<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1997
1933 ACT REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT
ON
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
LINCOLN LIFE & ANNUITY FLEXIBLE PREMIUM
VARIABLE LIFE ACCOUNT M
(EXACT NAME OF REGISTRANT)
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
(NAME OF DEPOSITOR)
120 Madison Street, Suite 1700, Syracuse, NY 13202
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
Depositor's Telephone Number, including Area Code
(315) 428-8400
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<S> <C>
Robert O. Sheppard, Esquire COPY TO:
Lincoln Life & Annuity Company of New York Kimberly J. Smith, Esquire
120 Madison Street, Suite 1700 Sutherland, Asbill & Brennan LLP
Syracuse NY 13202 1275 Pennsylvania Avenue, NW
(NAME AND ADDRESS OF AGENT FOR SERVICE) Washington, DC 20004
</TABLE>
Approximate date of proposed public offering: As soon as
practicable after the effective date of the registration statement.
UNITS OF INTEREST IN VARIABLE LIFE INSURANCE CONTRACTS
(TITLE OF SECURITIES BEING REGISTERED)
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
<PAGE>
CROSS REFERENCE SHEET
(RECONCILIATION AND TIE)
REQUIRED BY INSTRUCTION 4 TO FORM S-6
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ITEM OF FORM
N-8B-2 LOCATION IN PROSPECTUS
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1 Cover Page Highlights
2 Cover Page
3 *
4 Distribution of Policies
5 Lincoln Life
6(a) The Variable Account
6(b) *
9 Legal Proceedings
10(a)-(c) Short-Term Right to Cancel the Policy; Surrenders;
Accumulation Value; Reports to Policy Owners
10(d) Right to Exchange for a Fixed Benefit Policy; Policy Loans;
Surrenders; Allocation of Net Premium Payments
10(e) Lapse and Reinstatement
10(f) Voting Rights
10(g)-(h) Substitution of Securities
10(i) Premium Payments; Transfers; Death Benefit; Policy Values;
Settlement Options
11 The Funds
12 The Funds
13 Charges; Fees
14 Issuance
15 Premium Payments; Transfers
16 The Variable Account
17 Surrenders
18 The Variable Account
19 Reports to Policy Owners
20 *
21 Policy Loans
22 *
23 Lincoln Life
24 Incontestability; Suicide; Misstatement of Age or Sex
25 Lincoln Life
26 Fund Participation Agreements
27 The Variable Account
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<TABLE>
<CAPTION>
ITEM OF FORM
N-8B-2 LOCATION IN PROSPECTUS
- ----------------- --------------------------------------------------------------
<S> <C>
28 Directors and Officers of the Company
29 Lincoln Life
30 *
31 *
32 *
33 *
34 *
35 *
37 *
38 Distribution of Policies
39 Distribution of Policies
40 *
41(a) Distribution of Policies
42 *
43 *
44 The Funds; Premium Payments
45 *
46 Surrenders
47 The Variable Account; Surrenders, Transfers
48 *
49 *
50 The Variable Account
51 Cover Page; Highlights; Premium Payments; Right to Exchange
for a Fixed Benefit Policy
52 Substitution of Securities
53 Tax Matters
54 *
55 *
</TABLE>
* Not Applicable
<PAGE>
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
LINCOLN LIFE & ANNUITY FLEXIBLE PREMIUM
VARIABLE LIFE ACCOUNT M
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<S> <C>
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK SERVICING OFFICE:
120 MADISON STREET
SUITE 1700
SYRACUSE NY 13202
</TABLE>
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THE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
- --------------------------------------------------------------------------------
This prospectus describes a flexible premium variable life insurance
contract ("Policy") offered either in an individual or group form by Lincoln
Life & Annuity Company of New York ("Lincoln Life"). This Policy is intended to
provide life insurance benefits. It allows flexible premium payments, a choice
of underlying funding options, and a choice of two death benefit options. Its
value will vary with the investment performance of the underlying funding
options selected, as may the death benefit payable by Lincoln Life upon the
death of the Insured. Policy values may be used to continue the Policy in force,
may be borrowed within certain limits, and may be fully or partially
surrendered. Full surrenders are subject to a surrender charge. Annuity
settlement options equivalent to the Death Benefit are available for payment to
the Beneficiary upon the death of the Insured.
Lincoln Life offers nineteen funding vehicles under a Policy through the
Separate Account, each a diversified open-end management investment company
(commonly called a mutual fund) with a different investment objective: AIM
Variable Insurance Funds, Inc. -- AIM V.I. Capital Appreciation Fund, AIM V.I.
Growth Fund, AIM V.I. Value Fund, AIM V.I. Diversified Income Fund, CIGNA
Variable Products Group -- CIGNA VP Money Market Fund, CIGNA VP S&P 500 Index
Fund; Fidelity Variable Insurance Products Fund -- Equity-Income Portfolio;
Fidelity Variable Insurance Products Fund II -- Asset Manager Portfolio and
Investment Grade Bond Portfolio; MFS-Registered Trademark- Variable Insurance
Trust -- MFS Emerging Growth Series, MFS Total Return Series, MFS Utilities
Series and MFS World Governments Series; Templeton Variable Products Series Fund
- -- Templeton Asset Allocation Fund; Templeton International Fund, Templeton
Stock Fund; OCC Accumulation Trust -- Global Equity Portfolio, Managed Portfolio
and Small Cap Portfolio.
The fixed interest option offered under the Policy is the Fixed Account.
Amounts held in the Fixed Account are guaranteed and will earn a minimum
interest rate of 4% per year. SPECIAL LIMITS APPLY TO WITHDRAWALS AND TRANSFERS
FROM THE FIXED ACCOUNT. Unless specifically mentioned, this prospectus only
describes the variable investment options.
It may not be advantageous to replace existing insurance or supplement an
existing flexible premium variable life insurance policy with this Policy. This
entire Prospectus, and those of the Funds, should be read carefully to
understand the Policy being offered.
The Policy described in this prospectus is available only in New York.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE MUTUAL FUNDS AVAILABLE AS FUNDING OPTIONS FOR THE POLICIES OFFERED BY THIS
PROSPECTUS. ALL PROSPECTUSES SHOULD BE RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS DATED: , 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Definitions..................................... 3
Highlights...................................... 5
Initial Choices to be Made.................... 5
Charges and Fees.............................. 6
Lincoln Life.................................... 6
The Variable Account............................ 7
The Funds....................................... 7
Substitution of Securities.................... 10
Voting Rights................................. 10
Fund Participation Agreements................. 11
Death Benefit................................... 11
Death Benefit Options....................... 11
Changes in Death Benefit Option............. 12
Guaranteed Death Benefit Provision.......... 12
Payment of Death Benefit.................... 12
Changes in Specified Amount................. 13
Premium Payments; Transfers..................... 14
Premium Payments............................ 14
Allocation of Net Premium Payments.......... 15
Transfers................................... 15
Optional Variable Account Sub-Account
Allocation Programs........................ 16
Dollar Cost Averaging..................... 16
Automatic Rebalancing..................... 17
Charges; Fees................................... 17
Premium Load................................ 17
Monthly Deductions.......................... 17
Transaction Fee for Excess Transfers........ 19
Mortality and Expense Risk Charge and Fund
Expenses................................... 19
Surrender Charge............................ 21
The Fixed Account............................... 21
Policy Values................................... 22
Accumulation Value.......................... 22
Variable Accumulation Unit Value............ 23
Surrender Value............................. 23
Surrenders...................................... 23
Partial Surrenders.......................... 23
Full Surrenders............................. 24
Deferral of Payment and Transfers........... 24
Lapse and Reinstatement......................... 24
Lapse of a Policy; Effect of Guaranteed
Death Benefit Provision.................... 24
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PAGE
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Reinstatement of a Lapsed Policy............ 24
Policy Loans.................................... 25
Settlement Options.............................. 26
Other Policy Provisions......................... 26
Issuance.................................... 26
Effective Date of Coverage.................. 26
Short-Term Right to Cancel the Policy....... 26
Policy Owner................................ 27
Beneficiary................................. 27
Assignment.................................. 27
Right to Exchange for a Fixed Benefit
Policy..................................... 27
Incontestability............................ 28
Misstatement of Age or Sex.................. 28
Suicide..................................... 28
Nonparticipating Policies................... 28
Tax Matters..................................... 28
Policy Proceeds............................. 28
Taxation of Lincoln Life.................... 30
Section 848 Charges......................... 30
Other Considerations........................ 30
Other Matters................................... 30
Directors and Officers of Lincoln Life...... 30
Principal Underwriter....................... 32
Changes of Investment Policy................ 32
Other Contracts Issued by Lincoln Life...... 33
State Regulation............................ 33
Reports to Policy Owners.................... 33
Advertising................................. 33
Legal Proceedings........................... 33
Experts..................................... 34
Registration Statement...................... 34
Financial Statements............................ 34
Appendix 1...................................... 35
Illustration of Surrender Charges........... 35
Appendix 2...................................... 37
Illustrations of Accumulation Values,
Surrender Values, and Death Benefits....... 37
Appendix 3...................................... 47
Tax Information............................. 47
</TABLE>
2
<PAGE>
DEFINITIONS
ACCUMULATION VALUE: The sum of the Fixed Account Value,
Variable Account Value and the Loan Account Value.
ACCUMULATION UNIT: A unit of measure used to calculate the
value of a Variable Account Sub-Account.
ADDITIONAL PREMIUMS: Any premium paid in addition to Planned
Premiums.
CERTIFICATE: The document which evidences the participation
of an Owner in a group policy.
CODE: The Internal Revenue Code of 1986, as amended.
CORRIDOR DEATH BENEFIT: The Death Benefit calculated as a
percentage of the Accumulation Value rather than by
reference to the Specified Amount to satisfy the Internal
Revenue Service definition of "life insurance."
COST OF INSURANCE: The portion of the Monthly Deduction
designed to compensate Lincoln Life for the anticipated cost
of paying Death Benefits in excess of the Accumulation
Value, not including riders, supplemental benefits or
monthly expense charges.
DEATH BENEFIT: The amount payable to the beneficiary upon
the death of the Insured in accordance with the Death
Benefit Option elected, before deduction of the amount
necessary to repay any loans in full, and overdue
deductions.
DEATH BENEFIT OPTION: Either of two methods for determining
the Death Benefit.
FIXED ACCOUNT: The account under which principal is
guaranteed and interest is credited at a rate of not less
than 4% per year. Fixed Account assets are general assets of
Lincoln Life held in Lincoln Life's General Account.
FIXED ACCOUNT VALUE: The portion of the Accumulation Value,
other than the Loan Account Value, held in Lincoln Life's
General Account.
FUND(S): One or more of AIM Variable Insurance Funds, Inc.
-- AIM V.I. Capital Appreciation Fund, AIM V.I. Growth Fund,
AIM V.I. Value Fund, AIM V.I. Diversified Income Fund; CIGNA
Variable Products Group -- CIGNA VP Money Market Fund; CIGNA
VP S&P 500 Index Fund; Fidelity Variable Insurance Products
Fund -- Equity-Income Portfolio; Fidelity Variable Insurance
Products Fund II -- Asset Manager Portfolio and Investment
Grade Bond Portfolio; MFS-Registered Trademark- Variable
Insurance Trust -- MFS Emerging Growth Series; MFS Total
Return Series, MFS Utilities Series, MFS World Governments
Series; Templeton Variable Products Series Fund -- Templeton
Asset Allocation Fund, Templeton International Fund,
Templeton Stock Fund; OCC Accumulation Trust -- Global
Equity Portfolio, Managed Portfolio and Small Cap Portfolio.
Each of them is an open-end management investment company
(mutual fund) whose shares are available to fund the
benefits provided by the Policy.
GENERAL ACCOUNT: Lincoln Life's general asset account, in
which assets attributable to the non-variable portion of
Policies are held.
GRACE PERIOD: The 61-day period following a Monthly
Anniversary Day on which the Policy's Surrender Value is
insufficient to cover the current Monthly Deduction. Lincoln
Life will send notice at least 31 days before the end of the
Grace Period that the Policy will lapse without value unless
a sufficient payment (described in the notification letter)
is received by Lincoln Life.
GUARANTEED INITIAL DEATH BENEFIT PREMIUM: The Premium
Payment(s) which must be made to guarantee the Initial
Specified Amount for the first five Policy Years after
issue, regardless of investment performance, assuming there
will be no loans or partial surrenders.
GUIDELINE ANNUAL PREMIUM: The level amount required to
mature the Policy under guaranteed mortality and expense
charges and an annual interest rate of 5%.
3
<PAGE>
HOME OFFICE: The headquarters of Lincoln Life & Annuity
Company of New York, located at 120 Madison Street, Suite
1700, Syracuse, New York 13202.
INITIAL SPECIFIED AMOUNT: The amount (at least $100,000),
originally chosen by the Policy Owner, initially equal to
the Death Benefit. The Initial Specified Amount may be
increased or decreased as described in this Prospectus.
INSURED: The person on whose life the Policy is issued.
ISSUE AGE: The age of the Insured, to the nearest birthday,
on the Issue Date.
ISSUE DATE: The date on which the Policy becomes effective,
as shown in the Policy Specifications.
LINCOLN LIFE: Lincoln Life & Annuity Company of New York.
LOAN ACCOUNT: The account in which policy indebtedness
(outstanding loans and interest) accrues once it is
transferred out of the Fixed Account and Variable Account
Sub-Accounts. The Loan Account is part of Lincoln Life's
General Account.
LOAN ACCOUNT VALUE: An amount equal to the sum of all unpaid
Policy loans and loan interest.
MONTHLY ANNIVERSARY DAY: The day of the month as shown in
the Policy Specifications, or the next Valuation Day if that
day is not a Valuation Day or is nonexistent for that month,
when the Company makes the Monthly Deduction.
MONTHLY DEDUCTION: The monthly deduction made from the Net
Accumulation Value; this deduction includes the cost of
insurance, an administrative expense charge, and charges for
supplemental riders or benefits, if applicable.
NET ACCUMULATION VALUE: The Accumulation Value less the Loan
Account Value.
NET AMOUNT AT RISK: The Death Benefit before subtraction of
outstanding loans, if any, minus the Accumulation Value.
NET PREMIUM PAYMENT: The portion of a Premium Payment, after
deduction of 5.0% for the premium load, available for
allocation to the Fixed Account and the Variable Account
Sub-Accounts.
OWNER. The Owner on the Date of Issue will be the person
designated in the Policy Specifications as having all
ownership rights under the Policy; includes the Certificate
Owner under a group policy. If no person is designated as
Owner, the Insured will be the Owner.
PLANNED PREMIUMS: The amount of premium the Policy Owner
chooses to pay Lincoln Life on a scheduled basis. This is
the amount for which Lincoln Life sends a premium reminder
notice.
POLICY: The life insurance contract described in this
Prospectus, i.e., either an individual Policy or a
Certificate evidencing the Owner's participation in a group
policy, under which flexible premium payments are permitted
and the death benefit and contract values may vary with the
investment performance of the funding option(s) selected.
POLICY YEAR: Each twelve-month period, beginning on the
Issue Date, during which the Policy is in effect.
PREMIUM PAYMENT: A premium payment made under the Policy.
RIGHT-TO-EXAMINE PERIOD: The period of time following the
issuance of the Policy during which the Owner may return the
Policy and receive a refund of premiums paid, the latest of
(a) 10 days after the Policy is received, unless otherwise
stipulated by state law requirements, (b) 10 days after
Lincoln Life mails or personally delivers a Notice of
Withdrawal Right to the Owner, or (c) 45 days after the
application for the Policy is signed.
SERVICING OFFICE:
SETTLEMENT OPTION(S): Several ways in which the Beneficiary
may receive a Death Benefit, or in which the Owner may
choose to receive payments upon surrender of the Policy.
4
<PAGE>
SUB-ACCOUNT: That portion of the Variable Account which is
invested in shares of a specific Fund.
SURRENDER CHARGE: The amount retained by Lincoln Life upon
the full surrender of the Policy.
SURRENDER VALUE: The amount a Policy Owner can receive in
cash by surrendering the Policy. This equals the Net
Accumulation Value minus the applicable Surrender Charge.
All of the Surrender Value may be applied to one or more of
the Settlement Options.
VALUATION DAY: Every day on which Accumulation Units are
valued; any day on which the New York Stock Exchange is
open, except any day on which trading on the Exchange is
restricted, or on which an emergency exists, as determined
by the Securities and Exchange Commission, so that valuation
or disposal of securities is not practicable.
VALUATION PERIOD: The period of time beginning on the day
following a Valuation Day and ending on the next Valuation
Day. A Valuation Period may be more than one day in length.
VARIABLE ACCOUNT: Lincoln Life & Annuity Flexible Premium
Variable Life Account M. Consists of all Sub-Accounts
invested in shares of the Funds. Variable Account assets are
kept separate from the general assets of Lincoln Life and
are not chargeable with the general liabilities of Lincoln
Life.
VARIABLE ACCOUNT VALUE: The portion of the Accumulation
Value attributable to the Variable Account.
HIGHLIGHTS
The Policy is a flexible premium variable life insurance
policy. Its values may be accumulated on a fixed or variable
basis or a combination of fixed and variable bases. The
Policy's provisions may vary in some states.
INITIAL CHOICES
TO BE MADE
When purchasing a Policy, the Owner makes three important
choices:
1) Selecting one of the two Death Benefit Options;
2) Selecting the amount of Premium Payments to make; and
3) Selecting how Net Premium Payments will be allocated
among the available funding options.
LEVEL OR VARYING
DEATH BENEFIT
At the time of purchase, the Policy Owner (also called the
"Owner" in this Prospectus) must choose between the two
Death Benefit Options. The amount payable under either
option will be determined as of the date of the Insured's
death. Under the level Death Benefit Option, the Death
Benefit will be the greater of the Specified Amount, or the
Corridor Death Benefit. Under the varying Death Benefit
Option, the Death Benefit will be the greater of the
Specified Amount plus the Accumulation Value, or the
Corridor Death Benefit (See "Death Benefit").
The Policy also offers a Guaranteed Initial Death Benefit
Provision which ensures that for the first five Policy Years
the Death Benefit will not be less than the Initial
Specified Amount, regardless of market performance, assuming
there have been no loans or surrenders, even if the
Surrender Value is insufficient to cover the current Monthly
Deductions (See "Guaranteed Death Benefit Provision").
AMOUNT OF
PREMIUM PAYMENT
At the time of purchase, the Policy Owner must also choose
the amount of premium to be paid. The Owner may vary Premium
Payments to some extent and still keep the Policy in force.
Premium reminder notices will be sent for Planned Premiums
and for premiums required to continue this Policy in force.
If the Policy lapses it may be reinstated (See
"Reinstatement of a Lapsed Policy"). Premium Payments are
refundable during the Right-to-Examine Period.
5
<PAGE>
SELECTION OF
FUNDING
VEHICLE(S)
The Policy Owner must choose how to allocate Net Premium
Payments. Net Premium Payments allocated to the Variable
Account may be allocated to one or more Sub-Accounts of the
Variable Account, each of which invests in shares of a
particular Fund. The Initial Premium Payment will not be
allocated to the Variable Account until three days following
the expiration of the Right-to-Examine Period (see
"Short-Term Right to Cancel the Policy"). The Fixed Account
may also be elected as an allocation option. Allocations to
any Sub-Account or to the Fixed Account must be in whole
percentages. No allocation can be made which would result in
a Sub-Account Value of less than $50 or a Fixed Account
value of less than $2,500. Further, at this time, no more
than 18 Sub-Accounts may be opened during the life of the
Policy. Lincoln Life may expand this number at a future
date. The variable portion of a Policy is supported by the
Fund(s) selected as funding vehicle(s). The portion of the
Variable Account Value attributable to a particular Fund
through the Sub-Account of the Variable Account is not
guaranteed and will vary with the investment performance of
that Fund.
CHARGES
AND FEES
There is a 5.0% premium load on all Premium Payments.
Monthly deductions are made for the Cost of Insurance and
any riders.
Monthly deductions ($15 per month during the first Policy
Year and, currently, $5 per month thereafter) are also made
for administrative expenses.
Daily deductions from Variable Account Value are made for
the mortality and expense risk, currently at the annual rate
of .80% during the first twelve Policy Years and .55%
thereafter.
Investment results for each Sub-Account are affected by each
Fund's daily charge for management fees; these charges vary
by Fund and are shown at pages 10-11 of this Prospectus.
A transaction fee of $25 is imposed for each partial
surrender and for certain transfers in excess of 12 per
Policy Year.
A surrender charge will be deducted upon full surrender of a
Policy within the first ten Policy Years or within ten years
after an increase in Specified Amount.
Interest is charged on Policy loans. The net interest spread
(the amount by which interest charged exceeds interest
credited) is currently 1% per year in the first ten Policy
Years and .25% per year thereafter.
LINCOLN LIFE
Lincoln Life is a life insurance company chartered under New
York law on June 6, 1996. Lincoln Life's principal offices
are located at 120 Madison Street, Suite 1700, Syracuse, New
York 13202. Lincoln Life is licensed to sell life insurance
policies and annuity contracts in New York.
Lincoln Life is a subsidiary of The Lincoln National Life
Insurance Company. The Lincoln National Life Insurance
Company is a stock life insurance company incorporated under
the laws of Indiana on June 12, 1905. The Lincoln National
Life Insurance Company is principally engaged in offering
life insurance policies and annuity policies, and ranks
among the largest United States stock life insurance
companies in terms of assets and life insurance in force.
The Lincoln National Life Insurance Company is wholly owned
by Lincoln National Corporation ("LNC"), a publicly held
insurance holding company incorporated under Indiana law on
January 5, 1968. The offices of The Lincoln National Life
Insurance Company are located at 1300 South Clinton Street,
Fort Wayne, Indiana 46802. Through subsidiaries, LNC engages
primarily in the issuance of life insurance and annuities,
property casualty insurance, and other financial services.
Administrative services necessary for the operation of the
Separate Account and the Policies are currently provided by
The Lincoln National Life Insurance Company. However,
neither the assets of The Lincoln National Life Insurance
Company nor LNC support the obligations of Lincoln Life
under the Policies.
6
<PAGE>
Lincoln Life markets the Policies through independent
insurance brokers, general agents, and registered
representatives of broker-dealers which are members of the
National Association of Securities Dealers, Inc.
Lincoln Life, in common with other insurance companies, is
subject to regulation and supervision by the regulatory
authorities of the states in which it is licensed to do
business. A license from the state insurance department is a
prerequisite to the transaction of insurance business in
that state. In general, all states have statutory
administrative powers. Such regulation relates, among other
things, to licensing of insurers and their agents, the
approval of policy forms, the methods of computing reserves,
the form and content of statutory financial statements, the
amount of policyholders' and stockholders' dividends, and
the type of distribution of investments permitted. A blanket
bond for covers all of the officers and employees of
the Company.
THE VARIABLE ACCOUNT
Lincoln Life & Annuity Flexible Premium Variable Life
Account M was established pursuant to a resolution of the
Board of Directors of Lincoln Life. Under New York insurance
law, the income, gains or losses of the Variable Account are
credited without regard to the other income, gains or losses
of Lincoln Life. Lincoln Life serves as the custodian of the
assets of the Variable Account. These assets are held for
the Policies. Although the assets maintained in the Variable
Account equal to its reserves and other liabilities will not
be charged with any liabilities arising out of any other
business conducted by Lincoln Life, all obligations arising
under the Policies are general corporate liabilities of
Lincoln Life. Any and all distributions made by the Funds
with respect to shares held by the Variable Account will be
reinvested in additional shares at net asset value.
Deductions and surrenders from the Variable Account will, in
effect, be made by surrendering shares of the Funds at net
asset value. On each Valuation Day of each Fund, the
Variable Account purchases or redeems Fund shares based on a
netting of all transactions for that day. Shares of the
Funds held in the Variable Account are held by Lincoln Life
through an open account system, which makes unnecessary the
issuance and delivery of stock certificates.
The Variable Account is registered with the Securities and
Exchange Commission ("Commission") as a unit investment
trust under the Investment Company Act of 1940 ("1940 Act").
Such registration does not involve supervision of the
Variable Account or Lincoln Life's management or investment
practices or policies by the Commission. Lincoln Life does
not guarantee the Variable Account's investment performance.
Lincoln Life has several other separate accounts registered
as unit investment trusts with the Commission for the
purpose of funding the variable annuity contracts and
variable life insurance policies of Lincoln Life.
THE FUNDS
Each of the nineteen Sub-Accounts of the Variable Account is
invested solely in the shares of one of the nineteen Funds
available as funding vehicles under the Policies. Each of
the Funds is a series of one of seven entities, all
Massachusetts business trusts, except for AIM Variable
Insurance Funds, Inc., a Maryland corporation. Each such
entity is registered as an open-end, diversified management
investment company under the 1940 Act. These entities are
collectively referred to herein as the "Trusts."
The seven Trusts and their Investment advisers and
distributors are:
AIM Variable Insurance Funds, Inc. ("AIM V.I. Fund"),
managed by A I M Advisors, Inc., and distributed by
A I M Distributors, Inc., 11 Greenway Plaza, Suite 100,
Houston, TX 77046-1173;
CIGNA Variable Products Group ("CIGNA Group"), managed
by CIGNA Investments, Inc., and distributed by CIGNA
Financial Advisors, Inc., 900 Cottage Grove Road,
Hartford, CT 06152;
7
<PAGE>
Variable Insurance Products Fund ("Fidelity VIP"), and
Variable Insurance Products Fund II ("Fidelity VIP II"),
managed by Fidelity Management & Research
Company and distributed by Fidelity Distributors
Corporation, 82 Devonshire Street, Boston, MA 02103;
MFS-Registered Trademark- Variable Insurance Trust ("MFS
Trust"), managed by Massachusetts Financial Services
Company and distributed by MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116;
Templeton Variable Products Series Fund ("Templeton
Trust"), managed by Templeton Investment Counsel, Inc.
and its Templeton and Franklin affiliates and
distributed by Franklin/Templeton Distributors, Inc.,
700 Central Avenue, St. Petersburg, FL 33701;
OCC Accumulation Trust ("OCC Trust") (formerly Quest for
Value Accumulation Trust), managed by OpCap Advisors
(formerly Quest for Value Advisors) and distributed by
OCC Distributors (formerly Quest for Value
Distributors), One World Financial Center, New York, NY
10281.
Four Funds of AIM V.I. Fund are available under the
Policies:
AIM V.I. Capital Appreciation Fund;
AIM V.I. Diversified Income Fund;
AIM V.I. Growth Fund;
AIM V.I. Value Fund.
Two Funds of CIGNA GROUP are available under the Policies:
CIGNA VP Money Market Fund;
CIGNA VP S&P 500 Index Fund.
One Fund of FIDELITY VIP is available under the Policies:
Equity-Income Portfolio ("Fidelity VIP Equity-Income
Portfolio").
Two Funds of FIDELITY VIP II are available under the
Policies:
Asset Manager Portfolio ("Fidelity VIP II Asset Manager
Portfolio");
Investment Grade Bond Portfolio ("Fidelity VIP II
Investment Grade Bond Portfolio").
Four Funds of MFS Trust are available under the Policies:
MFS Emerging Growth Series;
MFS Total Return Series;
MFS Utilities Series;
MFS World Governments Series.
Three Funds of TEMPLETON Trust are available under the
Policies:
Templeton Asset Allocation Fund: Class 1;
Templeton International Fund: Class 1;
Templeton Stock Fund: Class 1.
Three Funds of OCC Trust are available under the Policies:
Global Equity Portfolio;
Managed Portfolio;
Small Cap Portfolio.
The investment advisory fees charged the Funds by their
advisers are shown on pages 11 and 12 of this Prospectus.
There follows a brief description of the investment
objective and program of each Fund. There can be no
assurance that any of the stated investment objectives will
be achieved.
AIM V.I. CAPITAL APPRECIATION FUND (Small Cap Stocks): Seeks
to provide capital appreciation through investments in
common stocks, with emphasis on medium-sized and smaller
emerging growth companies.
8
<PAGE>
AIM V.I. DIVERSIFIED INCOME FUND (Fixed
Income - Intermediate Term Bonds): Seeks to achieve a high
level of current income primarily by investing in a
diversified portfolio of foreign and U.S. government and
corporate debt securities, including lower rated high yield
debt securities (commonly known as "junk bonds").
AIM V.I. GROWTH FUND (Large Cap Stocks): Seeks to provide
growth of capital through investments primarily in common
stocks of leading U.S. companies considered by its adviser
to have strong earnings momentum.
AIM V.I. VALUE FUND (Large Cap Stocks): Seeks to achieve
long-term growth of capital by investing primarily in equity
securities judged by its adviser to be undervalued relative
to the current or projected earnings of the companies
issuing the securities, or relative to current market values
of assets owned by the companies issuing the securities or
relative to the equity markets generally. Income is a
secondary objective.
CIGNA VP MONEY MARKET FUND (Money Market): Seeks to provide
as high a level of current income as is consistent with the
preservation of capital and liquidity and the maintenance of
a stable $1.00 per share net asset value by investing in
short-term money market instruments.
CIGNA VP S&P 500 INDEX FUND (Large Cap Stocks): Seeks to
achieve its objective of long-term growth of capital by
attempting to replicate the composition and total return,
reduced by fund expenses, of the Standard and Poor's 500
Composite Stock Price Index.
FIDELITY VIP II ASSET MANAGER PORTFOLIO (Balanced or Total
Return): Seeks high total return with reduced risk over the
long-term by allocating its assets among domestic and
foreign stocks, bonds and short-term fixed-income
instruments.
FIDELITY VIP II INVESTMENT GRADE BOND PORTFOLIO (Fixed
Income - Intermediate Term Bonds): Seeks as high a level of
current income as is consistent with the preservation of
capital by investing in a broad range of investment-grade
fixed-income securities.
FIDELITY VIP EQUITY-INCOME PORTFOLIO (Large Cap Stocks):
Seeks reasonable income by investing primarily in
income-producing equity securities, with some potential for
capital appreciation, seeking a yield that exceeds the
composite yield on the securities comprising the Standard
and Poor's Composite Index of 500 Stocks.
MFS EMERGING GROWTH SERIES (Large Cap Stocks): Seeks to
provide long-term growth of capital by investing primarily
in common stocks of foreign and domestic issuers.
MFS TOTAL RETURN SERIES (Balanced or Total Return): Seeks
primarily to obtain above-average income (compared to a
portfolio invested entirely in equity securities) consistent
with the prudent employment of capital, and secondarily to
provide a reasonable opportunity for growth of capital and
income.
MFS UTILITIES SERIES (Specialty): Seeks capital growth and
current income (income above that available from a portfolio
invested entirely in equity securities) by investing, under
normal circumstances, at least 65% of its assets in equity
and debt securities of utility companies.
MFS WORLD GOVERNMENTS SERIES (International Fixed Income):
Seeks not only preservation, but also growth, of capital
together with moderate current income through a
professionally managed, internationally diversified
portfolio consisting primarily of debt securities and to a
lesser extent equity securities.
TEMPLETON ASSET ALLOCATION FUND (Balanced or Total Return):
Seeks a high level of total return through a flexible policy
of investing in stocks of companies in any nation, debt
securities of companies and governments of any nation, and
in money market instruments. Assets are allocated among
different investments depending upon worldwide market and
economic conditions.
9
<PAGE>
TEMPLETON INTERNATIONAL FUND (International Stocks): Seeks
long-term capital growth through a flexible policy of
investing in stocks and debt obligations of companies and
governments outside the United States.
TEMPLETON STOCK FUND (Global Stocks): Seeks capital growth
through a policy of investing primarily in common stocks
issued by companies, large and small, in various nations
throughout the world, including the U.S.
OCC GLOBAL EQUITY PORTFOLIO (International Stocks): Seeks
long-term capital appreciation through a global investment
strategy primarily involving equity securities.
OCC MANAGED PORTFOLIO (Balanced or Total Return): Seeks
growth of capital over time through investment in a
portfolio of common stocks, bonds and cash equivalents, the
percentage of which will vary based on management's
assessments of relative investment values.
OCC SMALL CAP PORTFOLIO (Small Cap Stocks): Seeks capital
appreciation through investments in a diversified portfolio
of equity securities of companies with market
capitalizations of under $1 billion.
The AIM Diversified Income Fund, Fidelity VIP Equity-Income
Portfolio, Fidelity VIP II Asset Manager Portfolio, MFS
Total Return Series, MFS Utilities Series, MFS World
Governments Series, OCC Global Equity Portfolio, OCC Managed
Portfolio, OCC Small Cap Portfolio, Templeton Asset
Allocation Fund, Templeton International Fund and Templeton
Stock Fund portfolios may invest in non-investment grade,
high yield, high-risk debt securities (commonly referred to
as "junk bonds"), as detailed in the individual Fund
prospectuses.
There is no assurance that the investment objective of any
of the Funds will be met. A Policy Owner bears the complete
investment risk for Accumulation Values allocated to a
Sub-Account. Each of the Sub-Accounts involves inherent
investment risk, and such risk varies significantly among
the Sub-Accounts. Policy Owners should read each Fund's
prospectus carefully and understand the Funds' relative
degrees of risk before making or changing investment
choices. Additional Funds may, from time to time, be made
available as investments to underlie the Policies. However,
the right to make such selections will be limited by the
terms and conditions imposed on such transactions by Lincoln
Life (See "Premium Payments").
Required premium levels will vary based on market
performance. In a prolonged market downturn, affecting all
Sub-Accounts, additional Premium Payments may be necessary
to maintain the level of coverage or to avoid lapsing of the
Policy. Review of periodic contract statements is strongly
suggested to determine appropriate premium requirements.
SUBSTITUTION OF SECURITIES
If the shares of any Fund should no longer be available for
investment by the Variable Account or if, in the judgment of
Lincoln Life, further investment in such shares should
become inappropriate in view of the purpose of the
investment objectives of the Policies or in view of legal,
regulatory or federal income tax restrictions, Lincoln Life
may substitute shares of another Fund. No substitution of
securities in any Sub-Account may take place without prior
approval of the Commission and under such requirements as it
may impose.
VOTING RIGHTS
In accordance with its view of present applicable law,
Lincoln Life will vote the shares of each Fund held in the
Variable Account at special meetings of the shareholders of
the particular Series Fund in accordance with written
instructions received from persons
10
<PAGE>
having the voting interest in the Variable Account. Lincoln
Life will vote shares for which it has not received
instructions, as well as shares attributable to it, in the
same proportion as it votes shares for which it has received
instructions. The Series Funds do not hold regular meetings
of shareholders.
The number of shares which a person has a right to vote will
be determined as of a date to be chosen by the appropriate
Series Fund not more than sixty (60) days prior to the
meeting of the particular Series Fund. Voting instructions
will be solicited by written communication at least fourteen
(14) days prior to the meeting.
The Funds' shares are issued and redeemed only in connection
with variable annuity contracts and variable life insurance
policies issued through separate accounts of Lincoln Life
and other life insurance companies. The Series Funds do not
foresee any disadvantage to Policy Owners arising out of the
fact that shares may be made available to separate accounts
which are used in connection with both variable annuity and
variable life insurance products. Nevertheless, the Series
Funds' Boards intend to monitor events in order to identify
any material irreconcilable conflicts which may possibly
arise and to determine what action, if any, should be taken
in response thereto. If such a conflict were to occur, one
of the separate accounts might withdraw its investment in a
Fund. This might force a Fund to sell portfolio securities
at disadvantageous prices.
FUND PARTICIPATION AGREEMENTS
With respect to a Trust, the adviser and/or the distributor,
or an affiliate thereof, may compensate Lincoln Life (or an
affiliate) for administrative, distribution, or other
services. It is anticipated that such compensation would be
based on assets of the particular Trust attributable to the
Policies along with certain other variable contracts issued
or administered by Lincoln Life (or an affiliate).
DEATH BENEFIT
DEATH BENEFIT OPTIONS
Two different Death Benefit Options are available. The
amount payable under either option will be determined as of
the date of the Insured's death.
Under OPTION 1 the Death Benefit will be the greater of the
Specified Amount (a minimum of $100,000 as of the date of
this Prospectus), or the applicable percentage (the
"Corridor Percentage") of the Accumulation Value required to
maintain the Policy as a "life insurance contract" for tax
purposes (the "Corridor Death Benefit"). The Corridor
Percentage is 250% through the Insured's age 40 and
decreases in accordance with the table in "Payment of Death
Benefit" to 100% at the Insured's age 95. Option 1 provides
a level Death Benefit until the Corridor Death Benefit
exceeds the Specified Amount.
Under OPTION 2 the Death Benefit will be the greater of the
Specified Amount (a minimum of $100,000 as of the date of
this Prospectus), plus the Accumulation Value, or the
Corridor Death Benefit. Option 2 provides a varying Death
Benefit which increases or decreases over time, depending on
the amount of premium paid and the investment performance of
the underlying funding options chosen.
Under both Option 1 and Option 2, the proceeds payable upon
death will be the Death Benefit, reduced by partial
surrenders and by the amount necessary to repay any loans in
full. Option 1 will be in effect unless Option 2 has been
elected in the application for the Policy or unless a change
has been allowed.
11
<PAGE>
CHANGES IN DEATH BENEFIT OPTION
A Death Benefit Option change will be allowed upon the
Owner's written request to the Servicing Office in form
satisfactory to Lincoln Life, subject to the following
conditions:
- The change will take effect on the Monthly Anniversary
Day or on the next Valuation Day following the date of
receipt of the request.
- There will be no change in the Surrender Charge, and
evidence of insurability may be required.
- No change in the Death Benefit Option may reduce the
Specified Amount below $100,000.
- For changes from Option 1 to Option 2, the new Specified
Amount will equal the Specified Amount less the
Accumulation Value at the time of the change.
- For changes from Option 2 to Option 1, the new Specified
Amount will equal the Specified Amount plus the
Accumulation Value at the time of the change.
GUARANTEED DEATH BENEFIT PROVISION
The Guaranteed Death Benefit Provision assures that, as long
as the Guaranteed Initial Death Benefit Premium is paid, the
Death Benefit will not be less than the Initial Specified
Amount during the first five Policy Years even if the
Surrender Value is insufficient to cover the current Monthly
Deductions, assuming there have been no loans or partial
surrenders.
Changes in Initial Specified Amount, partial surrenders, and
Death Benefit Option changes during the first five Policy
Years may affect the Guaranteed Death Benefit Premium. These
events and loans may also affect the Policy's ability to
remain in force.
PAYMENT OF DEATH BENEFIT
The Death Benefit under the Policy will be paid in a lump
sum within seven days after receipt at the Servicing Office
of due proof of the Insured's death (a certified copy of the
death certificate), unless the Owner or the Beneficiary has
elected that it be paid under one or more of the Settlement
Options (See "Settlement Options"). Payment of the Death
Benefit may be delayed if the Policy is being contested.
While the Insured is living, the Owner may elect a
Settlement Option for the Beneficiary and deem it
irrevocable, and may revoke or change a prior election. The
Beneficiary may make or change an election within 90 days of
the death of the Insured, unless the Owner has made an
irrevocable election.
All or a part of the Death Benefit may be applied under one
or more of the Settlement Options, or such other options as
Lincoln Life may make available in the future.
If the Policy is assigned as collateral security, Lincoln
Life will pay any amount due the assignee in one lump sum.
Any excess Death Benefit due will be paid as elected.
The Death Benefit under the Policy at any point in time must
be at least the following "Corridor Percentage" of the
Accumulation Value based on the Insured's attained age:
<TABLE>
<CAPTION>
INSURED'S CORRIDOR INSURED'S CORRIDOR
ATTAINED AGE PERCENTAGE ATTAINED AGE PERCENTAGE
------------ ----------- ------------- -----------
<S> <C> <C> <C>
0-40 250% 70 115%
41 243 71 113
42 236 72 111
43 229 73 109
44 222 74 107
-- - --
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
INSURED'S CORRIDOR INSURED'S CORRIDOR
ATTAINED AGE PERCENTAGE ATTAINED AGE PERCENTAGE
------------ ----------- ------------- -----------
<S> <C> <C> <C>
45 215% 75 105%
46 209 76 105
47 203 77 105
48 197 78 105
49 191 79 105
-- - --
50 185 80 105
51 178 81 105
52 171 82 105
53 164 83 105
54 157 84 105
-- - --
55 150 85 105
56 146 86 105
57 142 87 105
58 138 88 105
59 134 89 105
-- - --
60 130 90 105
61 128 91 104
62 126 92 103
63 124 93 102
64 122 94 101
-- - --
65 120 95 100
66 119 96 100
67 118 97 100
68 117 98 100
69 116 99 100
-- - --
</TABLE>
CHANGES IN SPECIFIED AMOUNT
Changes in the Specified Amount of a Policy can be made by
submitting a written request to the Servicing Office in form
satisfactory to Lincoln Life.
Changes in the Specified Amount are subject to the following
conditions:
- Satisfactory evidence of insurability and a supplemental
application may be required for an increase in the
Specified Amount.
- An increase in the Specified Amount will increase the
Surrender Charge.
- As of the date of this Prospectus, the minimum allowable
increase in Specified Amount is $1,000.
- No decrease may reduce the Specified Amount to less than
$100,000.
- No decrease may reduce the Specified Amount below the
minimum required to maintain the Policy's status under
the Code as a life insurance policy.
Decreases in Specified Amount will be effective on the
Monthly Anniversary Day on or next following receipt of the
request at our Servicing Office, if all requirements have
been met. Decreases in Specified Amount will be applied to
reduce existing Specified Amount in the following order:
first, the most recent increase in Specified Amount; then,
the next most recent increases in Specified Amount
successively; and finally, against the Specified Amount
provided at issue.
13
<PAGE>
Increases in Specified Amount, if approved by Lincoln Life
and provided the Insured is living, will be effective on (i)
the Monthly Anniversary Day on or next following receipt of
the request at our Servicing Office and (ii) the deduction
from the Accumulation Value of the first month's cost of
insurance for the increase. If the Specified Amount is
increased, a new Surrender Charge applies within ten years
following any increase in Specified Amount. (See "Charges;
Fees -- Surrender Charge".)
PREMIUM PAYMENTS; TRANSFERS
PREMIUM PAYMENTS
The Policies provide for flexible premium payments. Premium
Payments are payable in the frequency and in the amount
selected by the Policy Owner. The initial Premium Payment is
due on the Issue Date and is payable in advance. The minimum
payment is the amount necessary to maintain a positive
Surrender Value or Guaranteed Minimum Death Benefit. Each
subsequent Premium Payment must be at least $100. Lincoln
Life reserves the right to decline any application or
Premium Payment.
After the initial Premium Payment, all Premium Payments must
be sent directly to the Servicing Office and will be deemed
received when actually received there.
The Policy Owner may elect to increase, decrease or change
the frequency of Premium Payments.
PLANNED PREMIUMS are Premium Payments scheduled when a
Policy is applied for. They can be billed annually,
semiannually or quarterly. Pre-authorized automatic monthly
check payments may also be arranged.
ADDITIONAL PREMIUMS are any Premium Payments made ($100
minimum) in addition to Planned Premiums.
GUARANTEED INITIAL DEATH BENEFIT PREMIUM, if paid during
each of the first five Policy Years, enables the Policy to
remain in force regardless of investment performance,
assuming no surrenders or loans during that time. The
Guaranteed Initial Death Benefit Premium is stated in the
Policy Specifications. An increase in Specified Amount would
require a recalculation of the Guaranteed Initial Death
Benefit Premium. If this premium is not paid, or there are
partial surrenders or loans taken during the first five
Policy Years, the Policy will lapse during the first five
Policy Years if the Surrender Value is less than the next
Monthly Deduction, just as it would after the first five
Policy Years at any time the Surrender Value is less than
the next Monthly Deduction.
Payment of Planned Premiums or Additional Premiums in any
amount will not, except as noted above, guarantee that the
Policy will remain in force. Conversely, failure to pay
Planned Premiums or Additional Premiums will not necessarily
cause a Policy to lapse (See "Guaranteed Death Benefit
Provision").
PREMIUM INCREASES. At any time, the Owner may increase
Planned Premiums, or pay Additional Premiums, but:
- Evidence of insurability may be required if the
Additional Premium or the new Planned Premium during the
current Policy Year would increase the difference between
the Death Benefit and the Accumulation Value. If
satisfactory evidence of insurability is requested and
not provided, the increase in premium will be refunded
without interest and without participation of such
amounts in any underlying funding options.
- In no event may the total of all Premium Payments exceed
the then-current maximum premium limitations established
by federal law for a Policy to qualify as life insurance.
If, at any time, a Premium Payment would result in total
Premium
14
<PAGE>
Payments exceeding such maximum premium limitation,
Lincoln Life will only accept that portion of the Premium
Payment which will make total premiums equal the maximum.
Any part of the Premium Payment in excess of that amount
will be returned or applied as otherwise agreed and no
further Premium Payments will be accepted until allowed
by the then-current maximum premium limitations
prescribed by law.
- If there is any Policy indebtedness, any additional Net
Premium Payments will be used first as a loan repayment
with any excess applied as an additional Net Premium
Payment.
ALLOCATION OF NET PREMIUM PAYMENTS
At the time of purchase of the Policy, the Owner must decide
how to allocate Net Premium Payments among the Sub-Accounts
and the Fixed Account. Allocation to any one Variable
Account Sub-Account or to the Fixed Account must be in whole
percentages. No allocation can be made which would result in
a Sub-Account Value of less than $50 or a Fixed Account
value of less than $2,500. Further, at this time, no more
than 18 Sub-Accounts may be opened during the life of the
Policy. Lincoln Life may expand this number at a future
date. For each Variable Account Sub-Account, the Net Premium
Payments are converted into Accumulation Units. The number
of Accumulation Units credited to the Policy is determined
by dividing the Net Premium Payment allocated to the
Sub-Account by the value of the Accumulation Unit for the
Sub-Account.
During the Right-to-Examine Period, the Net Premium Payment
will be allocated to the Fixed Account, and interest
credited from the Issue Date if the Premium Payment was
received on or before the Issue Date. Lincoln Life will
allocate the initial Net Premium Payment directly to the
Sub-Account(s) selected by the Owner within three days after
expiration of the Right-to-Examine Period.
Unless Lincoln Life is directed otherwise by the Policy
Owner, subsequent Net Premium Payments will be allocated on
the same basis as the most recent previous Net Premium
Payment. Such allocation will occur as of the next Valuation
Period after each payment is received.
The allocation for future Net Premium Payments may be
changed at any time free of charge. Any new allocation will
apply to Premium Payments made more than one week after
Lincoln Life receives the notice of the new allocation at
its Servicing Office. Any new allocation is subject to the
same requirements as the initial allocation. Lincoln Life
may, at its sole discretion, waive minimum premium
allocation requirements.
TRANSFERS
Before the Insured attains age 100, values may, at any time,
be transferred ($500 minimum) from one Sub-Account to
another or from the Variable Account to the Fixed Account.
Within the 30 days after each Policy Anniversary, the Owner
may also transfer a portion of the Fixed Account Value to
one or more Sub-Accounts, until the Insured attains age 100.
Transfers from the Fixed Account are allowed in the 30-day
period after a Policy Anniversary and will be effective as
of the next Valuation Day after a request is received in
good order at the Servicing Office. The cumulative amount of
transfers from the Fixed Account within any such 30-day
period cannot exceed 20% of the Fixed Account Value on the
most recent Policy Anniversary. Lincoln Life may further
limit transfers from the Fixed Account at any time.
Subject to the above restrictions, up to 12 transfers may be
made in any Policy Year without charge, and any value
remaining in the Fixed Account or a Sub-Account after a
transfer must be at least $500. Transfers may be made in
writing or by telephone
15
<PAGE>
unless the Policy Owner has indicated in writing in the
application or otherwise that telephone transfers are not to
be permitted. To make a telephone transfer, the Policy Owner
must call and provide, as identification, his or her
Policy Number and a requested portion of his or her Social
Security number. A customer service representative will then
come on the line and, upon ascertaining that telephone
transfers are permitted for that Policy, take the transfer
request, which will be processed as of the next close of
business and confirmed the day after that. Lincoln Life
disclaims all liability for losses resulting from
unauthorized or fraudulent telephone transactions, but
acknowledges that if it does not follow these procedures,
which it believes to be reasonable, it may be liable for
such losses.
Any transfer among the Sub-Accounts or to the Fixed Account
will result in the crediting and cancellation of
Accumulation Units based on the Accumulation Unit values
next determined after a written request is received at the
Servicing Office. Transfer requests must be received by the
Servicing Office by the close of the New York Stock Exchange
(usually 4:00 pm ET on each day the New York Stock Exchange
is open) in order to be effective that day. Any transfer
made which causes the remaining value of Accumulation Units
for a Sub-Account to be less than $500 will result in those
remaining Accumulation Units being cancelled and their
aggregate value reallocated proportionately among the other
funding options chosen. The Policy Owner should carefully
consider current market conditions and each Sub-Account's
investment policies and related risks before allocating
money to the Sub-Accounts. See pages 8-9 and pages 19-20 of
this Prospectus.
Lincoln Life, at its sole discretion, may waive minimum
balance requirements on the Sub-Accounts.
OPTIONAL VARIABLE ACCOUNT SUB-ACCOUNT ALLOCATION PROGRAMS
The Owner may elect to enroll in either of the following
programs. However, both programs cannot be in effect at the
same time.
DOLLAR COST AVERAGING
Dollar Cost Averaging is a program which, if elected by the
Owner, systematically allocates specified dollar amounts
from the Money Market Sub-Account or the Fixed Account to
one or more of the Contract's Variable Account Sub-Accounts
at regular intervals as selected by the Owner. By allocating
on a regularly scheduled basis as opposed to allocating the
total amount at one particular time, an Owner may be less
susceptible to the impact of market fluctuations. Dollar
Cost Averaging will not assure a profit or protect against a
declining market.
Dollar Cost Averaging may be elected by establishing a Money
Market Sub-Account or the Fixed Account value of at least
$1,000. The minimum amount per month to allocate is $100
(subject to the 18 Sub-Account limitation described under
"Allocation of Net Premium Payments" above). Enrollment in
this program may occur at any time by calling or by
providing the information requested on the Dollar Cost
Averaging election form to Lincoln Life at its Servicing
Office, provided that sufficient value is in the Money
Market Sub-Account or the Fixed Account. Transfers to the
Fixed Account are not permitted under Dollar Cost Averaging.
Lincoln Life may, at its sole discretion, waive Dollar Cost
Averaging minimum deposit and transfer requirements.
Dollar Cost Averaging will terminate when any of the
following occurs: (1) the number of designated transfers has
been completed; (2) the value of the Money Market Sub-
Account or the Fixed Account is insufficient to complete the
next transfer; (3) the Owner requests termination by
telephone or in writing and such request is received at
least one week prior to the next scheduled transfer date to
take effect that month; or (4) the Policy is surrendered.
16
<PAGE>
There is no current charge for Dollar Cost Averaging but
Lincoln Life reserves the right to charge for this program.
AUTOMATIC REBALANCING
Automatic Rebalancing is an option which, if elected by the
Owner on the initial application, or thereafter by calling
, periodically restores to a pre-determined level
the percentage of Policy Value allocated to each Sub-Account
(e.g. 20% Money Market, 50% Growth, 30% Utilities). This
pre-determined level will be the allocation initially
selected on the application, unless subsequently changed.
The Automatic Rebalancing allocation may be changed at any
time by submitting a written request to Lincoln Life at its
Servicing Office or by calling .
If Automatic Rebalancing is elected, all Net Premium
Payments allocated to the Sub-Accounts must be subject to
Automatic Rebalancing. The Fixed Account is not available
for Automatic Rebalancing.
Automatic Rebalancing may take place on either a quarterly,
semi-annual or annual basis, as selected by the Owner. Once
Automatic Rebalancing is activated, any Sub-Account
transfers executed outside of the rebalancing option will
terminate the Automatic Rebalancing. Any subsequent premium
payment or withdrawal that modifies the net account balance
within each Sub-Account may also cause termination of
Automatic Rebalancing. Any such termination will be
confirmed to the Owner. The Owner may terminate Automatic
Rebalancing or re-enroll at any time by calling or
writing Lincoln Life at its Servicing Office.
There is no current charge for Automatic Rebalancing but
Lincoln Life reserves the right to charge for this program.
CHARGES; FEES
PREMIUM LOAD
A deduction of 5.0% of each Premium Payment will be made to
cover the premium load. This load represents state taxes and
federal income tax liabilities and a portion of the sales
expenses incurred by Lincoln Life. The 2.35% portion of this
deduction for premium taxes may be higher or lower than the
actual tax imposed by the applicable jurisdiction; it is in
the mid-range of state premium taxes, which range from 1.75%
to 5.0%. Lincoln Life estimates 1.15% of each Premium
Payment will be used to meet federal income tax liabilities
attributable to the treatment of deferred acquisition costs.
The remaining 1.5% of the deduction is for sales expenses.
MONTHLY DEDUCTIONS
A Monthly Deduction is made from the Net Accumulation Value
for administrative expenses. The monthly administrative fee
is $15 during the first Policy Year and, currently, $5
during subsequent Policy Years. This charge is for items
such as premium billing and collection, policy value
calculation, confirmations and periodic reports. For
subsequent Policy Years, this monthly fee will never exceed
$10.
A Monthly Deduction is also made from the Net Accumulation
Value for the Cost of Insurance and any charges for
supplemental riders. The Cost of Insurance depends on the
attained age, risk class and gender classification (in
accordance with state law) of the Insured and the current
Net Amount at Risk.
The Cost of Insurance is determined by dividing the Death
Benefit at the previous Monthly Anniversary Day by
1.0032737, subtracting the Accumulation Value at the
previous Monthly Anniversary Day, and multiplying the result
(the Net Amount at Risk) by the applicable Cost of Insurance
Rate as determined by Lincoln Life. The Guaranteed Maximum
Cost of Insurance Rates, per $1,000 of Net Amount at Risk,
for standard
17
<PAGE>
risks are set forth in the following Table based on the 1980
Commissioners Standard Ordinary Mortality Tables, Age
Nearest Birthday (1980 CSO); or, for unisex rates, on the
1980 CSO-B Table.
<TABLE>
<CAPTION>
ATTAINED
AGE MALE FEMALE UNISEX
(NEAREST MONTHLY MONTHLY MONTHLY
BIRTHDAY) RATE RATE RATE
- ----------- --------- --------- ---------
<S> <C> <C> <C>
0 0.34845 0.24089 0.32677
1 0.08917 0.07251 0.08667
2 0.08251 0.06750 0.07917
3 0.08167 0.06584 0.07834
4 0.07917 0.06417 0.07584
5 0.07501 0.06334 0.07251
6 0.07167 0.06084 0.06917
7 0.06667 0.06000 0.06584
8 0.06334 0.05834 0.06250
9 0.06167 0.05750 0.06084
10 0.06084 0.05667 0.06000
11 0.06417 0.05750 0.06250
12 0.07084 0.06000 0.06917
13 0.08251 0.06250 0.07834
14 0.09584 0.06887 0.09001
15 0.11085 0.07084 0.10334
16 0.12585 0.07601 0.11585
17 0.13919 0.07917 0.12752
18 0.14836 0.08167 0.13502
19 0.15502 0.08501 0.14085
20 0.15836 0.08751 0.14502
21 0.15919 0.08917 0.14585
22 0.15752 0.09084 0.14419
23 0.15502 0.09251 0.14252
24 0.15189 0.09501 0.14085
25 0.14752 0.09668 0.13752
26 0.11419 0.09918 0.13585
27 0.14252 0.10168 0.13418
28 0.14169 0.10501 0.13418
29 0.14252 0.10635 0.13585
30 0.14419 0.11251 0.13752
31 0.14836 0.11668 0.14169
32 0.15252 0.12085 0.14585
33 0.15919 0.12502 0.15252
34 0.16889 0.13168 0.15919
35 0.17586 0.13752 0.16836
36 0.18670 0.14669 0.17837
37 0.20004 0.15752 0.19170
38 0.21505 0.17003 0.20588
39 0.23255 0.18503 0.22338
40 0.25173 0.20171 0.24173
41 0.27424 0.22005 0.26340
42 0.29675 0.23922 0.28508
43 0.32260 0.25757 0.31010
44 0.34929 0.27674 0.33428
45 0.37931 0.29675 0.36263
46 0.41017 0.31677 0.39182
47 0.44353 0.33761 0.42268
48 0.47856 0.36096 0.45437
49 0.51777 0.38598 0.49107
<CAPTION>
ATTAINED
AGE MALE FEMALE UNISEX
(NEAREST MONTHLY MONTHLY MONTHLY
BIRTHDAY) RATE RATE RATE
- ----------- --------- --------- ---------
<S> <C> <C> <C>
50 0.55948 0.41350 0.53028
51 0.60870 0.44270 0.57533
52 0.66377 0.47523 0.62539
53 0.72636 0.51276 0.68297
54 0.79730 0.55114 0.74722
55 0.87326 0.59118 0.81566
56 0.95591 0.63123 0.88996
57 1.04192 0.66961 0.96593
58 1.13378 0.70633 1.04609
59 1.23236 0.74556 1.13211
60 1.34180 0.78979 1.22817
61 1.46381 0.84488 1.33511
62 1.60173 0.91417 1.45796
63 1.75809 1.00267 1.59922
64 1.93206 1.10539 1.75725
65 2.12283 1.21731 1.92955
66 2.32623 1.33511 2.11195
67 2.54312 1.45461 2.30614
68 2.77350 1.57247 2.50878
69 3.02328 1.69955 2.72909
70 3.30338 1.84590 2.97466
71 3.62140 2.02325 3.25640
72 3.98666 2.24419 3.58279
73 4.40599 2.51548 3.95978
74 4.87280 2.83552 4.38330
75 5.37793 3.19685 4.84334
76 5.91225 3.59370 5.33245
77 6.46824 4.01942 5.84227
78 7.04089 4.47410 6.36948
79 7.64551 4.97042 6.92851
80 8.30507 5.52957 7.54229
81 9.03761 6.17118 8.22883
82 9.86724 6.91414 9.01216
83 10.80381 7.77075 9.90124
84 11.82571 8.72632 10.87533
85 12.91039 9.76952 11.92213
86 14.03509 10.89151 13.01471
87 15.18978 12.08770 14.15507
88 16.36948 13.35774 15.33494
89 17.57781 14.70820 16.56493
90 18.82881 16.15259 17.85746
91 20.14619 17.71416 19.23699
92 21.57655 19.43814 20.76665
93 23.20196 21.40786 22.49837
94 25.28174 23.63051 24.70915
95 28.27411 27.16158 27.82758
96 33.10577 32.32378 32.78845
97 41.68476 41.21204 41.45783
98 58.01259 57.81394 57.95663
99 90.90909 90.90909 90.90909
</TABLE>
These Monthly Deductions are deducted proportionately from
the value of each funding option. This is accomplished for
the Sub-Accounts by canceling Accumulation Units and
withdrawing the value of the canceled Accumulation Units
from each funding option in the same proportion as their
respective values have to the Net Accumulation Value. The
Monthly Deductions are made on the Monthly Anniversary Day.
18
<PAGE>
If the Insured is still living at age 100 and the Policy has
not been surrendered, no further Monthly Deductions are
taken and any Variable Account Value is transferred to the
Fixed Account. The Policy will then remain in force until
surrender or the Insured's death.
TRANSACTION FEE FOR EXCESS TRANSFERS
There will be a $25 transaction fee for each transfer
between funding options in excess of 12 during any Policy
Year.
MORTALITY AND EXPENSE RISK CHARGE AND FUND EXPENSES
The purpose of the following Table is to help purchasers and
prospective purchasers understand the costs and expenses
that are borne, directly and indirectly, by purchasers
assuming that all Net Premium Payments are allocated to the
Variable Account. The table reflects expenses of the
Variable Account as well as of the individual Funds
underlying the Variable Sub-Accounts. The Mortality and
Expense Risk Charge shown is the currently charged rate
during the first twelve Policy Years. It currently declines
to .55% per year thereafter and is guaranteed not to exceed
.90% per year.
FEE TABLE
<TABLE>
<CAPTION>
AIM VARIABLE INSURANCE FUNDS, INC.
--------------------------------------------------
AIM V.L.
CAPITAL AIM V.I. AIM V.I. AIM V.I.
APPRECIATION DIVERSIFIED GROWTH VALUE
FUND INCOME FUND FUND FUND
------------- ------------ -------- ---------
<S> <C> <C> <C> <C>
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and Expense Risk
Charge............................ 0.80% 0.80% 0.80% 0.80%
Total Separate Account Annual
Expenses.......................... 0.80% 0.80% 0.80% 0.80%
FUND PORTFOLIO ANNUAL EXPENSES
Management Fees.................... 0.64% 0.60% 0.65% 0.64%
Other Expenses..................... % % % %
Total Fund Portfolio Annual
Expenses.......................... % % % %
<CAPTION>
FIDELITY VARIABLE INSURANCE
CIGNA VP PRODUCTS FUNDS
GROUP ---------------------------------
----------------------------------- VIP II VIP I VIP II
CIGNA VP CIGNA ASSET EQUITY- INVESTMENT
MONEY VP S&P MANAGER INCOME GRADE BOND
MARKET FUND 500 INDEX FUND PORTFOLIO PORTFOLIO PORTFOLIO
---------------- ---------------- -------- --------- ----------
<S> <C> <C> <C> <C> <C>
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and Expense Risk
Charge............................ 0.80% 0.80% 0.80% 0.80% 0.80%
Total Separate Account Annual
Expenses.......................... 0.80% 0.80% 0.80% 0.80% 0.80%
FUND PORTFOLIO ANNUAL EXPENSES
Management Fees.................... 0.35% 0.25% 0.64% 0.51% 0.45%
Other Expenses..................... % % % % %
Total Fund Portfolio Annual
Expenses.......................... %(1) %(1) %(2) %(2) %
</TABLE>
- ------------------------
(1) The Funds' investment adviser has voluntarily agreed to waive such portion
of its management fee as is necessary to cause the Total Fund Portfolio
Annual Expenses of the Fund not to exceed % of the VP Money Market Fund's
average daily net asset value and % of the VP S&P 500 Index Fund's average
daily net asset value. If this is not sufficient to cause the Total Fund
Portfolio Annual Expenses of the VP Money Market Fund and VP S&P 500 Index
Fund not to exceed the applicable percentage of average daily net asset
value, the adviser has agreed to pay such other expenses of those Funds as
is necessary to keep Total Fund Portfolio Annual Expenses from exceeding the
applicable percentage. This arrangement will continue in effect until May 1,
1998, and afterwards to the extent described in the Funds' then current
prospectus. To the extent management fees are waived by the adviser, or
expenses of a Fund are paid by the adviser, the total return to shareholders
will increase. Total return to shareholders will decrease to the extent
management fees are no longer waived or expenses of a Fund are no longer
paid. Total Fund Portfolio Annual Expenses would have been % and % for
VP Money Market and VP S&P 500 Index Fund, respectively, prior to
reimbursement by the adviser.
(2) A portion of the brokerage commissions that certain funds paid was used to
reduce funds expenses. In addition, certain funds have entered into
arrangements with their custodian and transfer agent whereby interest earned
on uninvested cash balances was used to reduce custodian and transfer agent
expenses. Including these reductions, Total Fund Portfolio Annual Expenses
would have been % for the VIP II Asset Manager Portfolio and % for the VIP
Equity-Income Portfolio.
19
<PAGE>
The table does not reflect the monthly deductions for the
cost of insurance and any riders, nor does it reflect the
monthly deduction of $15 during the first Policy Year, and
currently, $5 thereafter for administrative expenses. The
information set forth should be considered together with the
information provided in this Prospectus under the heading
"Charges and Fees", and in each Fund's Prospectus. All
expenses are expressed as a percentage of average account
value.
<TABLE>
<CAPTION>
MFS VARIABLE INSURANCE TRUST
---------------------------------------------------------
MFS MFS
EMERGING TOTAL MFS MFS WORLD
GROWTH RETURN UTILITIES GOVERNMENTS
SERIES SERIES SERIES SERIES
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and Expense Risk
Charge............................ 0.80% 0.80% 0.80% 0.80%
Total Separate Account Annual
Expenses.......................... 0.80% 0.80% 0.80% 0.80%
FUND PORTFOLIO ANNUAL EXPENSES
Management Fees.................... 0.75% 0.75% 0.75% 0.75%
Other Expenses..................... %(4) %(4) %(4) %(4)
Total Fund Portfolio Annual
Expenses.......................... %(3) %(3) %(3) %(3)
<CAPTION>
TEMPLETON VARIABLE PRODUCTS
SERIES FUNDS
--------------------------------------------
TEMPLETON
ASSET TEMPLETON TEMPLETON
ALLOCATION INTERNATIONAL STOCK
FUND FUND FUND
CLASS 1 CLASS 1 CLASS 1
-------------- ------------- ---------
<S> <C> <C> <C>
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and Expense Risk
Charge............................ 0.80% 0.80% 0.80%
Total Separate Account Annual
Expenses.......................... 0.80% 0.80% 0.80%
FUND PORTFOLIO ANNUAL EXPENSES
Management Fees.................... 0.61% 0.70% 0.70%
Other Expenses..................... % % %
Total Fund Portfolio Annual
Expenses.......................... %(5) %(5) %(5)
<CAPTION>
OCC ACCUMULATION TRUST
-----------------------------------
GLOBAL
EQUITY MANAGED SMALL CAP
PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- ---------
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and Expense Risk
Charge............................ 0.80% 0.80% 0.80%
Total Separate Account Annual
Expenses.......................... 0.80% 0.80% 0.80%
FUND PORTFOLIO ANNUAL EXPENSES
Management Fees.................... 0.80% 0.80% 0.80%
Other Expenses..................... % % %
Total Fund Portfolio Annual
Expenses.......................... %(6) %(6) %(6)
<FN>
- ------------------------
(3) The Adviser has agreed to bear expenses for each Series, subject to
reimbursement by each Series, such that each Series' "Other Expenses" shall
not exceed % of the average daily net assets of the Series during the
current fiscal year. Otherwise, "Other Expenses" for the Emerging Growth
Series, Total Return Series, Utilities Series and World Government Series
would be %, %, % and % respectively, and "Total Fund Portfolio
Annual Expenses" would be %, %, %, and % respectively, for
these Series. See "Information Concerning Shares of Each Series--Expenses."
(4) Each Series has an expense offset arrangement which reduces the Series'
custodian fee based upon the amount of cash maintained by the Series with
its custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Series' expenses). Any such fee reductions are not
reflected under "Other Expenses".
(5) Management Fees and Total Fund Portfolio Annual Expenses have been restated
to reflect the management fee schedule approved by shareholders effective
May 1, 1997. See fund prospectus for details. Actual fees and annual
expenses before May 1, 1997 were lower.
(6) The annual expenses of OCC Accumulation Trust Portfolios (the "Portfolios")
as of December 31, 1996 have been restated to reflect new management fee
and expense limitation arrangements in effect as of May 1, 1996.
Additionally, Other Expenses are shown gross of certain expense offsets
afforded the Portfolios which effectively lowered overall custody expenses.
Effective May 1, 1996, the expenses of the Portfolios were contractually
limited by OpCap Advisors so that their respective annualized operating
expenses (net of any expense offsets) do not exceed % their respective
average daily net assets. Furthermore, through December 31, 1998, the
annualized operating expenses of the Managed and Small Cap Portfolios will
be voluntarily limited by OpCap Advisors so that annualized operating
expenses (net of any expense offsets) of these Portfolios do not exceed
1.00% of their respective average daily net assets. Without such
contractual and voluntary expense limitations and without giving effect to
any expense offsets, the Management Fees, Other Expenses and Total
Portfolio Annual Expenses incurred for the fiscal year ended December 31,
1997 would have been: % % and %, respectively, for the Global
Equity Portfolio; %, % and %, respectively, for the Managed Portfolio;
and %, % and %, respectively, for the Small Cap Portfolio.
</TABLE>
20
<PAGE>
SURRENDER CHARGE
Upon surrender of a Policy, a surrender charge may apply, as
described below. This charge is in part a deferred sales
charge and in part a recovery of certain first year
administrative costs. (See "Appendix 1 -- Illustration of
Surrender Charges".)
The initial Surrender Charge, as specified in the Policy, is
based on the Initial Specified Amount and the amount of
Premium Payments during the first two Policy Years. Once
determined, the Surrender Charge will remain the same dollar
amount during the third through fifth Policy Years.
Thereafter, it declines monthly at a rate of 20% per year so
that after the end of the tenth Policy Year (assuming no
increases in the Specified Amount) the Surrender Charge will
be zero. Thus, the Surrender Charge at the end of the sixth
Policy Year would be 80% of the Surrender Charge at the end
of the fifth Policy Year, at the end of the seventh Policy
Year would be 60% of the Surrender Charge at the end of the
fifth Policy Year, and so forth. However, in no event will
the Surrender Charge exceed the maximum allowed by state or
federal law.
If the Specified Amount is increased, a new Surrender Charge
will be applicable, in addition to any existing Surrender
Charge. The Surrender Charge applicable to the increase
would be equal to the Surrender Charge on a new policy whose
Specified Amount was equal to the amount of the increase. As
of the date of this Prospectus, the minimum allowable
increase in Specified Amount is $1,000. Lincoln Life may
change this at any time.
If the Specified Amount is decreased while the Surrender
Charge applies, the Surrender Charge will remain the same.
No Surrender Charge is imposed on a partial surrender, but
an administrative fee of $25 is imposed, allocated pro-rata
among the Sub-Accounts (and, where applicable, the Fixed
Account) from which the partial surrender proceeds are taken
unless the Owner instructs Lincoln Life otherwise.
The portion of the Surrender Charge applied to reimburse the
Company for sales and promotional expense is at most 28.5%
of the sum of Premium Payments in the first two Policy Years
up to one Guideline Annual Premium, plus 8.5% of Premium
Payments in the first two Policy Years between one and two
times one Guideline Annual Premium plus 7.5% of Premium
Payments in the first two Policy Years in excess of two
times one Guideline Annual Premium. The portion applicable
to administrative expense is $6.00 per $1,000 of Initial
Specified Amount. Under certain circumstances involving the
payment of very large premiums during the first two Policy
Years, a lesser portion of the Surrender Charge will be
applied to reimburse Lincoln Life for sales and promotional
expense, to the extent required by federal or state law. Any
surrenders may result in tax implications. (See "Tax
Matters".)
Based on its actuarial determination, Lincoln Life does not
anticipate that the Surrender Charge will cover all sales
and administrative expenses which Lincoln Life will incur in
connection with the Policy. Any such shortfall, including
but not limited to payment of sales and distribution
expenses, would be available for recovery from the General
Account of Lincoln Life, which supports insurance and
annuity obligations.
THE FIXED ACCOUNT
Premium Payments allocated to the Fixed Account become part
of Lincoln Life's General Account, and do not participate in
the investment experience of the Variable Account.
21
<PAGE>
The General Account is subject to regulation and supervision
by the New York Insurance Department as well as the
insurance laws and regulations of the jurisdictions in which
the Policies are distributed.
IN RELIANCE ON CERTAIN EXEMPTIONS, EXCLUSIONS AND RULES,
LINCOLN LIFE HAS NOT REGISTERED INTERESTS IN THE FIXED
ACCOUNT AS A SECURITY UNDER THE SECURITIES ACT OF 1933 AND
HAS NOT REGISTERED THE FIXED ACCOUNT AS AN INVESTMENT
COMPANY UNDER THE 1940 ACT. ACCORDINGLY, NEITHER THE FIXED
ACCOUNT NOR ANY INTERESTS THEREIN ARE SUBJECT TO REGULATION
UNDER THE 1933 ACT OR THE 1940 ACT. LINCOLN LIFE HAS BEEN
ADVISED THAT THE STAFF OF THE SEC HAS NOT MADE A REVIEW OF
THE DISCLOSURES WHICH ARE INCLUDED IN THIS PROSPECTUS WHICH
RELATE TO OUR GENERAL ACCOUNT AND TO THE FIXED ACCOUNT UNDER
THE CONTRACT. THESE 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. THIS PROSPECTUS IS
GENERALLY INTENDED TO SERVE AS A DISCLOSURE DOCUMENT ONLY
FOR ASPECTS OF THE POLICY INVOLVING THE VARIABLE ACCOUNT,
AND THEREFORE CONTAINS ONLY SELECTED INFORMATION REGARDING
THE FIXED ACCOUNT. COMPLETE DETAILS REGARDING THE FIXED
ACCOUNT ARE IN THE POLICY.
Premium Payments allocated to the Fixed Account are
guaranteed to be credited with a minimum interest rate,
specified in the Policy, of at least 4.0%. Interest in
excess of 4.0% may be credited in our sole discretion. Such
interest rate will be established on a prospective basis in
Lincoln Life's sole discretion and may vary by the Policy
issue year and duration. Lincoln Life may vary the way in
which it credits interest to the Fixed Account from time to
time.
ANY INTEREST IN EXCESS OF 4.0% WILL BE DECLARED IN ADVANCE
IN LINCOLN LIFE'S SOLE DISCRETION. POLICY OWNERS BEAR THE
RISK THAT NO INTEREST IN EXCESS OF 4.0% WILL BE DECLARED.
POLICY VALUES
ACCUMULATION VALUE
Once a Policy has been issued, each Net Premium Payment
allocated to a Sub-Account of the Variable Account is
credited in the form of Accumulation Units, representing the
Fund in which assets of that Sub-Account are invested. Each
Net Premium Payment will be credited to the Policy as of the
end of the Valuation Period in which it is received at the
Servicing Office (or portion thereof allocated to a
particular Sub-Account). The number of Accumulation Units
credited is determined by dividing the Net Premium Payment
by the value of an Accumulation Unit next computed after
receipt. Since each Sub-Account has a unique Accumulation
Unit value, a Policy Owner who has elected a combination of
funding options will have Accumulation Units credited from
more than one source.
The Accumulation Value of a Policy is determined by: (a)
multiplying the total number of Accumulation Units credited
to the Policy for each applicable Sub-Account by its
appropriate current Accumulation Unit value; (b) if a
combination of Sub-Accounts is elected, totaling the
resulting values; and (c) adding any values attributable to
the General Account (i.e., the Fixed Account Value and the
Loan Account Value).
The number of Accumulation Units credited to a Policy will
not be changed by any subsequent change in the value of an
Accumulation Unit. Such value may vary from Valuation Period
to Valuation Period to reflect the investment experience of
the Fund used in a particular Sub-Account.
22
<PAGE>
The Fixed Account Value reflects amounts allocated to the
General Account through payment of premiums or transfers
from the Variable Account. The Fixed Account Value is
guaranteed; however, there is no assurance that the Variable
Account Value of the Policy will equal or exceed the Net
Premium Payments allocated to the Variable Account.
Each Policy Owner will be advised at least annually as to
the number of Accumulation Units which remain credited to
the Policy, the current Accumulation Unit values, the
Variable Account Value, the Fixed Account Value and the Loan
Account Value.
Accumulation Value will be affected by Monthly Deductions.
VARIABLE ACCUMULATION UNIT VALUE
The value of a Variable Accumulation Unit for any Valuation
Period is determined by multiplying the value of that
Variable Accumulation Unit for the immediately preceding
Valuation Period by the Net Investment Factor for the
current period for the appropriate Sub-Account. The Net
Investment Factor is determined separately for each
Sub-Account by dividing (a) by (b) and subtracting (c) from
the results where (a) equals the net asset value per share
of the Fund held in the Sub-Account at the end of a
Valuation Period plus the per share amount of any
distribution declared by the Fund if the "ex-dividend" date
is during the Valuation Period plus or minus taxes or
provisions for taxes, if any, attributable to the operation
of the Sub-Account during the Valuation Period; (b) equals
the net asset value per share of the Fund held in the
Sub-Account at the beginning of that Valuation Period, and
(c) is the daily charge for mortality and expense risk
multiplied by the number of days in the Valuation Period.
SURRENDER VALUE
The Surrender Value of a Policy is the amount the Owner can
receive in cash by surrendering the Policy. All or part of
the Surrender Value may be applied to one or more of the
Settlement Options. See "Surrender Charge."
SURRENDERS
PARTIAL SURRENDERS
A partial surrender may be made at any time by written
request to the Servicing Office during the lifetime of the
Insured and while the Policy is in force. Such request may
also be made by telephone if telephone transfers have been
previously authorized in writing. A $25 transaction fee is
charged.
The amount of a partial surrender may not exceed 90% of the
Surrender Value at the end of the Valuation Period in which
the election becomes or would become effective, and may not
be less than $500.
For an Option 1 Policy (See "Death Benefit"): A partial
surrender will reduce the Accumulation Value, Death Benefit,
and Specified Amount. The Specified Amount and Accumulation
Value will be reduced by equal amounts and will reduce any
past increases in the reverse order in which they occurred.
For an Option 2 Policy (See "Death Benefit"): A partial
surrender will reduce the Accumulation Value and the Death
Benefit, but it will not reduce the Specified Amount.
The Specified Amount remaining in force after a partial
surrender may not be less than $100,000. Any request for a
partial surrender that would reduce the Specified Amount
below this amount will not be granted. In addition, if,
following the partial surrender and
23
<PAGE>
the corresponding decrease in the Specified Amount, the
Policy would not comply with the maximum premium limitations
required by federal tax law, the decrease may be limited to
the extent necessary to meet the federal tax law
requirements.
If, at the time of a partial surrender, the Net Accumulation
Value is attributable to more than one funding option, the
$25 transaction charge and the amount paid upon the
surrender will be taken proportionately from the values in
each funding option, unless the Policy Owner and Lincoln
Life agree otherwise.
FULL SURRENDERS
A full surrender may be made at any time. Lincoln Life will
pay the Surrender Value next computed after receiving the
Owner's written request at the Servicing Office in a form
satisfactory to Lincoln Life. Payment of any amount from the
Variable Account on a full surrender will usually be made
within seven calendar days thereafter. All coverage under
the Policy will automatically terminate if the Owner makes a
full surrender.
DEFERRAL OF PAYMENT AND TRANSFERS
Payment of the surrendered amount from the Variable Account
may be postponed when the New York Stock Exchange is closed
and for such other periods as the Commission may require.
Payment or transfer from the Fixed Account may be deferred
up to six months at Lincoln Life's option. If Lincoln Life
exercises its right to defer such payment or transfer
interest will be added as required by law.
LAPSE AND REINSTATEMENT
LAPSE OF A POLICY; EFFECT OF GUARANTEED DEATH BENEFIT
PROVISION
A Policy will not lapse during the five-year period after
its Issue Date regardless of investment performance if, on
each Monthly Anniversary Day within that period the sum of
premiums paid equals or exceeds the required amount of the
Guaranteed Initial Death Benefit Premium for that period,
assuming there have been no loans or partial surrenders. If
there have been any loans or partial surrenders, the Policy
may lapse unless there is sufficient Surrender Value to
cover the Monthly Deduction.
After the five-year period expires, and depending on the
investment performance of the funding options, the
Accumulation Value may be insufficient to keep this Policy
in force, and payment of an additional premium may be
necessary.
A lapse occurs, and all coverage under the policy
automatically terminates, if a Monthly Deduction is greater
than the Surrender Value and no payment to cover the Monthly
Deduction is made within the Grace Period. Lincoln Life will
send the Owner a lapse notice at least 31 days before the
Grace Period expires.
REINSTATEMENT OF A LAPSED POLICY
The Owner can apply for reinstatement at any time during the
Insured's lifetime if the Policy was not surrendered for
cash. To reinstate a Policy, Lincoln Life will require
satisfactory evidence of insurability and an amount
sufficient to pay for the current Monthly Deduction plus two
additional Monthly Deductions.
If the Policy is reinstated within five years of the Issue
Date, all values including the Loan Account Value will be
reinstated to the point they were on the date of lapse.
However, the Guaranteed Initial Death Benefit Option will
not be reinstated.
24
<PAGE>
If the Policy is reinstated after five years following the
Issue Date, it will be reinstated on the Monthly Anniversary
Day following Lincoln Life's approval. The Accumulation
Value at reinstatement will be the Net Premium Payment then
made less the Monthly Deduction due that day.
If the Surrender Value is not sufficient to cover the full
Surrender Charge at the time of lapse, the remaining portion
of the Surrender Charge will also be reinstated at the time
of Policy reinstatement.
POLICY LOANS
A Policy loan requires that a loan agreement be executed and
that the Policy be assigned to Lincoln Life. The loan may be
for any amount up to 100% of the Surrender Value; however,
Lincoln Life may limit the amount of such loan so that total
Policy indebtedness will not exceed 90% of an amount equal
to the Accumulation Value less the Surrender Charge which
would be imposed on a full surrender. The minimum loan
amount is $500. The amount of a loan, together with
subsequent accrued but not paid interest on the loan,
becomes part of the Loan Account Value. If Policy values are
held in more than one funding option, withdrawals from each
funding option will be made in proportion to the assets in
each funding option at the time of the loan for transfer to
the Loan Account, unless Lincoln Life is instructed
otherwise in writing at the Servicing Office.
Interest on loans will accrue at an annual rate of 8%, and
net loan interest (interest charged less interest credited
as described below) is payable once a year in arrears on
each anniversary of the loan, or earlier upon full surrender
or other payment of proceeds of a Policy. Any interest not
paid when due becomes part of the loan and the net interest
will be withdrawn proportionately from the values in each
funding option.
Lincoln Life will credit interest on the Loan Account Value.
During the first ten Policy Years, Lincoln Life's current
practice is that interest will be credited at an annual rate
equal to the interest rate charged on the loan minus 1%
(guaranteed not to exceed 2%). Beginning with the eleventh
Policy Year, Lincoln Life's current practice is that
interest will be credited at an annual rate equal to the
interest rate charged on the loan, less .25% annually
(guaranteed not to exceed 1%). In no case will the annual
credited interest rate be less than 6% in each of the first
ten Policy Years and 7% thereafter.
Repayments on the loan will be allocated among the funding
options according to current Net Premium Payment
allocations. The Loan Account Value will be reduced by the
amount of any loan repayment.
A Policy loan, whether or not repaid, will affect the
proceeds payable upon the Insured's death and the
Accumulation Value because the investment results of the
Variable Account or the Fixed Account will apply only to the
non-loaned portion of the Accumulation Value. The longer a
loan is outstanding, the greater the effect is likely to be.
Depending on the investment results of the Variable Account
or the Fixed Account while the loan is outstanding, the
effect could be favorable or unfavorable.
If at any time the total indebtedness against the Policy,
including interest accrued but not due, equals or exceeds
the then current Accumulation Value less surrender charge,
the Policy will terminate without value subject to the
conditions in the Grace Period provision.
If a Policy lapses while a loan is outstanding, adverse tax
consequences may result.
25
<PAGE>
SETTLEMENT OPTIONS
Proceeds in the form of Settlement Options are payable by
Lincoln Life at the Beneficiary's election upon the
Insured's death, or while the Insured is alive upon election
by the Owner of one of the Settlement Options.
A written request may be made to elect, change, or revoke a
Settlement Option before payments begin under any Settlement
Option. This request must be in form satisfactory to Lincoln
Life, and will take effect upon its receipt at the Servicing
Office. The first payment under the Settlement Option
selected will become payable on the date proceeds are
settled under the option. Payments after the first payment
will be made on the first day of each month. Once payments
have begun, the Policy cannot be surrendered and neither the
payee nor the Settlement Option may be changed.
FIRST OPTION -- Payments for the lifetime of the payee.
SECOND OPTION -- Payments for the lifetime of the payee,
guaranteed for 60, 120, 180, or 240 months;
THIRD OPTION -- Payment for a stated number of years, at
least five but no more than thirty;
FOURTH OPTION -- Payment of interest annually on the sum
left with Lincoln Life at a rate of at least 3% per year,
and upon the payee's death the amount on deposit will be
paid.
ADDITIONAL OPTIONS -- Policy proceeds may also be settled
under any other method of settlement offered by Lincoln Life
at the time the request is made.
OTHER POLICY PROVISIONS
ISSUANCE
A Policy may only be issued upon receipt of satisfactory
evidence of insurability, and generally only where the
Insured is below the age of 80.
EFFECTIVE DATE OF COVERAGE
The effective date of this Policy will be the Issue Date,
provided the initial premium has been paid while the Insured
is alive and prior to any change in the health and
insurability of the Insured as represented in the
application.
SHORT-TERM RIGHT TO CANCEL THE POLICY
A Policy may be returned for cancellation and a full refund
of premium within 10 days after the Policy is received,
unless otherwise stipulated by state law requirements,
within 10 days after Lincoln Life mails or personally
delivers a Notice of Withdrawal Right to the Owner, or
within 45 days after the application for the Policy is
signed, whichever occurs latest. The Initial Premium Payment
made when the Policy is issued will be held in the Fixed
Account and not allocated to the Variable Account even if
the Policy Owner may have so directed until three business
days following the expiration of the Right-to-Examine
Period. If the Policy is returned for cancellation in a
timely fashion, the refund of premiums paid, without
interest, will usually occur within seven days of notice of
cancellation, although a refund of premiums paid by check
may be delayed until the check clears.
26
<PAGE>
POLICY OWNER
While the Insured is living, all rights in this Policy are
vested in the Policy Owner named in the application or as
subsequently changed, subject to assignment, if any.
The Policy Owner may name a new Policy Owner while the
Insured is living. Any such change in ownership must be in a
written form satisfactory to Lincoln Life and recorded at
the Servicing Office. Once recorded, the change will be
effective as of the date signed; however, the change will
not affect any payment made or action taken by Lincoln Life
before it was recorded. Lincoln Life may require that the
Policy be submitted for endorsement before making a change.
If the Policy Owner is other than the Insured, names no
contingent Policy Owner and dies before the Insured, the
Policy Owner's rights in this Policy belong to the Policy
Owner's estate.
BENEFICIARY
The Beneficiary(ies) shall be as named in the application or
as subsequently changed, subject to assignment, if any.
The Policy Owner may name a new Beneficiary while the
Insured is living. Any change must be in a written form
satisfactory to Lincoln Life and recorded at the Servicing
Office. Once recorded, the change will be effective as of
the date signed; however, the change will not affect any
payment made or action taken by Lincoln Life before it was
recorded.
If any Beneficiary predeceases the Insured, that
Beneficiary's interest passes to any surviving
Beneficiary(ies), unless otherwise provided. Multiple
Beneficiaries will be paid in equal shares, unless otherwise
provided. If no named Beneficiary survives the Insured, the
death proceeds shall be paid to the Policy Owner or the
Policy Owner's executor(s), administrator(s) or assigns.
ASSIGNMENT
While the Insured is living, the Policy Owner may assign his
or her rights in the Policy. The assignment must be in
writing, signed by the Policy Owner and recorded at the
Servicing Office. No assignment will affect any payment made
or action taken by Lincoln Life before it was recorded.
Lincoln Life is not responsible for any assignment not
submitted for recording, nor is Lincoln Life responsible for
the sufficiency or validity of any assignment. The
assignment will be subject to any indebtedness owed to
Lincoln Life before it was recorded.
RIGHT TO EXCHANGE FOR A FIXED BENEFIT POLICY
The Policy Owner may, within the first two Policy Years,
exchange the Policy for a permanent life insurance policy
then being offered by Lincoln Life. The benefits for the new
policy will not vary with the investment experience of a
separate account. The exchange must be elected within 24
months from the Issue Date. No evidence of insurability will
be required.
The Policy Owner, the Insured and the Beneficiary under the
new policy will be the same as those under the exchanged
Policy on the effective date of the exchange. The
Accumulation Value under the new Policy will be equal to the
Accumulation Value under the old Policy on the date the
exchange request is received. The new policy will have a
Death Benefit on the exchange date not more than the Death
Benefit of the original Policy immediately prior to the
exchange date. If the Accumulation Value is insufficient to
support the Death Benefit, the Policy Owner will be required
to make additional
27
<PAGE>
Premium Payments in order to effect the exchange. The new
policy will have the same Issue Date and Issue Age as the
original Policy. The initial Specified Amount and any
increases in Specified Amount will have the same rate class
as those of the original Policy. Any indebtedness may be
transferred to the new policy.
The exchange may be subject to an equitable adjustment in
rates and values to reflect variances, if any, in the rates
and values between the two Policies. After adjustment, if
any excess is owed the Policy Owner, Lincoln Life will pay
the excess to the Policy Owner in cash. The exchange may be
subject to federal income tax withholding.
INCONTESTABILITY
Lincoln Life will not contest payment of the death proceeds
based on the Initial Specified Amount after the Policy has
been in force during the Insured's lifetime for two years
from the Issue Date. For any increase in Specified Amount
requiring evidence of insurability, Lincoln Life will not
contest payment of the death proceeds based on such an
increase after it has been in force during the Insured's
lifetime for two years from its effective date.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, the
affected benefits will be adjusted. The amount of the Death
Benefit will be 1. multiplied by 2. and then the result
added to 3. where:
1. is the Net Amount at Risk at the time of the Insured's
death;
2. is the ratio of the monthly cost of insurance applied in
the policy month of death to the monthly cost of
insurance that should have been applied at the true age
and sex in the policy month of death; and
3. is the Accumulation Value at the time of the Insured's
death.
SUICIDE
If the Insured dies by suicide, while sane or insane, within
two years from the Issue Date, Lincoln Life will pay no more
than the sum of the premiums paid, less any indebtedness and
the amount of any partial surrenders. If the Insured dies by
suicide, while sane or insane, within two years from the
date an application is accepted for an increase in the
Specified Amount, Lincoln Life will pay no more than a
refund of the monthly charges for the cost of such
additional benefit.
NONPARTICIPATING POLICIES
These are nonparticipating Policies on which no dividends
are payable. These Policies do not share in the profits or
surplus earnings of Lincoln Life.
TAX MATTERS
POLICY PROCEEDS
Section 7702 of the Code provides that if certain tests are
met, a Policy will be treated as a life insurance policy for
federal tax purposes. Lincoln Life will monitor compliance
with these tests. Lincoln Life reserves the right to make
changes in this Policy or to make distributions from the
Policy to the extent it deems necessary, in its sole
discretion, to continue to qualify this Policy as life
insurance. The Policy should thus
28
<PAGE>
receive the same federal income tax treatment as fixed
benefit life insurance. As a result, the death proceeds
payable under a Policy are excludable from gross income of
the Beneficiary under Section 101 of the Code.
Section 7702A of the Code defines modified endowment
contracts as those policies issued or materially changed on
or after June 21, 1988 on which the total premiums paid
during the first seven years exceed the amount that would
have been paid if the policy provided for paid up benefits
after seven level annual premiums. The Code provides for
taxation of surrenders, partial surrenders, loans,
collateral assignments and other pre-death distributions
from modified endowment contracts in the same way annuities
are taxed. Modified endowment contract distributions are
defined by the Code as amounts not received as an annuity
and are taxable to the extent the cash value of the policy
exceeds, at the time of distribution, the premiums paid into
the policy. A 10% tax penalty generally applies to the
taxable portion of such distributions unless the Policy
Owner is over age 59 1/2 or disabled.
It may not be advantageous to replace existing insurance
with Policies described in this Prospectus. It may also be
disadvantageous to purchase a Policy to obtain additional
insurance protection if the purchaser already owns another
variable life insurance policy.
The Policies offered by this Prospectus may or may not be
issued as modified endowment contracts. Lincoln Life will
monitor premiums paid and will notify the Policy Owner when
the Policy's non-modified endowment contract status is in
jeopardy. If a Policy is not a modified endowment contract,
a cash distribution during the first 15 years after a Policy
is issued which causes a reduction in death benefits may
still become fully or partially taxable to the Owner
pursuant to Section 7702(f)(7) of the Code. The Policy Owner
should carefully consider this potential effect and seek
further information before initiating any changes in the
terms of the Policy. Under certain conditions, a Policy may
become a modified endowment contract as a result of a
material change or a reduction in benefits as defined by
Section 7702A(c) of the Code.
In addition to meeting the tests required under Section 7702
and Section 7702A, Section 817(h) of the Code requires that
the investments of separate accounts such as the Variable
Account be adequately diversified. Regulations issued by the
Secretary of the Treasury set the standards for measuring
the adequacy of this diversification. A variable life
insurance policy that is not adequately diversified under
these regulations would not be treated as life insurance
under Section 7702 of the Code. To be adequately
diversified, each Sub-Account of the Variable Account must
meet certain tests. Lincoln Life believes the Variable
Account investments meet the applicable diversification
standards.
Should the Secretary of the Treasury issue additional rules
or regulations limiting the number of funds, transfers
between funds, exchanges of funds or changes in investment
objectives of funds such that the Policy would no longer
qualify as life insurance under Section 7702 of the Code,
Lincoln Life will take whatever steps are available to
remain in compliance.
Lincoln Life will monitor compliance with these regulations
and, to the extent necessary, will change the objectives or
assets of the Sub-Account investments to remain in
compliance.
A total surrender or termination of the Policy by lapse may
have adverse tax consequences. If the amount received by the
Policy Owner plus total Policy indebtedness exceeds the
premiums paid into the Policy, the excess will generally be
treated as taxable income, regardless of whether or not the
Policy is a modified endowment contract.
29
<PAGE>
Federal estate and state and local estate, inheritance and
other tax consequences of ownership or receipt of Policy
proceeds depend on the circumstances of each Policy Owner or
Beneficiary.
TAXATION OF LINCOLN LIFE
Lincoln Life is taxed as a life insurance company under the
Code. Since the Variable Account is not a separate entity
from Lincoln Life and its operations form a part of Lincoln
Life, it will not be taxed separately as a "regulated
investment company" under Sub-chapter M of the Code.
Investment income and realized capital gains on the assets
of the Variable Account are reinvested and taken into
account in determining the value of Accumulation Units.
Lincoln Life does not initially expect to incur any Federal
income tax liability that would be chargeable to the
Variable Account. Based upon these expectations, no charge
is currently being made against the Variable Account for
federal income taxes. If, however, Lincoln Life determines
that on a separate company basis such taxes may be incurred,
it reserves the right to assess a charge for such taxes
against the Variable Account.
Lincoln Life may also incur state and local taxes in
addition to premium taxes in several states. At present,
these taxes are not significant. If they increase, however,
additional charges for such taxes may be made.
SECTION 848 CHARGES
The 5.0% premium load is assessed to cover state taxes,
federal income tax liabilities and a portion of the sales
expenses incurred by Lincoln Life. This load is made up of
2.35% for state taxes, 1.15% for the additional federal
income tax burden under Section 848 of the Code relating to
the tax treatment of deferred acquisition costs and a 1.5%
sales load.
OTHER CONSIDERATIONS
The foregoing discussion is general and is not intended as
tax advice. Counsel and other competent advisers should be
consulted for more complete information. This discussion is
based on Lincoln Life's understanding of Federal income tax
laws as they are currently interpreted by the Internal
Revenue Service. No representation is made as to the
likelihood of continuation of these current laws and
interpretations.
OTHER MATTERS
DIRECTORS AND OFFICERS OF LINCOLN LIFE
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S)
WITH REGISTRANT PRINCIPAL OCCUPATIONS LAST FIVE YEARS
<S> <C>
- ----------------------------------------------------------------------------------------
ROLAND C. BAKER President [1/95-present], First Penn-Pacific Life
DIRECTOR Insurance Co. Formerly: Chairman and CEO
1801 S. Meyers Road [7/88-1/95], Baker, Ralish, Shipley & Politzer, Inc.
Oakbrook Terrace, Ill. 60181
J. PATRICK BARRETT President [12/94-present], BGS Leasing Group, Ltd.;
DIRECTOR Chief Executive Officer [1/93-present], Syracuse
4605 Watergap Executive Air Service, Inc. Formerly: Chief
Manlius, NY 13104 Executive Officer [8/81-9/87] and Chairman
[7/83-9/87], Avis, Inc.
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S)
WITH REGISTRANT PRINCIPAL OCCUPATIONS LAST FIVE YEARS
- ----------------------------------------------------------------------------------------
<S> <C>
DAVID N. BECKER Vice President [1/90-present], The Lincoln National
SECOND VICE PRESIDENT AND Life Insurance Company
APPOINTED ACTUARY
1300 South Clinton Street
Fort Wayne, Ind. 46802
THOMAS D. BELL, JR. President and Chief Executive Officer
DIRECTOR [4/95-present], Burson-Marstellar. Formerly: Vice
230 Park Avenue, South Chairman [4/94-4/95], Gulfstream Aerospace Corp.;
New York, NY 10003 Vice Chairman and Chief Executive Officer
[1/89-1/94], Burson-Marstellar
JON A. BOSCIA President and Chief Executive Officer
DIRECTOR [10/96-present] (formerly Chief Operating Officer
1300 South Clinton Street [5/94-10/96]), Lincoln National Life Insurance Co.
Fort Wayne, Ind. 46802 Formerly: President [7/91-5/94] Lincoln Investment
Management Inc.
PHILIP L. HOLSTEIN President, Lincoln Life & Annuity Company of New
PRESIDENT AND DIRECTOR York [7/96-Present] Formerly: President, [1/82-7/96]
120 Madison Street, Suite 1700 The Holstein Company, Inc.
Syracuse, NY 13202
HARRY L. KAVETAS Executive Vice President and Chief Financial Officer
DIRECTOR [2/94-present], Eastman Kodak Company. Formerly:
343 State Street Vice President [9/61-12/93], IBM Corp.
Rochester, NY 14650-0235
BARBARA S. KOWALCZYK Senior Vice-President Corporation Planning
DIRECTOR [1/94-present], Lincoln National Corp.; Formerly:
200 East Berry Street Senior Vice President [1/77-1/94], Lincoln National
Fort Wayne, Ind. 46802 Investment Management Co.
MARGEURITE L. LACHMAN Managing Director
DIRECTOR [4/87-present], Schroder Real Estate Associates
437 Madison Avenue, 18th Floor
New York, NY 10022
LOUIS G. MARCOCCIA Officer [1/75-present], Syracuse University
DIRECTOR
Skytop Office Building
Skytop Road
Syracuse, NY 13244-5300
TROY D. PANNING Second Vice President and Chief Financial Officer
SECOND VICE PRESIDENT AND [11/96-present] Formerly: Manager [9/90-11/96],
CHIEF FINANCIAL OFFICER Ernst & Young LLP
120 Madison Street, Suite 1700
Syracuse, New York 13202
JOHN M. PIETRUSKI Chairman of Board
DIRECTOR [1/89-present], Texas Biotechnology Corp.
One Penn Plaza
Suite 3408
New York, NY 10119
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S)
WITH REGISTRANT PRINCIPAL OCCUPATIONS LAST FIVE YEARS
- ----------------------------------------------------------------------------------------
<S> <C>
LAWRENCE T. ROWLAND Executive Vice President [10/96-present] (formerly
DIRECTOR Senior Vice President One Reinsurance [1/93-10/96],
Place Vice President [10/91-1/93]), Lincoln National Life
1700 Magnavox Way Insurance Co.
Fort Wayne, Ind. 46804
JOHN L. STEINKAMP Vice President and Associate General Counsel
DIRECTOR [8/77-present], Lincoln National Corp.
200 East Berry Street
Fort Wayne, Ind. 46802
RICHARD C. VAUGHAN Executive Vice President and Chief Financial Officer
DIRECTOR [1/95-present] (formerly Senior Vice President
200 East Berry Street [6/92-1/95], Lincoln National Corp.
Fort Wayne, Ind. 46802
</TABLE>
PRINCIPAL UNDERWRITER
Lincoln Life intends to offer the Policies in all
jurisdictions where it is licensed to do business. The
Lincoln National Life Insurance Company, the principal
underwriter for the Policies, is registered with the
Securities and Exchange Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of
the National Association of Securities Dealers. The
principal business address of The Lincoln National Life
Insurance Company is 1300 South Clinton Street, Fort Wayne,
Indiana 46802.
The Policy will be sold by individuals who, in addition to
being licensed as life insurance agents for Lincoln Life,
are also registered representatives of The Lincoln National
Life Insurance Company. Gross first year commissions paid by
Lincoln Life, including expense reimbursement allowances, on
the sale of these Policies are not more than [ %] of
Premium Payments. Gross renewal commissions paid by Lincoln
Life will not exceed [ %] of Premium Payments. The local
agency receives additional compensation on the first year
required premium and all additional premiums, plus a small
percentage of Accumulation Values. In some situations, the
local agency may elect to share its commission with the
registered representative. Selling representatives are also
eligible for bonuses and non-cash compensation if certain
production levels are reached. All compensation is paid from
Lincoln Life's resources, which include certain charges made
under the Policy.
CHANGES OF INVESTMENT POLICY
Lincoln Life may materially change the investment policy of
the Variable Account. Lincoln Life must inform the Policy
Owners and obtain all necessary regulatory approvals. Any
change must be submitted to the New York state insurance
departments which shall disapprove it if deemed detrimental
to the interests of the Policy Owners or if it renders
Lincoln Life operations hazardous to the public. If a Policy
Owner objects, the Policy may be converted to a
substantially comparable fixed benefit life insurance policy
then offered by Lincoln Life on the life of the Insured. The
Policy Owner has the later of 60 days from the date of the
investment policy change or 60 days from being informed of
such change to make this conversion. Lincoln Life will not
require evidence of insurability for this conversion.
The new policy will not be affected by the investment
experience of any separate account. The new policy will be
for an amount of insurance not exceeding the Death Benefit
of the Policy converted on the date of such conversion.
32
<PAGE>
OTHER CONTRACTS ISSUED BY LINCOLN LIFE
Lincoln Life does presently and will, from time to time,
offer other variable annuity contracts and variable life
insurance policies with benefits which vary in accordance
with the investment experience of a separate account of
Lincoln Life.
STATE REGULATION
Lincoln Life is subject to the laws of New York governing
insurance companies and to regulation by the New York
Insurance Department. An annual statement in a prescribed
form is filed with the Insurance Department each year
covering the operation of Lincoln Life for the preceding
year and its financial condition as of the end of such year.
Regulation by the Insurance Department includes periodic
examination to determine Lincoln Life's contract liabilities
and reserves so that the Insurance Department may certify
the items are correct. Lincoln Life's books and accounts are
subject to review by the Insurance Department at all times
and a full examination of its operations is conducted
periodically by the New York Department of Insurance. Such
regulation does not, however, involve any supervision of
management or investment practices or policies.
REPORTS TO POLICY OWNERS
Lincoln Life maintains Policy records and will mail to each
Policy Owner, at the last known address of record, an annual
statement showing the amount of the current Death Benefit,
the Accumulation Value, and Surrender Value, premiums paid
and monthly charges deducted since the last report, the
amounts invested in the Fixed Account and in the Variable
Account and in each Sub-Account of the Variable Account, and
any Loan Account Value.
Policy Owners will also be sent annual reports containing
financial statements for the Variable Account and annual and
semi-annual reports of the Funds as required by the 1940
Act.
In addition, Policy Owners will receive statements of
significant transactions, such as changes in Specified
Amount, changes in Death Benefit Option, changes in future
premium allocation, transfers among Sub-Accounts, Premium
Payments, loans, loan repayments, reinstatement and
termination.
ADVERTISING
Lincoln Life is also ranked and rated by independent
financial rating services, including Moody's, Standard &
Poor's, Duff & Phelps and A.M. Best Company. The purpose of
these ratings is to reflect the financial strength or
claims-paying ability of Lincoln Life. The ratings are not
intended to reflect the investment experience or financial
strength of the Variable Account. Lincoln Life may advertise
these ratings from time to time. In addition, Lincoln Life
may include in certain advertisements, endorsements in the
form of a list of organizations, individuals or other
parties which recommend Lincoln Life or the Policies.
Furthermore, Lincoln Life may occasionally include in
advertisements comparisons of currently taxable and tax
deferred investment programs, based on selected tax
brackets, or discussions of alternative investment vehicles
and general economic conditions.
LEGAL PROCEEDINGS
[To be filed by amendment]
33
<PAGE>
EXPERTS
Actuarial opinions have been rendered by , as
stated in the opinion filed as an Exhibit to the
Registration Statement given on the authority of
as an expert in actuarial matters.
The consolidated financial statements of Lincoln Life &
Annuity Company of New York as of December 31, 1997 and 1996
included in this Prospectus have been so included in
reliance on the report of , independent
accountants, given on the authority of said firm as experts
in auditing and accounting. 's consent to this
reference to the firm as an "expert" is filed as an exhibit
to the registration statement of which this Prospectus is a
part.
REGISTRATION STATEMENT
A Registration Statement has been filed with the Securities
and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the Policies offered hereby. This
Prospectus does not contain all the information set forth in
the Registration Statement and amendments thereto and
exhibits filed as a part thereof, to all of which reference
is hereby made for further information concerning the
Variable Account, Lincoln Life, and the Policies offered
hereby. Statements contained in this Prospectus as to the
content of Policies and other legal instruments are
summaries. For a complete statement of the terms thereof,
reference is made to such instruments as filed.
FINANCIAL STATEMENTS
[To be filed by amendment]
34
<PAGE>
APPENDIX 1
ILLUSTRATION OF SURRENDER CHARGES
The Surrender Charge is calculated as (a) times (b), where
(a) is the sum of (i) a Deferred Sales Charge and (ii) a
Deferred Administrative Charge and (b) is the applicable
Surrender Charge Grading Factor. If the Specified Amount is
increased, a new Surrender Charge will be applicable, in
addition to any existing Surrender Charge.
Below are examples of Surrender Charge calculations, one
involving a level Specified Amount and one involving an
increase in the Specified Amount, followed by Definitions
and Tables used in the calculations.
EXAMPLE 1: A male nonsmoker, age 35, purchases a Policy with
a Specified Amount of $100,000 and a scheduled annual
premium of $1100. He now wants to surrender the Policy at
the end of the sixth Policy Year.
The Surrender Charge computed is as follows:
Sum of the premiums paid through the end of the second
Policy Year = $2200.00
Guideline Annual Premium Amount (Male, Age 35, $100,000
Specified Amount) = $1195.63
Surrender Charge =
<TABLE>
<S> <C>
(.285X$1195.63) + (.085X($2200-$1195.63)) = $340.75 + $85.37 = $ 426.12(i)
$6.00 per $1000 of Specified Amount $ 600.00(ii)
--------
$1026.12(a)
</TABLE>
The total Surrender Charge is $1026.12(a), times the
surrender charge grading factor,(b): ($1026.12 X 80%) =
$820.90.
EXAMPLE 2: A female nonsmoker, age 45, purchases a Policy
with an Initial Specified Amount of $200,000 and a scheduled
annual premium of $1500. She pays the scheduled annual
premium for the first five Policy Years. At the start of the
sixth Policy Year, she increases the Specified Amount to
$250,000 and continues to pay the scheduled annual premium
of $1500. She now wants to surrender the Policy at the end
of the eighth Policy Year. Separate Surrender Charges must
be calculated for the Initial Specified Amount and for the
increase in Specified Amount.
The Surrender Charges are computed as follows:
For the Initial Specified Amount,
Sum of the premiums paid through the end of the second
Policy Year = $3000.00
Guideline Annual Premium Amount (Female, Age 45, $200,000
Specified Amount = $2966.81
<TABLE>
<CAPTION>
Surrender Charge for Initial Specified Amount =
<S> <C>
(.285X$2966.81) +(.085X($3000.00-$2966.81)) = $845.54 + $2.82 = $ 848.36(i)
$6.00 per $1000 of Initial Specified Amount $1200.00(ii)
--------
$2048.36(a)
</TABLE>
The total Surrender Charge for the Initial Specified Amount
is $2048.36,(a), times the applicable surrender charge
grading factor,(b): ($2048.36 X 40%) = $819.34.
35
<PAGE>
For the increase in Specified Amount;
Sum of the premiums in the first two years following the
increase in Specified Amount, applicable to the increase in
Specified Amount =
($1500 X 2) X ($50,000 / $250,000) = $600.00.
Guideline Annual Premium Amount (Female, Age 50, $50,000
Specified Amount) = $993.68.
<TABLE>
<CAPTION>
Surrender Charge for the increase in Specified Amount =
<S> <C>
(.285 X $600.00) $ 171.00(i)
$6.00 per $1000 of increase in Specified Amount $ 300.00(ii)
--------
$ 471.00(a)
</TABLE>
The total Surrender Charge for the increase in the Specified
Amount is $471.00,(a), times the applicable surrender charge
grading factor,(b): ($471.00 X 100%) = $471.00
The overall Surrender Charge for the Policy is ($819.34 +
$471.00) = $1290.34.
DEFINITIONS AND TABLES
(a)(i) The Deferred Sales Charge is based on the actual
premium paid and the applicable Guideline Annual
Premium Amount, and is calculated assuming the
following:
<TABLE>
<S> <C>
DURING POLICY YEAR:
1 and 2 28.5% of the sum of the
premiums paid up to an amount
equal to the Guideline Annual
Premium Amount,* plus 8.5% of
the sum of the premiums paid
between one and two times the
Guideline Annual Premium
Amount, plus 7.5% of the sum
of the premiums paid in excess
of two times the Guideline
Annual Premium Amount.
3 through 10 same dollar amount as of the
end of Policy Year 2.
</TABLE>
In no event will the Deferred Sales Charge exceed the
maximum permitted under federal or state law.
(ii) The Deferred Administrative Charge is $6.00 per
$1,000 of Specified Amount.
(b) SURRENDER CHARGE GRADING FACTORS
<TABLE>
<S> <C>
Policy Years**
1-5 100%
Policy Year 6 80%
Policy Year 7 60%
Policy Year 8 40%
Policy Year 9 20%
Policy Year 10 0%
</TABLE>
If a Surrender Charge becomes effective at other than the
end of a Policy Year, any applicable Surrender Charge
grading factor will be applied on a pro rata basis as of
such effective date.
* Guideline Annual Premium Amount is the level annual
amount that would be payable through the latest maturity
date permitted under the Policy but not less than 20
years after date of issue or (if earlier) age 95 for the
future benefits under the Policy, subject to the
following provisions: (A) the payments were fixed by the
Life Insurer as to both timing and amount; and (B) the
payments were based on the 1980 Commissioners Standard
Ordinary Mortality Table, net investment earnings at the
greater of an annual effective of 5% or rate or rates
guaranteed at issue of the policy, the sales load under
the policy, and the fees and charges specified in the
policy. A new Guideline Annual Premium Amount is
determined for each increase in Specified Amount under
the policy; in such event, "Policy Years" are measured
from the effective date(s) of such increase(s).
** Number of Policy Years elapsed since the Date of Issue or
since the effective date(s) of any increase(s) in
Specified Amount.
36
<PAGE>
APPENDIX 2
ILLUSTRATIONS OF ACCUMULATION VALUES, SURRENDER VALUES,
AND DEATH BENEFITS
The illustrations in this Prospectus have been prepared to
help show how values under the Policies change with
investment performance. The illustrations illustrate how
Accumulation Values, Surrender Values and Death Benefits
under a Policy would vary over time if the hypothetical
gross investment rates of return were a uniform annual
effective rate of either 0%, 6% or 12%. If the hypothetical
gross investment rate of return averages 0%, 6%, or 12% over
a period of years, but fluctuates above or below those
averages for individual years, the Accumulation Values,
Surrender Values and Death Benefits may be different. The
illustrations also assume there are no Policy loans or
partial surrenders, no additional Premium Payments are made
other than shown, no Accumulation Values are allocated to
the Fixed Account, and there are no changes in the Specified
Amount or Death Benefit Option.
The amounts shown for the Accumulation Value, Surrender
Value and Death Benefit as of each Policy Anniversary
reflect the fact that the net investment return on the
assets held in the Sub-Accounts is lower than the gross
return. This is due to the daily charges made against the
assets of the Sub-Accounts for assuming mortality and
expense risks. The current mortality and expense risk
charges are equivalent to an annual effective rate of 0.80%
of the daily net asset value of the Variable Account. On
each Policy Anniversary beginning with the 13th, the
mortality and expense risk charge is reduced to 0.55% on an
annual basis of the daily net assets of the Variable
Account. The mortality and expense risk charge is guaranteed
never to exceed an annual effective rate of 0.90%. In
addition, the net investment returns also reflect the
deduction of Fund investment advisory fees and other
expenses which will vary depending on which funding vehicle
is chosen but which are assumed for purposes of these
illustrations to be equivalent to an annual effective rate
of % of the daily net asset value of the Variable
Account.
Considering current charges for mortality and expense risks
and the assumed Fund expenses, gross annual rates of return
of 0%, 6%, and 12% correspond to net investment experience
at constant annual rates of %, % and %. On each
Policy Anniversary beginning with the 13th, the gross annual
rates of return of 0%, 6%, and 12% correspond to net
investment experience at constant annual rates of %, %
and %. This is due to a reduction, currently in effect,
in the mortality and expense risk charge from an annual
effective rate of 0.80% to an annual effective rate of 0.55%
after twelve Policy Years.
Considering guaranteed charges for mortality and expense
risks and the assumed Fund expenses, gross annual rates of
0%, 6% and 12% correspond to net investment experience at
constant annual rates of %, % and %.
The illustrations also reflect the fact that Lincoln Life
makes monthly charges for providing insurance protection.
Current values reflect current Cost of Insurance charges and
guaranteed values reflect the maximum Cost of Insurance
charges guaranteed in the Policy. The values shown are for
Policies which are issued as standard. Policies issued on a
substandard basis would result in lower Accumulation Values
and Death Benefits than those illustrated.
The illustrations also reflect the fact that Lincoln Life
deducts a premium load from each Premium Payment. Current
and guaranteed values reflect a deduction of 5.0% of each
Premium Payment.
37
<PAGE>
The Surrender Values shown in the illustrations reflect the
fact that Lincoln Life will deduct a Surrender Charge from
the Policy's Accumulation Value for any Policy surrendered
in full during the first ten years.
In addition, the illustrations reflect the fact that Lincoln
Life deducts a monthly administrative charge at the
beginning of each Policy Month. This monthly administrative
expense charge is $15 per month in the first year. Current
values reflect a current monthly administrative expense
charge of $5 in renewal years, and guaranteed values reflect
the $10 maximum monthly administrative charge under the
Policy in renewal years.
Upon request, Lincoln Life will furnish a comparable
illustration based on the proposed insured's age, gender
classification, smoking classification, risk classification
and premium payment requested.
38
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
MALE NONSMOKER ISSUE AGE 45
PREFERRED -- $5,998 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
GUARANTEED BASIS
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
ACCUMULATED ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
END OF AT GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
POLICY 5% INTEREST NET NET NET NET NET NET NET NET NET
YEAR PER YEAR % % % % % % % % %
- ------ ----------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 6,298
2 12,911
3 19,854
4 27,145
5 34,800
6 42,838
7 51,278
8 60,139
9 69,444
10 79,214
15 135,900
20 208,246
25 300,580
30 418,425
</TABLE>
All Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefits, Accumulation
Values and Surrender Values would be less than
those illustrated.
Assumes no policy loans or partial surrenders
have been made. Guaranteed cost of insurance
rates, mortality and expense risk charges,
administrative fees and premium load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The "Net" percentages in these illustrations
reflect (1) the deduction of guaranteed
mortality and expense risk charges and (2)
assumed Fund total expenses of % per year.
See "Mortality and Expense Risk Charge and
Fund Expenses" at pages 20-21 of this
Prospectus.
39
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
MALE NONSMOKER ISSUE AGE 45
PREFERRED -- $5,998 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
CURRENT BASIS
<TABLE>
<CAPTION>
DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
PREMIUMS NET NET NET NET NET NET NET NET NET
ACCUMULATED IN YEARS 1-12 IN YEARS 1-12 IN YEARS 1-12
END OF AT
POLICY 5% INTEREST NET NET NET NET NET NET NET NET NET
YEAR PER YEAR IN YEARS 13 AND AFTER IN YEARS 13 AND AFTER IN YEARS 13 AND AFTER
- ------ ----------- ------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 6,298
2 12,911
3 19,854
4 27,145
5 34,800
6 42,838
7 51,278
8 60,139
9 69,444
10 79,214
15 135,900
20 208,246
25 300,580
30 418,425
</TABLE>
All Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefits, Accumulation
Values and Surrender Values would be less than
those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The "Net" percentages in these illustrations
reflect (1) the deduction of current mortality
and expense risk charges and (2) assumed Fund
total expenses of % per year. See
"Mortality and Expense Risk Charge and Fund
Expenses" at pages 20-21 of this Prospectus.
40
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
MALE NONSMOKER ISSUE AGE 55
PREFERRED -- $9,727 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
GUARANTEED BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
END OF AT ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
YEAR PER YEAR NET NET NET NET NET NET NET NET NET
- ------ ----------- -------- -------- ------------ -------- -------- ------------ -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 10,213
2 20,937
3 32,198
4 44,021
5 56,435
6 69,470
7 83,157
8 97,528
9 112,618
10 128,462
15 220,389
20 337,714
25 487,454
30 678,563
</TABLE>
All Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefits, Accumulation
Values and Surrender Values would be less than
those illustrated.
Assumes no policy loans or partial surrenders
have been made. Guaranteed cost of insurance
rates, mortality and expense risk charges,
administrative fees and premium load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The "Net" percentages in these illustrations
reflect (1) the deduction of guaranteed
mortality and expense risk charges and (2)
assumed Fund total expenses of % per year.
See "Mortality and Expense Risk Charge and
Fund Expenses" at pages 19-20 of this
Prospectus.
41
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
MALE NONSMOKER ISSUE AGE 55
PREFERRED -- $9,727 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
CURRENT BASIS
<TABLE>
<CAPTION>
DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
PREMIUMS NET NET NET NET NET NET NET NET NET
ACCUMULATED IN YEARS 1-12 IN YEARS 1-12 IN YEARS 1-12
END OF AT
POLICY 5% INTEREST NET NET NET NET NET NET NET NET NET
YEAR PER YEAR IN YEARS 13 AND AFTER IN YEARS 13 AND AFTER IN YEARS 13 AND AFTER
- ------ ----------- ---------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 10,213
2 20,937
3 32,198
4 44,021
5 56,435
6 69,470
7 83,157
8 97,528
9 112,618
10 128,462
15 220,389
20 337,714
25 487,454
30 678,563
</TABLE>
All Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefits, Accumulation
Values and Surrender Values would be less than
those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The "Net" percentages in these illustrations
reflect (1) the deduction of current mortality
and expense risk charges and (2) assumed Fund
total expenses of % per year. See
"Mortality and Expense Risk Charge and Fund
Expenses" at pages 19-20 of this Prospectus.
42
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
FEMALE NONSMOKER ISSUE AGE 45
PREFERRED -- $4,459 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
GUARANTEED BASIS
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
ACCUMULATED ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
END OF AT GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
POLICY 5% INTEREST NET NET NET NET NET NET NET NET NET
YEAR PER YEAR -1.70% 4.30% 10.30% -1.70% 4.30% 10.30% -1.70% 4.30% 10.30%
- ------ ----------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,682
2 9,598
3 14,760
4 20,180
5 25,871
6 31,846
7 38,120
8 44,708
9 51,626
10 58,889
15 101,030
20 154,813
25 223,456
30 311,063
</TABLE>
All Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefits, Accumulation
Values and Surrender Values would be less than
those illustrated.
Assumes no policy loans or partial surrenders
have been made. Guaranteed cost of insurance
rates, mortality and expense risk charges,
administrative fees and premium load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The "Net" percentages in these illustrations
reflect (1) the deduction of guaranteed
mortality and expense risk charges and (2)
assumed Fund total expenses of % per year.
See "Mortality and Expense Risk Charge and
Fund Expenses" at pages 19-20 of this
Prospectus.
43
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
FEMALE NONSMOKER ISSUE AGE 45
PREFERRED -- $4,459 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
CURRENT BASIS
<TABLE>
<CAPTION>
DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
PREMIUMS NET NET NET NET NET NET NET NET NET
ACCUMULATED IN YEARS 1-12 IN YEARS 1-12 IN YEARS 1-12
END OF AT
POLICY 5% INTEREST NET NET NET NET NET NET NET NET NET
YEAR PER YEAR IN YEARS 13 AND AFTER IN YEARS 13 AND AFTER IN YEARS 13 AND AFTER
- ------ ----------- ------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,682
2 9,598
3 14,760
4 20,180
5 25,871
6 31,846
7 38,120
8 44,708
9 51,626
10 58,889
15 101,030
20 154,813
25 223,456
30 311,063
</TABLE>
All Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefits, Accumulation
Values and Surrender Values would be less than
those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The "Net" percentages in these illustrations
reflect (1) the deduction of current mortality
and expense risk charges and (2) assumed Fund
total expenses of % per year. See
"Mortality and Expense Risk Charge and Fund
Expenses" at pages 19-20 of this Prospectus.
44
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
FEMALE NONSMOKER ISSUE AGE 55
PREFERRED -- $7,095 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
GUARANTEED BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
END OF AT ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
YEAR PER YEAR NET NET NET NET NET NET NET NET NET
- ------ ----------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 7,450
2 15,272
3 23,485
4 32,109
5 41,165
6 50,673
7 60,656
8 71,138
9 82,145
10 93,702
15 160,755
20 246,333
25 355,555
30 494,953
</TABLE>
All Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefits, Accumulation
Values and Surrender Values would be less than
those illustrated.
Assumes no policy loans or partial surrenders
have been made. Guaranteed cost of insurance
rates, mortality and expense risk charges,
administrative fees and premium load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The "Net" percentages in these illustrations
reflect (1) the deduction of guaranteed
mortality and expense risk charges and (2)
assumed Fund total expenses of % per year.
See "Mortality and Expense Risk Charge and
Fund Expenses" at pages 19-20 of this
Prospectus.
45
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
FEMALE NONSMOKER ISSUE AGE 55
PREFERRED -- $7,095 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
CURRENT BASIS
<TABLE>
<CAPTION>
DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
PREMIUMS NET NET NET NET NET NET NET NET NET
ACCUMULATED IN YEARS 1-12 IN YEARS 1-12 IN YEARS 1-12
END OF AT
POLICY 5% INTEREST NET NET NET NET NET NET NET NET NET
YEAR PER YEAR IN YEARS 13 AND AFTER IN YEARS 13 AND AFTER IN YEARS 13 AND AFTER
- ------ ----------- ------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 7,450
2 15,272
3 23,485
4 32,109
5 41,165
6 50,673
7 60,656
8 71,138
9 82,145
10 93,702
15 160,755
20 246,333
25 355,555
30 494,953
</TABLE>
All Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefits, Accumulation
Values and Surrender Values would be less than
those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The "Net" percentages in these illustrations
reflect (1) the deduction of current mortality
and expense risk charges and (2) assumed Fund
total expenses of % per year. See
"Mortality and Expense Risk Charge and Fund
Expenses" at pages 19-20 of this Prospectus.
46
<PAGE>
APPENDIX 3
TAX INFORMATION
The Office of Tax Analysis of the U.S. Department of the
Treasury published a "Report to the Congress on the Taxation
of Life Insurance Company Products" in March 1990. Page 4 of
this report is Table 1.1, a "Comparison of Tax Treatment of
Life Insurance Products and Other Retirement Savings Plans".
Because it is a convenient summary of the relevant tax
characteristics of these products and plans, it is reprinted
here, with footnotes to reflect exceptions to the general
rules.
------------------------
TABLE 1.1
COMPARISON OF TAX TREATMENT OF LIFE INSURANCE PRODUCTS AND
OTHER RETIREMENT SAVINGS PLANS
<TABLE>
<CAPTION>
CASH-VALUE
LIFE NON-QUALIFIED QUALIFIED
INSURANCE ANNUITIES IRA'S PENSION
--------------- ----------------- -------------- -----------
<S> <C> <C> <C> <C>
Annual Contribution Limits No No Yes Yes
Income Eligibility Limits No No Yes** No
Borrowing Treated as Distributions No* Yes Loans not Yes,
allowed beyond
$50,000
Income Ordering Rules (Income included in First No* Yes Yes Yes
Distribution)
Early Withdrawal Penalties No* Yes*** Yes*** Yes***
Minimum Distribution Rules by Age 70 1/2 No No Yes Yes
Maximum Annual Distribution Rules No No Yes Yes
Anti-discrimination Rules No No No Yes
</TABLE>
- ------------------------
Department of the Treasury March 1990
Office of Tax Analysis
*If the Policy is not a modified endowment contract.
**If amounts paid in to fund the IRA are deductible; once over the income
eligibility limits amounts paid into an IRA are permitted but not deductible.
***There are several exceptions to the application of the early withdrawal
penalties for annuities, IRAs and qualified pensions.
The foregoing information is not intended as tax advice. You
should consult with your own tax advisor for more complete
information.
47
<PAGE>
PART II
FEES AND CHARGES REPRESENTATION
Lincoln Life & Annuity Company of New York represents that the fees and
charges deducted under the Contracts, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by Lincoln Life & Annuity Company of New York.
UNDERTAKING
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.
INDEMNIFICATION
(a) Brief description of indemnification provisions.
In general, Article VII of the By-Laws of Lincoln Life & Annuity
Company of New York (Lincoln Life) provides that Lincoln Life will
indemnify certain persons against expenses, judgments and certain
other specified costs incurred by any such person if he/she is made a
party or is threatened to be made a party to a suit or proceeding
because he/she was a director, officer, or employee of Lincoln Life,
as long as he/ she acted in good faith and in a manner he/she
reasonably believed to be in the best interests of, or not opposed to
the best interests of, Lincoln Life. Certain additional conditions
apply to indemnification in criminal proceedings.
In particular, separate conditions govern indemnification of
directors, officers, and employees of Lincoln Life in connection with
suits by, or in the right of, Lincoln Life.
Please refer to Article VII of the By-Laws of Lincoln Life (Exhibit
No. 6(b) hereto) for the full text of the indemnification provisions.
Indemnification is permitted by, and is subject to the requirements
of, New York law.
(b) Undertaking pursuant to Rule 484 of Regulation C under the Securities
Act of 1933.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions
described in Item 28(a) above 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 such 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.
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet;
A cross-reference sheet (reconciliation and tie);
The prospectus, consisting of 47 pages;
The undertaking to file reports;
The signatures;
Written consents of the following persons:
Robert O. Sheppard, Esq. *
(actuary)*
(independent accountants)*
1. The following exhibits correspond to those required by paragraph A of
the instructions as to exhibits in Form N-8B-2:
(1) Resolution of the Board of Directors of Lincoln Life & Annuity
Company of New York and related documents authorizing establishment
of the Account.
(2) Not applicable.
(3) (a) Underwriting Agreement between The Lincoln National Life
Insurance Company and Lincoln Life & Annuity Company of New
York*
(b) Form of Selling Group Agreement.*
(c) Commission Schedule for Variable Life Policies.*
(4) Not applicable.
(5) (a) Proposed Form of Policy and Application.
<PAGE>
(b) Riders.
(6) (a) Articles of Incorporation of Lincoln Life & Annuity Company of
New York are incorporated herein by reference to Registration on
Form N-4 (File No. 333-38007) filed on October 16, 1997.
(b) Bylaws of Lincoln Life & Annuity Company of New York are
incorporated herein by reference to Registration on Form N-4
(File No. 333-38007) filed on October 16, 1997.*
(7) Not applicable.
(8) Fund Participation Agreements.
Agreements between Lincoln Life & Annuity Company of New York and:
(a) AIM Variable Insurance Funds, Inc.*
(b) CIGNA Variable Products Group.*
(c) Fidelity Variable Insurance Products Fund.*
(d) Fidelity Variable Insurance Products Fund II.*
(e) MFS-Registered Trademark- Variable Insurance Trust.*
(f) Templeton Variable Products Series Fund.*
(g) OCC Accumulation Trust.*
(9) Form of Services Agreement between Lincoln Life & Annuity Company of
New York and Delaware Management Company is incorporated herein by
reference to Registration on Form N-4 (File No. 333-38007) filed on
October 16, 1997.
(10) See Exhibit 1(5).
2. See Exhibit 1(5).
3. Opinion and Consent of Counsel.*
4. Not applicable.
5. Not applicable.
6. Opinion and consent of , F.S.A.*
7. Opinion and consent of , Independent Accountants.*
8. Not applicable.
* To be filed by amendment
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the registrant has duly caused
this Registration Statement on Form S-6 to be signed on its behalf by the
undersigned thereunto duly authorized, in the Town of Syracuse and State of New
York, on the 17th day of December, 1997.
LINCOLN LIFE & ANNUITY FLEXIBLE
PREMIUM VARIABLE LIFE ACCOUNT M
(Name of Registrant)
By: /s/ PHILIP L. HOLSTEIN
-----------------------------------
Philip L. Holstein
PRESIDENT
LINCOLN LIFE & ANNUITY COMPANY OF
NEW YORK
LINCOLN LIFE & ANNUITY COMPANY OF NEW
YORK
(Name of Depositor)
By: /s/ PHILIP L. HOLSTEIN
-----------------------------------
Philip L. Holstein
PRESIDENT
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on December 17th, 1997 by the
following persons, as officers and directors of the Depositor, in the capacities
indicated:
SIGNATURE TITLE
- -------------------------------------------------- -------------------------
/s/ PHILIP L. HOLSTEIN President, Treasurer and
------------------------------------------- Director (Principal
Philip L. Holstein Executive Officer)
/s/ JON A. BOSCIA
------------------------------------------- Director
Jon A. Boscia
/s/ RICHARD C. VAUGHAN
------------------------------------------- Director
Richard C. Vaughan
Second Vice President and
/s/ TROY D. PANNING Chief Financial Officer
------------------------------------------- (Principal Financial
Troy D. Panning Officer and Principal
Accounting Officer)
/S/ THOMAS D. BELL, JR.
------------------------------------------- Director
Thomas D. Bell, Jr.
/s/ ROLAND C. BAKER
------------------------------------------- Director
Roland C. Baker
/s/ HARRY L. KAVETAS
------------------------------------------- Director
Harry L. Kavetas
/s/ BARBARA STEURY KOWALCZYK
------------------------------------------- Director
Barbara Steury Kowalczyk
/s/ MARGUERITE LEANNE LACHMAN
------------------------------------------- Director
Marguerite Leanne Lachman
/s/ JOHN M. PIETRUSKI
------------------------------------------- Director
John M. Pietruski
------------------------------------------- Director
Lawrence T. Roland
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- -------------------------------------------------- -------------------------
<C> <S>
------------------------------------------- Director
J. Patrick Barrett
/s/ JOHN L. STEINKAMP
------------------------------------------- Director
John L. Steinkamp
/s/ LOUIS G. MARCOCCIA
------------------------------------------- Director
Louis G. Marcoccia
</TABLE>
<PAGE>
ESTABLISHMENT OF SEPARATE INVESTMENT ACCOUNT
OF
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
Pursuant to the authority given me by Resolution Number 96-21 adopted
by the Board of Directors of Lincoln Life & Annuity Company of New York (the
"Company") on July 24, 1996, I establish a separate investment account
designated as "Lincoln Life & Annuity Flexible Premium Variable Life Account M"
(the "Account"). The Account is to be used in connection with the issuance by
the Company of variable life insurance policies (the "Policies"). The Account
will be registered as a unit investment trust with the Securities and Exchange
Commission ("SEC") and shall invest in shares of the investment companies which
are registered with the SEC. The establishment and operation of the Account
will be in accordance with the applicable provisions of New York Insurance Law
and all rules and regulations issued pursuant thereto ("New York Insurance
Law"), and subject to the approval of the Superintendent of the Insurance
Department of the State of New York. The Account's investment objectives,
policies, and limitations shall be in accordance with (1) the registration
statement for the policies filed with the SEC under the Securities Act of 1933,
and (2) applicable provisions of New York Insurance Law and any other applicable
legal requirements.
/s/ Philip L. Holstein
---------------------------------
PHILIP L. HOLSTEIN, PRESIDENT
DATED: November 24, 1997
------------------
<PAGE>
I, C. Suzanne Womack, hereby certify that I am the duly elected and
qualified Secretary of Lincoln Life & Annuity Company of New York, and that
the following is a true and correct copy of the resolution adopted by the
Board of Directors at their meeting of July 24, 1996, and that such
resolution is in full force and effect as of the date hereof:
RESOLVED, That the chief executive officer of Lincoln Life & Annuity
Company of New York (the "Company") is hereby authorized in his discretion
from time to time to establish in his discretion from time to time to
establish one or more separate investment accounts in accordance with the
provisions of the New York Insurance Law, for such purpose or purposes as he
may determine and as may be appropriate under the New York Insurance Law; and
RESOLVED FURTHER, That if in the opinion of legal counsel of the Company,
it is necessary or desirable to register any of such accounts under the
Investment Company Act of 1940 or to register a security issued by any such
account under the Securities Act of 1933, or to make application for
exemption from registration, the chief executive officer or such other
officers as he may designate are hereby authorized to accomplish any such
registration or to make any such application for exemption, and to perform all
other acts as may be desirable or necessary in connection with the conduct of
business of the Company with respect to any such account.
/s/ C. Suzanne Womack
C. Suzanne Womack, Secretary
Dated:
July 24, 1996
<PAGE>
Insured JOHN DOE Policy Number SPECIMEN
Initial Specified Amount $100,000 Date of Issue January 1, 1998
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
A Stock Company Home Office Location: 120 Madison Street, Suite 1700
Syracuse, New York 13202
ADMINISTRATOR MAILING ADDRESS: [LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
ANNUITY & VARIABLE LIFE SERVICES CENTER -
ROUTING S249
HARTFORD, CT 06152-2249]
The Company agrees to pay the death benefit to the Beneficiary upon receipt of
due proof of the Insured's death during the continuance of the policy. The
Company further agrees to pay the surrender value to the Owner on the Coverage
Date provided the Insured is then alive.
RIGHT TO EXAMINE THIS POLICY. The policy may be returned to the insurance agent
through whom it was purchased or to the Company within 45 days of the date the
application is signed by the Owner or within 10 days after receipt of the
policy, (20 days after its receipt where required by law for policies issued in
replacement of other insurance), whichever is later. During this period, the
premium paid will be placed in the Fixed Account, and if the policy is so
returned, it will be deemed void from the Date of Issue and the Company will
refund all premium paid. If the policy is not returned during the
right-to-examine period, the premium payment will be processed as set forth in
the "Allocation of Premium Payments" provision.
ALL BENEFITS AND VALUES PROVIDED BY THIS POLICY WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.
THE DEATH BENEFIT AMOUNT ON THE DATE OF ISSUE EQUALS THE INITIAL SPECIFIED
AMOUNT OF THE POLICY. THEREAFTER, THE DEATH BENEFIT MAY VARY UNDER THE
CONDITIONS DESCRIBED UNDER THE "INSURANCE COVERAGE PROVISIONS". THE DURATION OF
COVERAGE IS VARIABLE AND MAY INCREASE OR DECREASE WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT.
The policy is issued and accepted subject to the terms set forth on the
following pages, which are made a part of the policy. In consideration of the
application and the payment of premiums as provided, this policy is executed by
the Company as of its Date of Issue.
/s/ Phillip L. Holstein
PRESIDENT
Registrar
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Variable life insurance payable in the event of death before the Coverage Date.
Surrender Value payable on the Coverage Date
Flexible premiums payable to Coverage Date or prior death of the Insured.
Non-participating. Investment results reflected in policy benefits.
<PAGE>
TABLE OF CONTENTS
PAGE
POLICY SPECIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
LIST OF VARIABLE ACCOUNT SUB-ACCOUNTS. . . . . . . . . . . . . . . . . . . . . 5
SCHEDULE 1: SURRENDER CHARGES . . . . . . . . . . . . . . . . . . . . . . . . 7
SCHEDULE 2: EXPENSE CHARGES AND FEES. . . . . . . . . . . . . . . . . . . . . 8
SCHEDULE 3: TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES . . . . . . . 9
SCHEDULE 4: CORRIDOR PERCENTAGES TABLE. . . . . . . . . . . . . . . . . . . .10
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
PREMIUM AND REINSTATEMENT PROVISIONS . . . . . . . . . . . . . . . . . . . . .12
OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS . . . . . . . . . . . . . . .13
VARIABLE ACCOUNT PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . .14
POLICY VALUES PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .15
TRANSFER PRIVILEGE PROVISION . . . . . . . . . . . . . . . . . . . . . . . . .18
NONFORFEITURE AND SURRENDER VALUE PROVISIONS . . . . . . . . . . . . . . . . .19
LOAN PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
INSURANCE COVERAGE PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . .20
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
FOLLOWED BY OPTIONAL METHODS OF SETTLEMENT AND ANY RIDERS
NOTE: PAGES 4 AND 6 ARE INTENTIONALLY "BLANK".
<PAGE>
POLICY SPECIFICATIONS
Policy Number Specimen
Insured John Doe
Initial Specified Amount $100,000 Date of Issue January 1, 1998
Minimum Specified Amount $100,000 Issue Age 35
Monthly Anniversary Day 1 Premium Class Nonsmoker
LN615 FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT: The Death Benefit Option initially elected under this policy is
Death Benefit Option 1. (See "Insurance Coverage Provisions").
PREMIUM PAYMENTS: Initial premium paid with application $580.00
Planned Premium
Additional premium payments may vary by frequency or amount.
PAYMENT MODE: Annually
GUARANTEED INITIAL DEATH BENEFIT PREMIUM: A payment of $2,249.70, is due on
or before each Monthly Anniversary
Day during the first 5 Policy
Years. If this premium is paid, it
will prevent the policy from
lapsing during these 5 Policy Years
and will also guarantee a minimum
death benefit equal to the Initial
Specified Amount during that
period, assuming there have been no
loans or surrenders. All or a
portion of the remaining monthly
premiums can be paid in advance at
any time. (For example, 12 times
this amount could be paid at the
beginning of a Policy Year to
satisfy the requirements for that
Policy Year). See "Minimum
Premiums" provision. If premiums
paid less any partial surrenders
and policy loans exceed the minimum
premium, the policy will not lapse
during the first 5 policy years.
NOTE: This policy may terminate prior to the Coverage Date if actual
premiums paid, interest credited and market performance are
insufficient to maintain a positive surrender value to continue
coverage to that date. The Coverage Date is the Policy
Anniversary nearest the Insured's age 100.
GUIDELINE ANNUAL PREMIUM AMOUNT: $1,195.63
NOTE: A separate Guideline Annual Premium Amount will apply to
increases if any, in Specified Amount.
LIMITS ON ALLOCATION OF NET PREMIUM PAYMENTS: The minimum allocation percentage
to the Fixed Account or a Variable Account Sub-Account is 10%. All allocations
must be made in whole percentages and in aggregate must total 100%. Premium
payments will be allocated net of the Premium Load specified in Schedule 2.
LIMITS ON TRANSFERS: Transfer(s) from the Fixed Account may only be made during
the 30-day period following each Policy Anniversary and is (are) subject to a
maximum aggregate annual limit which will be the lesser of (a) 25% of the Fixed
Account Value as of that Policy Anniversary or (b) $250,000.
GUARANTEED MINIMUM INTEREST RATES: The interest rate used to credit interest on
the Fixed Account Value may vary but will never be less than .010746% compounded
daily (4% compounded yearly).
The interest rate used to credit interest on the Loan Account Value may vary but
will never be less than the loan interest rate less 2% per year during Policy
Years 1 through 10 and less 1% per year thereafter. (As of the Date of Issue,
the difference between the loan interest rate charged and the interest rate
credited on the Loan Account Value is 1% per year for Policy Years 1 through 10
and .25% per year thereafter.)
OWNER: THE INSURED
BENEFICIARY: MARY DOE, WIFE (Continued on Page 3A)
<PAGE>
POLICY SPECIFICATIONS
MORTALITY AND EXPENSE RISK CHARGES. The guaranteed mortality and expense risk
charge which is referenced on page 8 is a daily rate which is equivalent to .90%
annually during Policy Years 1 through 12 and a daily rate which is equivalent
to .65% annually during the 13th and later Policy Years. As of the Date of
Issue of the policy, this charge is equal to a daily rate which is equivalent to
.80% annually during Policy Years 1 through 12 and a daily rate which is
equivalent to .55% annually during the 13th and later Policy Years.
MONTHLY ADMINISTRATIVE FEE. The monthly administrative fee as of the Date of
Issue of the policy is $15.00 per month during the first Policy Year. The
maximum monthly administrative fee which is also referenced on page 8 for
subsequent Policy Years is guaranteed to not exceed $7.50 per month.
<PAGE>
LIST OF VARIABLE ACCOUNT SUB-ACCOUNTS
FUND GROUPS FUNDS (SUB-ACCOUNTS)
AIM
AIM Variable Insurance Funds, Inc. AIM V.I. Capital Appreciation Fund
AIM V.I. Diversified Income Fund
AIM V.I. Growth Fund
AIM V.I. Value Fund
CIGNA INVESTMENTS, INC.
CIGNA Variable Products Group CIGNA Variable Products Money Market Fund
CIGNA Variable Products S&P 500 Index Fund
FIDELITY INVESTMENTS
Variable Insurance Products Fund Equity-Income Portfolio
Variable Insurance Products Fund II Asset Manager Portfolio
Investment Grade Bond Portfolio
MASSACHUSETTS FINANCIAL SERVICES
MFS Variable Insurance Trust MFS Emerging Growth Series
MFS Total Return Series
MFS Utilities Series
MFS World Governments Series
OPCAP
OCC Accumulation Trust OCC Global Equity Portfolio
OCC Managed Portfolio
OCC Small Cap Portfolio
TEMPLETON
Templeton Variable Product Funds Templeton Asset Allocation Fund
Templeton International Fund
Templeton Stock Fund
NOTE: NET PREMIUM PAYMENTS MAY ALSO BE ALLOCATED TO THE FIXED
ACCOUNT.
VARIABLE ACCOUNT SEPARATE ACCOUNT: Lincoln Life & Annuity Flexible Premium
Variable Life Account M.
<PAGE>
SCHEDULE 1: SURRENDER CHARGES
Surrender charges are used in the determination of the surrender value of the
policy and are assessed upon surrender of the policy. Such charges are
applicable within 10 years of the Date of Issue and within 10 years following
the date of any increase in Specified Amount. The surrender charge is
calculated as (a) times (b), where (a) is the sum of (i) a Deferred Sales Charge
and (ii) a Deferred Administrative Charge and (b) is the applicable Surrender
Charge Grading Factor from the table below, but in no event will the surrender
charge ever exceed the maximum surrender charge allowed by law.
(a) (i) The Deferred Sales Charge is based on the actual premium paid and the
applicable Guideline Annual Premium Amount, and is calculated as
follows:
DURING POLICY YEAR*:
1 and 2 28.5% of the sum of premiums paid up to an amount equal to
the Guideline Annual Premium Amount, plus 8.5% of the sum of
premiums paid between one and two times the Guideline Annual
Premium Amount, plus 7.5% of the sum of premiums paid in
excess of two times the Guideline Annual Premium Amount.
3 through 10 Same dollar amount as end of Policy Year* 2.
(ii) The Deferred Administrative Charge is $6.00 per $1,000 of Specified
Amount.
(b) SURRENDER CHARGE GRADING FACTORS
Policy Years* 1-5 100%
Policy Year 6 80%
Policy Year 7 60%
Policy Year 8 40%
Policy Year 9 20%
Policy Year 10 0%
If a surrender becomes effective at other than the end of a Policy Year,
any applicable surrender charge grading factor will be applied on a pro
rata basis as of such effective date.
*NUMBER OF POLICY YEARS ELAPSED SINCE THE DATE OF ISSUE OR FROM THE
EFFECTIVE DATE(S) OF ANY INCREASE(S) IN SPECIFIED AMOUNT.
No surrender charge is applied upon either a partial surrender or a decrease in
Specified Amount, however, a transaction fee of $25 is assessed for each partial
surrender and will be processed as set forth in the "Partial Surrender"
provision and for any decrease in Specified Amount effected while surrender
charges apply under the policy, there will be no change in the surrender charge
from that which was applicable before the decrease took effect.
<PAGE>
SCHEDULE 2: EXPENSE CHARGES AND FEES
PREMIUM LOAD. A charge equal to 5.0% of each premium payment will be deducted
to cover applicable state taxes, federal income tax liabilities, and a portion
of sales expenses.
MONTHLY ADMINISTRATIVE FEE. A monthly deduction is made on each Monthly
Anniversary Day. (See "Monthly Deduction" provision.) It includes an
administrative fee charge, cost of insurance charges and any charges for
supplemental riders or optional benefits.
The monthly administrative fee as of the Date of Issue of the policy is $15.00
per month during the first Policy Year and $5.00 per month during subsequent
Policy Years. This fee may be changed by the Company after the first Policy
Year based on its expectations of future expenses, but the amount of such fee is
guaranteed not to exceed the amount set forth in the Policy Specifications.
CHARGES AND FEES ASSOCIATED WITH THE VARIABLE ACCOUNT SUB-ACCOUNTS. For
mortality and expense risk, an asset charge is deducted from each Variable
Account Sub-Account at the end of each Valuation Period. This charge may be
changed by the Company from time to time, but it is guaranteed not to exceed a
daily rate which is set forth in the Policy Specifications.
In addition, Daily Fund Operating Expenses will be applied by each Fund as set
forth in the prospectus for the applicable Fund(s).
TRANSFER FEE. A transaction fee of $25 applies to each transfer in excess of 12
made during any Policy Year.
<PAGE>
SCHEDULE 3: TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
(ATTAINED AGE MONTHLY RATES PER $1,000 OF NET AMOUNT AT RISK)
SPECIAL NOTE: The actual monthly cost of insurance rates charged under this
policy will vary based on the sex, attained age (nearest
birthday) and Premium Class of the person insured; however, they
will not exceed the rates shown in the table below. In
determining the monthly cost of insurance, the Company will add
the amount of the Flat Extra Monthly Insurance Cost, if any,
shown in the Policy Specifications. If the person insured is in
a rated premium class, the Guaranteed Maximum Life Insurance
Rates will be those in the table multiplied by the Risk Factor,
if any, shown in the Policy Specifications. The rates below are
based on the 1980 CSO Tables (Male or Female as appropriate).
<TABLE>
<CAPTION>
ATTAINED ATTAINED ATTAINED
AGE MALE FEMALE AGE MALE FEMALE AGE MALE FEMALE
(NEAREST MONTHLY MONTHLY (NEAREST MONTHLY MONTHLY (NEAREST MONTHLY MONTHLY
BIRTHDAY) RATE RATE BIRTHDAY) RATE RATE BIRTHDAY) RATE RATE
- ---------- ------- ------- --------- ------- ------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.34845 0.24089 35 0.17586 0.13752 70 3.30338 1.84590
1 0.08917 0.07251 36 0.18670 0.14669 71 3.62140 2.02325
2 0.08251 0.06750 37 0.20004 0.15752 72 3.98666 2.24419
3 0.08167 0.06584 38 0.21505 0.17003 73 4.40599 2.51548
4 0.07917 0.06417 39 0.23255 0.18503 74 4.87280 2.83552
- ----------------------------------- -------------------------------- --------------------------------
5 0.07501 0.06334 40 0.25173 0.20171 75 5.37793 3.19685
6 0.07167 0.06084 41 0.27424 0.22005 76 5.91225 3.59370
7 0.06667 0.06000 42 0.29675 0.23922 77 6.46824 4.01942
8 0.06334 0.05834 43 0.32260 0.25757 78 7.04089 4.47410
9 0.06167 0.05750 44 0.34929 0.27674 79 7.64551 4.97042
- ----------------------------------- -------------------------------- --------------------------------
10 0.06084 0.05667 45 0.37931 0.29675 80 8.30507 5.52957
11 0.06417 0.05750 46 0.41017 0.31677 81 9.03761 6.17118
12 0.07084 0.06000 47 0.44353 0.33761 82 9.86724 6.91414
13 0.08251 0.06250 48 0.47856 0.36096 83 10.80381 7.77075
14 0.09584 0.06667 49 0.51777 0.38598 84 11.82571 8.72632
- ----------------------------------- -------------------------------- --------------------------------
15 0.11085 0.07084 50 0.55948 0.41350 85 12.91039 9.76952
16 0.12585 0.07501 51 0.60870 0.44270 86 14.03509 10.89151
17 0.13919 0.07917 52 0.66377 0.47523 87 15.18978 12.08770
18 0.14836 0.08167 53 0.72636 0.51276 88 16.36948 13.35774
19 0.15502 0.08501 54 0.79730 0.55114 89 17.57781 14.70820
- ----------------------------------- -------------------------------- --------------------------------
20 0.15836 0.08751 55 0.87326 0.59118 90 18.82881 16.15259
21 0.15919 0.08917 56 0.95591 0.63123 91 20.14619 17.71416
22 0.15752 0.09084 57 1.04192 0.66961 92 21.57655 19.43814
23 0.15502 0.09251 58 1.13378 0.70633 93 23.20196 21.40786
24 0.15169 0.09501 59 1.23235 0.74556 94 25.28174 23.83051
- ----------------------------------- -------------------------------- --------------------------------
25 0.14752 0.09668 60 1.34180 0.78979 95 28.27411 27.16158
26 0.14419 0.09918 61 1.46381 0.84488 96 33.10677 32.32378
27 0.14252 0.10168 62 1.60173 0.91417 97 41.68475 41.21204
28 0.14169 0.10501 63 1.75809 1.00267 98 58.01259 57.81394
29 0.14252 0.10835 64 1.93206 1.10539 99 83.33333 83.33333
- ----------------------------------- -------------------------------- --------------------------------
30 0.14419 0.11251 65 2.12283 1.21731
31 0.14836 0.11668 66 2.32623 1.33511
32 0.15252 0.12085 67 2.54312 1.45461
33 0.15919 0.12502 68 2.77350 1.57247
34 0.16669 0.13168 69 3.02328 1.69955
- ----------------------------------- --------------------------------
</TABLE>
<PAGE>
SCHEDULE 4: CORRIDOR PERCENTAGES TABLE
As of the Date of Issue of this policy the formula in effect to determine the
amount under item (b) of both Death Benefit Option 1 and Death Benefit Option 2
is based on a percent of the Accumulation Value as determined from the following
table:
INSURED'S CORRIDOR INSURED'S CORRIDOR
ATTAINED AGE PERCENTAGE ATTAINED AGE PERCENTAGE
------------ ---------- ------------ ----------
0-40 250% 70 115%
41 243 71 113
42 236 72 111
43 229 73 109
44 222 74 107
----- ----- ----- -----
45 215 75 105
46 209 76 105
47 203 77 105
48 197 78 105
49 191 79 105
----- ----- ----- -----
50 185 80 105
51 178 81 105
52 171 82 105
53 164 83 105
54 157 84 105
----- ----- ----- -----
55 150 85 105
56 146 86 105
57 142 87 105
58 138 88 105
59 134 89 105
----- ----- ----- -----
60 130 90 105
61 128 91 104
62 126 92 103
63 124 93 102
64 122 94 101
----- ----- ----- -----
65 120 95 100
66 119 96 100
67 118 97 100
68 117 98 100
69 116 99 100
----- ----- ----- -----
<PAGE>
DEFINITIONS
ACCUMULATION VALUE. The sum of (i) the then current value of the Fixed Account,
(ii) all of the then current values of the Variable Account Sub-Accounts (i.e.
the Variable Account Value), and (iii) the Loan Account Value.
DATE OF ISSUE. The date on which the policy becomes effective. The Date of
Issue is shown in the Policy Specifications.
DUE PROOF OF DEATH. An original certified copy of an official death
certificate, an original certified copy of a decree of a court of competent
jurisdiction as to the finding of death, or any other proof of death
satisfactory to the Company.
FIXED ACCOUNT. The account which provides for a guaranteed minimum interest
rate. The Company may, at its discretion, credit a higher current rate of
interest. Fixed Account assets are general assets of the Company and are
distinguishable from those allocated to a separate account of the Company.
FUND(S). The Portfolio(s) of Fund Groups whose shares are acquired for the
Variable Account Sub-Accounts in which Net Premium Payments or transfers may be
invested.
FUND GROUPS. The open-end management investment companies (mutual funds)
registered under the Investment Company Act of 1940, as amended, (hereinafter
referred as the "1940 Act"), one or more of whose Portfolio(s)' shares are made
available as investment vehicles for the policies through the Variable Account
Sub-Accounts.
HOME OFFICE. The term "Home Office" means the Company indicated on the front
cover of the policy.
IN WRITING. In a written form satisfactory to the Company and received by the
Company at its Home Office.
LOAN ACCOUNT. The account in which policy indebtedness (outstanding loans and
interest) accrues once it is transferred out of the Fixed Account and Variable
Account Sub-Accounts. The Loan Account is part of the Company's general
account.
LOAN ACCOUNT VALUE. The value of the Loan Account, the amount of which equals
the indebtedness under the policy.
MONTHLY ANNIVERSARY DAY. The day of the month, as shown in the Policy
Specifications, when the Company deducts certain charges. If that day does not
occur on a Valuation Day or is nonexistent for that month, then such charges
will be deducted on the next Valuation Day.
NET ACCUMULATION VALUE. An amount equal to the Accumulation Value less the
amount of indebtedness, if any, in the Loan Account.
NET PREMIUM PAYMENT. The amount of a premium payment, less the premium load
shown in Schedule 2. A Net Premium Payment is the amount available for
allocation to the Fixed Account and the Variable Account Sub-Accounts.
POLICY ANNIVERSARIES AND POLICY YEARS. Twelve-month periods measured from the
Date of Issue.
SEC. The Securities and Exchange Commission.
SUB-ACCOUNT. That portion of the Variable Account which invests in shares of a
specific Fund.
VALUATION DAY. Every day on which the New York Stock Exchange ("NYSE") is open
for business, except any day on which trading on the NYSE is restricted, or on
which an emergency exists, as determined by the SEC, so that valuation or
disposal of securities is not practicable.
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<PAGE>
DEFINITIONS (CONTINUED)
VALUATION PERIOD. The period of time for which a Fund determines its net asset
value; a Valuation Period begins on the day following a Valuation Day and ends
on the next Valuation Day. A Valuation Period may be more than one day in
length.
VARIABLE ACCOUNT. The account consisting of all Sub-Account(s) invested in
shares of the Fund(s). Variable Account assets are separate account assets of
the Company, the investment performance of which is kept separate from that of
the general assets of the Company and are not chargeable with the general
liability of the Company.
VARIABLE ACCUMULATION UNIT. A unit of measure used in the calculation of the
value of each Variable Account Sub-Account.
PREMIUM AND REINSTATEMENT PROVISIONS
PAYMENT OF PREMIUMS. All premiums are payable at the Home Office or to an
authorized representative of the Company. The first premium is due on the Date
of Issue and is payable in advance. Additional premiums may be paid under the
policy before the Coverage Date subject to the consent of the Company and the
requirements specified under the "Minimum Premiums" and "Additional Premiums"
provisions. Receipts signed by the President or Secretary and duly
countersigned will be furnished upon request.
MINIMUM PREMIUMS. The minimum premium for the policy is the amount necessary to
maintain a positive surrender value as set forth under the "Grace Period"
provision. The Guaranteed Initial Death Benefit Premium, as shown in the Policy
Specifications, is not mandatory but is the premium amount necessary to
guarantee that the death benefit will not be less than the Initial Specified
Amount during the first 5 Policy Years regardless of market performance,
assuming that there are no loans or partial surrenders under the policy. If
premiums paid less any partial surrenders and policy loans exceed the minimum
premium, the policy will not lapse during the first 5 policy years
PLANNED PREMIUMS. The Company will send premium reminder notices for the
amounts and frequency of payments established by the Owner. Changes in the
amounts or frequency of such planned periodic payments by the Owner will be
subject to the consent of the Company.
COVERAGE DATE. Payment of (a) the Guaranteed Initial Death Benefit Premium
shown in the Policy Specifications, or (b) Planned Premiums payable in
accordance with the payment mode specified, may not continue the policy in force
until the Coverage Date even if the amount is paid as scheduled. The Coverage
Date is not guaranteed based upon the level of Planned Premiums. The period for
which the policy will continue will depend on:
1. The amount, timing, and frequency of premium payment;
2. Changes in the Specified Amount and Death Benefit options;
3. Interest credits and insurance costs;
4. Changes in deductions for riders, if any; and
5. Partial withdrawals and loans.
ADDITIONAL PREMIUMS. In addition to planned premiums, if any, additional
premium payments of at least $100.00 each may be made before the Coverage Date
during the continuance of the policy. The Company reserves the right to limit
the amount or number of any such additional premium payments if such is
necessary to qualify the policy as life insurance under the Internal Revenue
Code.
Unless otherwise specified by the Owner, if there is any policy indebtedness,
any additional premiums paid will be used first as a loan repayment with any
excess applied as an additional premium.
ALLOCATION OF NET PREMIUM PAYMENTS. Net Premium Payments may be allocated to
the Fixed Account and/or to Variable Account Sub-Accounts under the policy
subject to the "Limits on Allocation of Net Premium Payments" shown in the
Policy Specifications. The Net Premium Payment associated with the initial
premium payment will be allocated within 3 business days of the expiration of
the "Right to Examine Contract" period in accordance with the allocation
percentages specified in the application. Subsequent Net Premium Payments will
be allocated on the same basis as the most recent previous Net Premium Payment
unless the Company is otherwise instructed in writing to change the allocation
percentages.
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<PAGE>
PREMIUM AND REINSTATEMENT PROVISIONS (CONTINUED)
GUIDELINE ANNUAL PREMIUM AMOUNT. The level annual amount as shown in the
Policy Specifications as of the Date of Issue is an amount calculated in
accordance with SEC Rule 6e-3(T) under the 1940 Act as in effect on such date.
The Guideline Annual Premium Amount under this policy is used in determining the
amount of the surrender charges if the policy is surrendered during a period for
which surrender charges are applicable.
GRACE PERIOD. If the surrender value on any Monthly Anniversary Day is less
than the required monthly deduction, a grace period of 61 days will be granted
to pay a premium sufficient to cover the required monthly deduction. If,
however, the Guaranteed Initial Death Benefit Premium requirement as set forth
in the Policy Specifications is met, the policy will not lapse during the first
5 Policy Years and a minimum death benefit amount at least equal to the Initial
Specified Amount will be guaranteed during that period, regardless of market
performance (assuming that there are no loans or partial surrenders under the
policy). If premiums paid less any partial surrenders and policy loans exceed
the minimum premium, the policy will not lapse during the first 5 policy years.
At least 31 days before the end of the grace period the Company will send a
notice that there is insufficient value under the policy. The notice will show
the amount of premium required to cover the monthly deduction to prevent the
policy from lapsing and will be mailed to the last known addresses of the Owner
and the assignee of record with the Company, if any. If such premium, as billed
by the Company, is not paid within the grace period, all coverage under the
policy will terminate without value at the end of the grace period. If the
Insured dies during the grace period, the Company will deduct any overdue
monthly deductions from the benefits.
REINSTATEMENT. After the policy has lapsed due to the expiration of a grace
period, it may be reinstated any time during the Insured's lifetime prior to the
Coverage Date provided: (a) it has not been surrendered for cash, (b) a written
application for reinstatement is submitted to the Company, (c) evidence of
insurability satisfactory to the Company is furnished, (d) enough premium is
paid to keep the policy in force for at least 2 months, and (e) any indebtedness
against the policy increased by any loan interest is paid or reinstated.
The effective date of the reinstated policy will be the Monthly Anniversary Day
next following the date the application for reinstatement is approved by the
Company. The Net Premium Payment and any loan repayment upon reinstatement will
be allocated as set forth under the "Allocation of Net Premium Payments"
provision and the "Loan Account and Loan Account Value" provision. Upon
reinstatement, the surrender charges assessed at the time of lapse will be
credited to the Accumulation Value (in proportion to the then current allocation
of net premium payments), and the surrender charge scale set forth in Schedule 1
will be reinstated as of the Policy Year in which the policy lapsed.
OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS
OWNER. The Owner on the Date of Issue will be the person designated in the
Policy Specifications. If no person is designated as Owner, the Insured will be
the Owner.
RIGHTS OF OWNER. While the Insured is alive, the Owner may exercise all rights
and privileges under the policy including the right to: (a) release or
surrender the policy to the Company, (b) agree with the Company to any change in
or amendment to the policy, (c) transfer all rights and privileges to another
person, (d) change the Beneficiary, and (e) assign the policy.
All rights and privileges of the Owner may be exercised without the consent of
any designated transferee, or any Beneficiary if the Owner has reserved the
right to change the Beneficiary. All such rights and privileges, however, may
be exercised only with the consent of any assignee recorded with the Company.
Unless provided otherwise, if the Owner is a person other than the Insured and
dies before the Insured, all the rights and privileges of the Owner will vest in
the Owner's executors, administrators or assigns.
TRANSFER OF OWNERSHIP. The Owner may transfer all rights and privileges of the
Owner. On the effective date of transfer, the transferee will become the Owner
and will have all the rights and privileges of the Owner. The Owner may revoke
any transfer prior to its effective date.
Unless provided otherwise, a transfer will not affect the interest of any
Beneficiary designated prior to the effective date of transfer.
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<PAGE>
OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS (CONTINUED)
A transfer of Ownership, or a revocation of transfer, must be in writing on a
form satisfactory to the Company and filed at the Home Office. A transfer, or a
revocation, will not take effect until recorded in writing by the Company. When
a transfer or revocation has been so recorded, it will take effect as of the
effective date specified by the Owner. Any payment made or any action taken or
allowed by the Company before the transfer, or the revocation, is recorded will
be without prejudice to the Company.
ASSIGNMENT. The Company will not be affected by any assignment of the policy
until the original assignment or a certified copy of the assignment is filed at
the Home Office.
The Company does not assume responsibility for the validity or sufficiency of
any assignment. An assignment of the policy will operate so long as the
assignment remains in force.
To the extent provided under the terms of the assignment, an assignment will
transfer the interest of any designated transferee or of any Beneficiary if the
Owner has reserved the right to change the Beneficiary.
BENEFICIARY. The Beneficiary on the Date of Issue will be the person designated
in the Policy Specifications.
Unless provided otherwise, the interest of any Beneficiary who dies before the
Insured will vest in the Owner or the Owner's executors, administrators or
assigns.
CHANGE OF BENEFICIARY. A new Beneficiary may be designated from time to time. A
request for change of Beneficiary must be in writing on a form satisfactory to
the Company and filed at the Home Office. The request must be signed by the
Owner. The request must also be signed by the Beneficiary if the right to change
the Beneficiary has not been reserved to the Owner.
A change of Beneficiary will not take effect until recorded in writing by the
Company. When a change of Beneficiary has been so recorded, whether or not the
Insured is then alive, it will take effect as of the date the request was
signed. Any payment made or any action taken or allowed by the Company before
the change of Beneficiary is recorded will be without prejudice to the Company.
Unless provided otherwise, the right to change any Beneficiary is reserved to
the Owner.
VARIABLE ACCOUNT PROVISIONS
VARIABLE ACCOUNT AND SUB-ACCOUNTS. Assets accumulated on a variable basis are
held in the Variable Account Separate Account designated in this policy on page
5 which was established by a resolution of the Company's Board of Directors as a
"separate account" under governing law of New York, the Company's state of
domicile, is registered as a unit investment trust under the 1940 Act and is
subject to the law of the state in which this policy is delivered. Under New
York law, the Variable Account assets (except assets in excess of its reserves
and other contract liabilities) cannot be charged with the general liabilities
of the Company. The Variable Account assets are owned and controlled
exclusively by the Company, and the Company is not a trustee with respect to
those assets.
The Variable Account is divided into Sub-Accounts. Each Sub-Account's assets
are invested in shares of a particular Fund of one of the Fund Groups made
available as funding vehicles under this policy. For each Sub-Account, the
Company maintains Variable Accumulation Units whose values reflect the
investment performance of the Fund whose shares are held in that Sub-Account.
Subject to any vote by persons having the right under the 1940 Act to vote
thereon, the Company may elect to operate the Variable Account as a management
company rather than a unit investment trust under the 1940 Act, or, if
registration is no longer required, to deregister the Variable Account. In such
event, the Company may endorse this policy to reflect such change and any
necessary or appropriate action taken to effect the change. Any changes in
Variable Account investment policy shall have been approved by the New York
Insurance Commissioner and approved or filed, as required, in the state or other
jurisdiction where this policy was issued.
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<PAGE>
VARIABLE ACCOUNT PROVISIONS (CONTINUED)
INVESTMENT RISK. Each Sub-Account's assets are always fully invested in the
shares of the particular Fund purchased for that Sub-Account. Each
Sub-Account's investment performance reflects the investment performance of that
Fund. Fund share values fluctuate, reflecting the risks of changing economic
conditions and the ability of a Fund Group's investment adviser or sub-adviser
to manage that Fund and anticipate changes in economic conditions. As to the
Variable Account assets, the Owner bears the entire investment risk of gain or
loss.
INVESTMENTS OF THE VARIABLE ACCOUNT SUB-ACCOUNTS. All amounts allocated to a
Variable Account Sub-Account will be used to purchase shares of the specific
Fund of a Fund Group used by that Sub-Account. Each Fund Group is registered
under the 1940 Act as an open-end management investment company, and each Fund
of that Fund Group is regulated as an open-end management investment company.
All Funds available as funding vehicles under this policy as of the Date of
Issue are listed in the application for the policy and on page 5 of the policy.
The Company may add additional Fund Groups and additional Funds at any time or
may change Funds or Fund Groups in accordance with the "Substituted Securities"
provision.
Any and all distributions made by a Fund will be reinvested in additional shares
of that Fund at net asset value. Deductions by the Company from a Sub-Account
will be made by redeeming a number of Fund shares at net asset value equal in
total value to the amount to be deducted.
SUBSTITUTED SECURITIES. Shares corresponding to a particular Fund may not
always be available for purchase or the Company may decide that further
investment in such Fund is no longer appropriate in view of the purposes of the
Variable Account or in view of legal, regulatory or federal income tax
restrictions. In such event, shares of another registered open-end investment
company or unit investment trust may be substituted both for Fund shares already
purchased and/or as the securities to be purchased in the future, provided that
these substitutions meet applicable Internal Revenue Service diversification
guidelines and any necessary regulatory or other approvals of such substitutions
have been obtained. In the event of any substitution pursuant to this
provision, the Company may make appropriate endorsement(s) to this policy to
reflect the substitution.
POLICY VALUES PROVISIONS
ACCUMULATION VALUE. The Accumulation Value equals the sum of (i) the then
current value of the Fixed Account (ii) all of the then current values of the
Variable Account Sub-Accounts (i.e. the Variable Account Value), and (iii) the
Loan Account Value. At any point in time, therefore, the Accumulation Value
reflects (a) Net Premium Payments made, (b) interest credited under the Fixed
Account, (c) the amount of any partial surrenders, (d) interest charged and
credited under the Loan Account, (e) any transfer fees, (f) all monthly and
other deductions as specified below, (g) the daily mortality and expense
deduction specified under Schedule 2, and (h) any increases or decreases as a
result of market performance in the Variable Account Sub-Accounts.
CALCULATION OF ACCUMULATION VALUE. On each Valuation Day after the Date of
Issue, the Accumulation Value will be equal to (1), plus (2), plus (3), plus or
minus (4) as the case may be, minus (5), minus (6), minus (7), and if the
Valuation Day is the same as a Monthly Anniversary Day, minus (8), where;
(1) is the Accumulation Value on the preceding Valuation Day;
(2) is all premiums received since the preceding Valuation Day less the premium
load charges from Schedule 2;
(3) the interest credited under the Fixed Account and the Loan Account since
the preceding Valuation Day;
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<PAGE>
POLICY VALUES PROVISIONS (CONTINUED)
(4) is the gain or loss in the Variable Account Value based on market
performance since the last Valuation Day;
(5) the charges and fees associated with the Variable Account Sub-Accounts from
Schedule 2;
(6) the amount of any partial surrenders since the preceding Valuation Day;
(7) any transaction fees assessed since the preceding Valuation Day;
(8) is the monthly deduction for the month following the Monthly Anniversary
Day.
FIXED ACCOUNT VALUE. The Fixed Account Value, if any, with respect to this
policy, at any point in time, is equal to the sum of the Net Premium Payments
allocated or other amounts (net of any charges) transferred to the Fixed Account
plus interest credited to such account less the monthly deductions applied to
such account and less any partial surrenders or amounts transferred from the
Fixed Account.
INTEREST CREDITED UNDER FIXED ACCOUNT. The Company will credit interest to the
Fixed Account daily. The interest rate applied to the Fixed Account will be the
greater of: (a) .010746% compounded daily, (4% compounded yearly), or (b) a
rate determined by the Company from time to time. Such rate will be established
on a prospective basis.
VARIABLE ACCOUNT VALUE. The Variable Account Value, if any, for any Valuation
Period is equal to the sum of the then current values of all Variable Account
Sub-Accounts under the policy. The value of each Variable Account Sub-Account
is determined by multiplying the number of Variable Accumulation Units, if any,
credited or debited to such Variable Account Sub-Account with respect to this
policy by the Variable Accumulation Unit Value of the particular Variable
Account Sub-Account for such Valuation Period.
CREDITING AND CANCELLING VARIABLE ACCUMULATION UNITS. Upon receipt of a premium
payment or a request for transfer of funds from the Fixed Account, all or that
portion, if any, of the Net Premium Payment to be allocated to the Variable
Account Sub-Accounts and/or the net amount transferred will be credited to the
Variable Account in the form of Variable Accumulation Units. The number of
Variable Accumulation Units to be credited is determined by dividing the dollar
amount allocated to the particular Variable Account Sub-Account by the Variable
Accumulation Unit Value for the particular Variable Account Sub-Account for the
Valuation Period during which the premium payment and/or the request for
transfer is received by the Company. The amount of monthly deduction allocated
to each Variable Account Sub-Account will result in the cancellation of Variable
Accumulation Units which have an aggregate value on the date of such deduction
equal to the total amount by which the Variable Account Sub-Account is reduced.
VARIABLE ACCUMULATION UNIT VALUE. The Variable Accumulation Unit Value for each
Variable Account Sub-Account was established at $10.00 for the first Valuation
Period of the particular Variable Account Sub-Account. The Variable
Accumulation Unit Value for the particular Variable Account Sub-Account for any
subsequent Valuation Period is determined by methodology which is the
mathematical equivalent of multiplying the Variable Accumulation Unit Value for
the particular Variable Account Sub-Account for the immediately preceding
Valuation Period by the Net Investment Factor for the particular Variable
Account Sub-Account for such subsequent Valuation Period. The Variable
Accumulation Unit Value for each Variable Account Sub-Account for any Valuation
Period is the value determined as of the end of the particular Valuation Period
and may increase, decrease or remain constant from Valuation Period to Valuation
Period.
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<PAGE>
POLICY VALUES PROVISIONS (CONTINUED)
NET INVESTMENT FACTOR. The Net Investment Factor is an index applied to measure
the investment performance of a Variable Account Sub-Account from one Valuation
Period to the next. The Net Investment Factor may be greater or less than or
equal to 1.0; therefore, the value of a Variable Accumulation Unit may increase,
decrease or remain the same.
The Net Investment Factor for any Variable Account Sub-Account for any Valuation
Period is determined by dividing (a) by (b) and then subtracting (c) from the
result where:
(a) is the net result of:
(1) is the net asset value (as described in the prospectus for the
Fund) of a Fund share held in the Variable Account Sub-Account
determined as of the end of the Valuation Period, plus
(2) the per share amount of any dividend or other distribution
declared by the Fund on the shares held in the Variable Account
Sub-Account if the "ex-dividend" date occurs during the Valuation
Period, plus or minus
(3) a per share credit or charge with respect to any taxes paid or
reserved for by the Company during the Valuation Period which are
determined by the Company to be attributable to the operation of the
Variable Account Sub-Account;
(b) is the net asset value of a Fund share held in the Variable Account
Sub-Account determined as of the end of the preceding Valuation Period; and
(c) is the asset charge factor determined by the Company for the Valuation
Period to reflect the charges for assuming the mortality and expense risks.
The asset charge factor for any Valuation Period is equal to the daily asset
charge factor multiplied by the number of 24-hour periods in the Valuation
Period. The daily asset charge factor will be determined annually by the
Company, but in no event may it exceed that specified in Schedule 2.
COST OF INSURANCE RATES. Monthly cost of insurance rates will be determined
from time to time by the Company based on its expectations of future mortality.
Any change in cost of insurance rates will apply to all individuals of the same
class as the Insured. Under no circumstance will the cost of insurance rates
ever be greater than those described in Schedule 3.
COST OF INSURANCE. The cost of insurance for the Insured is determined on a
monthly basis. Such cost is calculated as (1), multiplied by the result of (2)
minus (3), where:
1. is the cost of insurance rate as described in the "Cost of Insurance Rates"
provision,
2. is the death benefit at the beginning of the policy month, divided by
1.0032737, and
3. is the Accumulation Value at the beginning of the policy month prior to the
deduction for the monthly cost of insurance.
MONTHLY DEDUCTION. The monthly deduction for a policy month will be calculated
as Charge (1) plus Charge (2) where:
Charge (1) is the cost of insurance (as described in the "Cost of Insurance"
provision) and the cost of any supplemental riders or optional benefits, and
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<PAGE>
POLICY VALUES PROVISIONS (CONTINUED)
Charge (2) is the Monthly Administrative Fee as described under Schedule 2.
The amount of monthly deduction will be deducted from the Fixed Account and each
Variable Account Sub-Account in the same proportion that the value of each
account bears to the Net Accumulation Value as of the date on which the
deduction is made.
BASIS OF COMPUTATIONS. The minimum Fixed Account Value is guaranteed to be no
less than that calculated based on the applicable Commissioners 1980 Standard
Ordinary Mortality Table (age nearest birthday) from Schedule 3 with interest at
4% per year, compounded yearly.
All policy values are at least equal to that required by the jurisdiction in
which this policy is delivered. A detailed statement of the method of computing
values has been filed with the insurance supervisory official of that
jurisdiction.
TRANSFER PRIVILEGE PROVISION
TRANSFER PRIVILEGE. At any time while this policy is in effect, other than
during the "Right to Examine Contract" period, the Owner may transfer all or
part of the Variable Account Value to the Fixed Account and/or to one or more of
the Variable Account Sub-Accounts then available under the policy, and/or
transfer part of the Fixed Account Value to one or more Variable Account
Sub-Accounts, subject to the provisions set forth below. Transfers may be made
in writing. Transfer requests must be received at the Company's Home Office
prior to the time of day set forth in the prospectus and provided the NYSE is
open for business, in order to be processed as of the close of business on the
date the request is received; otherwise, the transfer will be processed on the
next business day the NYSE is open for business.
Transfers involving Variable Account Sub-Accounts will reflect the purchase or
cancellation of Variable Accumulation Units having an aggregate value equal to
the dollar amount being transferred to or from a particular Variable Account
Sub-Account. The purchase or cancellation of such units shall be made using
Variable Accumulation Unit Values of the applicable Variable Account Sub-Account
for the Valuation Period during which the transfer is effective. Transfers to
the Fixed Account will earn interest as specified under the "Interest Credited
Under Fixed Account" provision.
Unless otherwise changed by the Company to be less restrictive, transfers shall
be subject to the following conditions: (a) Up to 12 transfers may be made
during any Policy Year without charge, however, for each transfer in excess of
12, a transfer fee as set forth in Schedule 2 will be deducted on a pro-rata
basis from the Fixed Account and/or Variable Account Sub-Accounts from which the
transfer is being made; (b) No partial surrender transaction fee will be imposed
on transferred amounts; (c) The amount being transferred may not be less than
$500 unless the entire value of the Fixed Account or a Variable Account
Sub-Account is being transferred; (d) The amount being transferred may not
exceed the Company's maximum amount limit then in effect; (e) Transfers among
the Variable Account Sub-Accounts or from a Variable Account Sub-Account to the
Fixed Account can be made at any time; (f) Transfers from the Fixed Account are
subject to the "Limits on Transfers" as set forth in the Policy Specifications;
(g) Any value remaining in the Fixed Account or a Variable Account Sub-Account
following a transfer may not be less than $500; (h) Transfers involving Variable
Account Sub-Account(s) shall be subject to such additional terms and conditions
as may be imposed by the Funds.
If the investment strategy of a Variable Account Sub-Account were changed, the
Owner may transfer the amount in that Variable Account Sub-Account to the Fixed
Account without a transfer charge, even if the 12 free transfers have already
been used. Moreover, no transfer charge will be imposed when the Owner, in
accordance with the "Right to Convert" and "Change of Plan" provisions,
exchanges the policy for an equivalent fixed account policy, even if the 12 free
transfers have already been used.
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<PAGE>
NONFORFEITURE AND SURRENDER VALUE PROVISIONS
SURRENDER AND SURRENDER VALUE. This policy may be surrendered on any day during
the lifetime of the Insured and before the Coverage Date, for its surrender
value by returning it to the Company with a signed request for surrender in a
form satisfactory to the Company. The surrender will take effect on the
business day the policy and the request are received in the Home Office. The
amount payable on surrender of the policy (i.e., the "surrender value") will be
the Net Accumulation Value less any surrender charges as determined from
Schedule 1.
The surrender value will be paid in cash or under an elected optional mode of
settlement. Any deferment of payments will be subject to the "Deferment of
Payments" provision (See "General Provisions").
Any surrender from a Variable Account Sub-Account will result in the
cancellation of Variable Accumulation Units which have an aggregate value on the
effective date of the surrender equal to the total amount by which the Variable
Account Sub-Account is reduced. The cancellation of such units will be based on
the Variable Accumulation Unit Value of the Variable Account Sub-Account
determined at the close of the Valuation Period during which the surrender is
effective.
INSUFFICIENT VALUE. If the surrender value, on the day preceding a Monthly
Anniversary Day is insufficient to cover the monthly deduction for the month
following such Monthly Anniversary Day, the policy will terminate as provided in
the "Grace Period" provision.
PARTIAL SURRENDER. A partial surrender of this policy may be elected on any
Valuation Day during the lifetime of the Insured and prior to the Coverage Date
by submitting a written request to the Company. Such request may also be made
by telephone if telephone transfers have been previously authorized in writing.
The amount of each partial surrender (a) must be at least $500.00 but (b) may
not exceed 90% of the surrender value at the end of the Valuation Period during
which the election becomes or would become effective.
When a partial surrender is made, the Accumulation Value is reduced by (a) the
amount of the partial surrender and (b) the transaction fee as specified in
Schedule 1. Also, the death benefit will be reduced by the amount of the
partial surrender. The Specified Amount remaining in force after any partial
surrender may not be less than the Minimum Specified Amount shown in the Policy
Specifications.
When the partial surrender is processed, the amount of the partial surrender and
the transaction fee will be deducted from the applicable Fixed Account and/or
Variable Account Sub-Accounts in proportion to the then current account values
provided there are sufficient account values for making the deduction(s);
otherwise, the amount payable upon a partial surrender will be net of any
remaining transaction fee, unless the Owner and the Company agree otherwise.
LOAN PROVISIONS
POLICY LOANS. After a surrender value is available, the Company will grant a
loan against the policy provided: (a) a proper loan agreement is executed and
(b) a satisfactory assignment of the policy to the Company is made. The loan
may be for any amount up to 100% of the then current surrender value; however,
the Company reserves the right to limit the amount of such loan so that total
indebtedness will not exceed 90% of an amount equal to the then current
Accumulation Value less surrender charge.
The amount borrowed will be paid within seven days of the Company's receipt of
such request, except as the Company may be permitted to defer the payment of
amounts as specified under the "Deferment of Payments" provision. (See "General
Provisions.")
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<PAGE>
LOAN PROVISIONS (CONTINUED)
The minimum loan amount is $500. The Company reserves the right to modify this
amount in the future. The Company will effect such loan from the Fixed Account
and each Variable Account Sub-Account in proportion to the then current account
values, unless the Owner instructs the Company otherwise.
LOAN ACCOUNT AND LOAN ACCOUNT VALUE. The amount of any loan will be transferred
out of the Fixed Account and Variable Accounts Sub-Accounts as described above.
Such amount will become part of the Loan Account Value. The outstanding loan
balance at any time includes accrued interest on the loan.
The outstanding loan balance (i.e. Indebtedness) may be repaid at any time
during the lifetime of the Insured, however, the minimum loan repayment is
$100.00 or the amount of the outstanding indebtedness, if less. The Loan
Account Value will be reduced by the amount of any loan repayment. Loan
repayments will be allocated to the Fixed Account and each Variable Account
Sub-Account in the proportion in which current Net Premium Payment(s) are being
allocated, unless otherwise agreed to in writing by the Owner and the Company.
Net loan interest, which equals the difference between interest charged and
interest credited on the Loan Account Value, is payable annually on each policy
anniversary or as otherwise agreed in writing by the Owner and the Company. Such
loan interest amount, if not paid when due, will be transferred out of the Fixed
Account and each Variable Account Sub-Account in proportion to the then current
account value, unless both the Owner and the Company agree otherwise.
INTEREST RATE CHARGED ON LOAN ACCOUNT VALUE. Interest charged on the Loan
Account Value will be at a rate equivalent to 8% per year, payable in arrears.
INTEREST RATE CREDITED ON LOAN ACCOUNT VALUE. The interest rate used to credit
interest on the Loan Account Value may vary, but will not be less than the loan
interest rate less 2% per year during Policy Years 1 through 10 and less 1% per
year thereafter. (See Policy Specifications page for the rate in effect as of
the Date of Issue).
INDEBTEDNESS. The term "indebtedness" means money which is owed on this policy
due to an outstanding loan and interest accrued thereon. A loan, whether or not
repaid, will have a permanent effect on the Net Accumulation Value and on the
death benefits. Any indebtedness at time of settlement will reduce the proceeds
payable under the policy. A policy loan reduces the then current Net
Accumulation Value under the policy while repayment of a loan will cause an
increase in the then current Net Accumulation Value.
If at any time the total indebtedness against the policy, including interest
accrued but not due, equals or exceeds the then current Accumulation Value less
surrender charge, the policy will thereupon terminate without value subject to
the conditions in the "Grace Period" provision and a notice will be sent at
least 31 days before the end of the grace period to the Owner and to assignees,
if any, that this policy will terminate unless the indebtedness is repaid.
INSURANCE COVERAGE PROVISIONS
EFFECTIVE DATE OF COVERAGE. The effective date of this policy will be the Date
of Issue provided the initial premium has been paid (1) while the Insured is
alive and (2) prior to any change in the health and insurability of the Insured
as represented in the application.
For any insurance that has been reinstated, the effective date will be the
Monthly Anniversary Day that coincides with or next follows the day the
application for reinstatement is approved by the Company, provided the Insured
is alive on such day.
TERMINATION OF COVERAGE. All coverage under this policy will automatically
terminate upon whichever of the following occurs first:
20
<PAGE>
INSURANCE COVERAGE PROVISIONS (CONTINUED)
1. The Owner surrenders the policy.
2. The Insured dies.
3. The policy matures at its Coverage Date.
4. The grace period ends and the necessary premium payment has not been made
prior to such time.
Any monthly deduction made after termination of coverage will not, by itself, be
considered a reinstatement of the policy nor a waiver by the Company of the
termination. Any such deduction will be refunded.
DEATH BENEFIT. If the Insured dies while the policy is in force, the Company
will pay a death benefit based upon the Death Benefit Option in effect on the
date of death, less (a) any indebtedness against the policy and (b) the amount
of any partial surrenders.
The Death Benefit Options available under this policy are as follows:
DEATH Insured's Specified Amount includes the Accumulation Value. The
BENEFIT Insured's death benefit 41 (before deduction of any
OPTION 1 indebtedness against the policy and the amount of any partial
surrenders) will equal the greater of:
(a) the Specified Amount on the date of death, or
(b) an amount determined by the Company equal to that required
by the Internal Revenue Code to maintain this contract as a
life insurance policy (See Schedule 4). Any amount so
determined will be set forth in the annual report which the
Company will send to the Owner.
DEATH The Insured's Specified Amount is in addition to the Accumulation
BENEFIT Value. The Insured's death benefit (before deduction of any
OPTION 2 indebtedness against the policy and the amount of any partial
surrenders) will equal the greater of:
(a) the Specified Amount on the date of death plus the
Accumulation Value on the date of death, or
(b) an amount determined by the Company equal to that required
by the Internal Revenue Code to maintain this contract as a
life insurance policy (See Schedule 4). Any amount so
determined will be set forth in the annual report which the
Company will send to the Owner.
Unless the application for the policy indicates otherwise, or a change in the
death benefit option is effected as provided below, the Company will consider
Death Benefit Option 1 to be the option in effect.
CHANGES IN SPECIFIED AMOUNT. Unless provided otherwise, a change in Specified
Amount may be effected any time while this policy is in force, subject to (a)
the consent of the Company and (b) the following conditions:
1. All such changes must be requested in writing on a form satisfactory to the
Company and filed at the Home Office.
21
<PAGE>
INSURANCE COVERAGE PROVISIONS (CONTINUED)
2. If a decrease in the Insured's Specified Amount is requested, the decrease
will become effective on the Monthly Anniversary Day that coincides with or
next follows receipt of the request provided any requirements as determined
by the Company are met.
In such event, the Company will reduce the existing Specified Amount
against the most recent increase first, then against the next most recent
increases successively, and finally, against insurance provided under the
original application; however, the Company reserves the right to limit the
amount of any decrease so that the Specified Amount will not be less than
the Minimum Specified Amount shown in the Policy Specifications.
3. If an increase in the Insured's Specified Amount is requested:
(a) a supplemental application must be submitted and evidence of
insurability satisfactory to the Company must be furnished; and
(b) any other requirements as determined by the Company must be met.
If the Company approves the request, the increase will become effective
upon (i) the Monthly Anniversary Day that coincides with or next follows
the date the request is approved by the Company and (ii) the deduction from
the Accumulation Value (in proportion to the then current account values of
the Fixed Account and/or Variable Account Sub-Accounts) of the first
month's cost of insurance for the increase, provided the Insured is alive
on such day.
4. If a request is made to change the death benefit from Death Benefit Option
1 to Death Benefit Option 2:
(a) the Specified Amount will be reduced to equal the death benefit, less
the Accumulation Value, as of the effective date of change; and
(b) the effective date will be the Monthly Anniversary Day that coincides
with or next follows the date of receipt of the request for change.
5. If a request is made to change the death benefit from Death Benefit Option
2 to Death Benefit Option 1:
(a) the Specified Amount will be increased to equal the death benefit as
of the effective date of change; and
(b) the effective date will be the Monthly Anniversary Day that coincides
with or next follows the date of receipt of the request for change.
The Company will not allow a decrease in the amount of insurance below the
minimum amount required to maintain this contract as a life insurance policy
under the Internal Revenue Code.
RIGHT TO CONVERT. The Owner may convert this policy to a substantially
comparable flexible premium adjustable life insurance policy without evidence of
insurability for an amount of insurance not exceeding
the death benefit of the variable life insurance policy on the date of
conversion.
PAID-UP INSURANCE OPTION. At any time, the Owner may transfer all of the
Variable Account Value to the Fixed Account and then surrender the policy for
reduced guaranteed nonparticipating paid-up insurance. No monthly
administrative fees would apply to such paid-up insurance. The amount of paid-
up insurance will be that which the surrender value will purchase when applied
as a net single premium at the Insured's then attained age using the guaranteed
interest and mortality basis set forth under the "Basis of Computations"
provision of the policy. The paid-up insurance will not include any
supplementary or additional benefits provided by rider under the original
policy.
GENERAL PROVISIONS
THE POLICY. The policy and the application for the policy constitute the entire
contract between the parties. All statements made in the application will be
deemed representations and not warranties. No statement will be used in defense
of a claim under the policy unless it is contained in the application, and a
copy of the application is attached to the policy when issued.
22
<PAGE>
GENERAL PROVISIONS (CONTINUED)
Only the President, a Vice President, a Secretary, a Director or an Assistant
Director of the Company may execute or modify this policy.
The policy is executed at the administrator mailing address located on the front
cover of the policy.
NON-PARTICIPATION. The policy is not entitled to share in surplus distribution.
PAYMENT OF PROCEEDS. Proceeds, as used in this policy, means the amount payable
(a) on the Coverage Date, (b) upon the surrender of this policy before the
Coverage Date, or (c) upon the death of the Insured.
The proceeds payable to the Beneficiary upon receipt of due proof of the
Insured's death will be the Death Benefit as of the date of death which takes
into account (a) any indebtedness against the policy and (b) the amount of any
partial surrenders (See "Death Benefit" provision). If the Insured dies during
the grace period, the Company will pay the death benefit proceeds in effect
immediately prior to the grace period reduced by any overdue monthly deductions.
If the policy is surrendered before the Coverage Date, the proceeds will be the
surrender value described in the "Nonforfeiture and Surrender Value Provisions"
section. On the Coverage Date, the proceeds will be the Surrender Value.
The proceeds are subject to the adjustments described in the following
provisions:
1. Misstatement of Age or Sex;
2. Incontestability;
3. Suicide;
4. Grace Period;
5. Indebtedness; and
6. Partial Surrender
When settlement is made, the Company may require return of the policy.
DEFERMENT OF PAYMENTS. Any amounts payable as a result of loans, surrender, or
partial surrenders will be paid within 7 days of the Company's receipt of such
request. However, payment of amounts from the Variable Account Sub-Accounts may
be postponed when the NYSE is closed or when the SEC declares an emergency.
Additionally, the Company reserves the right to defer the payment of such
amounts from the Fixed Account for a period not to exceed 6 months from the date
written request is received by the Company; during any such deferred period, the
amount payable will bear interest as required by law.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the Insured is misstated, the
Company will adjust all benefits to the amounts that would have been purchased
for the correct age and sex.
SUICIDE. If the Insured commits suicide within 2 years from the Date of Issue,
the death benefit will be limited to a refund of premiums paid, less (a) any
indebtedness against the policy and (b) the amount of any partial surrenders.
If the Insured commits suicide within 2 years from the effective date of any
increase in the Specified Amount, the death benefit payment with respect to such
increase will be limited to a refund of the monthly charges for the cost of such
additional insurance.
23
<PAGE>
GENERAL PROVISIONS (CONTINUED)
INCONTESTABILITY. Except for nonpayment of monthly deductions, this policy will
be incontestable after it has been in force during the Insured's lifetime for 2
years from its Date of Issue. This means that the Company will not use any
misstatement in the application to challenge a claim or avoid liability after
that time. Any increase in the Specified Amount effective after the Date of
Issue will be incontestable only after such increase has been in force for 2
years during the Insured's lifetime.
The basis for contesting an increase in Specified Amount will be limited to
material misrepresentations made in the supplemental application for the
increase. The basis for contesting after reinstatement will be (a) limited for a
period of 2 years from the date of reinstatement and (b) limited to material
misrepresentations made in the reinstatement application.
ANNUAL REPORT. The Company will send a report to the Owner at least once a year
without charge. The report will show the Accumulation Value as of the reporting
date and the amounts deducted from or added to the Accumulation Value since the
last report. The report will also show (a) the current death benefit, (b) the
current policy values, (c) premiums paid and all deductions made since the last
report, (d) outstanding policy loans, and (e) any other information required by
the Superintendent of Insurance.
PROJECTION OF BENEFITS AND VALUES. The Company will provide a projection of
illustrative future death benefits and values to the Owner at any time upon
written request and payment of a reasonable service fee.
CHANGE OF PLAN. Within the first 2 Policy Years the Owner may exchange this
policy without any evidence of insurability for any one of the permanent
insurance policies then being issued by the Company to the same class to which
this policy belongs. The request for the exchange must be received by the
Company within 24 months from the Date of Issue of this policy. Unless
otherwise agreed to between the Owner and the Company, the new policy shall have
the same amount of insurance and surrender value as this policy as of the date
of exchange, its Date of Issue shall be the date of exchange, and the Insured's
issue age under the new policy shall be the Insured's then attained age (as of
the date of exchange).
POLICY CHANGES - APPLICABLE LAW. This policy must qualify initially and
continue to qualify as life insurance under the Internal Revenue Code in order
for the Owner to receive the tax treatment accorded to life insurance under
Federal law. Therefore, to maintain this qualification to the maximum extent
permitted by law, the Company reserves the right to return any premium payments
that would cause this policy to fail to qualify as life insurance under
applicable tax law as interpreted by the Company. Further, the Company reserves
the right to make changes in this policy or to make distributions from the
policy to the extent it deems necessary, in its sole discretion, to continue to
qualify this policy as life insurance. Any such changes will apply uniformly to
all policies that are affected. The Owner will be given advance written notice
of such changes.
24
<PAGE>
GENERAL PROVISIONS (CONTINUED)
Only the President, a Vice President, a Secretary, a Director or an Assistant
Director of the Company may execute or modify this policy.
The policy is executed at the administrator mailing address located on the front
cover of the policy.
NON-PARTICIPATION. The policy is not entitled to share in surplus distribution.
PAYMENT OF PROCEEDS. Proceeds, as used in this policy, means the amount payable
(a) on the Coverage Date, (b) upon the surrender of this policy before the
Coverage Date, or (c) upon the death of the Insured.
The proceeds payable to the Beneficiary upon receipt of due proof of the
Insured's death will be the Death Benefit as of the date of death which takes
into account (a) any indebtedness against the policy and (b) the amount of any
partial surrenders (See "Death Benefit" provision). If the Insured dies during
the grace period, the Company will pay the death benefit proceeds in effect
immediately prior to the grace period reduced by any overdue monthly deductions.
If the policy is surrendered before the Coverage Date, the proceeds will be the
surrender value described in the "Nonforfeiture and Surrender Value Provisions"
section. On the Coverage Date, the proceeds will be the Surrender Value.
The proceeds are subject to the adjustments described in the following
provisions:
1. Misstatement of Age;
2. Incontestability;
3. Suicide;
4. Grace Period;
5. Indebtedness; and
6. Partial Surrender
When settlement is made, the Company may require return of the policy.
DEFERMENT OF PAYMENTS. Any amounts payable as a result of loans, surrender, or
partial surrenders will be paid within 7 days of the Company's receipt of such
request. However, payment of amounts from the Variable Account Sub-Accounts may
be postponed when the NYSE is closed or when the SEC declares an emergency.
Additionally, the Company reserves the right to defer the payment of such
amounts from the Fixed Account for a period not to exceed 6 months from the date
written request is received by the Company; during any such deferred period, the
amount payable will bear interest as required by law.
MISSTATEMENT OF AGE. If the age of the Insured is misstated, the Company will
adjust all benefits to the amounts that would have been purchased for the
correct age.
SUICIDE. If the Insured commits suicide within 2 years from the Date of Issue,
the death benefit will be limited to a refund of premiums paid, less (a) any
indebtedness against the policy and (b) the amount of any partial surrenders.
If the Insured commits suicide within 2 years from the effective date of any
increase in the Specified Amount, the death benefit payment with respect to such
increase will be limited to a refund of the monthly charges for the cost of such
additional insurance.
25
<PAGE>
GENERAL PROVISIONS (CONTINUED)
INCONTESTABILITY. Except for nonpayment of monthly deductions, this policy will
be incontestable after it has been in force during the Insured's lifetime for 2
years from its Date of Issue. This means that the Company will not use any
misstatement in the application to challenge a claim or avoid liability after
that time. Any increase in the Specified Amount effective after the Date of
Issue will be incontestable only after such increase has been in force for 2
years during the Insured's lifetime.
The basis for contesting an increase in Specified Amount will be limited to
material misrepresentations made in the supplemental application for the
increase. The basis for contesting after reinstatement will be (a) limited for a
period of 2 years from the date of reinstatement and (b) limited to material
misrepresentations made in the reinstatement application.
ANNUAL REPORT. The Company will send a report to the Owner at least once a year
without charge. The report will show the Accumulation Value as of the reporting
date and the amounts deducted from or added to the Accumulation Value since the
last report. The report will also show (a) the current death benefit, (b) the
current policy values, (c) premiums paid and all deductions made since the last
report, (d) outstanding policy loans, and (e) any other information required by
the Superintendent of Insurance.
PROJECTION OF BENEFITS AND VALUES. The Company will provide a projection of
illustrative future death benefits and values to the Owner at any time upon
written request and payment of a reasonable service fee.
CHANGE OF PLAN. Within the first 2 Policy Years the Owner may exchange this
policy without any evidence of insurability for any one of the permanent
insurance policies then being issued by the Company to the same class to which
this policy belongs. The request for the exchange must be received by the
Company within 24 months from the Date of Issue of this policy. Unless
otherwise agreed to between the Owner and the Company, the new policy shall have
the same amount of insurance and surrender value as this policy as of the date
of exchange, its Date of Issue shall be the date of exchange, and the Insured's
issue age under the new policy shall be the Insured's then attained age (as of
the date of exchange).
POLICY CHANGES - APPLICABLE LAW. This policy must qualify initially and
continue to qualify as life insurance under the Internal Revenue Code in order
for the Owner to receive the tax treatment accorded to life insurance under
Federal law. Therefore, to maintain this qualification to the maximum extent
permitted by law, the Company reserves the right to return any premium payments
that would cause this policy to fail to qualify as life insurance under
applicable tax law as interpreted by the Company. Further, the Company reserves
the right to make changes in this policy or to make distributions from the
policy to the extent it deems necessary, in its sole discretion, to continue to
qualify this policy as life insurance. Any such changes will apply uniformly to
all policies that are affected. The Owner will be given advance written notice
of such changes.
26
<PAGE>
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Variable life insurance payable in the event of death before the Coverage Date.
Surrender Value payable on the Coverage Date
Flexible premiums payable to Coveratge Date or prior death of the Insured.
Non-participating. Investment results reflected in policy benefits.
27
<PAGE>
LIFE INSURANCE APPLICATION
PART I LINCOLN LIFE
INSTRUCTIONS
This Application Package Includes:
1. An Important Notice form.
INSTRUCTIONS:
Please give to the proposed insured in every case.
2. A Temporary Insurance Agreement (TIA)
INSTRUCTIONS:
Give a copy of the completed TIA form to the applicant in exchange for an
advance payment.
IMPORTANT: Never ask for or accept an advance payment unless all questions
on the TIA are answered "NO" and you believe the proposed insured is a good
risk. Completion of the TIA means you endorse the risk.
Collect at least the minimum advance payment and do not exceed the maximum
advance payment according to the Rate Manual limits. All checks should be
made payable to "LLANY."
Be sure the applicant understands the terms of the TIA and acknowledges
that fact by signing the agreement.
A licensed agent/representative must also sign the TIA.
Give a copy to the applicant and include the original TIA with the Part I
package.
If advance payment is not made, remove both TIA forms from the Part I
package before sending the application to the The Company.
REMINDER: THE TIA SHOULD NOT BE USED ON POLICIES THAT WILL BE DATED AHEAD.
3. An Application -- Part I
INSTRUCTIONS:
Write legibly. Complete all questions. Explain answers where asked to in
the spaces provided.
The Part I must be signed by the proposed insured and any applicant if
other than the insured. The signatures of the owner and the sub-owner are
required. A licensed agent/ representative must witness the signatures.
Leave pages attached at the top when submitting to the The Company. DO NOT
SEPARATE.
- --------------------------------------------------------------------------------
GENERAL INSTRUCTIONS:
- WRITE WITH BLACK OR DARK BLUE INK.
- ERASURES AND WHITEOUTS ARE NOT ACCEPTABLE.
- ANY ALTERATIONS MUST BE INITIALED BY THE APPLICANT.
- --------------------------------------------------------------------------------
DETAILED INSTRUCTIONS FOR COMPLETING THE ATTACHED FORMS CAN BE FOUND IN THE INB
MANUALS.
<PAGE>
IMPORTANT NOTICE
Since you have applied for insurance, we'd like you to know more about our
underwriting process and what occurs after you submit your application.
THE UNDERWRITING PROCESS
All forms of insurance are based on the concept of risk-sharing.
Underwriters seek to determine the level of risk represented by each applicant
and then assign that person to a group with similar risk characteristics. In
this way, the risk potential can be spread among all policyholders within a
given risk group, assuring that each assumes his or her fair share of the
insurance cost.
Underwriters collect and review risk factors such as age, occupation,
physical condition, medical history and any hazardous avocations. The level of
risk and premium for the amount of coverage requested is based on this
information.
If you, like most of our applicants, are not subject to unusual accident
hazards and meet our risk selection standards, underwriters will approve your
application and will issue your policy at standard rates. In other cases, we
may charge a higher premium, offer limited coverage or decline insurance. Our
goal is to provide the coverage you need in an equitable manner. To do this we
may ask for additional information about you or any other person to be insured
and we may request a medical exam, electrocardiogram, blood or urine sample or
additional information from sources such as attending physicians, hospitals, the
Medical Information Bureau, or an Investigative Consumer Report. (A full
description of the Medical Information Bureau and Investigative Consumer Reports
follows and should be read carefully.) When information from another party is
needed, this information will only be requested with your written authorization,
which is obtained when the application is completed.
You are our most important source of information and in some cases we may
wish to telephone you directly for an interview. A Lincoln Life & Annuity
Company of New York interviewer from our Underwriting Department may call you to
review and verify information provided on your application and ask additional
questions which will aid in evaluating your application for insurance. You
benefit because complete underwriting information may result in lower rates.
CONFIDENTIALITY
Information we collect about you will not be given to anyone without your
consent, except when it is necessary for conducting our business. The only
people who have access to the information are employees or those of our
reinsurers who service your policy or claim and those who have an insurance
related, regulatory, legal, research or marketing need for the information. In
other situations, we will ask you for written authorization to disclose
information about you.
IF YOU WOULD LIKE TO KNOW WHAT INFORMATION LINCOLN LIFE & ANNUITY COMPANY OF NEW
YORK HAS ON FILE ABOUT YOU OR IF YOU DESIRE BACKGROUND INFORMATION ON THE
INVESTIGATIVE CONSUMER REPORT, PLEASE WRITE OR CALL:
Individual Underwriting Department
Lincoln Life & Annuity Company of New York
120 Madison Street, Suite 1700
Syracuse, NY 13202
To protect your privacy, we will request proper identification (Social
Security Number, Policy Number, etc.). We will then advise you of the nature
and substance of the information by phone, or if you prefer, in writing. We can
also arrange for you to see or obtain copies of the information in our files
that was provided either by you or a third party. We may ask you to pay for the
cost of copying the information which you request.
We reserve the right to disclose medical information only to a doctor and
we will request that you provide us with the name of your physician. Within 30
days from the date we receive your request, we will furnish you and/or your
doctor the information that we have about you that you are entitled to receive.
If you believe any of the information we have furnished you is incorrect
or incomplete, you may request correction or amendment of our information and
include any appropriate documentation to support your claim. If we agree with
your request, we will make the correction and furnish a notice of the correction
to any person or organization which provided the information to us or received
the information from us.
If we do not agree with your correction, we will let you know our reasons
and you may place on record a concise statement explaining the basis of your
dispute. This information will be clearly noted in any future disclosure of the
information. Also, the statement of dispute will be given to other persons and
organizations who have supplied us with such information or received it from us
in the past.
FAIR CREDIT REPORTING ACT
As a part of our routine procedure for processing your initial application,
we may request that an Investigative Consumer Report be made. The insurance
support organization making the report may obtain a copy of the report and
disclose its contents to others for whom it performs such services. This report
typically includes information such as identity and residence verification,
character, reputation, marital status, estimate of worth and income, occupation,
avocations, medical history, habits, mode of living and other personal
characteristics.
You have the right to be personally interviewed as part of any
investigative consumer report which is completed. If you desire such an
interview, please indicate this at the time your application is submitted.
Additional information is usually obtained from several different sources.
Confidential interviews are conducted with neighbors, friends, business
associates, and acquaintances. Public records are carefully reviewed.
Past experience shows that information from investigative reports usually
does not have an adverse effect on our underwriting decision. If it should, we
will notify you in writing and identify the reporting agency. At that point, if
you wish to do so, you may discuss the matter with the reporting agency.
All of these rights are guaranteed to you by the Fair Credit Reporting Act,
which took effect in April, 1971. The procedures called for in this law are
consistent with our long-standing feeling concerning consumer reports and we
fully support this legislation.
MEDICAL INFORMATION BUREAU
Information you provide regarding your insurability or claims will be
treated as confidential except that Lincoln Life & Annuity Company of New York
or its reinsurers, may make a brief report of it to the Medical Information
Bureau. This is a nonprofit membership organization of life insurance companies
which operates an information exchange on behalf of its members.
Upon request by another member insurance company to which you have applied
for life or health insurance coverage or submitted a claim, the Bureau will
provide the information it may have 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, MA
02112 - Telephone number (617)426-3660.
The Lincoln Life & Annuity Company of New York 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.
<PAGE>
<TABLE>
<CAPTION>
<S><C>
LIFE INSURANCE APPLICATION
PART I LINCOLN LIFE
NO.
- -----------------------------------------------------------------------------------------------------------------------------------
POLICY INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
1. Proposed Insured's Name (FIRST, M.I., LAST, AS IT IS TO APPEAR 2. PROPOSED INSURED'S SS # 3. SEX
ON POLICY)
__ __ __ - __ __ - __ __ __ __ / / M / / F
- -----------------------------------------------------------------------------------------------------------------------------------
4. Date of Birth 5. Age nearest Birthday 6. Place of Birth 7. Insured's drivers license number and State of
issue:
(STATE) __________
- -----------------------------------------------------------------------------------------------------------------------------------
8. Home Address (NO., STREET, CITY, STATE & ZIP CODE) 9. Phone Numbers and most convenient time Proposed
Insured can be reached
(Home) ______________________ / / AM / / PM
(Work) ______________________ / / AM / / PM
- -----------------------------------------------------------------------------------------------------------------------------------
10. WHOLE LIFE INSURANCE Plan
- -----------------------------------------------------------------------------------------------------------------------------------
/ / OL Face Amount $ ____________ / / Lump Sum Premium $ _____________
/ / Target Amount $ ____________ / / Level Term Rider Face Amount $ _____________
TTR Escalator ___________% / / Additional Term Rider ___________%
/ / Term Purchase Option $ ____________ Start Year ________ Stop Year ________
/ / CPR/Target Premium $ ____________ / /
- -----------------------------------------------------------------------------------------------------------------------------------
BENEFITS (IF AVAILABLE)
/ / Waiver of Premium / / Optional Purchase of
Additional Insurance $ _____________
/ / Additional Indemnity (IF LESS / / Accelerated Death Benefit Payment Options
THAN FACE) $ ____________ / /
- -----------------------------------------------------------------------------------------------------------------------------------
11. FLEXIBLE PREMIUM UNIVERSAL LIFE INSURANCE Plan
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Specified Amount / / Planned Annual Premium $ _____________
/ / Specified Amount plus Cash Value/accumulation Value / / Lump Sum Deposit $ _____________
/ / Initial Specified Amount $ ____________ / /
- -----------------------------------------------------------------------------------------------------------------------------------
BENEFITS (IF AVAILABLE)
/ / Waiver of Monthly Deduction / / Additional Indemnity $ _____________
(IF LESS THAN FACE)
/ / Waiver of Specified Premium $ ____________ / / Accelerated Death Benefit Payment Options
/ / Guaranteed Insurability Rider $ ____________ / /
- -----------------------------------------------------------------------------------------------------------------------------------
12. OTHER INSURANCE Plan
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Face Amount $ ____________
- -----------------------------------------------------------------------------------------------------------------------------------
BENEFITS (IF AVAILABLE)
/ / Waiver of Premium / / Additional Indemnity (IF LESS THAN FACE) $ ____________ / / Yes / / No
- -----------------------------------------------------------------------------------------------------------------------------------
13. Shall the Automatic Premium Loan provision (if available) be made effective?
- -----------------------------------------------------------------------------------------------------------------------------------
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<PAGE>
<TABLE>
<CAPTION>
<S><C>
- -----------------------------------------------------------------------------------------------------------------------------------
14. How shall premiums be payable?
/ / Annually / / Semi-Annually / / Quarterly / / PAC / / Salary Allotment / / Account Billed
- -----------------------------------------------------------------------------------------------------------------------------------
15. To whom shall premium notices be sent?
/ / To both Insured and Owner / / To Owner only
- -----------------------------------------------------------------------------------------------------------------------------------
16. If Insured is to receive premium notices, where should they be sent?
/ / Insured's residence / / Insured's business / / Other
- -----------------------------------------------------------------------------------------------------------------------------------
17. Owner (if other than insured) Billing Address (NO., STREET, CITY, STATE & ZIP CODE)
- -----------------------------------------------------------------------------------------------------------------------------------
PROPOSED INSURED INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
18. Name of employer and nature of business
- -----------------------------------------------------------------------------------------------------------------------------------
19. Place of Business (NO., STREET, CITY, STATE & ZIP CODE)
- -----------------------------------------------------------------------------------------------------------------------------------
20. Current Occupation/Position 21. How long so employed? 22. Duties
- -----------------------------------------------------------------------------------------------------------------------------------
23. Do you contemplate flying, or have you flown during the past 2 years as a pilot, student pilot or crew member?
/ / Yes / / No IF "YES," AN AVIATION SUPPLEMENT IS REQUIRED.
- -----------------------------------------------------------------------------------------------------------------------------------
24. Do you plan to participate or have you participated within the past 2 years in motor vehicle or boat racing, hang gliding or
sky, skin, or scuba diving or similar sports?
/ / YES / / NO IF "YES," COMPLETE AVOCATION QUESTIONNAIRE.
- -----------------------------------------------------------------------------------------------------------------------------------
25. Do you contemplate residence or travel outside of the United States or Canada for more than 30 days within the next year?
/ / Yes / / No IF "YES," COMPLETE FOREIGN TRAVEL OR RESIDENCE QUESTIONNAIRE.
- -----------------------------------------------------------------------------------------------------------------------------------
26. Have you had convictions within the past 3 years for motor vehicle moving violations, or had your license suspended, revoked
or restricted?
/ / Yes / / No IF "YES," GIVE DETAILS BELOW.
- -----------------------------------------------------------------------------------------------------------------------------------
27. Have you ever been convicted of a felony?
/ / Yes / / No IF "YES," GIVE DETAILS BELOW.
- -----------------------------------------------------------------------------------------------------------------------------------
28. Have you used any form of tobacco or nicotine substitute within the last 12 months?
/ / Yes / / No IF "YES," DESCRIBE BELOW THE FREQUENCY, QUANTITY AND KIND OF TOBACCO OR NICOTINE SUBSTITUTE USED.
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER / EXISTING COVERAGE
- -----------------------------------------------------------------------------------------------------------------------------------
29. Have you ever applied for any Life or Health Insurance which was denied, required an extra premium, or was issued for a
reduced face amount?
/ / Yes / / No IF "YES," GIVE FULL DETAILS BELOW.
- -----------------------------------------------------------------------------------------------------------------------------------
30. Are you applying or have you negotiated for other Life or Health Insurance either formally or informally, within the last 6
months?
/ / Yes / / No IF "YES," GIVE DETAILS BELOW.
- -----------------------------------------------------------------------------------------------------------------------------------
Page 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S><C>
- -----------------------------------------------------------------------------------------------------------------------------------
31. Will you discontinue coverage, stop paying premiums, initiate a reduction in face amount, or borrow or surrender cash value on
any Life Insurance or Annuity if this insurance is issued? / / Yes / / No (If "YES," GIVE FULL DETAILS IN SPACE BELOW)
- -----------------------------------------------------------------------------------------------------------------------------------
COMPANY POLICY NUMBER AMOUNT
-----------------------------------------------------------------------------------------------------------
FORWARD PROPER
-----------------------------------------------------------------------------------------------------------
REPLACEMENT FORMS,
-----------------------------------------------------------------------------------------------------------
IF REQUIRED.
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
32. What is the total amount of Life Insurance (Personal and Business) presently in force on your life EXCLUDING ANY POLICIES THAT
WILL BE REPLACED? The amount shown for each policy should also include coverage under any term riders, but Group or Health
Insurance policies should not be included. List each policy separately. IF NONE, SO STATE.
- -----------------------------------------------------------------------------------------------------------------------------------
COMPANY WHEN ISSUED AMOUNT AI AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
POLICYOWNER INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
33. Policyowner Name (GIVE FULL NAME AND RELATIONSHIP TO PROPOSED INSURED. IF TRUST, INCLUDE TRUSTEE(S)/TRUST NAME/TRUST DATE)
- -----------------------------------------------------------------------------------------------------------------------------------
34. If Owner is other than the Insured, Owner SS # or Tax ID #
___ ___ ___ - ___ ___ - ___ ___ ___ ___ OR ___ ___ - ___ ___ ___ ___ ___ ___ ___
- -----------------------------------------------------------------------------------------------------------------------------------
35. Contingent Owner, if any, AND relationship to Proposed Insured
- -----------------------------------------------------------------------------------------------------------------------------------
36. I(We) have paid $ _____________________ to the Agent/Representative in exchange for the Temporary Life Insurance
Agreement, and I(we) acknowledge that I(we) fully understand and accept its terms.
- -----------------------------------------------------------------------------------------------------------------------------------
37. ADDITIONAL INSTRUCTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
BENEFICIARY INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
38. All Primary Beneficiaries who survive the Insured shall share equally unless otherwise indicated. If no Primary Beneficiary
survives the Insured, benefits will be paid in equal shares to the Contingent Beneficiaries, if surviving the Insured, unless
otherwise specified.
- -----------------------------------------------------------------------------------------------------------------------------------
a. PRIMARY BENEFICIARY AND RELATIONSHIP TO PROPOSED INSURED IF PERSONAL BENEFICIARY
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
b. CONTINGENT BENEFICIARY AND RELATIONSHIP TO PROPOSED INSURED IF PERSONAL BENEFICIARY
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
39. If Beneficiary or Owner is other than an individual, indicate whether:
Beneficiary is a: / / Corporation / / Partnership / / Other ___________________________________________
Owner is a: / / Corporation / / Partnership / / Other ___________________________________________
Name of person authorized to transact business _________________________________________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
Page 3
</TABLE>
<PAGE>
CERTIFICATIONS AND SIGNATURES
- --------------------------------------------------------------------------------
I(We) have read the above questions and answers and declare that they are
complete and true to the best of my(our) knowledge and belief. I(We) agree, a)
that this Application (Part I, pages 1 and 2, 3 and 4; Part II; or Part IIA if
required) shall form a part of any Policy issued, and b) that no
Agent/Representative of the Company shall have the authority to waive a complete
answer to any question in this Application, make or alter any contract, or waive
any of the Company's other rights or requirements. I(We) further agree that no
insurance shall take effect (except as provided in the Temporary Life Insurance
Agreement if advance payment has been made and acknowledged above and such
Agreement issued) unless and until the Policy has been delivered to and accepted
by me(us) and the initial premium paid during the lifetime of the Proposed
Insured(s) and provided the Proposed Insured(s) remain in the state of health
and insurability represented in Parts I and II of this application, or Part IIA
if required.
If the Accelerated Death Benefit Payment Options Rider is elected, the
undersigned Insured and/or Owner hereby certify and understand that RECEIPT OF
ACCELERATED DEATH BENEFIT PAYMENT(S) MAY AFFECT ELIGIBILITY FOR PUBLIC
ASSISTANCE PROGRAMS AND MAY BE TAXABLE, THAT INTEREST WILL ACCRUE AT THE SAME
RATE AS THE POLICY LOAN INTEREST RATE ON ANY ACCELERATED BENEFIT PAYMENT(S), AND
THAT THE COMPANY WILL ASSESS A ONE-TIME ADMINISTRATIVE CHARGE OF $500 AT THE
TIME THE FIRST ACCELERATED BENEFIT PAYMENT IS MADE.
UNDER PENALTIES OF PERJURY, IT IS CERTIFIED THAT: (a) THE SOCIAL SECURITY OR
EMPLOYER ID NUMBERS SHOWN IN THIS APPLICATION ARE CORRECT TAXPAYER
IDENTIFICATION NUMBERS, AND (b) THE HOLDERS OF SAID NUMBERS ARE NOT SUBJECT TO
ANY BACKUP WITHHOLDING OF U.S. FEDERAL INCOME TAX FOR FAILURE TO REPORT INTEREST
OR DIVIDENDS.
ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, POLICY VALUES AND CASH
SURRENDER VALUES ARE AVAILABLE UPON REQUEST.
- --------------------------------------------------------------------------------
Dated at (City and State) On (Month, Day & Year)
- --------------------------------------------------------------------------------
Witness - Licensed Agent/Representative Signature of Proposed Insured
- --------------------------------------------------------------------------------
Witness - Licensed Agent/Representative Signature of Proposed Insured
- --------------------------------------------------------------------------------
Witness Signature of Applicant/Owner if
other than Proposed Insured
- --------------------------------------------------------------------------------
Witness Signature of Applicant/Owner if
other than Proposed Insured
- --------------------------------------------------------------------------------
Page 4
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION BY REPRESENTATIVE
- ----------------------------------------------------------------------------------------------------------------------------------
<S><C>
The Licensed Representative who witnessed the signature(s) on this Application certifies that:
1) He/she asked all the questions on this application, and recommends this risk to the Company without reservation.
2) The policy being applied for / / is / / is not intended to replace existing Life Insurance or Annuity.
IF "YES," THE APPROPRIATE REPLACEMENT FORM MUST BE GIVEN TO THE CLIENT AT TIME OF APPLICATION.
- ----------------------------------------------------------------------------------------------------------------------------------
LICENSED Signature
REPRESENTATIVE (If other than Controlling Producer)
- ----------------------------------------------------------------------------------------------------------------------------------
CONTROLLING Signature Office Code S.S. # / TIN # Producer Code Share %
PRODUCER
- ----------------------------------------------------------------------------------------------------------------------------------
SECOND Name Office Code S.S. # / TIN # Producer Code Share %
PRODUCER
- ----------------------------------------------------------------------------------------------------------------------------------
THIRD Name Office Code S.S. # / TIN # Producer Code Share %
PRODUCER
- ----------------------------------------------------------------------------------------------------------------------------------
CONSULTANT Name Office Code S.S. # / TIN # Producer Code Share %
- ----------------------------------------------------------------------------------------------------------------------------------
SECOND Name Office Code S.S. # / TIN # Producer Code Share %
CONSULTANT
- ----------------------------------------------------------------------------------------------------------------------------------
SECTION FOR FIELD OFFICE ADMINISTRATION STAFF
- ----------------------------------------------------------------------------------------------------------------------------------
1. Verify that the licensed Representative who signed the application is licensed in the state in which the application
was taken.
2. Answer the following with respect to the Controlling Producer.
a. License for Lincoln Life & Annuity Company of New York is / / in force / / pending / / not required
b. Contract pending - what type? _____________________________________________________________________________
3. Office to which contract is to be sent _____________________________________________ 4. Office Code ______________
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING QUESTIONS RELATE TO THE PROPOSED INSURED AND ARE TO BE ANSWERED FULLY BY THE LICENSED REPRESENTATIVE
- ----------------------------------------------------------------------------------------------------------------------------------
1a. How long and how well have you known the Proposed Insured?
b. Has the Proposed Insured ever been known by another name? LIST ALL.
- ----------------------------------------------------------------------------------------------------------------------------------
2. WHEN and for WHAT reason did the Proposed Insured last consult a physician? INCLUDE PHYSICIAN'S NAME AND ADDRESS.
- ----------------------------------------------------------------------------------------------------------------------------------
3. Basis of Application: (CHECK ONE) / / Nonmedical / / Medical / / Paramedical
An appointment has been made with _________________________________________ on ____________________________
- ----------------------------------------------------------------------------------------------------------------------------------
4. Rate Basis: (CHECK ONE) / / Gender Neutral / / Sex-Distinct
- ----------------------------------------------------------------------------------------------------------------------------------
5. List business associates or family members on whom Applications are also being submitted.
- ----------------------------------------------------------------------------------------------------------------------------------
6. Total Net Worth (exclusive of Life Insurance) $ ________________ Annual Earned Income $ _______________
How much of Net Worth is in liquid investments
and savings? $ ________________ Other Income $ _______________
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Page 5
AUTHORIZATION
The purpose of this authorization is to allow the Insurance Company to determine
your eligibility for life or health insurance coverage or a claim for benefits
under a life or health policy.
I AUTHORIZE any medical professional, hospital, medical care institution,
insurer, Medical Information Bureau, Inc., consumer reporting agency, Social
Security Administration, employer, or other person having records or knowledge
of me or my family members' physical or mental health, or any other information
bearing on our insurability, to give Lincoln Life & Annuity Company of New York,
and its reinsurers, or any consumer reporting agency acting on the Company's
behalf, any such information. This shall include all information about my(our)
medical history, diagnosis, treatment, and prognosis including information
regarding alcohol or drug abuse.
I AUTHORIZE the Insurance Company to have a blood sample and urine sample
analyzed for the purpose of underwriting my application for insurance coverage.
The analysis of the blood and urine sample may include, but is not limited to,
tests where allowed by law for diabetes, liver function, kidney disorders,
cholesterol and related blood lipids, presence of acquired immune deficiency
syndrome antibodies, immune disorder, or the presence of medication, drugs, or
nicotine. I AUTHORIZE the Insurance Company to disclose the results of these
tests to the Medical Information Bureau described in the Important Notice.
I UNDERSTAND THAT my(our) medical records may be protected by certain Federal
Regulations, especially as they apply to any drug or alcohol abuse data. I
understand that I(we) may revoke this authorization at any time as it pertains
to any such drug or alcohol abuse data by written notification; however, any
action taken prior to revocation will not be affected.
This authorization shall be valid for a period of two years after the date it is
signed. A photographic copy of this authorization shall be as valid as the
original. I will be given a copy of this authorization at my request. An
investigative consumer report may be obtained and if such a report is obtained,
I may request to be interviewed in connection with the preparation of that
report. If a consumer report is obtained, I do not request to be
interviewed.
I ACKNOWLEDGE the receipt of the "Important Notice" containing Fair Credit
Reporting Act and Medical Information Bureau, Inc. information.
Signed on
----------------------------------------------------------------------
Month Day Year Signature of Proposed Insured
<PAGE>
<TABLE>
<CAPTION>
<S><C>
- -----------------------------------------------------------------------------------------------------------------------------------
PROVIDING THE FOLLOWING INFORMATION WILL HELP US BETTER UNDERSTAND OUR MARKETPLACE AND, ULTIMATELY WILL RESULT IN BETTER SERVICE TO
YOU AND YOUR CLIENTS. PLEASE PROVIDE AS MUCH INFORMATION AS POSSIBLE.
- -----------------------------------------------------------------------------------------------------------------------------------
1) What is the purpose of this insurance?
/ / Estate Taxation / / Buy/Sell / / Family Income
/ / Estate Maximization / / Key Man / / Charitable Gift
/ / Estate Liquidity / / Deferred Compensation / / Other_____________________
2) Occupation of the Insured
/ / Business Owner / / Executive / / Professional / / Retiree / / Other ____________________
3) How was this business initiated?
/ / Fee Client Referral / / Other Referral / / Seminar / / Cold Telephone Call
/ / Non-Fee Client Referral / / Repeat Sale / / Association / / Other ____________________
/ / Advisor Referral / / Broker / / Direct Mail
4) Type of Client Relationship
CHECK ONE ONLY: / / New fee client (new contract signed within 12 months)
/ / Renewal fee client (renewal contract signed within 12 months)
/ / Old fee client (no contract signed within 12 months)
/ / Not a fee client
- -----------------------------------------------------------------------------------------------------------------------------------
IF AMOUNT APPLIED FOR IS $100,000 OR OVER, A COVER LETTER SHOULD BE SUBMITTED WITH THE APPLICATION, INCLUDING FINANCIAL AND GENERAL
BACKGROUND INFORMATION ON THE PROPOSED INSURED, AND ON THE BUSINESS IF A BUSINESS INSURANCE SALE.
Page 6
</TABLE>
<PAGE>
VUL ADDENDUM TO APPLICATION LINCOLN LIFE
INSTRUCTIONS
This Application Package Includes:
1. An Important Notice form.
INSTRUCTIONS:
Please give to the proposed insured in every case.
2. A VUL Addendum to Application
INSTRUCTIONS:
Write legibly. Complete all questions. Explain answers
where asked to in the spaces provided.
Transfer(s) from the Fixed Account may only be made during the 30-day
period following each Policy Anniversary and is (are) subject to a maximum
annual limit of 20% of the Fixed Account Value as of that Policy
Anniversary. (See Policy Specification Page)
The VUL Addendum must be signed by the proposed insured(s) and any
applicant if other that the insured(s). The signatures of the owner and
subowner are required. A licensed agent/ representative must witness the
signatures.
Leave pages attached when submitting to the The Company.
DO NOT SEPARATE.
---------------------------------------------------------------------------
GENERAL INSTRUCTIONS:
- WRITE WITH BLACK OR DARK BLUE INK.
- ERASURES AND WHITEOUTS ARE NOT ACCEPTABLE.
- ANY ALTERATIONS MUST BE INITIALED BY THE APPLICANT.
---------------------------------------------------------------------------
DETAILED INSTRUCTIONS FOR COMPLETING THE ATTACHED FORM CAN BE FOUND IN THE
INB MANUALS.
<PAGE>
IMPORTANT NOTICE
Since you have applied for insurance, we'd like you to know more about our
underwriting process and what occurs after you submit your application.
THE UNDERWRITING PROCESS
All forms of insurance are based on the concept of risk-sharing.
Underwriters seek to determine the level of risk represented by each applicant,
and then assign that person to a group with similar risk characteristics. In
this way, the risk potential can be spread among all policyholders within a
given risk group, assuring that each assumes his or her fair share of the
insurance cost.
Underwriters collect and review risk factors such as age, occupation,
physical condition, medical history and any hazardous avocations. The level of
risk and premium for the amount of coverage requested is based on this
information.
If you, like most of our applicants, are not subject to unusual accident
hazards, and meet our risk selection standards, underwriters will approve your
application and will issue your policy at standard rates. In other cases, we
may charge a higher premium, offer limited coverage or decline insurance. Our
goal is to provide the coverage you need in an equitable manner. To do this we
may ask for additional information about you or any other person to be insured
and we may request a medical exam, electrocardiogram, blood or urine sample or
additional information from sources such as attending physicians, hospitals, the
Medical Information Bureau, or an Investigative Consumer Report. (A full
description of the Medical Information Bureau and Investigative Consumer Reports
follows and should be read carefully.) When information from another party is
needed, this information will only be requested with your written authorization,
which is obtained when the application is completed.
You are our most important source of information and in some cases we may
wish to telephone you directly for an interview. A Lincoln Life & Annuity
Company of New York interviewer from our Underwriting Department may call you to
review and verify information provided on your application and ask additional
questions which will aid in evaluating your application for insurance. You
benefit because complete underwriting information may result in lower rates.
CONFIDENTIALITY
Information we collect about you will not be given to anyone without your
consent, except when it is necessary for conducting our business. The only
people who have access to the information are employees or those of our
reinsurers who service your policy or claim and those who have an insurance
related, regulatory, legal, research or marketing need for the information. In
other situations, we will ask you for written authorization to disclose
information about you.
IF YOU WOULD LIKE TO KNOW WHAT INFORMATION LINCOLN LIFE & ANNUITY COMPANY OF NEW
YORK HAS ON FILE ABOUT YOU ORIF YOU DESIRE BACKGROUND INFORMATION ON
THEINVESTIGATIVE CONSUMER REPORT, PLEASE WRITE OR CALL:
Individual Underwriting Department
Lincoln Life & Annuity Company of New York
Hartford, CT 06152
(860) 726-5027
To protect your privacy, we will request proper identification (Social
Security Number, Policy Number, etc.). We will then advise you of the nature
and substance of the information by phone, or if you prefer, in writing. We can
also arrange for you to see or obtain copies of the information in our files
that was provided either by you or a third party. We may ask you to pay for the
cost of copying the information which you request. We reserve the right to
disclose medical information only to a doctor and we will request that you
provide us with the name of your physician. Within 30 days from the date we
receive your request, we will furnish you and/or your doctor the information
that we have about you that you are entitled to receive. If you believe any of
the information we have furnished you is incorrect or incomplete, you may
request correction or amendment of our information and include any appropriate
documentation to support your claim. If we agree with your request, we will
make the correction and furnish a notice of the correction to any person or
organization which provided the information to us or received the information
from us.
If we do not agree with your correction, we will let you know our reasons
and you may place on record a concise statement explaining the basis of your
dispute. This information will be clearly noted in any future disclosure of the
information. Also, the statement of dispute will be given to other persons and
organizations who have supplied us with such information or received it from us
in the past.
FAIR CREDIT REPORTING ACT
As a part of our routine procedure for processing your initial application,
we may request that an Investigative Consumer Report be made. The insurance
support organization making the report may obtain a copy of the report and
disclose its contents to others for whom it performs such services. This report
typically includes information such as identity and residence verification,
character, reputation, marital status, estimate of worth and income, occupation,
avocations, medical history, habits, mode of living and other personal
characteristics.
You have the right to be personally interviewed as part of any
investigative consumer report which is completed. If you desire such an
interview, please indicate this at the time your application is submitted.
Additional information is usually obtained from several different sources.
Confidential interviews are conducted with neighbors, friends, business
associates, and acquaintances. Public records are carefully reviewed.
Past experience shows that information from investigative reports usually
does not have an adverse effect on our underwriting decision. If it should, we
will notify you in writing and identify the reporting agency. At that point, if
you wish to do so, you may discuss the matter with the reporting agency.
All of these rights are guaranteed to you by the Fair Credit Reporting Act,
which took effect in April, 1971. The procedures called for in this law are
consistent with our long-standing feeling concerning consumer reports and we
fully support this legislation.
MEDICAL INFORMATION BUREAU
Information you provide regarding your insurability or claims will be
treated as confidential except that Lincoln Life & Annuity Company of New York
or its reinsurers, may make a brief report of it to the Medical Information
Bureau. This is a nonprofit membership organization of life insurance companies
which operates an information exchange on behalf of its members.
Upon request by another member insurance company to which you have applied
for life or health insurance coverage or submitted a claim, the Bureau will
provide the information it may have 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, MA 02112 -
Telephone number (617)426-3660.
The Lincoln Life & Annuity Company of New York 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.
<PAGE>
<TABLE>
<CAPTION>
<S><C>
VUL ADDENDUM TO APPLICATION LINCOLN LIFE
THIS VUL ADDENDUM IS SUBMITTED AS A SUPPLEMENT TO LIFE INSURANCE APPLICATION NO.
- -----------------------------------------------------------------------------------------------------------------------------------
NAME OF PROPOSED INSURED:
------------------------------------------------------------------- --------------------------------
FIRST MIDDLE INITIAL LAST
NAME OF OWNER:
------------------------------------------------------------------------------- --------------------------------
FIRST MIDDLE INITIAL LAST
- -----------------------------------------------------------------------------------------------------------------------------------
1. BROKER/
DEALER Print Name of Broker/Dealer: _____________________________________________________________________________
INFORMATION
Address: __________________________________________________________________________________________________
Telephone: ________________________________ Field Office Code: _______________________
- -----------------------------------------------------------------------------------------------------------------------------------
2. INITIAL FIXED ACCOUNT ________% Transfer(s) from the Fixed Account may only be made during the 30-day period
PREMIUM following each Policy Anniversary and is (are) subject to a maximum annual limit of 20% of the Fixed
PAYMENT Account Value as of that Policy Anniversary. (SEE POLICY SPECIFICATION PAGE)
ALLOCATION
(Allocation to any VARIABLE ACCOUNT - SUB-ACCOUNTS (FUNDS)
One % line must be
1% or more. Use AIM OPCAP
whole percentages ___% AIM V.I. CAPITAL APPRECIATION Fund ___% OCC Global Equity Portfolio
only. Grand Total ___% AIM V.I. Diversified Income Fund ___% OCC Managed Portfolio
of all allocations ___% AIM V.I. Growth Fund ___% OCC Small Cap Portfolio
made in this ___% AIM V.I. Value Fund
section of the
application must
equal 100%) CIGNA INVESTMENTS, INC. Templeton
___% CIGNA Variable Products Money Market Fund ___% Templeton Asset Allocation Fund
If DOLLAR COST ___% CIGNA Variable Products S&P 500 Index Fund ___% Templeton International Fund
AVERAGING is ___% Templeton Stock Fund
employed, an
allocation must FIDELITY INVESTMENTS
be made to the ___% Asset Manager Portfolio Other (if available for these products)
/ / Fixed Account ___% Equity-Income Portfolio ___%_________________________________
OR THE ___% Investment Grade Bonds Portfolio ___%_________________________________
/ / Money Market
Fund MASSACHUSETTS FINANCIAL SERVICES
and the % ___% MFS Emerging Growth Series
allocation must ___% MFS Total Return Series
result in at least ___% MFS Utilities Series
$1,000 to such ___% MFS World Governments Series
account. Please
complete Section 5. NOTE: ALL PAYMENTS AND VALUES PROVIDED BY THE LIFE INSURANCE POLICY WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. THE DEATH
BENEFIT AND THE CASH VALUES MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE EXPERIENCE OF THE VARIABLE
ACCOUNT. ALSO, THE DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER SPECIFIED CONDITIONS.
- -----------------------------------------------------------------------------------------------------------------------------------
3. AUTOMATIC / / Quarterly / / Semi-annual / / Annual
REBALANCING
/ / Yes / / No NOTE: THIS SERVICE IS NOT AVAILABLE IF DOLLAR COST AVERAGING IS SELECTED.
- -----------------------------------------------------------------------------------------------------------------------------------
(Page 1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S><C>
- -----------------------------------------------------------------------------------------------------------------------------------
4. DOLLAR COST SELECT ONE TRANSFER OPTION ($1,000 MINIMUM PER TRANSFER):
AVERAGING / / $_____________ monthly / / $_____________ quarterly
(FOLLOW Each amount transferred is to be applied to the following Fund(s) in these percentages
INSTRUCTIONS (USE WHOLE PERCENTAGES ONLY. TOTAL MUST EQUAL 100%).
IN SECTION 2
BEFORE AIM OPCAP
COMPLETING ___% AIM V.I. Capital Appreciation Fund ___% OCC Global Equity Portfolio
THIS SECTION) ___% AIM V.I. Diversified Income Fund ___% OCC Managed Portfolio
___% AIM V.I. Growth Fund ___% OCC Small Cap Portfolio
___% AIM V.I. Value Fund
CIGNA Investments, Inc. TEMPLETON
___% CIGNA Variable Products Money Market Fund ___% Templeton Asset Allocation Fund
___% CIGNA Variable Products S&P 500 Index Fund ___% Templeton International Fund
___% Templeton Stock Fund
FIDELITY INVESTMENTS
___% Asset Manager Portfolio OTHER (if available for these products)
___% Equity-Income Portfolio ___%_____________________________
___% Investment Grade Bonds Portfolio ___%_____________________________
MASSACHUSETTS FINANCIAL SERVICES
___% MFS Emerging Growth Series
___% MFS Total Return Series
___% MFS Utilities Series
___% MFS World Governments Series
I(We) understand that these transfers will be made on the 20th day of the month (or the next business day)
and will continue for the period specified or until the value of the Fund noted above with respect to the
policy/contract is exhausted or I(we) terminate the program, whichever occurs earlier. I(We) also
understand that I(we) may add to such Fund at any time to continue this program or may change the periodic
amounts.
- -----------------------------------------------------------------------------------------------------------------------------------
5. CERTIFICATIONS I(We) have read the above questions and answers and declare that they are complete and true to the best of
my (our) knowledge and belief. I(We) agree, a) that this VUL Addendum to Application and Life Insurance
Application (Part I pages 1, 2, 3 and 4, and Part II, or Part IIA, if required) shall form a part of any
policy/contract issued, and b) that no Agent/Representative of the Company shall have the authority to
waive a complete answer to any question in this Addendum to Application, make or alter any contract, or
waive any of the Company's other rights or requirements. I(We) further agree that no insurance shall take
effect unless and until the policy/contract has been delivered to and accepted by me(us) and the initial
premium paid during the lifetime of the Proposed Insured, and provided the Proposed Insured remains in the
state of health and insurability represented in Parts I and II, or Part IIA if required, of this
Application.
I(We) acknowledge receipt of a current prospectus.
ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, POLICY VALUES AND CASH SURRENDER VALUES ARE AVAILABLE
UPON REQUEST.
- -----------------------------------------------------------------------------------------------------------------------------------
6. SIGNATURES
Signed at ____________________________________________________ On _____/_____/_____
CITY / STATE MO DAY YEAR
-----------------------------------------------------------------------------------------------------------
SIGNATURE OF PROPOSED INSURED
-----------------------------------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S) IF OTHER THAN PROPOSED INSURED
-----------------------------------------------------------------------------------------------------------
SIGNATURE OF WITNESS
-----------------------------------------------------------------------------------------------------------
SIGNATURE OF LICENSED AGENT/REGISTERED REPRESENTATIVE
- -----------------------------------------------------------------------------------------------------------------------------------
(Page 2)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S><C>
- -----------------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING QUESTIONS RELATE TO THE POLICY OWNER AND ARE TO BE ANSWERED FULLY BY THE LICENSED REPRESENTATIVE AND THE POLICY OWNER.
- -----------------------------------------------------------------------------------------------------------------------------------
1. Total Net Worth $________________
How much of Net Worth is in Stock and Bonds? $________________
- -----------------------------------------------------------------------------------------------------------------------------------
2. Overall Investment Objective For Sub-account Selections / / Conservative / / Moderate Conservative / / Moderate
/ / Moderate Aggressive / / Aggressive
- -----------------------------------------------------------------------------------------------------------------------------------
3. Name Of Current Employer
- -----------------------------------------------------------------------------------------------------------------------------------
4. Address Of Employer (STREET, CITY, STATE, ZIP)
- -----------------------------------------------------------------------------------------------------------------------------------
5. Occupation / / Business Owner / / Executive / / Professional / / Retiree / / Other______________
- -----------------------------------------------------------------------------------------------------------------------------------
6. If a corporation, partnership or other legal entity, the name of any persons authorized to transact business on behalf of the
entity.
- -----------------------------------------------------------------------------------------------------------------------------------
7. Does Policy Owner have affiliation with, or work for, a member of a Stock Exchange or the National Association of Securities
Dealers, Inc., or other entity in dealing as agent or principal in securities? / / Yes / / No
If yes, what is the name and address of the company?
- -----------------------------------------------------------------------------------------------------------------------------------
8a. Is there a current need for life insurance? / / Yes / / No
b. Does Policy Owner/Insured understand that Variable Universal Life is a life insurance policy? / / Yes / / No
c. Does Policy Owner/Insured understand that the cash value, and the benefits provided under
the policy, vary dependent upon the investment experience of the sub-accounts, and that a
decrease in cash value may cause a lapse in the policy and loss of life insurance coverage? / / Yes / / No
- -----------------------------------------------------------------------------------------------------------------------------------
9.
Signed at __________________________________________ on _____/_____/_____
------------------------------------------------------- -------------------------------------------------------------
SIGNATURE OF POLICY OWNER SIGNATURE OF PROPOSED INSURED
Licensed Representative Attestation: The above-named Policy Owner has been informed of the risks involved in this life
insurance policy and I believe the VUL-1 product is suitable given the Policy Owner's overall objective towards investing and
time horizon.
------------------------------------------------------- --------------------------------------------------------------
SIGNATURE OF LICENSED REPRESENTATIVE LICENSED REPRESENTATIVE NAME
- -----------------------------------------------------------------------------------------------------------------------------------
10.
___________________________________________________ on _____/_____/_____
SIGNATURE OF FIELD INVESTMENT REVIEWER
(Page 3)
</TABLE>
<PAGE>
OPTIONAL METHODS OF SETTLEMENT
This rider is made part of the policy to which it is attached as of the Date of
Issue. Upon written request, the Company will agree to pay in accordance with
any one of the options shown below all or part of the net proceeds that may be
payable under the policy.
If any income optional settlement provides for instalment payments for a given
age of payee for an amount which would be the same for different periods
certain, the Company will deem that an election has been made for the longest
period certain for such age and amount.
While the Insured is alive, the request, including the designation of the payee,
may be made by the Owner. At the time a Death Benefit becomes payable under the
policy, the request, including the designation of the payee, may then be made by
the Beneficiary. Once Income Payments have begun, the policy cannot be
surrendered and the payee cannot be changed, nor can the settlement option be
changed.
PAYMENT DATES. The first Income Payment under the settlement option selected
will become payable on the date proceeds are settled under the option.
Subsequent payments will be made on the first day of each month in accordance
with the manner of payment selected.
MINIMUM PAYMENT AMOUNT. The settlement option elected must result in an Income
Payment at least equal to the minimum payment amount in accordance with the
Company's rules then in effect. If at any time payments are less than the
minimum payment amount, the Company has the right to change the frequency to an
interval that will provide the minimum payment amount. If any amount due is
less than the minimum per year, the Company may make other arrangements that are
equitable.
INCOME PAYMENTS. Income Payments will remain constant pursuant to the terms of
the settlement option(s) selected. The amount of each Income Payment shall be
determined in accordance with the terms of the settlement option and the
table(s) set forth in this rider, as applicable. The mortality table used is
the 1983 Individual Annuitant Mortality (IAM) Table "a" and 3% interest. In
determining the settlement amount, the settlement age of the payee will be
reduced by one year when the first installment is payable during the 1990's,
reduced by two years when the first installment is payable during the decade
2000-2009, and so on.
FIRST OPTION: LIFE ANNUITY. An annuity payable monthly to the payee during the
lifetime of the payee, ceasing with the last payment due prior to the death of
the payee.
SECOND OPTION: LIFE ANNUITY WITH CERTAIN PERIOD. An annuity providing monthly
income to the payee for a fixed period of 60, 120, 180, or 240 months (as
selected), and for as long thereafter as the payee shall live.
THIRD OPTION: ANNUITY CERTAIN. An amount payable monthly for the number of
years selected which may be from 5 to 30 years.
FOURTH OPTION: AS A DEPOSIT AT INTEREST. The Company will retain the proceeds
while the payee is alive and will pay interest annually thereon at a rate of not
less than 3% per year. Upon the payee's death, the amount on deposit will be
paid.
EXCESS INTEREST. At the sole discretion of the Company, excess interest may be
paid or credited from time to time in addition to the payments guaranteed under
any Optional Method of Settlement.
Page 1
<PAGE>
ADDITIONAL OPTIONS. Any proceeds payable under the policy may also be settled
under any other method of settlement offered by the Company at the time of the
request.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
/s/ Phillip L. Holstein
PRESIDENT
Page 2
<PAGE>
OPTIONAL METHODS OF SETTLEMENT (CONTINUED)
LIFE ANNUITY AND LIFE ANNUITY WITH CERTAIN PERIOD TABLE FOR EACH $1,000
APPLIED - MALE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Settlement age of Number of installments certain Settlement age of Number of installments certain
payee nearest payee nearest
birthday 60 120 180 240 birthday 60 120 180 240
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Age Life Annuity Age Life Annuity
10 $2.87 $2.87 $2.87 $2.87 $2.87 35 $3.44 $3.44 $3.44 $3.43 $3.41
11 2.89 2.89 2.89 2.88 2.88 36 3.48 3.48 3.48 3.46 3.45
12 2.90 2.90 2.90 2.90 2.90 37 3.52 3.52 3.52 3.50 3.48
13 2.92 2.92 2.91 2.91 2.91 38 3.57 3.56 3.56 3.54 3.52
14 2.93 2.93 2.93 2.93 2.92 39 3.61 3.61 3.60 3.58 3.56
15 2.95 2.95 2.95 2.94 2.94 40 3.66 3.65 3.65 3.63 3.60
16 2.96 2.96 2.96 2.96 2.96 41 3.71 3.70 3.69 3.67 3.64
17 2.98 2.98 2.98 2.98 2.97 42 3.76 3.75 3.74 3.72 3.68
18 3.00 3.00 3.00 2.99 2.99 43 3.81 3.81 3.79 3.77 3.73
19 3.02 3.02 3.01 3.01 3.01 44 3.87 3.86 3.85 3.82 3.77
20 3.04 3.04 3.03 3.03 3.03 45 3.93 3.92 3.90 3.87 3.82
21 3.06 3.05 3.05 3.05 3.05 46 3.99 3.98 3.96 3.92 3.87
22 3.08 3.08 3.07 3.07 3.07 47 4.05 4.05 4.02 3.98 3.92
23 3.10 3.10 3.09 3.09 3.09 48 4.12 4.11 4.09 4.04 3.97
24 3.12 3.12 3.12 3.11 3.11 49 4.19 4.18 4.15 4.10 4.03
25 3.14 3.14 3.14 3.14 3.13 50 4.27 4.26 4.22 4.17 4.08
26 3.17 3.17 3.16 3.16 3.15 51 4.34 4.33 4.30 4.23 4.14
27 3.19 3.19 3.19 3.19 3.18 52 4.43 4.41 4.37 4.30 4.20
28 3.22 3.22 3.22 3.21 3.20 53 4.51 4.50 4.45 4.37 4.26
29 3.25 3.25 3.24 3.24 3.23 54 4.60 4.59 4.54 4.45 4.32
30 3.28 3.28 3.27 3.27 3.26 55 4.70 4.68 4.62 4.53 4.39
31 3.31 3.31 3.30 3.30 3.29 56 4.80 4.78 4.72 4.61 4.45
32 3.34 3.34 3.33 3.33 3.32 57 4.91 4.89 4.82 4.69 4.51
33 3.37 3.37 3.37 3.36 3.35 58 5.03 5.00 4.92 4.78 4.58
34 3.41 3.41 3.40 3.39 3.38 59 5.15 5.12 5.03 4.87 4.65
<CAPTION>
- ---------------------------------------------------------
Settlement age of Number of installments certain
payee nearest
birthday 60 120 180 240
- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Age Life Annuity
60 $5.28 $5.25 $5.14 $4.96 $4.71
61 5.43 5.39 5.27 5.06 4.78
62 5.58 5.53 5.39 5.16 4.84
63 5.74 5.69 5.53 5.26 4.90
64 5.91 5.85 5.66 5.36 4.96
65 6.10 6.03 5.81 5.46 5.02
66 6.30 6.21 5.96 5.56 5.08
67 6.51 6.41 6.12 5.66 5.13
68 6.73 6.62 6.28 5.77 5.18
69 6.97 6.84 6.44 5.86 5.23
70 7.23 7.07 6.61 5.96 5.27
71 7.51 7.32 6.79 6.05 5.31
72 7.80 7.58 6.96 6.14 5.34
73 8.12 7.85 7.14 6.23 5.37
74 8.46 8.14 7.32 6.31 5.40
75 8.82 8.45 7.50 6.38 5.42
76 9.21 8.76 7.67 6.45 5.44
77 9.63 9.10 7.84 6.51 5.45
78 10.08 9.44 8.01 6.57 5.47
79 10.56 9.80 8.17 6.62 5.48
80 11.07 10.17 8.33 6.66 5.49
81 11.62 10.55 8.48 6.70 5.49
82 12.20 10.94 8.61 6.73 5.50
83 12.82 11.33 8.74 6.76 5.50
84 13.47 11.73 8.86 6.79 5.51
85 14.17 12.12 8.97 6.81 5.51
</TABLE>
LR434 NY Page 3
<PAGE>
OPTIONAL METHODS OF SETTLEMENT (CONTINUED)
LIFE ANNUITY AND LIFE ANNUITY WITH CERTAIN PERIOD TABLE FOR EACH $1,000
APPLIED - FEMALE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Settlement age of Number of installments certain Settlement age of Number of installments certain
payee nearest payee nearest
birthday 60 120 180 240 birthday 60 120 180 240
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Age Life Annuity Age Life Annuity
10 $2.80 $2.80 $2.80 $2.80 $2.80 35 $3.26 $3.26 $3.26 $3.25 $3.24
11 2.81 2.81 2.81 2.81 2.81 36 3.29 3.29 3.29 3.28 3.27
12 2.82 2.82 2.82 2.82 2.82 37 3.32 3.32 3.32 3.31 3.30
13 2.83 2.83 2.83 2.83 2.83 38 3.35 3.35 3.35 3.34 3.33
14 2.85 2.85 2.85 2.84 2.84 39 3.39 3.39 3.38 3.38 3.37
15 2.86 2.86 2.86 2.86 2.86 40 3.42 3.42 3.42 3.41 3.40
16 2.87 2.87 2.87 2.87 2.87 41 3.46 3.46 3.46 3.45 3.43
17 2.89 2.89 2.89 2.88 2.88 42 3.50 3.50 3.50 3.49 3.47
18 2.90 2.90 2.90 2.90 2.90 43 3.54 3.54 3.54 3.53 3.51
19 2.92 2.92 2.92 2.91 2.91 44 3.59 3.59 3.58 3.57 3.55
20 2.93 2.93 2.93 2.93 2.93 45 3.64 3.63 3.63 3.61 3.59
21 2.95 2.95 2.95 2.95 2.94 46 3.68 3.68 3.67 3.66 3.63
22 2.96 2.96 2.96 2.96 2.96 47 3.73 3.73 3.72 3.71 3.68
23 2.98 2.98 2.98 2.98 2.98 48 3.79 3.79 3.77 3.76 3.72
24 3.00 3.00 3.00 3.00 2.99 49 3.84 3.84 3.83 3.81 3.77
25 3.02 3.02 3.02 3.02 3.01 50 3.90 3.90 3.89 3.86 3.82
26 3.04 3.04 3.04 3.03 3.03 51 3.97 3.96 3.95 3.92 3.88
27 3.06 3.06 3.06 3.06 3.05 52 4.03 4.03 4.01 3.98 3.93
28 3.08 3.08 3.08 3.08 3.07 53 4.10 4.10 4.08 4.04 3.99
29 3.10 3.10 3.10 3.10 3.09 54 4.18 4.17 4.15 4.11 4.04
30 3.13 3.13 3.12 3.12 3.12 55 4.25 4.25 4.22 4.18 4.11
31 3.15 3.15 3.15 3.14 3.14 56 4.34 4.33 4.30 4.25 4.17
32 3.18 3.18 3.17 3.17 3.16 57 4.42 4.41 4.38 4.32 4.23
33 3.20 3.20 3.20 3.20 3.19 58 4.52 4.51 4.47 4.40 4.30
34 3.23 3.23 3.23 3.22 3.22 59 4.61 4.60 4.56 4.48 4.37
<CAPTION>
Settlement age of Number of installments certain
payee nearest
birthday 60 120 180 240
- ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Age Life Annuity
60 $4.72 $4.70 $4.66 $4.57 $4.44
61 4.83 4.81 4.76 4.66 4.51
62 4.95 4.93 4.87 4.75 4.58
63 5.08 5.05 4.98 4.85 4.65
64 5.21 5.18 5.10 4.95 4.72
65 5.36 5.32 5.22 5.05 4.79
66 5.51 5.47 5.36 5.16 4.86
67 5.67 5.63 5.50 5.26 4.93
68 5.85 5.80 5.65 5.37 5.00
69 6.04 5.98 5.80 5.49 5.06
70 6.25 6.18 5.97 5.60 5.12
71 6.47 6.39 6.14 5.71 5.18
72 6.71 6.62 6.32 5.83 5.23
73 6.98 6.86 6.50 5.94 5.28
74 7.26 7.12 6.69 6.04 5.32
75 7.57 7.40 6.89 6.14 5.35
76 7.90 7.69 7.09 6.24 5.39
77 8.26 8.01 7.29 6.33 5.41
78 8.65 8.34 7.49 6.41 5.43
79 9.08 8.70 7.69 6.49 5.45
80 9.54 9.07 7.89 6.55 5.47
81 10.03 9.47 8.08 6.61 5.48
82 10.58 9.88 8.26 6.66 5.49
83 11.16 10.31 8.43 6.70 5.49
84 11.80 10.75 8.59 6.74 5.50
85 12.48 11.20 8.74 6.77 5.50
<CAPTION>
ANNUITY CERTAIN TABLE FOR EACH $1,000 APPLIED
Numbers of years Amount of each installment Number of years Amount of each installment
during which during which
installments will be installments will be
paid Annual Monthly paid Annual Monthly
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5 $211.99 $17.91 12 $97.54 $8.24
6 179.22 15.14 13 91.29 7.71
7 155.83 13.16 14 85.95 7.26
8 138.31 11.68 15 81.33 6.87
9 124.69 10.53 16 77.29 6.53
10 113.82 9.61 17 73.74 6.23
11 104.93 8.86 18 70.59 5.96
<CAPTION>
Number of years Amount of each installment
during which
installments will be
paid Annual Monthly
- ------------------------------------------------
<S> <C> <C>
19 $67.78 $5.73
20 65.26 5.51
25 55.76 4.71
30 49.53 4.18
</TABLE>
LR434 NYPage Page 4
<PAGE>
OPTIONAL METHODS OF SETTLEMENT
This rider is made part of the policy to which it is attached as of the Date of
Issue. Upon written request, the Company will agree to pay in accordance with
any one of the options shown below all or part of the net proceeds that may be
payable under the policy.
If any income optional settlement provides for instalment payments for a given
age of payee for an amount which would be the same for different periods
certain, the Company will deem that an election has been made for the longest
period certain for such age and amount.
While the Insured is alive, the request, including the designation of the payee,
may be made by the Owner. At the time a Death Benefit becomes payable under the
policy, the request, including the designation of the payee, may then be made by
the Beneficiary. Once Income Payments have begun, the policy cannot be
surrendered and the payee cannot be changed, nor can the settlement option be
changed.
PAYMENT DATES. The first Income Payment under the settlement option selected
will become payable on the date proceeds are settled under the option.
Subsequent payments will be made on the first day of each month in accordance
with the manner of payment selected.
MINIMUM PAYMENT AMOUNT. The settlement option elected must result in an Income
Payment at least equal to the minimum payment amount in accordance with the
Company's rules then in effect. If at any time payments are less than the
minimum payment amount, the Company has the right to change the frequency to an
interval that will provide the minimum payment amount. If any amount due is
less than the minimum per year, the Company may make other arrangements that are
equitable.
INCOME PAYMENTS. Income Payments will remain constant pursuant to the terms of
the settlement option(s) selected. The amount of each Income Payment shall be
determined in accordance with the terms of the settlement option and the
table(s) set forth in this rider, as applicable. The mortality table used is
the 1983 Individual Annuitant Mortality (IAM) Table "a" using a 50/50
male/female weighting, assuming 3% interest. In determining the settlement
amount, the settlement age of the payee will be reduced by one year when the
first installment is payable during the 1990's, reduced by two years when the
first installment is payable during the decade 2000-2009, and so on.
FIRST OPTION: LIFE ANNUITY. An annuity payable monthly to the payee during the
lifetime of the payee, ceasing with the last payment due prior to the death of
the payee.
SECOND OPTION: LIFE ANNUITY WITH CERTAIN PERIOD. An annuity providing monthly
income to the payee for a fixed period of 60, 120, 180, or 240 months (as
selected), and for as long thereafter as the payee shall live.
THIRD OPTION: ANNUITY CERTAIN. An amount payable monthly for the number of
years selected which may be from 5 to 30 years.
FOURTH OPTION: AS A DEPOSIT AT INTEREST. The Company will retain the proceeds
while the payee is alive and will pay interest annually thereon at a rate of not
less than 3% per year. Upon the payee's death, the amount on deposit will be
paid.
EXCESS INTEREST. At the sole discretion of the Company, excess interest may be
paid or credited from time to time in addition to the payments guaranteed under
any Optional Method of Settlement.
Page 1
<PAGE>
ADDITIONAL OPTIONS. Any proceeds payable under the policy may also be
settled under any other method of settlement offered by the Company at the
time of the request.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
/s/ Phillip L. Holstein
PRESIDENT
Page 2
<PAGE>
OPTIONAL METHODS OF SETTLEMENT (CONTINUED)
LIFE ANNUITY AND LIFE ANNUITY WITH CERTAIN PERIOD TABLE FOR EACH $1,000 APPLIED
- - UNISEX
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Settlement age of Number of installments certain Settlement age of Number of installments certain
payee nearest payee nearest
birthday 60 120 180 240 birthday 60 120 180 240
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Age Life Annuity Age Life Annuity
10 2.84 2.84 2.84 2.84 2.83 35 3.35 3.35 3.35 3.34 3.33
11 2.85 2.85 2.85 2.85 2.85 36 3.39 3.39 3.38 3.38 3.36
12 2.86 2.86 2.86 2.86 2.86 37 3.42 3.42 3.42 3.41 3.40
13 2.88 2.88 2.88 2.87 2.87 38 3.46 3.46 3.46 3.45 3.43
14 2.89 2.89 2.89 2.89 2.89 39 3.50 3.50 3.49 3.48 3.47
15 2.91 2.90 2.90 2.90 2.90 40 3.54 3.54 3.54 3.52 3.50
16 2.92 2.92 2.92 2.92 2.91 41 3.59 3.59 3.58 3.56 3.54
17 2.94 2.94 2.93 2.93 2.93 42 3.63 3.63 3.62 3.61 3.58
18 2.95 2.95 2.95 2.95 2.95 43 3.68 3.68 3.67 3.65 3.62
19 2.97 2.97 2.97 2.96 2.96 44 3.73 3.73 3.72 3.70 3.67
20 2.99 2.99 2.98 2.98 2.98 45 3.78 3.78 3.77 3.74 3.71
21 3.00 3.00 3.00 3.00 3.00 46 3.84 3.84 3.82 3.79 3.76
22 3.02 3.02 3.02 3.02 3.01 47 3.90 3.89 3.88 3.85 3.80
23 3.04 3.04 3.04 3.04 3.03 48 3.96 3.95 3.93 3.90 3.85
24 3.06 3.06 3.06 3.06 3.05 49 4.02 4.02 3.99 3.96 3.91
25 3.08 3.08 3.08 3.08 3.07 50 4.09 4.08 4.06 4.02 3.96
26 3.11 3.11 3.10 3.10 3.10 51 4.16 4.15 4.13 4.08 4.01
27 3.13 3.13 3.13 3.12 3.12 52 4.23 4.22 4.20 4.15 4.07
28 3.15 3.15 3.15 3.15 3.14 53 4.31 4.30 4.27 4.21 4.13
29 3.18 3.18 3.17 3.17 3.16 54 4.39 4.38 4.35 4.28 4.19
30 3.20 3.20 3.20 3.20 3.19 55 4.48 4.47 4.43 4.36 4.25
31 3.23 3.23 3.23 3.22 3.22 56 4.57 4.56 4.51 4.43 4.32
32 3.26 3.26 3.26 3.25 3.24 57 4.67 4.65 4.60 4.51 4.38
33 3.29 3.29 3.29 3.28 3.27 58 4.78 4.76 4.70 4.60 4.45
34 3.32 3.32 3.32 3.31 3.30 59 4.89 4.87 4.80 4.68 4.51
<CAPTION>
- --------------------------------------------------------
Settlement age of Number of installments certain
payee nearest
birthday 60 120 180 240
- --------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Age Life Annuity
60 5.00 4.98 4.91 4.77 4.58
61 5.13 5.10 5.02 4.87 4.65
62 5.27 5.23 5.13 4.96 4.72
63 5.41 5.37 5.26 5.06 4.79
64 5.56 5.52 5.39 5.16 4.85
65 5.73 5.68 5.52 5.27 4.92
66 5.90 5.84 5.67 5.37 4.98
67 6.09 6.02 5.82 5.48 5.04
68 6.29 6.21 5.97 5.58 5.10
69 6.51 6.41 6.13 5.69 5.15
70 6.74 6.63 6.30 5.79 5.20
71 6.99 6.86 6.47 5.90 5.25
72 7.25 7.10 6.65 6.00 5.29
73 7.54 7.36 6.83 6.09 5.33
74 7.85 7.63 7.02 6.19 5.36
75 8.19 7.92 7.21 6.27 5.39
76 8.55 8.23 7.39 6.36 5.42
77 8.93 8.56 7.58 6.43 5.44
78 9.35 8.90 7.77 6.50 5.45
79 9.80 9.26 7.95 6.56 5.47
80 10.29 9.63 8.12 6.61 5.48
81 10.81 10.02 8.29 6.66 5.49
82 11.37 10.42 8.45 6.70 5.49
83 11.98 10.83 8.60 6.74 5.50
84 12.62 11.25 8.74 6.76 5.50
85 13.31 11.67 8.86 6.79 5.51
<CAPTION>
ANNUITY CERTAIN TABLE FOR EACH $1,000 APPLIED
- ---------------------------------------------------------------------------------------------------
Numbers of years Amount of each installment Number of years Amount of each installment
during which during which
installments will be installments will be
paid Annual Monthly paid Annual Monthly
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5 $211.99 $17.91 12 $97.54 $8.24
6 179.22 15.14 13 91.29 7.71
7 155.83 13.16 14 85.95 7.26
8 138.31 11.68 15 81.33 6.87
9 124.69 10.53 16 77.29 6.53
10 113.82 9.61 17 73.74 6.23
11 104.93 8.86 18 70.59 5.96
<CAPTION>
Number of years Amount of each installment
during which
installments will be
paid Annual Monthly
- ---------------------------------------------------
<S> <C> <C>
19 $67.78 $5.73
20 65.26 5.51
25 55.76 4.71
30 49.53 4.18
</TABLE>
<PAGE>
WAIVER OF MONTHLY DEDUCTION BENEFIT RIDER
This rider is made part of the policy to which it is attached if "Form LR436 NY,
Waiver of Monthly Deduction Benefit" is shown in the Policy Specifications. As
used in this rider the Date of Expiry is the policy anniversary nearest to the
Insured's 65th birthday.
BENEFITS. The Company will waive the monthly deductions falling due under the
policy, during the continuance of Total Disability (as defined below) provided:
(a) Total Disability commences prior to the policy anniversary nearest to the
Insured's 60th birthday, (b) the Home Office is furnished due proof that the
Insured has become so disabled, and (c) the Insured has remained continuously so
disabled for at least 6 consecutive months.
If Total Disability commences on or after the policy anniversary nearest to the
Insured's 60th birthday but prior to the Date of Expiry, such monthly deductions
falling due will be waived subject to the above due proof and continuous
disability requirements.
If Total Disability commences prior to the policy anniversary nearest to the
Insured's 60th birthday and the Insured remains continuously so disabled to the
policy anniversary nearest to the Insured's 65th birthday, Total Disability will
be deemed to be permanent. In such event, all such monthly deductions falling
due subsequent to the policy anniversary nearest the Insured's 65th birthday
will be waived automatically as long as the Insured shall live.
All monthly deductions made which subsequently qualify for waiver will be added
to the Accumulation Value in the same manner in which monthly deductions are
made under the policy.
DEFINITION OF TOTAL DISABILITY. The term "Total Disability" as used in this
rider means the complete incapacity of the Insured which (a) results from bodily
injury or disease beginning while this policy and this rider are in force, and
(b) during the first 24 months of disability prevents the Insured from
performing the duties of the Insured's occupation for remuneration or profit and
thereafter prevents the Insured from engaging in any occupation for remuneration
or profit for which the Insured is qualified or may reasonably become qualified
by education, training or experience.
The term "Total Disability" also means the total and irrecoverable loss of the
sight of both eyes, or of the use of both hands, or both feet, or of one hand
and one foot whether or not such loss prevents the Insured from engaging in any
occupation or business provided, however, the cause of such loss occurs after
the effective date of this rider.
RISKS NOT COVERED. The insurance under this rider does not cover disability
resulting from (a) intentionally self-inflicted injury or (b) military or naval
service with any country at war. "Military or naval service" includes service in
any air force or branch of any country or international organization or
combination of countries. "War" includes undeclared war and armed conflict
involving the military, naval or air forces of any country, international
organization or combination of countries.
CHANGE IN DEATH BENEFIT. The Company will not allow an increase in the Specified
Amount under the policy during the continuance of Total Disability.
Unless provided otherwise, if Death Benefit Option 1 is in effect when waiver of
monthly deductions commence, the Company will automatically change it to Death
Benefit Option 2. In such event, the Company will reduce the Specified Amount to
equal the death benefit less the Accumulation Value of the policy as of the date
Total Disability commenced.
COST OF INSURANCE. The cost for the insurance provided by this rider will be
part of the monthly deduction made under the policy. The amount so deducted each
month will be determined by multiplying the applicable Rate Factor from the
table below by the sum of all the other covered monthly charges for the policy
and all riders.
Page 1
<PAGE>
If the Insured is in a rated premium class, the rate factor used in determining
the cost for the insurance will be the Rate Factor from the table multiplied by
the Risk Factor, if any, shown in the Policy Specifications.
ATTAINED
AGE MALE RATE FEMALE RATE
(NEAREST BIRTHDAY) FACTOR FACTOR
-----------------------------------------------------------
5-24 .0270 .0315
25-39 .0300 .0350
40-44 .0300 .0425
45-49 .0350 .0500
50-54 .0500 .0600
55 .0650 .0800
56 .0750 .0900
57 .0850 .1000
58 .0950 .1100
59 .1050 .1200
60 .0750 .0900
61 .0700 .0850
62 .0650 .0800
63 .0500 .0600
64 .0200 .0300
WRITTEN NOTICE AND PROOF OF CLAIM. Written notice of claim and due proof of
Total Disability must be given to the Company at the Home Office (a) while the
Insured is alive and during the continuance of Total Disability.
Failure to give such timely notice and proof will not, however, invalidate or
diminish any claim if it is shown that such notice and proof were given as soon
as was reasonably possible.
PROOF OF CONTINUATION OF TOTAL DISABILITY. While the Insured is disabled, the
Company may require proof of the continuance of Total Disability and may require
the Insured to be examined at reasonable intervals by a physician other than the
Insured. The Company may not, however, require such proof more often than once
a year if at least 2 years have elapsed since the approval of the claim. If
such proof is not furnished or if the Insured fails to submit to such
examination no further monthly deductions will be waived.
RECOVERY FROM DISABILITY. If and when the Insured has recovered from Total
Disability, no further monthly deductions will be waived. Monthly deductions
becoming due after such recovery will be made in accordance with the terms of
the policy.
TERMINATION. This rider and all insurance provided under it will terminate
automatically upon whichever of the following occurs first: (a) the Date of
Expiry, except with respect to benefits accruing during the continuance of any
then existing Total Disability for which the Company has received due proof as
required, (b) nonpayment of a premium within the grace period as specified in
the policy, (c) the date the policy matures or is continued in force under a
settlement option, or (d) surrender or other termination of the policy. If,
however, the policy is reinstated prior to the Date of Expiry, this rider will
likewise be reinstated.
Upon written request and the return of the policy for endorsement, this rider
may be terminated as of any Monthly Anniversary Day. In such event, subsequent
monthly deductions will be reduced accordingly.
Any termination of the coverage provided by this rider would be without
prejudice to any claim beginning while this rider was in effect.
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<PAGE>
INCONTESTABILITY. Except for nonpayment of monthly deductions, this rider will
be incontestable after it has been in force during the Insured's lifetime and
without the occurrence of Total Disability (a) for 2 years from its date of
issue, or (b) with respect to any requested increase in Specified Amount under
the policy, for 2 years from the date of such increase.
CONSIDERATION. The consideration for the Waiver of Monthly Deductions Benefit is
the application for this benefit, a copy of which is attached to and made a part
of the policy, and the payment of the additional cost for this benefit.
EFFECTIVE DATE. This rider becomes effective as of its date of issue which is
the Date of Issue of the policy unless a later date is shown in the Policy
Specifications.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
/s/ Phillip L. Holstein
PRESIDENT
Page 3
<PAGE>
WAIVER OF MONTHLY DEDUCTION BENEFIT RIDER
This rider is made part of the policy to which it is attached if "Form LR437 NY,
Waiver of Monthly Deduction Benefit" is shown in the Policy Specifications. As
used in this rider the Date of Expiry is the policy anniversary nearest to the
Insured's 65th birthday.
BENEFITS. The Company will waive the monthly deductions falling due under the
policy, during the continuance of Total Disability (as defined below) provided:
(a) Total Disability commences prior to the policy anniversary nearest to the
Insured's 60th birthday, (b) the Home Office is furnished due proof that the
Insured has become so disabled, and (c) the Insured has remained continuously so
disabled for at least 6 consecutive months.
If Total Disability commences on or after the policy anniversary nearest to the
Insured's 60th birthday but prior to the Date of Expiry, such monthly deductions
falling due will be waived subject to the above due proof and continuous
disability requirements.
If Total Disability commences prior to the policy anniversary nearest to the
Insured's 60th birthday and the Insured remains continuously so disabled to the
policy anniversary nearest to the Insured's 65th birthday, Total Disability will
be deemed to be permanent. In such event, all such monthly deductions falling
due subsequent to the policy anniversary nearest the Insured's 65th birthday
will be waived automatically as long as the Insured shall live.
All monthly deductions made which subsequently qualify for waiver will be added
to the Accumulation Value in the same manner in which monthly deductions are
made under the policy.
DEFINITION OF TOTAL DISABILITY. The term "Total Disability" as used in this
rider means the complete incapacity of the Insured which (a) results from bodily
injury or disease beginning while this policy and this rider are in force, and
(b) during the first 24 months of disability prevents the Insured from
performing the duties of the Insured's occupation for remuneration or profit and
thereafter prevents the Insured from engaging in any occupation for remuneration
or profit for which the Insured is qualified or may reasonably become qualified
by education, training or experience.
The term "Total Disability" also means the total and irrecoverable loss of the
sight of both eyes, or of the use of both hands, or both feet, or of one hand
and one foot whether or not such loss prevents the Insured from engaging in any
occupation or business provided, however, the cause of such loss occurs after
the effective date of this rider.
RISKS NOT COVERED. The insurance under this rider does not cover disability
resulting from (a) intentionally self-inflicted injury or (b) military or naval
service with any country at war. "Military or naval service" includes service in
any air force or branch of any country or international organization or
combination of countries. "War" includes undeclared war and armed conflict
involving the military, naval or air forces of any country, international
organization or combination of countries.
CHANGE IN DEATH BENEFIT. The Company will not allow an increase in the Specified
Amount under the policy during the continuance of Total Disability.
Unless provided otherwise, if Death Benefit Option 1 is in effect when waiver of
monthly deductions commence, the Company will automatically change it to Death
Benefit Option 2. In such event, the Company will reduce the Specified Amount to
equal the death benefit less the Accumulation Value of the policy as of the date
Total Disability commenced.
COST OF INSURANCE. The cost for the insurance provided by this rider will be
part of the monthly deduction made under the policy. The amount so deducted each
month will be determined by multiplying the applicable Rate Factor from the
table below by the sum of all the other covered monthly charges for the policy
and all riders.
Page 1
<PAGE>
If the Insured is in a rated premium class, the rate factor used in determining
the cost for the insurance will be the Rate Factor from the table multiplied by
the Risk Factor, if any, shown in the Policy Specifications.
ATTAINED
AGE RATE
(NEAREST BIRTHDAY) FACTOR
--------------------------------------------------
5-24 .0270
25-39 .0300
40-44 .0300
45-49 .0350
50-54 .0500
55 .0650
56 .0750
57 .0850
58 .0950
59 .1050
60 .0750
61 .0700
62 .0650
63 .0500
64 .0200
WRITTEN NOTICE AND PROOF OF CLAIM. Written notice of claim and due proof of
Total Disability must be given to the Company at the Home Office (a) while the
Insured is alive and during the continuance of Total Disability.
Failure to give such timely notice and proof will not, however, invalidate or
diminish any claim if it is shown that such notice and proof were given as soon
as was reasonably possible.
PROOF OF CONTINUATION OF TOTAL DISABILITY. While the Insured is disabled, the
Company may require proof of the continuance of Total Disability and may require
the Insured to be examined at reasonable intervals by a physician other than the
Insured. The Company may not, however, require such proof more often than once
a year if at least 2 years have elapsed since the approval of the claim. If
such proof is not furnished or if the Insured fails to submit to such
examination no further monthly deductions will be waived.
RECOVERY FROM DISABILITY. If and when the Insured has recovered from Total
Disability, no further monthly deductions will be waived. Monthly deductions
becoming due after such recovery will be made in accordance with the terms of
the policy.
TERMINATION. This rider and all insurance provided under it will terminate
automatically upon whichever of the following occurs first: (a) the Date of
Expiry, except with respect to benefits accruing during the continuance of any
then existing Total Disability for which the Company has received due proof as
required, (b) nonpayment of a premium within the grace period as specified in
the policy, (c) the date the policy matures or is continued in force under a
settlement option, or (d) surrender or other termination of the policy. If,
however, the policy is reinstated prior to the Date of Expiry, this rider will
likewise be reinstated.
Upon written request and the return of the policy for endorsement, this rider
may be terminated as of any Monthly Anniversary Day. In such event, subsequent
monthly deductions will be reduced accordingly.
Any termination of the coverage provided by this rider would be without
prejudice to any claim beginning while this rider was in effect.
Page 2
<PAGE>
INCONTESTABILITY. Except for nonpayment of monthly deductions, this rider will
be incontestable after it has been in force during the Insured's lifetime and
without the occurrence of Total Disability (a) for 2 years from its date of
issue, or (b) with respect to any requested increase in Specified Amount under
the policy, for 2 years from the date of such increase.
CONSIDERATION. The consideration for the Waiver of Monthly Deductions Benefit is
the application for this benefit, a copy of which is attached to and made a part
of the policy, and the payment of the additional cost for this benefit.
EFFECTIVE DATE. This rider becomes effective as of its date of issue which is
the Date of Issue of the policy unless a later date is shown in the Policy
Specifications.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
/s/ Phillip L. Holstein
PRESIDENT
Page 3
