11 3.11 3.11 61 4.74 4.63 4.46
32 3.14 3.14 3.13 62 4.85 4.72 4.52
33 3.17 3.16 3.16 63 4.97 4.81 4.59
34 3.20 3.19 3.18 64 5.08 4.91 4.66
35 3.22 3.22 3.21 65 5.21 5.01 4.73
36 3.26 3.25 3.24 66 5.34 5.11 4.79
37 3.29 3.28 3.27 67 5.48 5.21 4.85
38 3.32 3.31 3.30 68 5.62 5.32 4.92
39 3.36 3.35 3.33 69 5.77 5.42 4.97
40 3.39 3.38 3.37 70 5.93 5.53 5.03
41 3.43 3.42 3.40 71 6.09 5.63 5.08
42 3.47 3.46 3.44 72 6.26 5.73 5.13
43 3.51 3.50 3.48 73 6.44 5.84 5.17
44 3.56 3.54 3.52 74 6.62 5.93 5.21
45 3.60 3.59 3.56 75 6.80 6.03 5.24
46 3.65 3.63 3.60 76 6.98 6.12 5.27
47 3.70 3.68 3.65 77 7.17 6.20 5.30
48 3.76 3.73 3.70 78 7.35 6.27 5.32
49 3.81 3.78 3.74 79 7.54 6.34 5.34
80** 7.72 6.41 5.35
</TABLE>
Payments are based upon the age, nearest birthday, of the Payee on the date
the first payment is due. If monthly installments for two or more specified
periods for a given age are the same, the specified period of longer duration
will apply.
* Also applies to younger ages.
** Also applies to older ages.
97600U Page 22
<PAGE>
TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT
The following charges apply to each $1,000 of Initial Specified Amount
surrendered during the first 10 policy years. The charges also apply to each
$1,000 of increase in Specified Amount surrendered during the first 10 years
of such increase. The word "surrender" as used in this provision means Full
Surrender, or a reduction in Specified Amount at the request of the Owner, or
due to a Partial Surrender. The charge for the surrender of all or any portion
of the Initial Specified Amount will be equal to the rate shown below for the
age at issue and the year of surrender, multiplied by the number of thousands
of Initial Specified Amount being surrendered. The charges for surrender of
all or any portion of an increase in Specified Amount will be equal to the
rates shown below for the age at issue of such increase and year of surrender,
multiplied by the number of thousands of such increase being surrendered. In
addition, there will be a charge not to exceed $25.00 for each partial
surrender.
<TABLE>
<CAPTION>
ISSUE
AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
1 2 3 4 5 6 7 8 9 10 11
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 2.23 2.23 2.23 1.95 1.67 1.39 1.12 0.84 0.56 0.28 0.00
1 2.24 2.24 2.24 1.96 1.68 1.40 1.12 0.84 0.56 0.28 0.00
2 2.35 2.35 2.35 2.06 1.76 1.47 1.18 0.88 0.59 0.29 0.00
3 2.35 2.35 2.35 2.06 1.76 1.47 1.18 0.88 0.59 0.29 0.00
4 2.47 2.47 2.47 2.16 1.85 1.54 1.24 0.93 0.62 0.31 0.00
5 2.58 2.58 2.58 2.26 1.94 1.61 1.29 0.97 0.65 0.32 0.00
6 2.70 2.70 2.70 2.36 2.03 1.69 1.35 1.01 0.68 0.34 0.00
7 2.82 2.82 2.82 2.47 2.12 1.76 1.41 1.06 0.71 0.35 0.00
8 2.83 2.83 2.83 2.48 2.12 1.77 1.42 1.06 0.71 0.35 0.00
9 2.94 2.94 2.94 2.57 2.21 1.84 1.47 1.10 0.74 0.37 0.00
10 3.06 3.06 3.06 2.68 2.30 1.91 1.53 1.15 0.77 0.38 0.00
11 3.18 3.18 3.18 2.78 2.39 1.99 1.59 1.19 0.80 0.40 0.00
12 3.30 3.30 3.30 2.89 2.48 2.06 1.65 1.24 0.83 0.41 0.00
13 3.53 3.53 3.53 3.09 2.65 2.21 1.77 1.32 0.88 0.44 0.00
14 3.64 3.64 3.64 3.19 2.73 2.28 1.82 1.37 0.91 0.46 0.00
15 3.76 3.76 3.76 3.29 2.82 2.35 1.88 1.41 0.94 0.47 0.00
16 3.89 3.89 3.89 3.40 2.92 2.43 1.95 1.46 0.97 0.49 0.00
17 4.00 4.00 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00
18 4.12 4.12 4.12 3.61 3.09 2.58 2.06 1.55 1.03 0.52 0.00
19 4.36 4.36 4.36 3.82 3.27 2.73 2.18 1.64 1.09 0.55 0.00
20 4.48 4.48 4.48 3.92 3.36 2.80 2.24 1.68 1.12 0.56 0.00
21 4.60 4.60 4.60 4.03 3.45 2.88 2.30 1.73 1.15 0.58 0.00
22 4.82 4.82 4.82 4.22 3.62 3.01 2.41 1.81 1.21 0.60 0.00
23 4.94 4.94 4.94 4.32 3.71 3.09 2.47 1.85 1.24 0.62 0.00
24 5.18 5.18 5.18 4.53 3.89 3.24 2.59 1.94 1.30 0.65 0.00
25 5.42 5.42 5.42 4.74 4.07 3.39 2.71 2.03 1.36 0.68 0.00
26 5.65 5.65 5.65 4.94 4.24 3.53 2.83 2.12 1.41 0.71 0.00
27 5.89 5.89 5.89 5.15 4.42 3.68 2.95 2.21 1.47 0.74 0.00
28 6.12 6.12 6.12 5.36 4.59 3.83 3.06 2.30 1.53 0.77 0.00
29 6.36 6.36 6.36 5.57 4.77 3.98 3.18 2.39 1.59 0.80 0.00
30 6.60 6.60 6.60 5.78 4.95 4.13 3.30 2.48 1.65 0.83 0.00
31 7.07 7.07 7.07 6.19 5.30 4.42 3.54 2.65 1.77 0.88 0.00
32 7.30 7.30 7.30 6.39 5.48 4.56 3.65 2.74 1.83 0.91 0.00
33 7.64 7.64 7.64 6.69 5.73 4.78 3.82 2.87 1.91 0.96 0.00
34 8.00 8.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00
35 8.35 8.35 8.35 7.31 6.26 5.22 4.18 3.13 2.09 1.04 0.00
36 8.71 8.71 8.71 7.62 6.53 5.44 4.36 3.27 2.18 1.09 0.00
37 9.18 9.18 9.18 8.03 6.89 5.74 4.59 3.44 2.30 1.15 0.00
38 9.54 9.54 9.54 8.35 7.16 5.96 4.77 3.58 2.39 1.19 0.00
39 10.01 10.01 10.01 8.76 7.51 6.26 5.01 3.75 2.50 1.25 0.00
</TABLE>
97600U Page 23
<PAGE>
TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT
The following charges apply to each $1,000 of Initial Specified Amount
surrendered during the first 10 policy years. The charges also apply to each
$1,000 of increase in Specified Amount surrendered during the first 10 years
of such increase. The word "surrender" as used in this provision means Full
Surrender, or a reduction in Specified Amount at the request of the Owner, or
due to a Partial Surrender. The charge for the surrender of all or any portion
of the Initial Specified Amount will be equal to the rate shown below for the
age at issue and the year of surrender, multiplied by the number of thousands
of Initial Specified Amount being surrendered. The charges for surrender of
all or any portion of an increase in Specified Amount will be equal to the
rates shown below for the age at issue of such increase and year of surrender,
multiplied by the number of thousands of such increase being surrendered. In
addition, there will be a charge not to exceed $25.00 for each partial
surrender.
<TABLE>
<CAPTION>
ISSUE
AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
1 2 3 4 5 6 7 8 9 10 11
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 10.48 10.48 10.48 9.17 7.86 6.55 5.24 3.93 2.62 1.31 0.00
41 11.05 11.05 11.05 9.67 8.29 6.91 5.53 4.14 2.76 1.38 0.00
42 11.63 11.63 11.63 10.18 8.72 7.27 5.82 4.36 2.91 1.45 0.00
43 12.11 12.11 12.11 10.60 9.08 7.57 6.06 4.54 3.03 1.51 0.00
44 12.80 12.80 12.80 11.20 9.60 8.00 6.40 4.80 3.20 1.60 0.00
45 13.39 13.39 13.39 11.72 10.04 8.37 6.70 5.02 3.35 1.67 0.00
46 14.09 14.09 14.09 12.33 10.57 8.81 7.05 5.28 3.52 1.76 0.00
47 14.80 14.80 14.80 12.95 11.10 9.25 7.40 5.55 3.70 1.85 0.00
48 15.49 15.49 15.49 13.55 11.62 9.68 7.75 5.81 3.87 1.94 0.00
49 16.31 16.31 16.31 14.27 12.23 10.19 8.16 6.12 4.08 2.04 0.00
50 17.14 17.14 17.14 15.00 12.86 10.71 8.57 6.43 4.29 2.14 0.00
51 18.06 18.06 18.06 15.80 13.55 11.29 9.03 6.77 4.52 2.26 0.00
52 19.00 19.00 19.00 16.63 14.25 11.88 9.50 7.13 4.75 2.38 0.00
53 19.93 19.93 19.93 17.44 14.95 12.46 9.97 7.47 4.98 2.49 0.00
54 20.99 20.99 20.99 18.37 15.74 13.12 10.50 7.87 5.25 2.62 0.00
55 22.14 22.14 22.14 19.37 16.61 13.84 11.07 8.30 5.54 2.77 0.00
56 23.32 23.32 23.32 20.41 17.49 14.58 11.66 8.75 5.83 2.92 0.00
57 24.60 24.60 24.60 21.53 18.45 15.38 12.30 9.23 6.15 3.08 0.00
58 25.99 25.99 25.99 22.74 19.49 16.24 13.00 9.75 6.50 3.25 0.00
59 27.29 27.29 27.29 23.88 20.47 17.06 13.65 10.23 6.82 3.41 0.00
60 28.91 28.91 28.91 25.30 21.68 18.07 14.46 10.84 7.23 3.61 0.00
61 30.55 30.55 30.55 26.73 22.91 19.09 15.28 11.46 7.64 3.82 0.00
62 32.30 32.30 32.30 28.26 24.23 20.19 16.15 12.11 8.08 4.04 0.00
63 34.08 34.08 34.08 29.82 25.56 21.30 17.04 12.78 8.52 4.26 0.00
64 36.06 36.06 36.06 31.55 27.05 22.54 18.03 13.52 9.02 4.51 0.00
65 38.17 38.17 38.17 33.40 28.63 23.86 19.09 14.31 9.54 4.77 0.00
66 39.07 39.07 39.07 34.19 29.30 24.42 19.54 14.65 9.77 4.88 0.00
67 39.19 39.19 39.19 34.29 29.39 24.49 19.60 14.70 9.80 4.90 0.00
68 39.32 39.32 39.32 34.41 29.49 24.58 19.66 14.75 9.83 4.92 0.00
69 39.46 39.46 39.46 34.53 29.60 24.66 19.73 14.80 9.87 4.93 0.00
70 39.60 39.60 39.60 34.65 29.70 24.75 19.80 14.85 9.90 4.95 0.00
71 39.76 39.76 39.76 34.79 29.82 24.85 19.88 14.91 9.94 4.97 0.00
72 39.80 39.80 39.80 34.83 29.85 24.88 19.90 14.93 9.95 4.98 0.00
73 39.85 39.85 39.85 34.87 29.89 24.91 19.93 14.94 9.96 4.98 0.00
74 39.90 39.90 39.90 34.91 29.93 24.94 19.95 14.96 9.98 4.99 0.00
75 39.95 39.95 39.95 34.96 29.96 24.97 19.98 14.98 9.99 4.99 0.00
76 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
77 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
78 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
79 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
80 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
</TABLE>
97600U Page 24
<PAGE>
AMERICAN GENERAL LIFE
INSURANCE COMPANY
This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An Adjustable Death
Benefit is payable upon the Insured's death prior to the Maturity Date.
Investment results are reflected in policy benefits. ACCUMULATION VALUES and
CASH VALUES are flexible and will be based on the amount and frequency of
premiums paid and the investment results of the Separate Account.
NONPARTICIPATING - NOT ELIGIBLE FOR DIVIDENDS.
For Information, Service or to make a Complaint
Contact your Servicing Agent, or our VUL Administration
2727-A ALLEN PARKWAY
P.O. BOX 4880
HOUSTON, TEXAS 77210-4880
1-888-325-9315
[AMERICAN GENERAL LOGO]
A STOCK COMPANY
A Subsidiary of American General Corporation
97600
EXHIBIT 1.(5)(a)(ii)
AMERICAN GENERAL LIFE
Insurance Company
Home Office:
Houston, Texas
2727-A Allen Parkway JOHN DOE American
P.O. Box 1931 POLICY NUMBER: 000000000 General
Houston, Texas 77251 [Graphic Omitted]
A STOCK COMPANY
(713) 522-1111 A Subsidiary of American
General Corporation
WE WILL PAY THE DEATH BENEFIT PROCEEDS to the Beneficiary if the Insured dies
prior to the Maturity Date and while this policy is in force. Payment will be
made after We receive due proof of the Insured's death, and will be subject to
the terms of this policy.
WE WILL PAY THE CASH SURRENDER VALUE of this policy to the Owner on the
Maturity Date if the Insured is living on that date.
THE AMOUNT OR DURATION OF THE DEATH BENEFIT PROCEEDS AND THE ACCUMULATION
VALUES PROVIDED BY THIS POLICY WHEN BASED ON THE INVESTMENT EXPERIENCE OF A
SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
The consideration for this contract is the application and payment of the
first premium. The first premium must be paid on or before delivery of this
policy.
This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An adjustable Death
Benefit is payable upon the Insured's death prior to the Maturity Date.
Investment results are reflected in policy benefits. ACCUMULATION VALUES are
flexible and will be based on the amount and frequency of premiums paid and
the investment results of the Separate Account. NONPARTICIPATING-NOT ELIGIBLE
FOR DIVIDENDS.
NOTICE OF TEN DAY RIGHT TO EXAMINE POLICY
YOU MAY RETURN THIS POLICY WITHIN 10 DAYS AFTER DELIVERY IF YOU ARE NOT
SATISFIED WITH IT FOR ANY REASON. THE POLICY MAY BE RETURNED TO US OR TO THE
REGISTERED REPRESENTATIVE THROUGH WHOM IT WAS PURCHASED. UPON SURRENDER OF
THIS POLICY WITHIN THE 10 DAY PERIOD, IT WILL BE DEEMED VOID FROM THE DATE OF
ISSUE, AND WE WILL REFUND ANY PREMIUMS PAID ADJUSTED TO REFLECT INVESTMENT
EXPERIENCE.
SIGNED AT THE HOME OFFICE ON THE DATE OF ISSUE.
_____________ _____________
Secretary President
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
READ YOUR POLICY CAREFULLY
97610
<PAGE>
<TABLE>
INDEX
<CAPTION>
<S> <C>
Allocation of Policy Deductions 4
Allocation of Net Premiums 4
Annual Report 19
Automatic Rebalancing 14
Beneficiary and Proceeds 16
Cash Surrender Value 10
Cash Value 10
Changing Your Insurance Policy 7
Change of Ownership or Beneficiary 16
Changing the Death Benefit Option 7
Changing the Specified Amount 7
Contract 5
Cost of Insurance Rate Table 21
Date of Issue 3,5
Death Benefit and Death Benefit Options 6
Dollar Cost Averaging 14
Expense Charges
Monthly Administration Fee 3A,11
Premium Expense Charge 3A
Premium Tax 3
General Account 9
General Provisions 18
Grace Period 12
Incontestability 18
Investment Advisor, Change of 9
Investments of the Separate Account 8
Maturity Date 3
Monthly Guarantee Premium 12
Owner 5
Payment Options 17
Policy Loans 15
Policy Values 9
Premium Class 2
Premium Payments 5
Separate Account 7
Surrender, Full and Partial 12
Transfer Provision 13
Valuation of Assets 8
Valuation Dates 8
Valuation Units 8
</TABLE>
COMPANY REFERENCE. We, Our, Us, or Company means American General Life
Insurance Company.
YOU, YOUR. The words You or Your mean the Owner of this policy.
HOME OFFICE. Our office at 2727-A Allen Parkway, Houston, Texas 77019; Mailing
Address P.O. Box 4880, Houston, Texas 77210-4880.
WRITTEN, IN WRITING. A written request or notice in acceptable form and
content, which is signed and dated, and received at Our Home Office.
PREMIUM CLASS. The Premium Class of this policy is shown on Page 3 as one or a
combination of the following terms:
SELECT. The term "Select" means the Insured qualifies as a better than average
mortality risk. PREFERRED. The term "Preferred" means the cost of insurance is
based on the Insured being a nonuser of tobacco. STANDARD. The term "Standard"
means the cost of insurance is based on the Insured being a tobacco user.
JUVENILE. All policies issued to Insureds at issue age 17 or less are
designated as "Juvenile". This means that cost of insurance rates stated in
the policy for insurance ages 18 and above are Standard rates. (Rates are not
classified on the basis of the Insured being a user or non-user of tobacco at
ages 0 through 17.) SPECIAL. The term "Special" means an extra premium is
being charged due to the Insured's health, occupation or avocation. RATES ON
POLICY ANNIVERSARY NEAREST INSURED'S 18TH BIRTHDAY (FOR INSURED'S AGE 17 OR
LESS ON DATE OF ISSUE). If the Insured's age, nearest birthday, is 17 or less
on the Date of Issue of this policy, Standard rates will be used starting on
the policy anniversary nearest the Insured's 18th birthday, except as follows.
Prior to the anniversary nearest the Insured's 18th birthday, a written
statement, signed by the Insured, may be submitted to the Company requesting
that Preferred rates be made effective. The statement must include the date
the Insured last used tobacco, or state that the Insured as never used
tobacco, whichever applies. If the request is approved, Preferred rates will
be made effective on the policy anniversary nearest the Insured's 18th
birthday. Otherwise, Standard rates will apply. We will send a notice to the
Owner at lest 30 days prior to the policy anniversary nearest the Insured's
18th birthday that an application for Preferred rates may be submitted.
NOTICE
This Policy Is A Legal Contract Between
The Policy Owner And The Company.
97610 Page 2
<PAGE>
POLICY SCHEDULE
BASIC POLICY MONTHLY COST YEARS PAYABLE
VARIABLE LIFE SEE PAGE 21 60
ADDITIONAL BENEFITS PROVIDED BY RIDERS
NONE
PREMIUM CLASS: SELECT PREFERRED
INITIAL PREMIUM: $1,528.90
PLANNED PERIODIC PREMIUM: $1,528.90 PAYABLE ANNUALLY
MONTHLY DEDUCTION DAY: 1ST DAY OF EACH MONTH
MINIMUM DEATH BENEFIT AMOUNT (AFTER
A DECREASE IN SPECIFIED AMOUNT) $100,000
MINIMUM PARTIAL SURRENDER $ 500.00
MINIMUM VALUE THAT MAY BE RETAINED IN A
DIVISION AFTER A PARTIAL SURRENDER $ 500.00
COVERAGE MAY EXPIRE PRIOR TO THE MATURITY DATE SHOWN WHERE EITHER NO PREMIUMS
ARE PAID FOLLOWING PAYMENT OF THE INITIAL PREMIUM, OR SUBSEQUENT PREMIUMS ARE
INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE.
INSURED: JOHN DOE POLICY NUMBER: 0000000000
INSURANCE AGE: 35 DATE OF ISSUE: NOVEMBER 1, 1997
INITIAL SPECIFIED AMOUNT: $100,000 MATURITY DATE: NOVEMBER 1, 2057
DEATH BENEFIT OPTION: 1 THIS IS A (SEX DISTINCT) POLICY
THIS IS A (STATE NAME) POLICY
97610 Page 3
<PAGE>
POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000
CHARGES DEDUCTED FROM THE SEPARATE ACCOUNT
MORTALITY AND EXPENSE CHARGE. DEDUCTIONS FROM THE SEPARATE ACCOUNT WILL
BE MADE AT AN ANNUAL RATE NOT TO EXCEED .90%. AFTER THE 10TH POLICY
YEAR, THE CURRENT MORTALITY AND EXPENSE CHARGES WILL BE REDUCED BY
.25% IN EACH POLICY YEAR THAT THE CURRENT MORTALITY AND EXPENSE
CHARGE ANNUAL RATE WITHOUT THE REDUCTION IS LESS THAN .90%. THE
CURRENT RATE ON THE DATE OF ISSUE IS [.75%]. THE ACTUAL DEDUCTION
WILL BE MADE ON A DAILY BASIS. THE CURRENT RATE ON A DAILY BASIS IS
[.002055%].
EXPENSE CHARGES
PREMIUM EXPENSE CHARGE: CURRENT GUARANTEED
(ADJUSTABLE PREMIUM EXPENSE
CHARGE PERCENTAGE) [2.5%] 5.0%
PREMIUM TAX (IF APPLICABLE). DEPENDING ON THE LAWS OF THE JURISDICTION IN
WHICH THIS POLICY WAS ISSUED, A PERCENTAGE OF EACH PREMIUM MAY BE
DEDUCTED FOR PREMIUM TAX. THE PREMIUM TAX RATE FOR THIS POLICY IS
[0%].
MONTHLY EXPENSE CHARGE:
MONTHLY EXPENSE CHARGE FOR FIRST TWO YEARS: $19.59
(SEE MONTHLY EXPENSE CHARGE TABLE FOR RATES
APPLYING TO INCREASES IN SPECIFIED AMOUNT)
MONTHLY ADMINISTRATION FEE: CURRENT GUARANTEED
[$6.00] $12.00
BASIC POLICY CHARGES AND FEES
COST OF INSURANCE CHARGES. GUARANTEED MAXIMUM COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK ARE SHOWN ON PAGE 21.
97610 Page 3A
<PAGE>
POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000
<TABLE>
INITIAL ALLOCATION OF NET PREMIUMS AND POLICY DEDUCTIONS
<CAPTION>
INVESTMENT OPTIONS INITIAL ALLOCATION INITIAL ALLOCATIONS
OF NET PREMIUMS OF POLICY DEDUCTIONS
<S> <C> <C>
GENERAL ACCOUNT:
(125) AGL Declared Fixed Interest Account 100% 100%
SEPARATE ACCOUNT: VL-R
[(126) AIM V.I. International Equity Fund 0% 0%
(127) AIM V.I. Value Fund 0% 0%
(128) International Equities Fund 0% 0%
(129) MidCap Index Fund 0% 0%
(130) Money Market Fund 0% 0%
(131) Stock Index Fund 0% 0%
(132) Quality Bond Portfolio 0% 0%
(133) Small Cap Portfolio 0% 0%
(134) MFS Emerging Growth Series 0% 0%
(135) Equity Growth Portfolio 0% 0%
(136) High Yield Portfolio 0% 0%
(137) Putnam VT Diversified Income Fund 0% 0%
(138) Putnam VT Growth and Income Fund 0% 0%
(139) Putnam VT International Growth and Income Fund 0% 0%
(140) Equity Portfolio 0% 0%
(141) Growth Portfolio 0% 0%
(142) Strategic Stock Portfolio 0% 0%]
</TABLE>
97610 Page 3B
<PAGE>
TABLE OF MONTHLY EXPENSE CHARGES FOR THE FIRST TWO YEARS
PER $1,000 OF SPECIFIED AMOUNT
(Also applies to an increase in Specified Amount during
first two years of the Increase)
ISSUE ISSUE
AGE AGE
35 0.1959 58 0.5084
36 0.2047 59 0.5363
37 0.2140 60 0.5662
38 0.2238 61 0.5982
39 0.2340 62 0.6323
40 0.2449 63 0.6688
41 0.2564 64 0.7078
42 0.2685 65 0.7495
43 0.2812 66 0.7800
44 0.2946 67 0.8200
45 0.2647 68 0.8600
46 0.2775 69 0.9000
47 0.2912 70 0.9500
48 0.3056 71 1.0000
49 0.3209 72 1.0600
50 0.3371 73 1.1100
51 0.3544 74 1.1700
52 0.3727 75 1.2400
53 0.3921 76 1.3000
54 0.4126 77 1.3700
55 0.4345 78 1.4500
56 0.4576 79 1.5300
57 0.4822 80 1.6100
The MONTHLY EXPENSE CHARGE FOR THE INITIAL SPECIFIED AMOUNT for the first two
years is shown on page 3A of the policy. To determine the Monthly Expense
Charge for an increase in Specified Amount, multiply the appropriate rate
shown above by the number of thousands of increase in Specified Amount. The
result will be deducted from the Accumulation Value monthly during the first
two years of the increase.
97610 Page 4
<PAGE>
CONTRACT. Your policy is a legal contract that You have entered into with Us.
You have paid the first premium and have submitted an application, a copy of
which is attached. In return, We promise to provide the insurance coverage
described in this policy.
The entire contract consists of:
1. The basic policy;
2. The riders that add benefits to the basic policy, if any;
3. Endorsements, if any; and
4. The attached copy of Your application, and any amendments or
supplemental applications.
DATE OF ISSUE. The Date of Issue of this policy is the date on which the first
premium is due. The Date of Issue is also the date from which all policy
years, anniversaries, and monthly deduction dates are determined.
OWNER. The Owner is as stated in the application unless later changed. During
the Insured's lifetime, the Owner may exercise every right the policy confers
or we allow (subject to the rights of any assignee of record, and to any
endorsement on this policy limiting such rights). You may have Joint Owners of
the policy. In that case, the authorization of both Joint Owners is required
for all policy changes except for transfers, premium allocations and deduction
allocations. We will accept the authorization of either Joint Owner for
transfers and changes in premium and deduction allocations. The Owner and the
Insured may be the same person but do not have to be. If the Owner dies while
the policy is in force and the Insured is living, ownership rights pass on to
a successor owner, if any, or to the estate of the Owner.
PREMIUM PAYMENTS
All premiums after the first are payable in advance. Premium payments are
flexible. This means You may choose the amount and frequency of payments.
The actual amount and frequency of premium payments will affect the
Accumulation Value and the amount and duration of insurance. Please refer to
the Policy Values Provision for a detailed explanation.
PLANNED PERIODIC PREMIUMS. The amount and frequency of the Planned Periodic
Premiums You selected are shown on page 3. You may request a change in the
amount and frequency. We may limit the amount of any increase. (See Maximum
Premium).
UNSCHEDULED ADDITIONAL PREMIUMS. You may pay additional premiums at any time
before the Maturity Date shown on page 3. We may limit the number and amount
of additional premiums. (See Maximum Premium).
MAXIMUM PREMIUM. The sum of the premiums paid under this policy may not exceed
the guideline premium limitation as defined by Section 7702, Internal Revenue
Code of 1986 (or as later amended). Any portion of any premium paid which is
determined to be in excess of the limit will be refunded.
PREMIUM EXPENSE CHARGE. The Premium Expense Charge is calculated by
multiplying the premium paid (after deduction of any state premium tax) by the
Premium Expense Charge Percentage. The Premium Expense Charge Percentage is
adjustable, but will never be more than the guaranteed Premium Expense Charge
Percentage shown on the Policy Schedule.
NET PREMIUM. The Net Premium is the premium paid, less any applicable state
premium tax and the Premium Expense charge.
ALLOCATION OF PREMIUMS. The initial allocation of Net Premiums is shown on the
Policy Schedule and will remain in effect until changed by Written notice from
the Owner. The percentage allocation for future Net Premiums may be changed at
any time by Written notice.
97610 Page 5
<PAGE>
The initial Net Premium will be allocated to the Money Market Division on the
later of the following dates:
1. The Date of Issue; or
2. The date all requirements needed to place the policy in force have been
satisfied, including underwriting approval and receipt in the Home
Office of the necessary premium.
The initial Net Premium will remain in the Money Market Division until the
first Valuation Date following the 15th day after it was applied. Any
additional Net Premiums received prior to the first Valuation date which
follows the 15th day after the initial Net Premium was applied will be
allocated to the Money Market Division until such Valuation Date. At that
time, We will transfer the Accumulation Value to the selected Investment
Option(s). Each premium received after such Valuation date will be reduced by
any applicable state premium tax and the Premium Expense Charge and applied
directly to the selected Investment Option(s) as of the Business Day received.
Changes in the allocation will be effective on the date we receive the Owner's
notice. The allocation may be 100% to any available Division or may be divided
among these options in whole percentage points totaling 100%. We reserve the
right to limit the number of Divisions which you may select.
WHERE TO PAY. You may make your payments to Us at our Home Office or to an
authorized agent. A receipt signed by an officer of the Company will be
furnished upon request.
DEATH BENEFIT AND DEATH BENEFIT OPTIONS
DEATH BENEFIT PROCEEDS. If the Insured dies prior to the Maturity Date and
while this policy is in force, We will pay the Death Benefit Proceeds to the
Beneficiary. The Death Benefit Proceeds will be subject to:
1. The Death Benefit Option in effect on the date of death; and
2. Any increases or decreases made to the Specified Amount. The Initial
Specified Amount is shown on page 3.
Guidelines for changing the Death Benefit Option or the Specified Amount will
be found in the section entitled "Changing Your Insurance Policy."
The Death Benefit Proceeds will be the Death Benefit Amount reduced by any
outstanding policy loan and will be subject to the other provisions of the
"Beneficiary and Proceeds" section.
DEATH BENEFIT OPTION. The Death Benefit Option which You have chosen is shown
on page 3 as either Option 1 or Option 2.
OPTION 1. If you have chosen Option 1 the Death Benefit Amount will be the
greater of:
1. The Specified Amount on the date of death; or
2. The Accumulation Value on the date of death multiplied by the Death
Benefit Percentage Factor for the Insured's age nearest birthday as
shown in the table that follows.
OPTION 2. If you have chosen Option 2, the Death Benefit Amount will be the
greater of:
1. The Specified Amount plus the Accumulation Value on the date of death;
or
2. The Accumulation Value on the date of death multiplied by the Death
Benefit Percentage Factor for the Insured's age nearest birthday as
shown in the table that follows.
<TABLE>
TABLE OF DEATH BENEFIT PERCENTAGE FACTORS
<CAPTION>
Att'd Percentage Att'd Percentage Att'd Percentage Att'd Percentage
Age Factor Age Factor Age Factor Age Factor
<S> <C> <C> <C> <C> <C> <C> <C>
0-40 250% 50 185% 60 130% 70 115%
41 243 51 178 61 128 71 113
42 236 52 171 62 126 72 111
43 229 53 164 63 124 73 109
44 222 54 157 64 122 74 107
45 215 55 150 65 120 75-90 105
46 209 56 146 66 119 91 104
47 203 57 142 67 118 92 103
48 197 58 138 68 117 93 102
49 191 59 134 69 116 94 101
95+ 100
</TABLE>
97610 Page 6
<PAGE>
CHANGING YOUR INSURANCE POLICY
You may request a change in the Specified Amount or Death Benefit Option at
any time except that a decrease in the Specified Amount may not become
effective prior to the end of the first policy year. Your request must be
submitted to Our Home Office in writing in a form acceptable to Us.
INCREASING THE SPECIFIED AMOUNT. We will require a supplemental application
and evidence of insurability satisfactory to Us for any increase in the
Specified Amount. An increase will be effective on the monthly deduction day
on or next following the date the application for increase is approved by Us.
The effective date will appear in an endorsement to this policy.
DECREASING THE SPECIFIED AMOUNT. Any decrease will go into effect on the
monthly deduction day following the day We receive the request. The Death
Benefit Amount remaining in effect after any decrease cannot be less than the
greater of:
1. The Minimum Death Benefit Amount shown on page 3; or
2. Any Death Benefit Amount which, upon comparing such amount to the sum of
premiums already paid, would result in an excess of premium payments.
(See the "Maximum Premium" provision.)
Any such decrease will be applied in the following order:
1. Against the Specified Amount provided by the most recent increase;
2. Against the next most recent increases successively;
3. Against the Specified Amount provided under the original application.
CHANGING THE DEATH BENEFIT OPTION. You may request a change in the Death
Benefit Option you have chosen.
1. If You request a change from Option 1 to Option 2: The new Specified
Amount will be the Specified Amount, prior to change, less the
Accumulation Value as of the effective date of the change, but not less
than zero.
2. If You request a change from Option 2 to Option 1: The new Specified
Amount will be the Death Benefit Amount as of the effective date of the
change.
We will not require evidence of insurability for a change in the Death Benefit
Option. The change will go into effect on the monthly deduction day following
the date We receive Your request for change.
CHANGING THE TERMS OF YOUR POLICY. Any change in Your policy must be approved
by one of Our officers. No agent has the authority to make any changes or
waive any of the terms of Your policy.
SEPARATE ACCOUNT PROVISIONS
SEPARATE ACCOUNT. Separate Account VL-R is a segregated investment account
established by the Company under Texas law to separate the assets funding the
variable benefits for the class of policies to which this policy belongs from
the other assets of the Company. That portion of the assets of the Separate
Account equal to the reserves and other policy liabilities with respect to the
Separate Account shall not be chargeable with liabilities arising out of any
other business We may conduct . Income, gains and losses, whether or not
realized from assets allocable to the Separate Account, are credited to or
charged against such Account without regard to Our other income, gains or
losses.
97610 Page 7
<PAGE>
INVESTMENTS OF THE SEPARATE ACCOUNT. The Separate Account is segmented into
Divisions. Each Division invests in a single Investment Option. Net Premiums
will be applied to the Separate Account and allocated to one or more
Divisions. The assets of the Separate Account are invested in the Investment
Options listed on the Policy Schedule Pages. From time to time, We may add
additional Divisions to those shown on the Policy Schedule pages. We may also
discontinue offering one or more Divisions. Any change in Divisions available
or selected are shown on the Policy Schedule or on an amended Policy Schedule.
Any change in investment selection shall be pursuant to a duly executed change
form filed with Our Home Office. Transfers may be made to the additional
Divisions subject to the rules stated in the Transfer Provision and any new
rules or limitations tied to such additional Divisions.
If shares of any of the Investment Options become unavailable for investment
by the Separate Account, or the Company's Board of Directors deems further
investment in these shares inappropriate, the Company may limit further
investment in the shares or may substitute shares of another Investment Option
for shares already purchased under this policy.
VALUATION OF ASSETS. The assets of the Separate Account are valued as of each
Valuation Date at their fair market value in accordance with Our established
procedures. The Separate Account Value as of any Valuation Date prior to the
Maturity Date is the sum of Your account values in each Division of the
Separate Account as of that date.
VALUATION UNITS. In order to determine policy values in the Divisions We use
Valuation Units which are calculated separately for each Division. The
Valuation Unit value for each Division will vary to reflect the investment
experience of the applicable Investment Option. The Valuation Unit for a
Division will be determined on each Valuation Date for the Division by
multiplying the Valuation Unit value for the Division on the preceding
Valuation Date by the Net Investment Factor for that Division for the current
Valuation Date.
The Net Investment Factor for each Division is determined by dividing (1) by
(2) and subtracting (3), where:
(1) is the net asset value per share of the applicable Investment Option as
of the current Valuation Date (plus any per share amount of any dividend
or capital gains distribution paid by the Investment Option since the
last Valuation Date); and
(2) is the net asset value per share of the shares held in the Division as
determined at the end of the previous valuation period; and
(3) is a factor representing the Mortality and Expense Charge.
The net asset value of an investment company's shares held in each investment
division shall be the value reported by Us by that investment company.
VALUATION DATES. Valuation of the various Divisions will occur on each
Business Day during each month. If the underlying Investment Option is unable
to value or determine the Division's investment in an Investment Option due to
any of the reasons stated in the "Suspension and Deferral of Payments
Provision", the Valuation Date for the Division with respect to the unvalued
portion shall be the first Business Day that the assets can be valued or
determined.
BUSINESS DAY. A business day is each day that the New York Stock Exchange and
the Company are open for business. A business day immediately preceded by one
or more non-business calendar days will include those non-business days as
part of that business day. For example, a business day which falls on a Monday
will consist of a Monday and the immediately preceding Saturday and Sunday.
MINIMUM BALANCE. If a partial surrender causes the balance in any Division to
drop below $500, the Company reserves the right to transfer the remaining
balance to the Money Market Division. If a transfer causes the balance in any
Division to drop below $500, the Company reserves the right to transfer the
remaining balance in proportion to the transfer request.
97610 Page 8
<PAGE>
CHANGE OF INVESTMENT ADVISOR OR INVESTMENT POLICY. Unless otherwise required
by law or regulation, the investment advisor or any investment policy may not
be changed without Our consent. If required, approval of or change of any
investment objective will be filed with the Insurance Department of the state
where this policy is being is delivered.
RIGHTS RESERVED BY US. Upon notice to You, this policy may be modified by Us,
but only if such modification is necessary to:
1. Operate the Separate Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law;
2. Transfer any assets in any Division to another Division, or to one or
more other separate accounts;
3. Add, combine or remove Divisions in the Separate Account, or combine the
Separate Account with another Separate Account;
4. Make any new Division available to You on a basis to be determined by
Us;
5. Substitute for the shares held in any Division the shares of another
Division or the shares of another investment company or any other
investment permitted by law;
6. Make any changes as required by the Internal Revenue Code, or by any
other applicable law, regulation or interpretation in order to continue
treatment of this policy as life insurance; or
7. Make any changes required to comply with rules of any Division.
When required by law, We will obtain Your approval of changes and We will gain
approval from any appropriate regulatory authority.
GENERAL ACCOUNT. The General Account is a Fixed Account within Our general
assets which We have established for:
1. Any amounts transferred from the Divisions as a result of a loan; or
2. Any amounts allocated by the Owner to such Account.
The General Account is credited with interest at an annual rate of not less
than 4%, and is not based on the investment experience of any Division of the
Separate Account. Interest applied to that portion of the General Account
equal to a policy loan will be at an annual effective rate of not less than 4%
nor more than 4.75%.
POLICY VALUES PROVISION
ACCUMULATION VALUE. The Accumulation Value of Your policy is the total of all
values in the General Account and in the Divisions of the Separate Account.
The Accumulation Value reflects:
1. Premiums paid;
2. Deductions for Expense Charges;
3. Monthly deductions;
4. The investment experience of the Divisions selected;
5. The value of amounts allocated to the General Account, including
interest earned on amounts allocated to the General Account;
6. Deductions due to partial withdrawals; and
7. Deductions, if any, resulting from decreases in Specified Amount.
Net Premiums are allocated, in accordance with your instructions, to the
General Account or allocated to the selected Divisions of the Separate Account
and converted to Valuation Units.
97610 Page 9
<PAGE>
On each Monthly Deduction day, a Monthly Deduction will be made by reducing
the unloaned portion of the General Account or redeeming Valuation Units from
each applicable Division in the same ratio as the Allocation of Policy
Deductions in effect on the Monthly Deduction day. If the number of Valuation
Units in any Division, or in the unloaned portion of the General Account is
insufficient to make a Monthly Deduction in this manner, We will cancel
Valuation Units from each applicable Division and reduce the unloaned portion
of the General Account in the same ratio the Monthly Deduction bears to the
unloaned Accumulation Value of your policy. You must state In Writing in
advance how Monthly Deductions should be made if other than this method is to
be used.
The Accumulation Value in any Division is determined by multiplying the value
of a Valuation Unit by the number of Valuation Units held under the policy in
that Division.
The value of Valuation Units equal to the amount being borrowed from the
Separate Account will be transferred to the General Account as of the Business
Day that the loan request is received In Writing.
Valuation Units are surrendered to reflect a partial surrender as of the
Business Day that the request for partial surrender is received In Writing.
ON THE DATE OF ISSUE. The Accumulation Value on the Date of Issue will be
determined as follows:
1. The Net Premium received; less
2. The Monthly Deduction for the first policy month; (See "How We Calculate
a Monthly Deduction.")
The first deduction day is the Date of Issue. The Monthly Deduction day is
shown on page 3.
ON EACH DEDUCTION DAY. On each deduction day after the Date of Issue, we will
determine the Accumulation Value as follows:
1. First, we will take the Accumulation Value as of the last deduction day;
and
2. Add the interest earned for the month on the excess of the General
Account value on the last deduction day over any withdrawals and
transfers made from the General Account since the last deduction day;
and
3. Add any investment gain (or subtract any investment loss) on the
Divisions of the Separate Account since the last deduction day as
measured by the change in the value of the Valuation Units; and
4. Add all Net Premiums received since the last deduction day; and
5. Subtract any partial surrender made since the last deduction day; and
6. Subtract the Monthly Deduction for the policy month following the
monthly deduction day. (See "How We Calculate a Monthly Deduction.")
ON ANY VALUATION DATE OTHER THAN A DEDUCTION DAY. The Accumulation Value on
any Valuation Date other than a deduction day will be the sum of:
1. The value of the General Account as of the last deduction day;
2. Less any withdrawals since the last deduction day;
3. Plus all Net Premiums received since the last deduction day;
4. Plus the sum of the values of the Divisions of the Separate Account as
of the last deduction day, plus the amount of any investment gain (or
minus any investment loss) on the Divisions since the last deduction day
as measured by the change in value of the Valuation Units.
CASH SURRENDER VALUE. The Cash Surrender Value of this policy will be equal to
the Accumulation Value less any indebtedness.
97610 Page 10
<PAGE>
HOW WE CALCULATE A MONTHLY DEDUCTION. Each Monthly Deduction includes:
1. The cost of insurance provided by the basic policy; and
2. The cost of insurance for benefits provided by riders; and
3. The Monthly Administration Fee; and
4. During the first two policy years, a Monthly Expense Charge. (This
charge also applies to the amount of any increase in Specified Amount
during the first two years of such increase.)
HOW WE CALCULATE THE COST OF INSURANCE FOR THE BASIC POLICY. We calculate the
cost of insurance at the beginning of each policy month on the deduction day.
The cost of insurance is determined as follows:
1. Reduce the Death Benefit Amount by the amount of Accumulation Value on
the deduction day before the cost of insurance deduction is taken, and
after the Monthly Expense Charge, if any, the Monthly Administration Fee
and Cost of Insurance for riders are deducted;
2. Multiply the difference by the cost of insurance rate per $1,000 of net
risk amount as provided in the Cost of Insurance Rate provision; and
3. Divide the result by 1000.
If Option 1 is in effect, and there have been increases in the Specified
Amount, the Accumulation Value will first be considered part of the Initial
Specified Amount. If the Accumulation Value exceeds the Initial Specified
Amount, the excess will be considered part of prior Specified Amount increases
in the order of the increases.
COST OF INSURANCE FOR BENEFITS PROVIDED BY RIDERS. The cost of insurance for
benefits provided by riders will be as stated on the Policy Schedule or in an
endorsement to this policy.
MONTHLY ADMINISTRATION FEE. An administration fee will be deducted monthly.
The amount of the monthly fee may be adjusted, but will never be greater than
the guaranteed Monthly Administration Fee.
FIRST TWO YEARS MONTHLY EXPENSE CHARGE. A Monthly Expense Charge will be
deducted during the first two policy years, and during the first two years of
any increase in Specified Amount. The Monthly Expense Charge for the first two
years for the Initial Specified Amount is shown onpage 3. The Monthly Expense
Charge for the first two years of any increase in Specified Amount will be
calculated by multiplying the appropriate rate shown on page 4 by the number
of thousands of such increase.
COST OF INSURANCE RATE. The cost of insurance rate for the Initial Specified
Amount, and for each Specified Amount increase, is based on the Insured's:
1. Sex (if issued on a Sex Distinct basis);
2. Age nearest birthday on each policy anniversary; and
3. Premium class shown on the Policy Schedule, associated with the Initial
Specified Amount and each increase in the Specified Amount.
The guaranteed monthly cost of insurance rates are shown in the table on page
21. We can use cost of insurance rates that are lower than the guaranteed
rates. Any change in rates will apply to all policies in the same rate class
as this policy. The rate class of this policy is determined on its Date of
Issue according to:
1. The calendar year of issue and policy year;
2. The plan of insurance;
3. The amount of insurance; and
4. The age, sex and premium class of the Insured if issued on a Sex
Distinct basis. The age and premium class if issued on a Unisex basis.
CHANGES IN RATES, CHARGES AND FEES. This policy does not participate in Our
profits or surplus. Any redetermination of the cost of insurance rates,
interest rates, mortality and expense charges, percentage of premium charges
or the Monthly Administration Fee will be based on Our expectations as to
investment earnings, mortality, persistency and expenses. We will not change
these charges in order to recoup any prior losses.
97610 Page 11
<PAGE>
INTEREST RATE. The guaranteed interest rate used in calculating Accumulation
Values of amounts allocated to the General Account is .3274% per month
compounded monthly. This is equivalent to 4.0% per year, compounded annually.
We can use interest rates greater than the guaranteed rates to calculate
Accumulation Values.
GRACE PERIOD. If the Cash Surrender Value on a deduction day is not enough to
meet the Monthly Deduction for the current month, this policy will remain in
force during the 61-day period that follows. If the Cash Surrender Value on a
policy anniversary is not enough to pay any loan interest due, this policy
will remain in force during the 61-day period that follows. Such 61-day period
is referred to in this policy as the "Grace Period." There is no Grace Period
for the initial Monthly Deduction.
If the required premium is not paid by the end of the Grace Period, this
policy will terminate without value. However, we will give you at least 31
days notice prior to termination that your policy is in the Grace Period and
advise you of the amount of premium required to keep your policy in force.
Such 31 days prior notice will be sent to you at your last known address, and
to the assignee of record, if any. If death occurs during the Grace Period,
Monthly Deductions through the policy month in which death occurred will be
deducted from the proceeds.
If a surrender request is received within 31 days after the Grace Period
commences, the Cash Surrender Value payable will not be less than the Cash
Surrender Value on the Monthly Deduction day the Grace Period commenced. The
Monthly Deduction for the policy month following such Monthly Deduction day
will not be subtracted in the calculation of such Cash Surrender Value.
FULL SURRENDER. Subject to the Beneficiary and Proceeds section, You may
return Your policy to Us and request its Cash Surrender Value at any time
during the Insured's lifetime before the Maturity Date. The Cash Surrender
Value will be determined as of the Business Day the policy and the signed
request for surrender are received In Writing in the Home Office. The Company
may delay payment if the Suspension and Deferral of Payments Provision is in
effect.
PARTIAL SURRENDER. At any time after the first policy year, you may request
withdrawal of a portion of the Cash Surrender Value of the policy. Your
request must be made in writing prior to the Maturity Date during the
Insured's lifetime. The minimum partial surrender is $500.00.
Valuation Units are surrendered to reflect a partial surrender as of the
Business Day the request for partial surrender is received In Writing in the
Home Office.
A partial surrender will result in a reduction of the Accumulation Value and
the Death Benefit Amount. The Accumulation Value will be reduced by the amount
of partial surrender benefit. The reduced Death Benefit Amount will be
determined in accordance with the Death Benefit Option provision. If your
Death Benefit Option is Option 1, the Specified Amount will be reduced by the
amount of the partial surrender. (The reduced amount will not be less than
zero.) The Death Benefit Amount remaining after this reduction must be no less
than the Minimum Death Benefit Amount shown on page 3.
A partial surrender will result in the cancellation of Valuation Units from
each applicable Division and reduction of the unloaned portion of the General
Account in the same ratio as the Allocation of Policy Deductions in effect on
the date of each partial surrender. If the number of Valuation Units in any
Division or in the unloaned portion of the General Account is insufficient to
make a partial surrender in this manner, We will cancel Valuation Units from
each applicable Division and reduce the unloaned portion of the General
Account in the ratio the partial surrender request bears to the unloaned
Accumulation Value of your policy. You must state In Writing in advance how
partial surrenders should be made if other than this method is to be used.
There will be a $25.00 charge for each partial surrender.
The Company may delay payment if the Suspension and Deferral of Payments
Provision is in effect.
97610 Page 12
<PAGE>
PERIOD OF INSURANCE COVERAGE IF AMOUNT OR FREQUENCY OF PREMIUM PAYMENTS IS
REDUCED OR IF PREMIUM PAYMENTS ARE DISCONTINUED. If You reduce the amount or
frequency of premium payments, or if You discontinue payment of premiums and
do not surrender this policy, We will continue making Monthly Deductions (as
long as there is sufficient Cash Surrender Value to make such deductions)
until the Maturity Date. This policy will remain in force until the earlier of
the following dates:
1. The Maturity Date (if there is sufficient Cash Surrender Value to make
Monthly Deductions to that date); or
2. The end of the Grace Period.
TRANSFER PROVISION
TRANSFER OF ACCUMULATION VALUE. You may transfer all or part of Your interest
in a Division of the Separate Account or the General Account subject to the
following:
1. Transfers will be made as of the Business Day that the transfer request
is received in good order.
2. The minimum which may be transferred is $500.00.
3. A transfer from the General Account to a Separate Account Division may
only be made during the 60 day period that begins on a policy
anniversary. The total amount transferred during the 60 day period is
limited in any policy year to 25% of the unloaned portion of the General
Account as of the policy anniversary.
4. We reserve the right to terminate, suspend or modify the transfer
privilege described above.
If You elect to use the transfer privilege, We will not be liable for a
transfer made in accordance with Your instructions.
Transfers between Separate Account Divisions result in the redemption of
Valuation Units in one Division and the purchase of Valuation Units in the
Division to which the transfer is made.
DOLLAR COST AVERAGING. Dollar Cost Averaging is an automatic transfer of funds
made periodically prior to the Maturity Date in accordance with the Transfers
provision, except as provided below, and instructions from the Owner. Dollar
Cost Averaging (DCA) is subject to the following guidelines:
1. DCA transfers may be made:
(a) On any day of the month except the 29th, 30th or 31st;
(b) On a monthly, quarterly, semi-annual or annual basis;
(c) From the Money Market Division to one or more of the other
Separate Account Divisions. (The General Account is not eligible
for DCA)
97610 Page 13
<PAGE>
TRANSFER PROVISION (CONT'D)
2. DCA may be elected only if the Accumulation Value at the time of
election is $5,000, or more.
3. The minimum amount of each DCA transfer is $100, or the remaining amount
in the Money Market Division, if less.
4. DCA may not begin prior to the first Valuation Date following the 15th
day after the initial Net Premium is applied.
5. DCA will end when there is no longer any value in the Money Market
Division, or when You request that DCA end. (You will be notified if the
value of Your Money Market Division reaches zero).
6. Amounts applied to the Money Market Division while DCA is active will be
available for future Dollar Cost Averaging in accordance with the
current DCA request.
7. There is no charge for DCA.
8. DCA is not available if Automatic Rebalancing is active.
AUTOMATIC REBALANCING. Automatic Rebalancing occurs when funds are transferred
by the Company between the Separate Account Divisions so that the values in
each Division match the premium allocation percentages then in effect. You may
choose Automatic Rebalancing on a quarterly, semi-annual or annual basis if
your Accumulation Value is $5,000 or more. The date Automatic Rebalancing
occurs will be based on the Date of Issue of Your policy. For example, if Your
policy is dated January 17, and You have requested Automatic Rebalancing on a
quarterly basis, Automatic Rebalancing will start on April 17, and will occur
quarterly thereafter. After Automatic Rebalancing is elected, it will continue
until We are notified In Writing that it is to be discontinued. There is no
charge for Automatic Rebalancing. Automatic Rebalancing is not available if
Dollar Cost Averaging is active.
SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION
We may suspend the calculation and payment of the policy's Cash Surrender
Value in the following circumstances:
1. If there is a failure in any of the means normally employed in
ascertaining the prices or values of investments, properties or assets;
or
2. If, for any reason the prices or values of investments, properties or
assets in the Separate Account cannot be reasonably ascertained; or
3. If circumstances exist as a result of which it is not reasonably
practicable to realize any of the Separate Account's investment or to
determine fairly the net asset value of the Separate Account; or
4. If the remittance of funds involved in the realization of, or in the
payment for investment or payment due under this policy cannot be
carried out without undue delay and at normal rates of exchange; or
5. The U.S. Securities and Exchange Commission (SEC) determines that a
state of emergency exists; or
6. An order of the SEC permits a delay for the protection of policyholders.
97610 Page 14
<PAGE>
SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION (CONT'D)
As to amounts allocated to the General Account, We may defer payment of any
Cash Surrender Value withdrawal or loan amount for up to six months after We
receive a request for it.
Written notice of both the imposition and termination of any such suspension
will be given to the Owners, assignees of record and any irrevocable
Beneficiaries.
Payments which were due to have been made and which were deferred following
the suspension of the calculation of the Cash Surrender Value will be made
within thirty (30) days of the lifting of the suspension, and will be
calculated based on the Valuation Date which immediately follows termination
of the suspension.
POLICY LOANS
You may borrow from Us at any time while this policy is in force, an amount
which is equal to or less than the policy's loan value. The loan value will be
the Cash Surrender Value less an amount equal to 3 Monthly Deductions, and
less interest on the amount to be borrowed to the next policy anniversary.
The value of Valuation Units equal to the amount being borrowed from the
Separate Account will be transferred to the General Account as of the Business
Day that the loan request is received in good order.
LOAN INTEREST. Loan interest will accrue daily at an annual effective rate of
4.54% payable in advance. (This is equivalent to an annual effective rate of
4.75% paid in arrears.) On each policy anniversary, loan interest for the next
year is due in advance. Unpaid loan interest will be deducted from the various
accounts according to the deduction percentages then in effect, and added to
the loaned portion of the General Account. If the number of Valuation Units in
any Division, or in the unloaned portion of the General Account is
insufficient to deduct unpaid loan interest in this manner, We will cancel
Valuation Units from each applicable division and reduce the unloaned portion
of the General Account in the same ratio the unpaid loan inteest bears to the
unloaned Accumulation Value of your policy. You must state In Writing in
advance how unpaid loan interst should be deducted if other than this method
is to be used.
HOW YOU MAY REPAY A POLICY LOAN. You may repay all or part of a policy loan at
any time, except that:
1. Repayment may be made only while this policy is in force and prior to
the death of the Insured; and,
2. A partial repayment must be at least $100.00.
At any time Your policy loan exceeds the Cash Surrender Value, this policy
will lapse. However, at least 31 days prior notice must be mailed by Us to
Your last known address and to the assignee of record, if any.
WE CAN DELAY PAYMENT. We can delay lending You money for up to 6 months, or
the period allowed by law, whichever is less. However, We cannot delay lending
You money if the amount is to be used to pay a premium to Us.
OBTAINING A LOAN. You may obtain a policy loan by Written request and
assignment of the policy as sole security for the loan. The Company may delay
a loan if the Suspension and Deferral of Payments Provision is in effect.
EFFECT OF A LOAN. When a loan is made, an amount equal to the amount being
borrowed from the Separate Account will be transferred to the General Account.
A loan will result in the cancellation of Units from each applicable Division
and reduction of the unloaned portion of the General Account in the ratio that
the loan bears to the unloaned Accumulation Value of Your policy. You must
state In Writing in advance which Division units are to be canceled if a
different method is to be used.
97610 Page 15
<PAGE>
Repayment of a loan will first be allocated to the General Account until you
have repaid any loaned amounts that were allocated to the General Account. You
may tell Us how to allocate repayments above that amount. If you do not tell
us, an amount equal to the loan repayment will be transferred from the General
Account to the Divisions in the same ratio currently in effect for the
allocation of Net Premiums.
A loan, whether or not repaid, will have a permanent effect on the Cash
Surrender values and on the death benefits. If not repaid, any indebtedness
will reduce the amount of Death Benefit Proceeds and the amount available upon
surrender of the policy.
PREFERRED LOANS. A "Preferred Loan" is a policy loan that is made at a net
cost to the Owner that is less than the net cost of other policy loans.
Starting on the tenth policy anniversary, this policy will be eligible for
"Preferred Loans" subject to the following guidelines:
1. The maximum amount eligible for Preferred Loans during a policy year is
restricted to the lesser of the following values on the first day of
such policy year:
a. The policy loan value; or
b. 10% of the Accumulation Value.
2. When a Preferred Loan is made, interest to the next policy anniversary
will be charged at the rate shown in the Loan Interest provision.
3. Interest credited to the amount of the Accumulation Value offset by a
Preferred Loan:
a. Will be at an annual effective rate that is equal to or less than
the Policy Loan annual effective interest rate; and
b. Will be at a higher rate than the rate used to credit interest to
values offset by any other policy loan. BENEFICIARY AND PROCEEDS
BENEFICIARY. The Beneficiary as named in the application, or later changed by
You, will receive the proceeds upon the death of the Insured. Unless You have
stated otherwise, proceeds will be paid as follows:
1. If any Beneficiary dies before the Insured, that Beneficiary's interest
will pass to any other Beneficiaries according to their respective
interests.
2. If no Beneficiary survives the Insured, proceeds will be paid to You, as
Owner, if You are then living; otherwise proceeds will be paid to Your
estate.
CHANGE OF OWNERSHIP OR BENEFICIARY. You may change the Owner or the
Beneficiary at any time during the lifetime of the Insured unless the previous
designation provides otherwise. To do so, send a Written request to Our Home
Office in a form acceptable to Us. The change will go into effect when We have
recorded the change. However, after the change is recorded, it will be deemed
effective as of the date of Your Written request for change. The change will
be subject to any payment made or action taken by Us before the request is
recorded.
COMMON DISASTER. If We cannot determine whether a Beneficiary or the Insured
died first in a common disaster, We will assume that the Beneficiary died
first. Proceeds will be paid on this basis unless an endorsement to this
policy provides otherwise.
PROCEEDS. Proceeds means the amount payable on:
1. The Maturity Date;
2. Exercise of the full surrender benefit; or
3. The Insured's death.
The proceeds on the Maturity Date will be the Cash Surrender Value. The
proceeds on the Insured's death will be the Death Benefit Amount less any
outstanding policy loan.
All proceeds and partial surrender benefits are subject to the provisions of
the Payment Options section and the other provisions of this policy.
97610 Page 16
<PAGE>
PAYMENT OPTIONS
Instead of being paid in one sum, all or part of the proceeds may be applied
under any of the Payment Options described below. In addition to these
options, other methods of payment may be chosen with Our
consent.
PAYMENT CONTRACT. When proceeds become payable under a Payment Option, a
Payment Contract will be issued to each payee. The Payment Contract will state
the rights and benefits of the payee. It will also name those who are to
receive any balance unpaid at the death of the payee.
ELECTION OF OPTIONS. The Owner may elect or change any Payment Option while
the Insured is living, subject to the provisions of this policy. This election
or change must be In Writing. Within 60 days after the Insured's death, a
payee entitled to proceeds in one sum may elect to receive proceeds under any
option.
OPTION 1. PAYMENTS FOR A SPECIFIED PERIOD: Equal monthly payments will be made
for a specified period. The Option 1 Table in this policy shows the monthly
income for each $1,000 of proceeds applied.
OPTION 2. PAYMENTS OF A SPECIFIED AMOUNT: Equal monthly payments of a
specified amount will be made. Each payment must be at least $60 a year for
each $ 1,000 of proceeds applied. Payments will continue until the amount
applied, with interest, has been paid in full.
OPTION 3. MONTHLY PAYMENTS FOR LIFE: Equal monthly payments will be made for a
specified period, and will continue after that period for as long as the payee
lives. The specified period may be 10, 15 or 20 years. The Option 3 Table in
this policy shows the monthly income for each $1,000 of proceeds applied. If
issued on a Sex Distinct basis, tables are based on the 1983a Male or Female
Mortality Tables adjusted by projection scale G for 9 years, interest at the
rate of 3% per year, and a 2% load. If issued on a Unisex basis, tables are
based on the 1983a Male or Female Tables, adjusted by projection scale G for 9
years, with unisex rates based on 60% female and 40% male, and interest at the
rate of 3% per year, and a 2% load.
At the time payments are to begin under this option, the payee may choose one
of the following:
1. Monthly payments based on the Option 3 Table; or
2. Monthly payments equal to a monthly annuity based on our single premium
immediate annuity rates then in use.
OPTION 4. PROCEEDS LEFT AT INTEREST: Proceeds may be left on deposit with us
for any period up to 30 years. Interest earned on the proceeds may be:
1. Left on deposit to accumulate at the rate of 3% compounded annually; or
2. Paid in installments at the rate for each $1,000 of proceeds of $30
annually, $14.89 semiannually, $7.42 quarterly or $2.47 monthly.
Upon the death of the payee, or at the end of the specified period, any
balance left on deposit will be paid in a lump sum or under Options 1, 2 or 3.
INTEREST RATES. The guaranteed rate of interest for proceeds held under
Payment Options 1, 2, 3 and 4 is 3% compounded annually. We may credit
interest at a higher rate. The amount of any increase will be determined by
Us.
PAYMENTS. The first payment under Options 1, 2 and 3 will be made when the
claim for settlement has been approved. Payments after the first will be made
according to the manner of payment chosen. Interest under Option 4 will be
credited from the date of death and paid or added to the proceeds as provided
in the Payment Contract.
AVAILABILITY OF OPTIONS. If the proposed payee is not a natural person,
payment options may be chosen only with Our consent. If this policy is
assigned, We will have the right to pay the assignee in one sum the amount to
which the assignee is entitled. Any balance will be applied according to the
option chosen.
97610 Page 17
<PAGE>
The amount to be applied under any one option must be at least $2,000. The
payment elected under any one option must be at least $25.
EVIDENCE THAT PAYEE IS ALIVE. Before making any payment under a Payment
Option, We may ask for proof that the payee is alive. If proof is requested,
no payment will be made or considered due until We receive proof.
DEATH OF A PAYEE. If a payee dies, any unpaid balance will be paid as stated
in the Payment Contract. If there is no surviving payee named in the Payment
Contract, We will pay the estate of the payee:
1. Under Options 1 and 3, the value as of the date of death of the
remaining payments for the specified period, discounted at the rate of
interest, compounded annually, that was used in determining the amount
of the monthly payment;
2. Under Options 2 and 4, the balance of any proceeds remaining unpaid with
accrued interest, if any.
WITHDRAWAL OF PROCEEDS UNDER OPTIONS 1 OR 2. If provided in the Payment
Contract, a payee will have the right to withdraw the entire unpaid balance
under Options 1 or 2. Under Option 1, the amount will be the value of the
remaining payments for the specified period discounted at the rate of interest
used in determining monthly income. Under Option 2, the amount will be the
entire unpaid balance.
WITHDRAWAL OF PROCEEDS UNDER OPTION 4. A payee will have the right to withdraw
proceeds left under Option 4 subject to the following rules:
1. The amount to be withdrawn must be $500 or more;
2. A partial withdrawal must leave a balance on deposit of $1,000 or more.
WITHDRAWALS MAY BE DEFERRED. We may defer payment of any withdrawal for up to
6 months from the date We receive a withdrawal request.
ASSIGNMENT. Payment Contracts may not be assigned.
CHANGE IN PAYMENT. The right to make any change in payment is available only
if it is provided in the Payment Contract.
CLAIMS OF CREDITORS. To the extent permitted by law, proceeds will not be
subject to any claims of a Beneficiary's creditors.
GENERAL PROVISIONS
ASSIGNING YOUR POLICY. During the lifetime of the Insured, You may assign this
policy as security of an obligation. We will not be bound by an assignment
unless it is received In Writing at Our Home Office. Two copies of the
assignment must be submitted. We will retain one copy and return the other. We
will not be responsible for the validity of any assignment.
INCONTESTABILITY. We rely on the statements made in the application for the
policy and applications for any reinstatements or increases in Specified
Amount. These statements, in the absence of fraud, are considered
representations and not warranties. No statement may be used in defense of a
claim under the policy unless it is in such applications.
Except as stated below, We cannot contest this policy after it has been in
force during the Insured's lifetime for 2 years from the Date of Issue.
97610 Page 18
<PAGE>
Exceptions: We cannot contest any claim related to an increase in Specified
Amount after such increase has been in effect during the Insured's lifetime
for 2 years.
If this policy is reinstated, We cannot contest this policy after it has been
in force during the Insured's lifetime for 2 years from the date of
reinstatement.
We can contest a reinstatement or an increase in Specified Amount only on the
basis of the information furnished in the application for such reinstatement
or increase.
This 2-year limitation does not apply to any Disability or Accidental Death
Benefit, or to the nonpayment of premium.
SUICIDE EXCLUSION. If the Insured takes his or her own life, while sane or
insane, within 2 years from the Date of Issue, We will limit the Death Benefit
Proceeds to the premiums paid less any policy loans and less any partial cash
surrenders paid.
If there are any increases in the Specified Amount (See the section entitled
"Changing Your Insurance Policy") a new 2 year period shall apply to each
increase beginning on the date of each increase. The Death Benefit Proceeds
will be the costs of insurance associated with each increase.
When the laws of the state in which this policy is delivered require less than
this 2 year period, the period will be as stated in such laws.
AGE OR SEX INCORRECTLY STATED (AGE INCORRECTLY STATED IF ISSUED ON A UNISEX
BASIS). If the (1) age or sex of the Insured (if this policy was issued on a
Sex Distinct Basis) or (2) age of the Insured (if this policy was issued on a
Unisex basis) has been misstated to Us, We will adjust the excess of the Death
Benefit Amount over the Accumulation Value on the date of death to that which
would have been purchased by the Monthly Deduction for the policy month of
death at the correct cost of insurance rate. By age We mean age nearest
birthday as of the Date of Issue.
STATUTORY BASIS OF POLICY VALUES. The Accumulation Values of the policy are
not less than the minimum values required by the law of the state where this
policy is delivered. The calculation of the Accumulation Values includes a
charge for the cost of insurance, as shown in the Table of Guaranteed Monthly
Cost of Insurance Rates. Calculation of minimum Accumulation Values,
nonforfeiture benefits and Guaranteed Cost of Insurance Rates are based on the
Composite 1980 Commissioners Standard Ordinary Male/Female/Unisex (Table B)
Mortality Table for the appropriate sex and age nearest birthday. A detailed
statement of the method of computing values has been filed with the state
insurance department where required.
NO DIVIDENDS. This policy will not pay dividends. It will not participate in
any of our surplus or earnings.
ANNUAL REPORT. We will send You at least once a year an annual report which
will show a summary of all transactions since the last report, including:
1. Premiums paid since the last report;
2. Transfers since the last report;
3. Expense charges deducted since the last report;
4. The cost of insurance deducted since the last report;
5. Partial surrender benefits paid to You since the last report;
6. The amount of any outstanding policy loan;
7. Separate Account Unit Values;
8. The current Cash Surrender and Accumulation Values; and
9. The Death Benefit Amount.
97610 Page 19
<PAGE>
WHEN THIS POLICY TERMINATES. This policy will terminate if:
1. You request that this policy be terminated;
2. The Insured dies;
3. The policy matures; or
4. The Grace Period ends and there is not sufficient Cash Surrender Value
to cover a Monthly Deduction.
REINSTATEMENT. "Reinstating" means placing Your policy in force after it has
terminated at the end of the Grace Period. We will reinstate this policy if We
receive:
1. Your Written request within five years after the end of the Grace Period
and before the Maturity Date; and
2. Evidence of insurability satisfactory to Us; and
3. Payment of enough premium to keep the policy in force for two months;
and
4. Payment or reinstatement of any indebtedness.
The reinstated policy will be in force from the Monthly Deduction day on or
following the date We approve the reinstatement application.
The Accumulation Value at the time of reinstatement will be:
1. The Net Premium allocated in accordance with the premium allocation
percentages at time of lapse unless the reinstatement application
provides otherwise, using Unit Values as of the date of reinstatement;
plus
2. Any loan repaid or reinstated; less
3. The monthly deduction for one month.
If a person other than the Insured is covered by a rider attached to this
policy, coverage will be reinstated according to that rider.
97610 Page 20
<PAGE>
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
<TABLE>
<CAPTION>
ATTAINED AGE ATTAINED AGE
Nearest Birthday MALE Nearest Birthday MALE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
<S> <C> <C> <C>
0 0.35 50 0.56
1 0.09 51 0.61
2 0.08 52 0.67
3 0.08 53 0.73
4 0.08 54 0.80
5 0.08 55 0.88
6 0.07 56 0.96
7 0.07 57 1.05
8 0.06 58 1.14
9 0.06 59 1.24
10 0.06 60 1.35
11 0.06 61 1.48
12 0.07 62 1.62
13 0.08 63 1.78
14 0.10 64 1.95
15 0.11 65 2.15
16 0.13 66 2.36
17 0.14 67 2.58
18 0.15 68 2.82
19 0.16 69 3.07
20 0.16 70 3.36
21 0.16 71 3.70
22 0.16 72 4.08
23 0.16 73 4.52
24 0.15 74 5.01
25 0.15 75 5.54
26 0.14 76 6.11
27 0.14 77 6.71
28 0.14 78 7.33
29 0.14 79 7.99
30 0.14 80 8.71
31 0.15 81 9.52
32 0.15 82 10.45
33 0.16 83 11.50
34 0.17 84 12.67
35 0.18 85 13.93
36 0.19 86 15.25
37 0.20 87 16.63
38 0.22 88 18.06
39 0.23 89 19.55
40 0.25 90 21.11
41 0.27 91 22.80
42 0.30 92 24.66
43 0.32 93 26.82
44 0.35 94 29.67
45 0.38
46 0.41
47 0.44
48 0.48
49 0.52
</TABLE>
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly
cost will be calculated as shown on page 3.
97610M Page 21
<PAGE>
TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
<TABLE>
<CAPTION>
OPTION 1 TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
Number Amount of Number Amount of Number Amount of Number Amount of
of Years Monthly of Years Monthly of Years Monthly of Years Monthly
Payable Installments Payable Installments Payable Installments Payable Installments
<S> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 15 $6.87 25 $4.71 35 $3.82
6 15.14 16 6.53 26 4.59 36 3.76
7 13.16 17 6.23 27 4.47 37 3.70
8 11.68 18 5.96 28 4.37 38 3.65
9 10.53 19 5.73 29 4.27 39 3.60
10 9.61 20 5.51 30 4.18 40 3.55
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
</TABLE>
<TABLE>
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
<CAPTION>
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
Male
<S> <C> <C> <C> <C> <C> <C> <C>
20* $2.95 $2.94 $2.94 50 $4.05 $4.00 $3.93
21 2.97 2.96 2.96 51 4.11 4.06 3.99
22 2.98 2.98 2.98 52 4.18 4.13 4.04
23 3.00 3.00 3.00 53 4.26 4.19 4.10
24 3.02 3.02 3.02 54 4.34 4.27 4.16
25 3.05 3.04 3.04 55 4.42 4.34 4.22
26 3.07 3.06 3.06 56 4.51 4.42 4.28
27 3.09 3.09 3.08 57 4.60 4.50 4.35
28 3.12 3.11 3.11 58 4.69 4.58 4.41
29 3.14 3.14 3.13 59 4.79 4.66 4.47
30 3.17 3.16 3.16 60 4.90 4.75 4.54
31 3.20 3.19 3.18 61 5.01 4.84 4.60
32 3.22 3.22 3.21 62 5.13 4.94 4.67
33 3.25 3.25 3.24 63 5.26 5.03 4.73
34 3.29 3.28 3.27 64 5.39 5.13 4.79
35 3.32 3.31 3.00 65 5.52 5.23 4.85
36 3.35 3.35 3.33 66 5.66 5.33 4.91
37 3.39 3.38 3.36 67 5.81 5.43 4.97
38 3.43 3.42 3.40 68 5.96 5.53 5.02
39 3.47 3.46 3.44 69 6.12 5.63 5.07
40 3.51 3.50 3.47 70 6.28 5.73 5.11
41 3.55 3.54 3.51 71 6.44 5.82 5.15
42 3.60 3.58 3.55 72 6.61 5.91 5.19
43 3.65 3.63 3.59 73 6.78 6.00 5.23
44 3.70 3.67 3.64 74 6.96 6.08 5.26
45 3.75 3.72 3.68 75 7.13 6.16 5.28
46 3.80 3.77 3.73 76 7.30 6.24 5.31
47 3.86 3.83 3.78 77 7.47 6.31 5.33
48 3.92 3.88 3.83 78 7.64 6.37 5.34
49 3.98 3.94 3.88 79 7.81 6.42 5.36
80** 7.97 6.48 5.37
</TABLE>
Payments are based upon the age, nearest birthday, of the Payee on the date
the first payment is due. If monthly installments for two or more specified
periods for a given age are the same, the specified period of longer duration
will apply.
*Also applies to younger ages.
**Also applies to older ages.
97610M Page 22
<PAGE>
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
<TABLE>
<CAPTION>
ATTAINED AGE ATTAINED AGE
Nearest Birthday FEMALE Nearest Birthday FEMALE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
<S> <C> <C> <C>
0 0.24 50 0.41
1 0.07 51 0.44
2 0.07 52 0.48
3 0.07 53 0.51
4 0.06 54 0.55
5 0.06 55 0.59
6 0.06 56 0.63
7 0.06 57 0.67
8 0.06 58 0.71
9 0.06 59 0.75
10 0.06 60 0.79
11 0.06 61 0.85
12 0.06 62 0.92
13 0.06 63 1.01
14 0.07 64 1.11
15 0.07 65 1.23
16 0.08 66 1.35
17 0.08 67 1.47
18 0.08 68 1.59
19 0.09 69 1.72
20 0.09 70 1.86
21 0.09 71 2.05
22 0.09 72 2.27
23 0.09 73 2.55
24 0.10 74 2.88
25 0.10 75 3.25
26 0.10 76 3.67
27 0.10 77 4.11
28 0.11 78 4.59
29 0.11 79 5.11
30 0.11 80 5.71
31 0.12 81 6.39
32 0.12 82 7.19
33 0.13 83 8.12
34 0.13 84 9.18
35 0.14 85 10.34
36 0.15 86 11.60
37 0.16 87 12.97
38 0.17 88 14.45
39 0.19 89 16.05
40 0.20 90 17.79
41 0.22 91 19.72
42 0.24 92 21.89
43 0.26 93 24.44
44 0.28 94 27.67
45 0.30
46 0.32
47 0.34
48 0.36
49 0.39
</TABLE>
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly cost will be
calculated as shown on page 3.
97610F Page 21
<PAGE>
TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
<TABLE>
<CAPTION>
OPTION 1 TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
Number Amount of Number Amount of Number Amount of Number Amount of
of Years Monthly of Years Monthly of Years Monthly of Years Monthly
Payable Installments Payable Installments Payable Installments Payable Installments
<S> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 15 $6.87 25 $4.71 35 $3.82
6 15.14 16 6.53 26 4.59 36 3.76
7 13.16 17 6.23 27 4.47 37 3.70
8 11.68 18 5.96 28 4.37 38 3.65
9 10.53 19 5.73 29 4.27 39 3.60
10 9.61 20 5.51 30 4.18 40 3.55
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
</TABLE>
<TABLE>
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
<CAPTION>
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
Female
<S> <C> <C> <C> <C> <C> <C> <C>
20* $2.85 $2.85 $2.85 50 $3.75 $3.73 $3.69
21 2.87 2.87 2.87 51 3.80 3.78 3.74
22 2.89 2.88 2.88 52 3.86 3.84 3.79
23 2.90 2.90 2.90 53 3.92 3.89 3.85
24 2.92 2.92 2.91 54 3.99 3.96 3.90
25 2.94 2.93 2.93 55 4.06 4.02 3.96
26 2.95 2.95 2.95 56 4.13 4.09 4.02
27 2.97 2.97 2.97 57 4.21 4.16 4.08
28 2.99 2.99 2.99 58 4.29 4.23 4.15
29 3.01 3.01 3.01 59 4.37 4.31 4.21
30 3.03 3.03 3.03 60 4.46 4.39 4.28
31 3.06 3.05 3.05 61 4.56 4.47 4.35
32 3.08 3.08 3.07 62 4.66 4.56 4.42
33 3.10 3.10 3.10 63 4.76 4.65 4.49
34 3.13 3.13 3.12 64 4.88 4.75 4.56
35 3.16 3.15 3.15 65 4.99 4.85 4.63
36 3.19 3.18 3.17 66 5.12 4.95 4.70
37 3.21 3.21 3.20 67 5.25 5.05 4.77
38 3.24 3.24 3.23 68 5.39 5.16 4.83
39 3.28 3.27 3.26 69 5.53 5.27 4.90
40 3.31 3.30 3.29 70 5.69 5.38 4.96
41 3.35 3.34 3.33 71 5.85 5.49 5.02
42 3.38 3.37 3.36 72 6.02 5.60 5.08
43 3.42 3.41 3.40 73 6.19 5.71 5.13
44 3.46 3.45 3.43 74 6.37 5.82 5.17
45 3.50 3.49 3.47 75 6.56 5.92 5.21
46 3.55 3.53 3.51 76 6.75 6.02 5.25
47 3.59 3.58 3.56 77 6.95 6.11 5.28
48 3.64 3.63 3.60 78 7.14 6.20 5.30
49 3.69 3.67 3.65 79 7.34 6.28 5.32
80** 7.54 6.35 5.34
</TABLE>
Payments are based upon the age, nearest birthday, of the Payee on the date
the first payment is due. If monthly installments for two or more specified
periods for a given age are the same, the specified period of longer duration
will apply.
* Also applies to younger ages.
** Also applies to older ages.
97610F Page 22
<PAGE>
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
<TABLE>
<CAPTION>
ATTAINED AGE ATTAINED AGE
Nearest Birthday RATE Nearest Birthday RATE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
<S> <C> <C> <C>
0 0.33 50 0.53
1 0.09 51 0.58
2 0.08 52 0.63
3 0.08 53 0.69
4 0.08 54 0.75
5 0.07 55 0.82
6 0.07 56 0.89
7 0.07 57 0.97
8 0.06 58 1.05
9 0.06 59 1.14
10 0.06 60 1.24
11 0.06 61 1.35
12 0.07 62 1.47
13 0.08 63 1.61
14 0.09 64 1.77
15 0.10 65 1.95
16 0.12 66 2.14
17 0.13 67 2.34
18 0.14 68 2.54
19 0.14 69 2.77
20 0.15 70 3.02
21 0.15 71 3.32
22 0.14 72 3.66
23 0.14 73 4.05
24 0.14 74 4.49
25 0.14 75 4.98
26 0.14 76 5.50
27 0.13 77 6.04
28 0.13 78 6.60
29 0.14 79 7.21
30 0.14 80 7.87
31 0.14 81 8.63
32 0.15 82 9.49
33 0.15 83 10.49
34 0.16 84 11.59
35 0.17 85 12.78
36 0.18 86 14.05
37 0.19 87 15.39
38 0.21 88 16.80
39 0.22 89 18.30
40 0.24 90 19.89
41 0.26 91 21.63
42 0.29 92 23.60
43 0.31 93 25.88
44 0.33 94 28.87
45 0.36
46 0.39
47 0.42
48 0.46
49 0.49
</TABLE>
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly cost will be
calculated as shown on page 3.
97610U Page 21
<PAGE>
TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
<TABLE>
<CAPTION>
OPTION 1 TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
Number Amount of Number Amount of Number Amount of Number Amount of
of Years Monthly of Years Monthly of Years Monthly of Years Monthly
Payable Installments Payable Installments Payable Installments Payable Installments
<S> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 15 $6.87 25 $4.71 35 $3.82
6 15.14 16 6.53 26 4.59 36 3.76
7 13.16 17 6.23 27 4.47 37 3.70
8 11.68 18 5.96 28 4.37 38 3.65
9 10.53 19 5.73 29 4.27 39 3.60
10 9.61 20 5.51 30 4.18 40 3.55
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
</TABLE>
<TABLE>
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
<CAPTION>
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
<S> <C> <C> <C> <C> <C> <C> <C>
20* $2.89 $2.89 $2.89 50 $3.87 $3.84 $3.79
21 2.91 2.91 2.90 51 3.93 3.90 3.85
22 2.93 2.92 2.92 52 3.99 3.96 3.90
23 2.94 2.94 2.94 53 4.06 4.02 3.95
24 2.96 2.96 2.96 54 4.13 4.08 4.01
25 2.98 2.98 2.98 55 4.21 4.15 4.07
26 3.00 3.00 3.00 56 4.28 4.22 4.13
27 3.02 3.02 3.02 57 4.37 4.30 4.19
28 3.04 3.04 3.04 58 4.45 4.38 4.26
29 3.07 3.06 3.06 59 4.55 4.46 4.32
30 3.09 3.09 3.08 60 4.64 4.54 4.39
31 3.11 3.11 3.11 61 4.74 4.63 4.46
32 3.14 3.14 3.13 62 4.85 4.72 4.52
33 3.17 3.16 3.16 63 4.97 4.81 4.59
34 3.20 3.19 3.18 64 5.08 4.91 4.66
35 3.22 3.22 3.21 65 5.21 5.01 4.73
36 3.26 3.25 3.24 66 5.34 5.11 4.79
37 3.29 3.28 3.27 67 5.48 5.21 4.85
38 3.32 3.31 3.30 68 5.62 5.32 4.92
39 3.36 3.35 3.33 69 5.77 5.42 4.97
40 3.39 3.38 3.37 70 5.93 5.53 5.03
41 3.43 3.42 3.40 71 6.09 5.63 5.08
42 3.47 3.46 3.44 72 6.26 5.73 5.13
43 3.51 3.50 3.48 73 6.44 5.84 5.17
44 3.56 3.54 3.52 74 6.62 5.93 5.21
45 3.60 3.59 3.56 75 6.80 6.03 5.24
46 3.65 3.63 3.60 76 6.98 6.12 5.27
47 3.70 3.68 3.65 77 7.17 6.20 5.30
48 3.76 3.73 3.70 78 7.35 6.27 5.32
49 3.81 3.78 3.74 79 7.54 6.34 5.34
80** 7.72 6.41 5.35
</TABLE>
Payments are based upon the age, nearest birthday, of the Payee on the date
the first payment is due. If monthly installments for two or more specified
periods for a given age are the same, the specified period of longer duration
will apply.
* Also applies to younger ages.
** Also applies to older ages.
97610U Page 22
<PAGE>
AMERICAN GENERAL LIFE
INSURANCE COMPANY
This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An Adjustable Death
Benefit is payable upon the Insured's death prior to the Maturity Date.
Investment results are reflected in policy benefits. ACCUMULATION VALUES are
flexible and will be based on the amount and frequency of premiums paid and
the investment results of the Separate Account. NONPARTICIPATING - NOT
ELIGIBLE FOR DIVIDENDS.
For Information, Service or to make a Complaint
Contact your Servicing Agent, or our VUL Administration
2727-A ALLEN PARKWAY
P.O. BOX 4880
HOUSTON, TEXAS 77210-4880
1-888-325-9315
[AMERICAN GENERAL LOGO]
A STOCK COMPANY
A Subsidiary of American General Corporation
97610
EXHIBIT 1.(5)(b)(i)
AMERICAN GENERAL LIFE INSURANCE COMPANY
Home Office: Houston, Texas
APPLICATION FOR LIFE INSURANCE
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
1. NAMES OF PERSONS PROPOSED FOR INSURANCE Sex Relationship Date of Birth Ins. Place of Height Weight
First Middle Last Mo Day Yr Age Birth Ft In
A. JOHN M DOE M Primary 1 - 1 - 62 35 TEXAS 5' 10" 175
Drivers Lic Num & State:____________________________ SS# ___________________
B.
Drivers Lic Num & State:____________________________ SS# ___________________
C.
D.
</TABLE>
For child or family benefits, list only children who are natural or legally
adopted children of the Primary Proposed Insured or Spouse and who actually
reside at the address of the Primary Proposed Insured.
-----------------------------------------------------------------------------
2. PRESENT RESIDENCE OF PRIMARY PROPOSED INSURED
Address 123 MAIN ST.
City HOUSTON State TEXAS ZIP 77041
Telephone (713) 466-3800 No. of Yrs. 10
-----------------------------------------------------------------------------
3. OCCUPATION Proposed Insured A
Occupation BANKER Yrs. 10
Employer Name BANK ONE
Address ________________________________
City____________________________________State______Zip_______
Telephone (___)________________
PROPOSED INSURED B
Occupation ______________ Yrs. ___
Employer Name ____________________
Address ________________________________
City____________________________________State______Zip_______
Telephone (___)________________
-----------------------------------------------------------------------------
4. HAS PROPOSED INSURED A OR B USED TOBACCO IN ANY FORM IN THE PAST 24 MONTHS?
Proposed Insured A [ ] Yes [X] No
Proposed Insured B [ ] Yes [ ] No
-----------------------------------------------------------------------------
5. PLAN OF BASIC INSURANCE:
Amount
UNIVERSAL LIFE $ 25,000
-------------- ---------------
Planned Periodic Premium $______________
Lump Sum Payment $______________
Benefit Option: [ ] 1 - Level [ ] 2 - Increasing
Are you requesting Select Rates? [ ] Yes [ ] No
-----------------------------------------------------------------------------
6. ADDITIONAL BENEFITS TO BE ADDED Amount
[ ] Maturity Extension Rider - Death Benefit
[ ] Maturity Extension Rider - Accumulation Value
[ ] Terminal Illness Rider
[ ] Waiver of Premium/Waiver of Monthly Deduction
[ ] Waiver of Monthly Guarantee Premium
[ ] Accidental Death Benefit $______________
[ ] Spouse/Other Insured Rider $______________
[ ] FIB __________ Units CIB___________ Units
[ ] Additional Insurance Option $______________
[ ] Joint Insurance 4-Year Term $______________
[ ] First-to-die Term Rider $______________
[ ] Joint Term $______________
[ ] Joint ART A n B n $______________
[ ] Automatic Increase Rider _____________%
[ ] Return of Premium Death Benefit Option
[ ] Premium Assurance Rider
[ ] Other __________________________________ $______________
-----------------------------------------------------------------------------
7. PREMIUMS TO BE PAID
[ ] Automatic Bank Check [ ] Direct
[ ] List Bill or Government Allotment List Bill # ___________
Company __________________
[ ] Annually [ ] Semi-Annually [ ] Quarterly
Amount paid with application $ _______________ or None
-----------------------------------------------------------------------------
8. BENEFICIARY DESIGNATION PROPOSED INSURED A
________________________________________________________________________
First Relationship
________________________________________________________________________
Second Relationship
________________________________________________________________________
Trust Name Date of Trust
Proposed Insured B
________________________________________________________________________
First Relationship
________________________________________________________________________
Second Relationship
________________________________________________________________________
Trust Name Date of Trust
-----------------------------------------------------------------------------
9. PREMIUM PAYOR
Name ___________________________________________________
Address _________________________________________________
City ______________________ State _________ ZIP _________
Relationship to Primary Proposed Insured ________________
SECONDARY PAYOR
Name ___________________________________________________
Address _________________________________________________
City ______________________ State _________ ZIP _________
-----------------------------------------------------------------------------
10. POLICYOWNER AND TAXPAYER IDENTIFICATION NUMBER (MUST BE COMPLETED)
Policyowner Name ________________________________________
Address _________________________________________________
City ______________________ State _________ ZIP _________
Social Security or Tax ID Number ________________________
Policyowner Date of Birth _______________________________
[ ] Insured [ ] Other Relationship ____________
CONTINGENT OWNER DESIGNATION
Contingent Policyowner Name _____________________________
Social Security or Tax ID Number ________________________
(Contingent Policyowner designation becomes effective upon the death
of the Primary Owner)
-----------------------------------------------------------------------------
11. INCLUDE AUTOMATIC PREMIUM LOAN IF AVAILABLE? [ ] Yes [ ] No
Home Office Endorsement Only. May not be used in any state where prohibited.
-----------------------------------------------------------------------------
L 8754-95 REV 897 -1-
<PAGE>
12. HAS ANY PERSON PROPOSED FOR INSURANCE DURING THE LAST 12 MONTHS
a. had a heart attack, stroke, cancer, diabetes, or
disorder of the immune system? [ ] YES [ ] NO
b. been confined to a hospital or other health care
facility and/or been advised to have any diagnostic
test or surgery not yet performed? [ ] YES [ ] NO
-----------------------------------------------------------------------------
Temporary insurance is not available if there are any "yes" answers to
question number 1
-----------------------------------------------------------------------------
13. REPLACEMENTS, EXCHANGES, CONVERSIONS
If this is a replacement, required state replacement forms and disclosures
must be used. If state does not require Policy Comparison Form, you must
attach AGL Replacement Comparison Guide (L8726).
a. List below all Life Insurance policies in force and applied for in all
companies.
<TABLE>
(Use explanations section on pg. 3 if necessary.)
<CAPTION>
Proposed Proposed Is Beneficiary
Insured Insured Year Coverage Amount Business or Replace
A B Company Issued Life ADB Personal Yes No
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
Proposed Insured
A B_D
Yes No Yes No
<S> <C> <C> <C> <C>
b. Is this insurance intended to be a 1035 tax-free exchange? [ ] [X] [ ] [ ]
c. Is this insurance intended to be a term conversion? [ ] [X] [ ] [ ]
d. Will this insurance replace, change, or use the cash value of any existing
insurance policy or annuity? [ ] [X] [ ] [ ]
</TABLE>
-----------------------------------------------------------------------------
PART 2. UNDERWRITING INFORMATION
IMPORTANT: (QUESTIONS 1 & 2 MUST BE ANSWERED EVEN IF A MEDICAL EXAM WILL BE
PROVIDED)
-----------------------------------------------------------------------------
PROVIDE DETAILS TO ANY YES ANSWERS UNDER EXPLANATIONS ON PAGE 3
1. HAS ANY PROPOSED INSURED:
Proposed Insured
A B_D
Yes No Yes No
a. in the past 2 years flown in any type of
aircraft or plan to fly in the future, other
than as a passenger? [ ] [X] [ ] [ ]
(If "Yes" complete Military & Civilian Aviation Supplement.)
b. in the past 2 years participated or expect
to participate in any vehicle racing on land
or water, bobsledding, scuba or skin diving,
skydiving or parachuting, ultralight
aviation, or mountaineering? [ ] [X] [ ] [ ]
(If "Yes" complete Avocation Questionnaire.)
c. during the past 90 days submitted an
application for life insurance to any other
company or is any contemplated? [ ] [X] [ ] [ ]
d. ever had a life insurance application
modified, rated, declined, postponed,
withdrawn, canceled, or refused for renewal? [ ] [X] [ ] [ ]
e. any intention of traveling or residing
outside the United States or Canada within
the next 24 months [ ] [X] [ ] [ ]
f. during the past 3 years been refused a
driver's license, had a moving violation, or
been involved in 1 or more accidents? [ ] [X] [ ] [ ]
(If "Yes" give license number, issue state & details.)
g. ever used cocaine, barbiturates, heroin, or
other narcotic drugs, except as legally
prescribed by a physician? [ ] [X] [ ] [ ]
h. ever sought, received advice, counseling or
treatment for the use of alcohol, marijuana,
barbiturates, or drugs including
prescription drugs? [ ] [X] [ ] [ ]
-----------------------------------------------------------------------------
2. HAS ANY PROPOSED INSURED EVER BEEN DIAGNOSED
OR TREATED BY ANY MEMBER OF THE MEDICAL
PROFESSION FOR ACQUIRED IMMUNE DEFICIENCY
SYNDROME (AIDS)? [ ] [X] [ ] [ ]
-----------------------------------------------------------------------------
3. HAS ANY PROPOSED INSURED IN THE PAST 3 YEARS EVER HAD:
a. fainting spells, nervous disorder,
convulsions or paralysis? [ ] [X] [ ] [ ]
b. pain or discomfort in the chest, or
shortness of breath? [ ] [X] [ ] [ ]
c. disorder of the stomach, intestines,
rectum or blood in the urine? [ ] [X] [ ] [ ]
-----------------------------------------------------------------------------
4. HAS ANY PROPOSED INSURED EVER CONSULTED A PHYSICIAN FOR OR BEEN DIAGNOSED
OR TREATED FOR:
Proposed Insured
A B_D
Yes No Yes No
a. mental disorder, epilepsy or stroke?
b. disease or disorder of the heart or blood
vessels, heart attack, high blood
pressure, or rheumatic fever? [ ] [X] [ ] [ ]
c. elevated cholesterol? [ ] [X] [ ] [ ]
d. disease or disorder of the lungs, asthma,
emphysema, or tuberculosis? [ ] [X] [ ] [ ]
e. disease or disorder of stomach,
intestines, rectum, liver, or gall
bladder? [ ] [X] [ ] [ ]
f. disease or disorder of the kidney,
bladder, or prostate gland? [ ] [X] [ ] [ ]
g. sugar, albumin, blood, or pus in the
urine? [ ] [X] [ ] [ ]
h. cancer, tumor, syphilis, diabetes, gland
or blood disorder, ulcer, rupture, or
disease or disorder of the breast or
reproductive organs? [ ] [X] [ ] [ ]
-----------------------------------------------------------------------------
5. HAS ANY PROPOSED INSURED DURING THE PAST 3 YEARS:
a. received or claimed disability or
hospital indemnity benefits or a pension
for any injury, sickness, disability or
impaired condition? [ ] [X] [ ] [ ]
b. had any other impairment, sickness,
laboratory tests, or diagnostic
procedures? [ ] [X] [ ] [ ]
c. been confined in a hospital or other
health care facility, had a blood
transfusion, or had surgery performed,
advised, or contemplated? [ ] [X] [ ] [ ]
-----------------------------------------------------------------------------
6. Is any Proposed Insured now taking any
medication or under any treatment? [ ] [X] [ ] [ ]
-----------------------------------------------------------------------------
7. Medical Exam Certificate (Complete when submitting a medical examination
from another company.)
a. Attached examination is on the life of:
____________________________________________________
b. Name of insurance company for which examination was made and date of
the examination:
____________________________________________________
Company Date of Exam
c. Has Proposed Insured A or B consulted a
doctor or other practitioner or received
medical or surgical advice since the date
of the examination? [ ] [X] [ ] [ ]
d. To the best of Proposed Insured A's or
B's knowledge and belief, are any
statements in the examination now
inaccurate, as of today? [ ] [X] [ ] [ ]
-----------------------------------------------------------------------------
L 8754-95 REV 897 -2-
<PAGE>
-----------------------------------------------------------------------------
8. FAMILY HISTORY
<TABLE>
PROPOSED INSURED A
<CAPTION>
Family If living If not living, State of health or
History current age(s) age at death cause & date of death
<S> <C> <C> <C>
Father
Mother
Brothers
& Sisters
</TABLE>
<TABLE>
PROPOSED INSURED B
<CAPTION>
Family If living If not living, State of health or
History current age(s) age at death cause & date of death
<S> <C> <C> <C>
Father
Mother
Brothers
& Sisters
</TABLE>
-----------------------------------------------------------------------------
9. PERSONAL PHYSICIAN INFORMATION
Proposed Insured A
Who is your personal physician?
Name: ____________________________________________________________
Address: _________________________________________________________
City ____________________________ State ___________ Zip___________
Phone: __________________________________________________________
Date personal physician was last seen? ___________________________
Reason Seen? _____________________________________________________
Proposed Insured B
Who is your personal physician?
Name: ____________________________________________________________
Address: _________________________________________________________
City ____________________________ State ___________ Zip___________
Phone: __________________________________________________________
Date personal physician was last seen? ___________________________
Reason Seen? _____________________________________________________
-----------------------------------------------------------------------------
EXPLANATIONS:
Details of any "Yes" answers to questions 1-7. Identify question number;
circle applicable items; include diagnosis, treatment dates, duration, and
names and addresses of all attending physicians and health care facilities.
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUES (Proposed) Insured A QUES (Proposed) Insureds B_D
<S> <C> <C> <C>
</TABLE>
-----------------------------------------------------------------------------
PART 3. FINANCIAL INFORMATION
FINANCIAL INFORMATION MUST BE COMPLETED (1) FOR BUSINESS INSURANCE OR (2) FOR
A PROPOSED INSURED AGE 65 OR OVER OR (3) WHERE THE FACE AMOUNT EXCEEDS
$250,000 FOR PROPOSED INSUREDS UNDER AGE 65. IF FACE AMOUNT APPLIED FOR IS $1
MILLION OR MORE, PROVIDE AN EXPANDED FINANCIAL STATEMENT. I BELIEVE THAT THIS
PURCHASE OF LIFE INSURANCE IS SUITABLE FOR THIS APPLICANT/INSURED, BASED UPON
THE APPLICANT'S NEEDS, FINANCIAL SITUATION AND INSURANCE OBJECTIVES.
-----------------------------------------------------------------------------
1. FOR PERSONAL INSURANCE:
a. What is the purpose of the insurance? Check all that apply.
[ ] Estate preservation [ ] Family protection [ ] Mortgage protection
[ ] Charitable [ ] Other ____________________
b. What is the Proposed Insured(s)
1) Annual earned income $____________________
2) Annual interest & other income $____________________
(include retained earnings)
3) Total assets $____________________
4) Total liabilities $____________________
2. FOR BUSINESS INSURANCE:
a. What is the purpose of the insurance? Check all that apply.
[ ] Key person [ ] Buy-Sell [ ] Split dollar [ ] Stock redemption
[ ] Creditor [ ] Other
b. Annual net profit before taxes: Last year $____________________
2 years ago $____________________ net worth $____________________
c. If key person insurance: Retained earnings $ __________
Yes No
1) Are all partners or key people to be covered? [ ] [ ]
2) Does either Proposed Insured have an ownership
interest in the business? [ ] [ ]
If "Yes" what is Proposed Insured A's percent of ownership?__________%
If "Yes" what is Proposed Insured B's percent of ownership?__________%
-----------------------------------------------------------------------------
L 8754-95 REV 897 -3-
<PAGE>
-----------------------------------------------------------------------------
SPECIAL INSTRUCTIONS
-----------------------------------------------------------------------------
AUTHORIZATION TO OBTAIN AND DISCLOSE INFORMATION
I hereby give my consent to: (1) any physician or medical practitioner; (2)
hospital, clinic, or other health care facility; (3) insurance or reinsurance
company; (4) consumer reporting agency, insurance support organization; (5)
my employer; or (6) the Medical Information Bureau, Inc., to give to American
General Life Insurance Company (American General Life) all information it has
pertaining to: (1) my medical consultations, treatments or surgeries; (2)
hospital confinements which concern the physical and mental condition of
myself, my spouse or my minor children; (3) my use of drugs or alcohol; or
(4) any other non-health (non-medical) information.
In turn, American General Life is free to disclose such information and any
information developed during its evaluation of my application to: (1) its
reinsurers; (2) the Medical Information Bureau, Inc.; (3) other insurance
companies; (4) me; (5) any physician designated by me; or (6) any person or
entity required to receive such information by law or as I may further
consent.
I, as well as any person authorized to act on my behalf, may, upon written
request, obtain a copy of this consent from American General Life.
This consent shall be valid for thirty (30) months from the date stated
below. I agree that a photocopy of this consent shall be as valid as the
original. I authorize American General Life to obtain an investigative
consumer report on me. I understand that I may: (1) request to be interviewed
in connection with the preparation of the investigative consumer report; and
(2) receive, upon written request, a copy of such report if no personal
interview is in fact conducted.
DECLARATION. I have read the above statements or they have been read to me. I
represent that the above statements are true and complete to the best of my
knowledge and belief. I understand that any misrepresentation contained in
this application and relied on by the Company may be used to reduce or deny a
claim or void the policy if it is within its contestable period and if such
misrepresentation materially affects the acceptance of the risk. Except as
may be provided in a Limited Temporary Life Insurance Agreement for which all
eligibility requirements are met, I understand and agree that no insurance
shall be in effect pursuant to this application, or under any policy issued
by the Company, until: (1) the policy has been delivered and accepted; (2)
the full first mode premium for the issued policy has been paid; and, (3)
between the date of the application and the delivery and acceptance of the
policy, there has been no material change in the health of any person
proposed for insurance. I understand and agree that no agent is authorized
to: (1) accept risks or pass upon insurability; (2) make or modify contracts;
or (3) waive any of the Company's rights or requirements.
I have received a copy of the Fair Credit Reporting Act, Medical Information
Bureau (MIB), Insurance Information Practices, and Telephone Interview
Information notices.
IF ELIGIBLE: I have received and accepted the Limited Temporary Life
Insurance Agreement. Temporary insurance is available only if: (1) the full
first mode premium is submitted with this application; and (2) only "No"
answers have been given in Part 1, Question 12.
Any person who includes any false or misleading information on an application
for insurance policy is subject to criminal and civil penalties.
-----------------------------------------------------------------------------
UNDER PENALTIES OF PERJURY, I CERTIFY: (1) THAT THE NUMBER SHOWN ON THIS
APPLICATION IS MY CORRECT SOCIAL SECURITY (OR TAXPAYER IDENTIFICATION) NUMBER
AND (2) THAT I AM NOT SUBJECT TO BACKUP WITHHOLDING UNDER SECTION
3406(a)(1)(C) OF THE INTERNAL REVENUE CODE. THE INTERNAL REVENUE SERVICE DOES
NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
-----------------------------------------------------------------------------
Signed at ____________________ _____________________ Date: ______________
CITY STATE
_______________________________
SIGNATURE OF PROPOSED INSURED A
(If below age 15, signature of parent or guardian.)
_______________________________
SIGNATURE OF OWNER/TRUSTEE (If other than
Primary Proposed Insured. Show officer's title if signing for firm.)
_______________________________
SIGNATURE OF OWNER
_______________________________
SIGNATURE OF PROPOSED INSURED B
_______________________________
SIGNATURE OF OWNER
_______________________________
SIGNATURE OF OWNER
I certify that I have truthfully and accurately recorded on the application
the information supplied by the Proposed Insured(s) and personally witnessed
the signature(s) of the Proposed Insured(s).
_______________________________
AGENT NAME (Please Print)
_______________________________ __________ _________________
SIGNATURE OF AGENT AGENT NO. STATE LICENSE NO.
-----------------------------------------------------------------------------
L 8754-95 REV 897 -4-
<PAGE>
-----------------------------------------------------------------------------
AGENT'S REPORT (MUST be completed to issue policy.)
-----------------------------------------------------------------------------
1. IF PRIMARY PROPOSED INSURED HAS LIVED AT PRESENT ADDRESS LESS THAN 5
YEARS, LIST PREVIOUS ADDRESSES FOR THE PAST 5 YEARS, WITH DATES.
List address where correspondence should be sent, if different than the
Primary Proposed Insured's or Owner's address shown in Part 1.
-----------------------------------------------------------------------------
2. CURRENT MARITAL STATUS
[ ] Married [ ] Single [ ] Divorced [ ] Separated [ ] Widowed
-----------------------------------------------------------------------------
3. IF MARRIED, WHAT AMOUNT OF INSURANCE IS IN FORCE
ON THE SPOUSE? $_________________
-----------------------------------------------------------------------------
4. IF PRIMARY PROPOSED INSURED IS A CHILD, WHAT AMOUNT OF INSURANCE IS IN
FORCE ON THE FATHER AND/OR MOTHER? $_________________
-----------------------------------------------------------------------------
5. HOW LONG HAVE YOU KNOWN THE PROPOSED INSURED(S)?
Insured A ______________ Insured B ______________
-----------------------------------------------------------------------------
6. ARE YOU RELATED BY BLOOD OR MARRIAGE TO ANY PROPOSED INSURED?
[ ] Yes [ ] No Relationship ______________
-----------------------------------------------------------------------------
7. DID YOU PERSONALLY SEE ALL PROPOSED INSUREDS AND ASK EACH AND EVERY
QUESTION AND ACCURATELY RECORD THEIR ANSWERS YOURSELF?
[ ] Yes [ ] No If "No" give details in Remarks.
-----------------------------------------------------------------------------
8. WHICH OF THE FOLLOWING HAVE YOU SCHEDULED?
Proposed Insured
A B
Blood Profile [ ] [ ]
HOS [ ] [ ]
Inspection [ ] [ ]
Resting EKG [ ] [ ]
Stress EKG [ ] [ ]
Chest X-Ray [ ] [ ]
Para Med ___________________________________________
NAME OF EXAMINER/SERVICE DATE
Medical ___________________________________________
NAME OF EXAMINER/SERVICE DATE
APS from ___________________________________________
DOCTOR DATE
APS from ___________________________________________
DOCTOR DATE
-----------------------------------------------------------------------------
9. COMPLETE IF PART 3 NOT COMPLETED
a. Purpose of insurance. Check all that apply.
[ ] Estate preservation [ ] Family protection [ ] Charitable
[ ] Mortgage protection [ ] Other _______________
b. Annual earned income of the Proposed Insured(s) or of the Payor, if
other than the Primary Proposed Insured
Proposed Insured A $________________
Proposed Insured B $________________
-----------------------------------------------------------------------------
10. TELEPHONE INTERVIEW INFORMATION
Best time to call Proposed Insured(s) at
Business (___)____________ Home (___)_______________
Time______________________ Time______________________
-----------------------------------------------------------------------------
11. AGENT(S) TO RECEIVE COMMISSION & VOLUME CREDIT
<TABLE>
<CAPTION>
(Circle letter to indicate who Agency Agent Percent
should receive correspondence.) Number Number of credit
<S> <C> <C> <C>
a.
b.
c.
</TABLE>
-----------------------------------------------------------------------------
12. To the best of your knowledge, will the insurance applied for replace or
change existing insurance or annuity in this or any other company?
[ ] Yes [ ] No
(If "Yes", complete requirement of the state of residence.)
-----------------------------------------------------------------------------
REMARKS:
-----------------------------------------------------------------------------
_______ __________________________________ ___________________________
Date Contact Person if other than Agent SIGNATURE OF AGENT
__________________________________ ___________________________
Telephone No. of Agent PLEASE PRINT NAME
__________________________________ ___________________________
Facsimile No. of Agent STREET ADDRESS (Please Print)
___________________________
CITY STATE ZIP
-----------------------------------------------------------------------------
L 8754-95 REV 897 -5-
<PAGE>
-----------------------------------------------------------------------------
BANK DRAFT INFORMATION
-----------------------------------------------------------------------------
The Automatic Bank Check plan, commonly known as ABC or Electronic Funds
Transfer, is a preauthorized debit service which offers a convenient way to
pay your insurance premiums. Under the ABC plan, your insurance premiums are
collected from your bank account electronically. After each premium payment
has been withdrawn from your bank account, a single-line entry in the amount
of your premium payment will appear on your bank statement. That entry will
be your receipt for payment of your premium. When paying with ABC, you no
longer have to write additional checks or mail any premium payments. As long
as you maintain a sufficient balance in your bank account, your insurance
premiums are automatically paid from your account with no further effort on
your part.
PREAUTHORIZED DEBIT AGREEMENT
I, the undersigned bank account owner, hereby authorize and request American
General Life Insurance Company ("Company") to initiate electronic or other
commercially accepted type debits against the indicated bank account in the
depository institution named below ("Depository") for the payment of premiums
and other indicated charges due on the insurance policy or policies listed
below (hereafter referred to as "Policy", whether one or more), and to
continue to initiate such debits in the event of a conversion, renewal or
other change to any such policy. I hereby agree to indemnify and hold the
Company harmless from any loss, claim or liability of any kind by reason or
dishonor of any debit.
I understand that this Authorization will not affect the terms of the Policy,
other than the mode of payment, and that if premiums are not paid within the
applicable grace period, the Policy will terminate, subject to any applicable
nonforfeiture provision. I acknowledge that the debit appearing on my bank
statement shall constitute my receipt of payment, but no payment is deemed
made until the company receives actual payment in its Home Office. I
understand that this Authorization will not result in any insurance becoming
effective under any conditional receipt or temporary insurance unless all
terms of such conditional receipt or temporary insurance have been met.
I agree that this Authorization may be terminated by me or the Company at any
time and for any reason by providing written notice of such termination to
the non-terminating party and may be terminated by the Company immediately if
any debt is not honored by the Depository named below for any reason.
Policy No. Insured Premium Amount
______________________ ______________________ ______________________
______________________ ______________________ ______________________
______________________ ______________________ ______________________
Bank Account Number ______________________ FREQUENCY: [ ] Monthly
Transit Routing Number____________________ [ ] Quarterly
Name of Depository _______________________ [ ] Semi-Annually
Address of Depository ____________________ [ ] Annually
Preferred withdrawal date _________________
[ ] Please initiate debits against my account for all outstanding premiums
due.
_______________________________ ________
Signature of Bank Account Owner Date
PLEASE ATTACH VOIDED CHECK
-----------------------------------------------------------------------------
L 8754-95 REV 897 -6-
<PAGE>
-----------------------------------------------------------------------------
AMERICAN GENERAL LIFE INSURANCE COMPANY
Home Office: Houston, Texas
LIMITED TEMPORARY LIFE INSURANCE AGREEMENT
Received $_______________________ on this date from _______________________ .
This amount was paid when, on this date, a life insurance application was
signed in which is named as the Primary Proposed Insured. We agree to provide
temporary life insurance coverage as described below, subject to the rules
that follow:
ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO THE COMPANY: DO NOT MAKE CHECK
PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK.
NOTE: AGENT DOES NOT HAVE THE AUTHORITY TO ACCEPT A PREMIUM (INCLUDING
AUTOMATIC BANK DRAFT CHECK, SALARY SAVINGS OR GOVERNMENT ALLOTMENT) WITH THIS
APPLICATION IF THE CONDITIONS IN THE DECLARATION CANNOT BE MET; IF ANY PART
OF QUESTION 12 HAS BEEN ANSWERED "YES", ANSWERED FALSELY, OR LEFT BLANK, THIS
AGREEMENT WILL BE VOID AND ANY PAYMENT SUBMITTED WILL BE REFUNDED.
1. The full first mode premium must be submitted with this application. (Any
payment submitted must be honored on its first presentation for payment.)
2. The answer to all parts of question 12 must be "NO".
3. Upon receipt of due proof of the death of any person to be insured during
the period covered by this agreement, the total amount we will pay under
the policy, any riders, and this agreement, will be the lesser of:
(a) the amount applied for on such person; or
(b) $300,000 and the amount of any premium paid for coverage in excess of
$300,000 on such person.
4. Such payment will be made in one sum to the beneficiary stated in the
application. If death is due to suicide, payment will be limited to the
return of the amount paid. Coverage under this agreement will be subject
to the terms of the policy for which application is made.
5. Coverage will begin on the latest of the following dates:
(a) the date of the application;
(b) the date that all medical examinations have been taken; or
(c) the date requested in the application.
6. Coverage under this agreement will cease on the earliest of the following
dates:
(a) the date we issue the policy as applied for;
(b) the date a policy issued other than as applied for is offered to the
applicant;
(c) the date we decline the application;
(d) the date we state that the application will not be considered on a
prepaid basis; or
(e) 60 days from the date coverage begins under this agreement.
7. Any payment submitted to and accepted by the Company will be:
(a) applied to pay the first premium due if the policy is issued as
applied for;
(b) applied toward payment of the first premium if a policy is issued
other than as applied for and is accepted by the applicant;
(c) refunded if we decline the application or if the applicant refuses to
accept a policy issued other than as applied for.
No changes may be made in the terms and conditions of this form.
No statement which claims to make such a change will bind the Company.
I understand and agree that no agent is authorized to accept risks or pass
upon insurability, to make or modify contracts, or to waive any of the
company's rights or requirements.
Signed at ____________________ _____________________ Date: ______________
CITY STATE
_________________________ _____________________
SIGNATURE OF AGENT AGENT NUMBER
-----------------------------------------------------------------------------
L 8754-95 REV 897 -7-
<PAGE>
DETACH THIS NOTICE & LEAVE IT WITH THE PROPOSED INSURED
AMERICAN GENERAL LIFE INSURANCE COMPANY
Home Office: Houston, Texas
NOTICE TO PROPOSED INSURED
-----------------------------------------------------------------------------
FAIR CREDIT REPORTING ACT
In compliance with the Fair Credit Reporting Act, as amended, we advise you
that we may, as a part of our normal procedure for processing your contract
application, request that an investigative consumer report be prepared
whereby information is obtained through personal interviews with your
neighbors, friends, former employers, primary insurance company or others
with whom you are acquainted. This inquiry includes information as to your
character, general reputation, personal characteristics and mode of living.
You have the right to make a written request to our home office within a
reasonable period of time to receive additional, detailed information about
the nature and scope of this investigation, if one is made. Please address
your request to New Business, American General Life Insurance Company, P.O.
Box 1931, Houston, Texas 77251-1931. These reports are obtained in your best
interest. They assist us in determining that the Company's insureds meet
certain standards, thus allowing us to continue offering coverage at the
lowest possible cost to all who qualify.
MEDICAL INFORMATION BUREAU
Information regarding your insurability will be treated as confidential.
American General Life Insurance Company or its reinsurers may, however, make
a brief report thereon to the Medical Information Bureau, a non-profit
membership organization of life insurance companies, which operates an
information exchange on behalf of its members. If you apply to another Bureau
member company for life or health insurance coverage, or a claim for benefits
is submitted to such a company, the Bureau, upon request, will supply such
company with the information in its file.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the Bureau's file, you may contact the Bureau and seek a
correction in accordance with the procedures set forth in the Federal Fair
Credit Reporting Act. The address of the Bureau's information office is Post
Office Box 105, Essex Station, Boston, Massachusetts 01112, telephone number
(617) 426-3660.
American General Life Insurance Company or its reinsurers may also release
information in its file to other life insurance companies to whom you may
apply for life or health insurance, or to whom a claim for benefits may be
submitted.
INSURANCE INFORMATION PRACTICES
To issue an insurance policy, we need to obtain information about you and any
other persons proposed for insurance. Some of that information will come from
you and some will come from other sources. That information and any
subsequent information collected by us may in certain circumstances be
disclosed to third parties without your specific authorization.
You have a right of access and correction with respect to the information
collected about you except information which relates to a claim or civil or
criminal proceeding.
If you wish to have a more detailed explanation of our information practices,
please contact: American General Life Insurance Company, New Business, P.O.
Box 1931, Houston, Texas 77251-1931.
TELEPHONE INTERVIEW INFORMATION (IF APPLICABLE)
To help us process your application as rapidly as possible, American General
Life may have one of its representatives contact you by telephone and at your
convenience to secure additional underwriting information.
You may be assured that all information developed in this interview will be
kept in strictest confidence and used solely for insurance purposes.
-----------------------------------------------------------------------------
L 8754-95 REV 897 -8-
EXHIBIT 1.(5)(b)(ii)
AMERICAN GENERAL LIFE INSURANCE COMPANY ("AGL")
Home Office: Houston, Texas
Variable Universal Life Insurance Supplemental Application
(This supplement must accompany the appropriate application for life
insurance.)
-----------------------------------------------------------------------------
PART 1. Applicant INFORMATION
Supplement to the application on the life of _____________________,
dated ____________________.
-----------------------------------------------------------------------------
PART 2. Initial Allocation Percentages
Investment Options: In the "Premium Allocation" column, indicate how each
premium received is to be allocated. In the "Deduction Allocation" column,
indicate which investment options are to be used for the deduction of monthly
account charges. Total allocations in each column must equal 100%. Use whole
percentages only.
<TABLE>
<CAPTION>
Premium Deduction
Allocation Allocation
<S> <C> <C>
AGL Declared Fixed Interest Account (125) ____% ____%
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. International Equity Division (126) ____% ____%
AIM V.I. Value Division (127) ____% ____%
AMERICAN GENERAL SERIES PORTFOLIO COMPANY
International Equities Division (128) ____% ____%
MidCap Index Division (129) ____% ____%
Money Market Division (130) ____% ____%
Stock Index Division (131) ____% ____%
DREYFUS VARIABLE INVESTMENT FUND
Quality Bond Division (132) ____% ____%
Small Cap Division (133) ____% ____%
MFS VARIABLE INSURANCE TRUST
MFS Emerging Growth Series (134) ____% ____%
MORGAN STANLEY UNIVERSAL FUNDS, INC.
Equity Growth Division (135) ____% ____%
High Yield Division (136) ____% ____%
PUTNAM VARIABLE TRUST
Putnam VT Diversified Income Division (137) ____% ____%
Putnam VT Growth and Income Division (138) ____% ____%
Putnam VT Int'l Growth and Income Division (139) ____% ____%
SAFECO RESOURCE SERIES TRUST
Equity Division (140) ____% ____%
Growth Division (141) ____% ____%
VAN KAMPEN AMERICAN CAPITAL LIFE INVESTMENT TRUST
Strategic Stock Division (142) ____% ____%
Other: ________________________________ ____% ____%
100% 100%
</TABLE>
-----------------------------------------------------------------------------
PART 3. Dollar Cost Averaging
Dollar Cost Averaging: ($5,000 minimum beginning accumulation value) An
amount can be systematically transferred from the Money Market Division (130)
and transferred to one or more of the investment options below. The AGL
Declared Fixed Interest Account is not available for Dollar Cost Averaging.
Please refer to the prospectus for more information on the Dollar Cost
Averaging option.
Day of the month for transfers: (Choose a day of the month between 1-28.)
Frequency of transfers: [ ] Monthly [ ] Quarterly [ ]Semiannually [ ] Annually
Transfer $________ ($100 minimum, whole dollars only) from the AGSPC Money
Market Division to the following division(s):
<TABLE>
<S> <C>
(126) AIM V.I. International Equity $___________
(127) AIM V.I. Value $___________
(128) International Equities $___________
(129) MidCap Index $___________
(131) Stock Index $___________
(132) Quality Bond $___________
(133) Small Cap $___________
(134) MFS Emerging Growth Series $___________
(135) Equity Growth $___________
(136) High Yield $___________
(137) Putnam VT Diversified Income $___________
(138) Putnam VT Growth and Income $___________
(139) Putnam VT Int'l Growth and Income $___________
(140) Equity $___________
(141) Growth $___________
(142) Strategic Stock $___________
Other: ________________________________ $___________
</TABLE>
-----------------------------------------------------------------------------
PART 4. Automatic Rebalancing
Automatic Rebalancing: ($5,000 initial minimum beginning accumulation value)
Variable division assets will be automatically rebalanced based on the
premium percentages designated in Part 2. If the AGL Declared Fixed Interest
Account has been designated for premium allocation in Part 2, the rebalancing
will be based on the proportion allocated to the variable divisions. Please
refer to the prospectus for more information on the Automatic Rebalancing
option.
[ ] Check here for Automatic Rebalancing.
Frequency: [ ] Quarterly [ ] Semiannually [ ] Annually
NOTE: Automatic Rebalancing is not available if the Dollar Cost Averaging
option has been chosen.
-----------------------------------------------------------------------------
L 8992-97 PAGE 1 OF 2
<PAGE>
AMERICAN GENERAL LIFE INSURANCE COMPANY
Home Office: Houston, Texas
-----------------------------------------------------------------------------
PART 5. Telephone Authorization
I (or we, if Joint Owners), hereby authorize American General Life Insurance
Company ("AGL") to act on telephone instructions to transfer values among the
variable divisions and the AGL Declared Fixed Interest Account and to change
allocations for future purchase payments and monthly deductions given by:
(Initial appropriate box below.)
[ ] Policy Owner(s)_ if Joint Owners, either of us acting independently.
[ ] Policy Owner(s) or the Agent/Registered Representative who is appointed
to represent AGL and the firm authorized to service my policy.
AGL and any person designated by this authorization will not be responsible
for any claim, loss or expense based upon telephone instructions received and
acted on in good faith, including losses due to telephone instruction
communication errors. AGL's liability for erroneous transfers and
allocations, unless clearly contrary to instructions received, will be
limited to correction of the allocations on a current basis. If an error,
objection or other claim arises due to a telephone transaction, I will notify
AGL in writing within five working days from receipt of confirmation of the
transaction from AGL. I understand that this authorization is subject to the
terms and provisions of my variable universal life insurance policy and its
related prospectus. This authorization will remain in effect until my written
notice of its revocation is received by AGL at its home office.
[ ] Initial here to decline the above telephone Authorization.
-----------------------------------------------------------------------------
PART 6. Suitability (All questions must be answered.)
YES NO
1. Have you, the Proposed Insured or Owner (if different),
received the variable universal life insurance policy
prospectus and the prospectuses describing the [ ] [ ]
investment options?
(If "yes," please furnish the Prospectus dates.)
Variable Universal Life Insurance Policy Prospectus: _________________
Supplements (if any): _________________
2. Do you understand that under the Policy applied for:
a. The amount or duration of the death benefit may
increase or decrease, depending on the investment
experience of the Separate Account? [ ] [ ]
b. The Policy values may increase or decrease, depending
on the investment experience of the Separate Account,
the AGL Declared Fixed Interest Account accumulation,
and certain expense deductions? [ ] [ ]
c. The Policy is designed to provide life insurance
coverage and to allow for the accumulation of values
in the Separate Account? [ ] [ ]
3. Do you believe the Policy you selected meets your
insurance and investment objectives and your anticipated
financial needs? [ ] [ ]
-----------------------------------------------------------------------------
Signed at: ___________________________ Date: _____________________
City
________________________________________
Signature of Primary Proposed Insured
________________________________________
Signature of Owner (if different from Proposed Insured)
________________________________________
Signature of Joint Owner (if applicable)
________________________________________
Signature of Registered Representative
________________________________________
Print Name of Broker/Dealer
________________________________________
Signature of Broker/Dealer's Licensed Principal
-----------------------------------------------------------------------------
L 8992-97 PAGE 2 OF 2
EXHIBIT 7
LIMITED POWER OF ATTORNEY
WHEREAS, American General Life Insurance Company, a Texas company (and
its successors, if applicable) ("Company"), intends from time to time to file
with the Securities and Exchange Commission ("Commission"), one or more Form
S-6 Registration Statement(s) under the Securities Act of 1933 and one or more
Form N-8B-2 Registration Statement(s) under the Investment Company Act of
1940, on behalf of the Company and the Separate Account(s) maintained or to be
maintained by the Company, with such amendments thereto as may be necessary or
appropriate, together with any and all exhibits and other documents related
thereto;
NOW, THEREFORE, the undersigned individual, in his capacity as a
director or officer of the Company, hereby appoints Thomas B. Phillips and
Steven A. Glover, and each of them, either of whom may act without the joinder
of the other, his true and lawful attorney-in-fact and with full power of
substitution and resubstitution, to execute in his name, place, and stead, in
his capacity as a director or officer or both, as the case may be, of the
Company, any and all Form S-6 and Form N-8B-2 Registration Statements and all
amendments thereto; and any related Form N-8A notices of registration and
applications for exemptions or amendments thereto, as each said
attorney-in-fact shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, and to file the
same or cause the same to be filed with the Commission. The above-named
attorneys-in-fact shall each have full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every
act whatsoever necessary or desirable in connection with any and all Form S-6
and Form N-8B-2 Registration Statements, and any and all amendments thereto,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of each
said attorney-in-fact.
EXECUTED this 10th day of NOVEMBER, 1997.
/s/ROYCE G. IMHOFF, II
----------------------
Royce G. Imhoff, II
<PAGE>
LIMITED POWER OF ATTORNEY
WHEREAS, American General Life Insurance Company, a Texas company (and
its successors, if applicable) ("Company"), intends from time to time to file
with the Securities and Exchange Commission ("Commission"), one or more Form
S-6 Registration Statement(s) under the Securities Act of 1933 and one or more
Form N-8B-2 Registration Statement(s) under the Investment Company Act of
1940, on behalf of the Company and the Separate Account(s) maintained or to be
maintained by the Company, with such amendments thereto as may be necessary or
appropriate, together with any and all exhibits and other documents related
thereto;
NOW, THEREFORE, each of the undersigned individuals, in his capacity as
a director or officer of the Company, hereby appoints Thomas B. Phillips and
Steven A. Glover, and each of them, either of whom may act without the joinder
of the other, his true and lawful attorney-in-fact and with full power of
substitution and resubstitution, to execute in his name, place, and stead, in
his capacity as a director or officer or both, as the case may be, of the
Company, any and all Form S-6 and Form N-8B-2 Registration Statements and all
amendments thereto; and any related Form N-8A notices of registration and
applications for exemptions or amendments thereto, as each said
attorney-in-fact shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith, and to file the
same or cause the same to be filed with the Commission. The above-named
attorneys-in-fact shall each have full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every
act whatsoever necessary or desirable in connection with any and all Form S-6
and Form N-8B-2 Registration Statements, and any and all amendments thereto,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of each
said attorney-in-fact.
EXECUTED this 3rd day of DECEMBER, 1997.
/s/JOHN V. LAGRASSE
-------------------------- --------------------------
(Robert M. Devlin) (John V. LaGrasse)
(Not a Director as of the execution date.) /s/RODNEY O. MARTIN, JR.
-------------------------- --------------------------
(Michael G. Atnip) Rodney O. Martin, Jr.)
/s/JAMES D. D'AGOSTINO, JR. /s/JON P. NEWTON
-------------------------- --------------------------
(James S. D' Agostino, Jr.) (Jon P. Newton)
/s/DAVID A. FRAVEL /s/PHILIP K. POLKINGHORN
-------------------------- --------------------------
(David A. Fravel) (Philip K. Polkinghorn)
/s/ROBERT F. HERBERT, JR. /s/PETER V. TUTERS
-------------------------- --------------------------
(Robert F. Herbert, Jr.) (Peter V. Tuters)
