<PAGE>
As filed with the Securities and Exchange Commission on October 8, 1998.
File No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: Separate Account Two
B. Name of depositor: Royal Life Insurance Company of America
C. Complete address of depositor's principal executive offices:
P.O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Marianne O'Doherty, Esq.
Royal Life Insurance Company of America
P.O. Box 2999
Hartford, CT 06104-2999
E. Title and amount of securities being registered: Pursuant to Rule 24f-2
under the Investment Company Act of 1940, the Registrant will register an
indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the securities
being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable after
the effective date of this registration statement.
The registrant hereby amends this Registration Statement on such 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), may determine.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
Item No. of
FORM N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
1. Cover page
2. Cover page
3. Not applicable
4. Royal Life Insurance Company of America; How We Sell Our
Policy
5. The Separate Account
6. The Separate Account
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; The Funds; Application for a Policy; Policy
Benefits and Rights; Other Matters - Voting Rights,
Dividends
11. Summary; The Funds
12. Summary; The Funds
13. Deductions and Charges; How We Sell Our Policy; Federal
Tax Considerations
14. Application
15. Allocation of Premiums
16. The Funds; Allocation of Premiums
17. Summary; Policy Benefits and Rights - Account Value and
Amount Payable on Surrender of the Policy, Cancellation
and Exchange Rights
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
18. The Funds; Deduction and Charges; Federal Tax
Considerations
19. Other Matters - Statements
20. Not applicable
21. Policy Benefits and Rights - Policy Loans
22. Not applicable
23. Safekeeping of Separate Account Assets
24. Other Matters - Assignment
25. Royal Life Insurance Company of America
26. Not applicable
27. Royal Life Insurance Company of America
28. Royal Life Insurance Company of America
29. Royal Life Insurance Company of America
30. Not applicable
31. Not applicable
32. Not applicable
33. Not applicable
34. Not applicable
35. How We Sell Our Policy
36. Not required by Form S-6
37. Not applicable
38. How We Sell Our Policy
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
39. Royal Life Insurance Company of America; How We Sell Our
Policy
40. Not applicable
41. Royal Life Insurance Company of America; How We Sell Our
Policy
42. Not applicable
43. Not applicable
44. Allocation of Premiums
45. Not applicable
46. Policy Benefits and Rights - Account Value
47. The Funds
48. Cover Page; Royal Life Insurance Company of America
49. Not applicable
50. The Separate Account
51. Summary; Royal Life Insurance Company of America; Your
Policy; Policy Benefits and Rights; Other Matters -
Beneficiary
52. The Funds, Investment Adviser
53. Federal Tax Considerations
54. Not applicable
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
<PAGE>
PART I
<PAGE>
6
ROYAL LIFE INSURANCE COMPANY OF AMERICA
SEPARATE ACCOUNT TWO [PRODUCT NAME]
P. O. BOX 2999 Modified Single Premium
HARTFORD, CT 06104-2999 Variable Life Insurance Policies
TELEPHONE (800) [ ]
This Prospectus describes information you should know before you purchase the
[Product Name] variable life insurance policy. Please read it carefully.
The [PRODUCT NAME] variable life insurance policy is a contract between you
and Royal Life Insurance Company of America where you agree to make payments
to us and we agree to pay a death benefit to your beneficiaries. The
[PRODUCT NAME] is a modified single premium variable life insurance policy.
It is:
X Modified single premium, because you pay one large single payment, and
under certain circumstances you may add payments.
X Variable, because the value of your life insurance policy will fluctuate
with the performance of the stock market.
After purchase, you allocate your payments to "sub-accounts" or subdivisions
of our separate account, an account that keeps your life insurance policy
assets separate from our company assets. These sub-accounts then purchase
shares of mutual funds set up exclusively for variable annuity or variable
life insurance products. These funds are not the same mutual funds that you
buy through your stockbroker or through a retail mutual fund, but they may
have similar investment strategies and the same portfolio managers as retail
mutual funds. This life insurance policy offers you funds with investment
strategies ranging from conservative to aggressive and you may pick those
funds that meet your investment style. The sub-accounts and the funds are
listed below:
- - Advisers Sub-Account which purchases shares of Class IA of Hartford
Advisers HLS Fund, Inc.
- - Bond Sub-Account which purchases shares of Class IA of Hartford Bond HLS
Fund, Inc.
- - Capital Appreciation Sub-Account which purchases shares of Class IA of
Hartford Capital Appreciation HLS Fund, Inc.
- - Dividend and Growth Sub-Account which purchase shares of Class IA of
Hartford Dividend and Growth HLS Fund, Inc.
- - Global Leaders Sub-Account which purchases shares of Class IA of Hartford
Global Leaders HLS Fund, Inc.
- - Growth and Income Sub-Account which purchases shares of Class IA of
Hartford Growth and Income HLS Fund, Inc.
- - High Yield Sub-Account which purchases shares of Class IA of Hartford High
Yield HLS Fund, Inc.
<PAGE>
7
- - Index Sub-Account which purchases shares of Class IA of Hartford Index
HLS Fund, Inc.
- - International Advisers Sub-Account which purchases shares of Class IA of
Hartford International Advisers HLS Fund, Inc.
- - International Opportunities Sub-Account which purchases shares of Class IA
of Hartford International Opportunities HLS Fund, Inc.
- - MidCap Sub-Account which purchases shares of Class IA of Hartford MidCap
HLS Fund, Inc.
- - Money Market Sub-Account which purchases shares of Class IA of Hartford
Money Market HLS Fund, Inc.
- - Mortgage Securities Sub-Account which purchases shares of Class IA of
Hartford Mortgage Securities HLS Fund, Inc.
- - Small Company Sub-Account which purchases shares of Class IA of Hartford
Small Company HLS Fund, Inc.
- - Stock Sub-Account which purchases of Class IA of Hartford Stock HLS Fund,
Inc.
If you decide to buy this life insurance policy, you should keep this
prospectus for your records. Although we file the Prospectus with the
Securities and Exchange Commission, the Commission doesn't approve or
disapprove these securities or determine if the information is truthful or
complete. Anyone who represents that the Securities and Exchange Commission
does these things may be guilty of a criminal offense.
This Prospectus can also be obtained from the Securities and Exchange
Commissions' website (HTTP://WWW.SEC.GOV).
This life insurance policy IS NOT:
- - a bank deposit or obligation
- - federally insured
- - endorsed by any bank or governmental agency
- - available for sale in all states
Prospectus Dated: [ ], 1998
<PAGE>
8
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SPECIAL TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ABOUT US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Royal Life Insurance Company of America. . . . . . . . . . . . . . . . . . 16
The Separate Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
The Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investment Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
YOUR POLICY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Allocation of Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Accumulation Unit Values . . . . . . . . . . . . . . . . . . . . . . . . . 22
DEDUCTIONS AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Chart of Deduction and Charges . . . . . . . . . . . . . . . . . . . . . . 23
Cost of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Administrative Charge. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Annual Maintenance Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Surrender Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Your Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Option 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Option 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Other Deductions or Charges. . . . . . . . . . . . . . . . . . . . . . . . 28
POLICY BENEFITS AND RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . 28
Death Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Account Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Transfer of Account Value. . . . . . . . . . . . . . . . . . . . . . . . . 29
Policy Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Amount Payable on Surrender of the Policy. . . . . . . . . . . . . . . . . 31
Partial Surrenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Benefits at Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Lapse and Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . 32
Cancellation and Exchange Rights . . . . . . . . . . . . . . . . . . . . . 32
Suspension of Valuation, Payments and Transfers. . . . . . . . . . . . . . 33
LAST SURVIVOR POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . 33
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Limit on Right to Contest. . . . . . . . . . . . . . . . . . . . . . . . . 35
Misstatement as to Age and Sex . . . . . . . . . . . . . . . . . . . . . . 35
Settlement Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
<PAGE>
9
<TABLE>
<S> <C>
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
EXECUTIVE OFFICERS AND DIRECTORS . . . . . . . . . . . . . . . . . . . . . 38
HOW WE SELL OUR POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS . . . . . . . . . . . . . . . 41
FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . 42
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Taxation of Royal and the Separate Account . . . . . . . . . . . . . . . . 42
Income Taxation of Policy Benefits . . . . . . . . . . . . . . . . . . . . 42
Last Survivor Policies . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Modified Endowment Policies. . . . . . . . . . . . . . . . . . . . . . . . 43
Estate and Generation Skipping Taxes . . . . . . . . . . . . . . . . . . . 44
Diversification Requirements . . . . . . . . . . . . . . . . . . . . . . . 44
Ownership of the Assets in the Separate Account. . . . . . . . . . . . . . 45
Life Insurance Purchased for Use in Split Dollar Arrangements. . . . . . . 46
Federal Income Tax Withholding . . . . . . . . . . . . . . . . . . . . . . 46
Non-Individual Ownership of Policies . . . . . . . . . . . . . . . . . . . 46
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Life Insurance Purchases by Nonresident Aliens and Foreign Corporations. . 46
LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
YEAR 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 48
APPENDIX A -- SPECIAL INFORMATION FOR POLICIES PURCHASED IN NEW YORK . . . 49
APPENDIX B -- ILLUSTRATIONS OF BENEFITS. . . . . . . . . . . . . . . . . . 52
</TABLE>
<PAGE>
10
SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The current value of the Sub-Accounts plus the value of the
Loan Account under the Policy.
ACCUMULATION UNIT: A unit of measure we use to calculate the value of a
Sub-Account.
ANNUAL WITHDRAWAL AMOUNT: The amount that can be withdrawn in any Policy
Year before we charge you a surrender charge.
ANNUITY UNIT: A unit of measure we use to calculate the amount of annuity
payments.
ATTAINED AGE: The Issue Age plus the number of fully completed Policy Years.
CASH SURRENDER VALUE: The Cash Value less all Indebtedness.
CASH VALUE: The Account Value less any Surrender Charge and any Unamortized
Tax charge due upon surrender.
CODE: The Internal Revenue Code of 1986, as amended.
COVERAGE AMOUNT: The Death Benefit less the Account Value.
DEATH BENEFIT: The greater of (1) the Face Amount specified in the Policy or
(2) the Account Value on the date of death multiplied by a stated percentage
as specified in the Policy.
DEATH PROCEEDS: The amount that Royal will pay on the death of the Insured.
This equals the Death Benefit less any Indebtedness.
DEDUCTION AMOUNT: A deduction on the Policy Date and on each Monthly
Activity Date for the cost of insurance, Tax Expense charges under Option 1,
an administrative charge and a mortality and expense risk charge.
FACE AMOUNT: On the Policy Date, the Face Amount is the amount shown on the
Policy's Specifications page. Thereafter, the Face Amount is reduced in
proportion to any partial surrenders.
FUNDS: The registered investment management companies in which assets of the
Separate Account may be invested.
GUIDELINE SINGLE PREMIUM: The "Guideline Single Premium" as defined in
Section 7702 of the Code.
<PAGE>
11
HOME OFFICE: Currently located at 200 Hopmeadow Street, Simsbury,
Connecticut; however, the mailing address is P.O. Box 2999, Hartford,
Connecticut 06104-2999.
INDEBTEDNESS: All monies owed to Royal by the Policy Owner, including all
outstanding loans on the Policy, any interest due or accrued and any unpaid
Deduction Amount or annual maintenance fee arising during a grace period.
INSURED: The person on whose life the Policy is issued.
ISSUE AGE: As of the Policy Date, the Insured's age on Insured's last
birthday.
LOAN ACCOUNT: An account in Royal's General Account, established for any
amounts transferred from the Sub-Accounts for requested loans. The Loan
Account credits a fixed rate of interest that is not based on the investment
experience of the Separate Account.
MONTHLY ACTIVITY DATE: The day of each month on which any deductions or
charges are subtracted from the Account Value of the Policy. Monthly
Activity Dates occur on the same day of the month as the Policy Date.
POLICY: The Policy is the individual Policy and any endorsements or riders.
If you are enrolled under a group Policy, the Policy is a certificate.
POLICY ANNIVERSARY: The anniversary of the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
measured.
POLICY LOAN RATE: The interest rate charged on Policy loans.
POLICY OWNER OR YOU: The owner of the Policy
POLICY OWNER OPTIONS: You may elect one of two options offered by Royal to
pay Mortality and Expense Risk charges and certain tax related charges. You
must elect the option at the time the Policy is issued and the option cannot
be changed once the Policy is issued. The following options are available:
OPTION 1: ASSET BASED CHARGES: Under this option you elect to pay a
Mortality and Expense Risk charge that is deducted monthly from
Account Value at an annual rate of .90% in Policy Years 1 through
10 and at an annual rate of .50% in Policy Years 11 and beyond; a
Tax Expense charge that is also deducted monthly at an annual rate
of .40% for the first 10 Policy Years and an Unamortized Tax charge
that is imposed during the first 9 Policy Years on surrenders or
partial surrenders according to the rate set forth in "Deductions
and Charges - Policy Owner Options - Unamortized Tax Charge." See
"Deductions and Charges - Policy Owner Options."
<PAGE>
12
OPTION 2: FRONTED CHARGES: Under this option you elect to pay a
Mortality and Expense Risk charge that is deducted monthly from
Account Value at an annual rate of .65% in Policy Years 1 through
10 and an annual rate of .50% in Policy Years 11 and beyond and a
Tax Expense charge that is deducted from any Premium payment in all
Policy Years at an annual rate of 4.0%. This option is not
available in all states. See "Deductions and Charges - Policy
Owner Options."
POLICY YEAR: The twelve months between Policy Anniversaries.
ROYAL OR US: Royal Life Insurance Company of America.
SEPARATE ACCOUNT: For this life insurance policy, the separate acccount is
Royal Life Insurance Company of America Separate Account Two.
SUB-ACCOUNT: The subdivisions of the Separate Account.
SURRENDER CHARGE: A charge which may be assessed upon surrender of the Policy
or partial surrenders in excess of the Annual Withdrawal Amount.
VALUATION DAY: The date on which the Sub-Account is valued. The Valuation
Day is every day the New York Stock Exchange is open for trading. The value
of the Separate Account is determined at the close of the New York Stock
Exchange (generally 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
<PAGE>
13
SUMMARY
HOW DO I PURCHASE THE LIFE INSURANCE POLICY?
You apply for life insurance by completing an application. If you are
between the age of 35 and 80, you may be eligible for simplified underwriting
without a medical examination. If you are accepted, you pay one large single
premium. Under certain circumstances you may be able to add additional
premiums.
For a limited time, at least 10 days after you receive your life insurance
policy, you may cancel it without paying a sales charge. A longer period is
provided in certain cases.
WHAT IS THE DEATH BENEFIT?
You designate a beneficiary who will receive the death benefit if you die
while the policy is in force. The policy pays a minimum death benefit, called
the "face amount." The actual death benefit may be larger than the face
amount if the underlying investments of the policy perform well.
DOES THE POLICY HAVE CASH VALUES?
Yes. The value of your life insurance policy will fluctuate with the
performance of the underlying investments. You may transfer amounts among
your investment options, subject to restrictions.
WHAT TYPE OF SALES CHARGE WILL I PAY?
You don't pay a sales charge when you purchase your policy. We may charge
you deferred sales charge when you terminate or withdraw amounts invested in
your policy. We assess a sales charge on amounts withdrawn that exceed 10% of
the total amounts you have paid into your policy if these amounts have been
in your policy for less than seven years. The sales charge is applied to
amounts withdrawn that exceed 10% of the total amounts paid in and will
depend on the length of time the payment you made has been in your policy.
If the amount you paid has been in your policy:
X For less than three years, the charge is 7.5%.
X For more than three years and less than five years, the charge is 6%.
X For more than five years and less than seven years, the charge is 4%.
X For more than seven years and less than nine years, the charge is 2%.
You won't be charged a sales charge on:
X Payments that have been in your policy for more than nine years.
X distributions made due to death
<PAGE>
14
X most payments we make to you as part of an annuity option
See page 25 for a complete description of how sales charges are assessed.
WHAT INSURANCE CHARGES ARE ASSESSED UNDER THE POLICY?
We will deduct an amount from your policy each month to cover certain
charges. These charges include a cost of insurance charge, a tax expense
charge under Option 1, an administrative charge and a mortality and expense
risk charge. If your policy is worth less than $50,000, or if you terminate
your policy, we will deduct an annual maintenance fee of $30.
You may choose to pay these charges under one of two options. Once chosen,
you cannot change your option:
UNDER OPTION 1:
X We will deduct a mortality and expense risk charge each month at an
annual rate of .90% during the first 10 years of your policy, and
thereafter at an annual rate of .50%.
X We will deduct a tax expense charge each month at an annual rate of
.40% during the first 10 years of your policy.
X We will deduct an unamortized tax charge during the first 9 years on
withdrawals, according to a schedule of rates described in
"Deductions and Charges- Policy Owner Options - Unamortized Tax
Charge."
UNDER OPTION 2: (May not be available in all states)
X We will deduct a mortality and expense risk charge each month at an
annual rate of .65% during the first 10 years of your policy, and
thereafter at an annual rate of .50%.
X We will deduct a tax expense charge from your premium at an annual
rate of 4.0%.
WHAT FEES DO I PAY TO THE UNDERLYING INVESTMENT PORTFOLIOS?
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Other Expenses
Management (absent any Total Fund
Fees (absent any expense Operating
fee waivers) reimbursements) Expenses (1)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hartford Bond Fund 0.505% 0.017% 0.522%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Stock Fund 0.458% 0.013% 0.471%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
15
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Money Market Fund 0.450% 0.017% 0.467%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Advisers Fund 0.635% 0.014% 0.648%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Capital Appreciation Fund 0.641% 0.015% 0.656%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Mortgage Securities Fund 0.450% 0.030% 0.480%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Index Fund 0.400% 0.015% 0.415%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford International Opportunities Fund 0.699% 0.081% 0.780%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Dividend & Growth Fund 0.662% 0.011% 0.673%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford International Advisers Fund 0.775% 0.094% 0.869%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Small Company Fund 0.772% 0.017% 0.789%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford MidCap Fund 0.775% 0.071% 0.846%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Global Leaders (2) 0.750% 0.200% 0.950%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford Growth and Income Fund (2) 0.750% 0.150% 0.900%
- -------------------------------------------------------------------------------------------------------------------------------
Hartford High Yield Fund (2) 0.750% 0.150% 0.900%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Management Fees generally represent the fees paid to the investment
adviser or its affiliate for investment and administrative services
provided. Other Expenses are expenses (other than Management Fees)
which are deducted from the fund including legal, accounting and
custodian fees. For a complete description of the nature of the
services provided in consideration of the operating expenses deducted,
please see the Fund prospectuses.
(2) Hartford Global Leaders Fund, Hartford High Yield Fund, and Hartford
Growth and Income Fund are new Funds. "Total Fund Operating Expenses"
are based on annualized estimates of such expenses to be incurred in
the current fiscal year. HL Investement Advisors, Inc. has agreed to
waive its fees for these until the assets of the Funds (excluding
assets contributed by companies affiliated with HL Investments
Advisors, Inc.) reach $20 million. After this waiver, the Management
Fee and Total Fund Operating Expenses would be:
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OPERATING
FEES EXPENSES
---------- ----------
<S> <C> <C>
Hartford Growth and Income.......... 0.200% 0.350%
Hartford Global Leaders Fund........ 0.200% 0.400%
Hartford High Yield Fund............ 0.200% 0.350%
</TABLE>
CAN I TAKE OUT ANY OF MY MONEY?
X You may withdraw all or part of amounts available in your policy at
any time.
X Each year you may withdraw up to 10% of your payments without having
to pay a sales charge.
<PAGE>
16
You may have to pay tax on the money you take out and, if you take money out
before you are 59 1/2 you may have to pay a tax penalty.
You may choose to convert your withdrawal into one of our payment options,
without a sales charge.
MAY I TAKE A LOAN ON THE POLICY?
Yes. The policy provides for two types of cash loans. The policy secures
the loans. Loans may not exceed 90% of the policy's cash value.
IS IT POSSIBLE FOR THE POLICY TO TERMINATE?
Your policy could terminate if the value of the policy becomes too low to
support the policy's monthly charges and fees. If this occurs, Royal will
notify you in writing. You will then have a 61-day grace period in order for
you to pay additional amounts to prevent the policy from terminating.
WHAT ABOUT TAXES?
Under current tax law, your beneficiaries will receive the death benefit free
of federal income tax. However, you will subject to income tax if you receive
any loans, withdrawals or other amounts from the policy, and you may be
subject to a 10% penalty tax.
ABOUT US
--------
ROYAL LIFE INSURANCE COMPANY OF AMERICA
Royal Life Insurance Company of America ("Royal") is a stock life insurance
company engaged in the business of writing life insurance in all states of
the United States and the District of Columbia. Royal was originally
incorporated under the laws of Connecticut on September 16, 1963. Its
offices are located in Simsbury, Connecticut; however, its mailing address is
P.O. Box 5085, Hartford, CT 06104-5085. Royal is ultimately controlled by
Hartford Financial Services Group, Inc., one of the largest financial service
providers in the United States.
THE SEPARATE ACCOUNT
Separate Account Two ("Separate Account") is a separate account of Royal
established on September 1, 1998 pursuant to the insurance laws of the State
of Connecticut and it is organized as a unit investment trust registered with
the Securities and Exchange Commission under the
<PAGE>
17
Investment Company Act of 1940. The Separate Account meets the definition of
"separate account" under federal securities law. Under Connecticut law, the
assets of the Separate Account are held exclusively for the benefit of Policy
Owners and persons entitled to payments under the Policies. The assets of
the Separate Account are not chargeable with liabilities arising out of any
other business which Royal may conduct.
THE FUNDS
The assets of each Sub-Account are invested exclusively in shares of Class IA
of one of the Funds. You may allocate premiums among the Funds. You should
review the following brief descriptions of the investment objectives of the
Funds in connection with that allocation. You are also advised to read the
Funds' prospectus accompanying this Prospectus for more detailed information.
There is no assurance that any of the Funds will achieve its stated
objectives.
The Funds may not be available in all states.
HARTFORD ADVISERS HLS FUND
Seeks maximum long-term total rate of return by investing in common
stocks and other equity securities, bonds and other debt securities, and
money market instruments.
HARTFORD BOND HLS FUND
Seeks maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities. Up to 20% of the total assets
of this Fund may be invested in debt securities rated in the highest category
below investment grade ("Ba" by Moody's Investor Services, Inc. or "BB" by
Standard & Poor's) or, if unrated, are determined to be of comparable quality
by the Fund's investment adviser. Securities rated below investment grade are
commonly referred to as "high yield-high risk securities" or "junk bonds."
For more information concerning the risks associated with investing in such
securities, please refer to the section in the accompanying prospectus for
the Funds entitled "Hartford Bond Fund - Investment Policies."
HARTFORD CAPITAL APPRECIATION HLS FUND
Seeks growth of capital by investing in equity securities selected
solely on the basis of potential for capital appreciation.
HARTFORD DIVIDEND AND GROWTH HLS FUND
Seeks a high level of current income consistent with growth of capital
and reasonable investment risk.
<PAGE>
18
HARTFORD GLOBAL LEADERS HLS FUND
Seeks growth of capital by investing primarily in equity securities
issued by U.S. companies and non-U.S. companies.
HARTFORD GROWTH AND INCOME HLS FUND
Seeks growth of capital and current income by investing primarily in
equity securities with earnings growth potential and steady or rising
dividends.
HARTFORD HIGH YIELD HLS FUND
Seeks high current income by investing in non-investment grade
fixed-income securities. Growth of capital is a secondary objective.
HARTFORD INDEX HLS FUND
Seeks to provide investment results which approximate the price and
yield performance of publicly-traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price Index.*
HARTFORD INTERNATIONAL ADVISERS HLS FUND
Seeks maximum long-term total return consistent with prudent investment
risk by investing in a portfolio of equity, debt and money market securities.
Securities in which the Fund invests primarily will be denominated in
non-U.S. currencies and will be traded in non-U.S. markets.
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND
Seeks growth of capital by investing primarily in equity securities
issued by non-U.S. companies.
HARTFORD MIDCAP HLS FUND
Seeks to achieve long-term capital growth through capital appreciation
by investing primarily in equity securities.
HARTFORD MORTGAGE SECURITIES HLS FUND
Seeks maximum current income consistent with safety of principal and
maintenance of liquidity by investing primarily in mortgage-related
securities, including securities issued by the Government National Mortgage
Association.
HARTFORD SMALL COMPANY HLS FUND
Seeks growth of capital by investing primarily in equity securities
selected on the basis of potential for capital appreciation.
<PAGE>
19
HARTFORD STOCK HLS FUND
Seeks long-term growth by investing primarily in equity securities.
HARTFORD MONEY MARKET HLS FUND
Seeks maximum current income consistent with liquidity and preservation
of capital.
*"Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", "S&P
500-Registered Trademark-", "Standard & Poor's 500", and "500" are trademarks
of The McGraw-Hill Companies, Inc. and have been licensed for use by Royal.
The Hartford Index Fund is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard &Poor's makes no representation regarding the
advisability of investing in the Hartford Index Fund.
All of the Funds are organized as corporations under the laws of the State of
Maryland and are registered as diversified open-end management companies
under the Investment Company Act of 1940. Each Fund continually issues an
unlimited number of full and fractional shares of beneficial interest in the
Fund. Such shares are offered to separate accounts, including the Separate
Account, established by Royal or one of its affiliated companies specifically
to fund the Policies and other policies or contracts issued by Royal or its
affiliates, as permitted by the Investment Company Act of 1940.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither Royal nor the Funds
currently foresee any such disadvantages either to variable life insurance
Policy Owners or variable annuity contract owners, the Funds' Board of
Directors intends to monitor events in order to identify any material
conflicts between variable life Policy Owners and variable annuity contract
owners and to determine what action, if any, should be taken in response
thereto. If the Board of Directors were to conclude that separate funds
should be established for variable life insurance and variable annuity
separate accounts, Royal will bear the attendant expenses.
All investment income of, and other distributions to, each Sub-Account
arising from the applicable Fund are reinvested in shares of that Fund at net
asset value. The income and both realized gains or losses on the assets of
each Sub-Account are therefore separate and are credited to or charged
against the Sub-Account without regard to income, gains or losses from any
other Sub-Account or from any other business of Royal. Royal will purchase
shares in the Funds in connection with premiums allocated to the applicable
Sub-Account in accordance with Policy Owners' directions and will redeem
shares in the Funds to meet Policy obligations or make adjustments in
reserves, if any. The Funds are required to redeem Fund shares at net asset
value and to make payment within seven days.
Royal reserves the right, subject to compliance with the law as then in
effect, to make additions to,
<PAGE>
20
deletions from, or substitutions for the Separate Account and its
Sub-Accounts which fund the Policies. No substitution of securities will
take place without notice to and consent of Policy Owners and without prior
approval of the Securities and Exchange Commission to the extent required by
the Investment Company Act of 1940. Subject to Policy Owner approval, Royal
also reserves the right to end the registration under the Investment Company
Act of 1940 of the Separate Account or any other separate accounts of which
it is the depositor and which may fund the Policies.
Each Fund is subject to investment restrictions which may not be changed
without the approval of a majority of the shareholders of the Fund. See the
Funds' prospectuses accompanying this Prospectus.
INVESTMENT ADVISER
All of the Funds are sponsored by Royal and are incorporated under the laws
of the State of Maryland. HL Investment Advisors, Inc. ("HL Advisors")
serves as the investment manager for each of the Funds.
Wellington Management Company, L.L.P. ("Wellington Management") serves as
sub-investment adviser for Hartford Advisers Fund, Hartford Capital
Appreciation Fund, Hartford Dividend and Growth Fund, Hartford Global Leaders
Fund, Hartford Growth and Income Fund, Hartford International Advisers Fund,
Hartford International Opportunities Fund, Hartford Small Company Fund,
Hartford Stock Fund and Hartford MidCap Fund.
In addition, HL Advisors has entered an investment services agreement with
Hartford Investment Management Company, Inc., ("HIMCO"), pursuant to which
HIMCO will provide certain investment services to Hartford Bond Fund,
Hartford High Yield Fund, Hartford Index Fund, Hartford Mortgage Securities
Fund, and Hartford Money Market Fund.
A full description of the Funds, their investment policies and restrictions,
risks, charges and expenses and all other aspects of their operation is
contained in the accompanying Funds' prospectuses which should be read in
conjunction with this Prospectus before investing and in the Funds' Statement
of Additional Information which may be ordered from Royal.
YOUR POLICY
APPLICATION
If you wish to purchase a Policy, you must submit an application to Royal. A
Policy will be issued only on the lives of Insureds age 90 and under who
supply evidence of insurability satisfactory to Royal. Acceptance is subject
to Royal's underwriting rules and Royal reserves the right to reject an
application for any reason. IF AN APPLICATION FOR A POLICY IS REJECTED, THEN
YOUR INITIAL PREMIUM WILL BE RETURNED ALONG WITH AN ADDITIONAL AMOUNT FOR
INTEREST, BASED ON THE CURRENT RATE BEING CREDITED BY ROYAL. No change
in the terms or conditions of a Policy will be made without your consent.
<PAGE>
21
The Policy will be effective on the Policy Date only after Royal has received
all outstanding delivery requirements and received the initial premium. The
Policy Date is the date used to determine all future cyclical transactions on
the Policy, E.G., Monthly Activity Date, Policy Months and Policy Years. The
Policy Date may be prior to, or the same as, the date the Policy is issued
("Issue Date").
If the Coverage Amount is over then current limits established by Royal, the
initial payment will not be accepted with the application. In other cases
where Royal receives the initial payment with the application, Royal will
provide fixed conditional insurance during underwriting according to the
terms of conditional receipt established by Royal. The fixed conditional
insurance will be the insurance applied for, up to a maximum that varies by
age. If no fixed conditional insurance was in effect, on Policy delivery,
Royal will require a sufficient payment to place the insurance in force.
PREMIUMS
The Policy permits you to pay a large single premium and, subject to
restrictions, additional premiums. You may choose a minimum initial premium
of 80%, 90% or 100% of the Guideline Single Premium (based on the Face
Amount). Under current underwriting rules, which are subject to change,
applicants between ages 35 and 80 may be eligible for simplified underwriting
without a medical examination if they meet simplified underwriting standards
as evidenced in their responses in the application. For applicants who are
below age 35 or above age 80, or who do not meet simplified underwriting
eligibility, full underwriting applies, except that substandard underwriting
applies only in those cases that represent substandard risks according to
customary underwriting guidelines.
Additional premiums are allowed if they do not cause the Policy to fail to
meet the definition of a life insurance Policy under Section 7702 of the
Code. The amount and frequency of additional premium payments will affect
the Cash Value and the amount and duration of insurance. Royal may require
evidence of insurability for any additional premiums which increase the
Coverage Amount. Generally, the minimum initial premium Royal will accept is
$10,000. Royal may accept less than $10,000 under certain circumstances.
Premium which does not meet the tax qualification guidelines for life
insurance under the Code will not be applied to the Policy.
ALLOCATION OF PREMIUMS
Within three business days of receipt of a completed application and the
initial premium payment at Royal's Home Office, Royal will allocate the
entire premium payment to the Hartford Money Market Sub-Account. After the
expiration of the right to cancel period, the Account Value in Hartford Money
Market Sub-Account will be allocated among the Funds in whole percentages to
purchase Accumulation Units in the applicable Sub-Accounts as you direct in
the application. Premiums received on or after the expiration of the right
to cancel period will be allocated among the Sub-Accounts to purchase
Accumulation Units in such Sub-Accounts as directed by you or, in the absence
of directions, as specified in the original application. The number of
Accumulation
<PAGE>
22
Units in each Sub-Account to be credited to a Policy (including the initial
allocation to Hartford Money Market Sub-Account) will be determined first by
multiplying the premium payment by the percentage to be allocated to each
Fund to determine the portion to be invested in the Sub-Account. Each
portion to be invested in each Sub-Account is then divided by the
Accumulation Unit Value of that particular Sub-Account next computed after
receipt of the premium payment.
ACCUMULATION UNIT VALUES
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for
that Sub-Account for the Valuation Period then ended. The Net Investment
Factor for each Sub-Account is the net asset value per share of the
corresponding Fund at the end of the Valuation Period (plus the per share
dividends or capital gains by that Fund if the ex-dividend date occurs in the
Valuation Period then ended) divided by the net asset value per share of the
corresponding Fund at the beginning of the Valuation Period. Refer to the
Funds' prospectuses accompanying this Prospectus for a description of how the
assets of each Fund are valued, since such determination has a direct bearing
on the Accumulation Unit Value of the Sub-Account and therefore the Account
Value of a Policy. See, also, "Policy Benefits and Rights -- Account Value."
All valuations in connection with a Policy, E.G., with respect to determining
Account Value and Cash Surrender Value and in connection with Policy Loans,
or calculation of Death Benefits, or with respect to determining the number
of Accumulation Units to be credited to a Policy with each premium, other
than the initial premium, will be made on the date the request or payment is
received by Royal at its Home Office if such date is a Valuation Day;
otherwise such determination will be made on the next succeeding date which
is a Valuation Day.
DEDUCTIONS AND CHARGES
The deduction or charges associated with this Policy are subtracted,
depending on the type of deduction or charge, from Premium payments as they
are made, upon surrender or partial surrender of the Policy, on the Policy
Anniversary Date or on a monthly pro rated basis from each Sub-Account
("Deduction Amount").
Deductions are taken from Premium payments before allocations to the
Sub-Accounts are made. Monthly Deduction Amounts are subtracted on the
Policy Date and on each Monthly Activity Date after the Policy Date to cover
charges and expenses incurred in connection with a Policy. Each Deduction
Amount will be subtracted pro rata from each Sub-Account such that the
proportion of Account Value of the Policy attributable to each Sub-Account
remains the same before and after the deduction. The Deduction Amount will
vary from month to month. If the Cash Surrender Value is not sufficient to
cover a Deduction Amount due on any Monthly Activity Date, the Policy may
lapse. See "Policy Benefits and Rights -- Lapse and Reinstatement."
<PAGE>
23
The Policy Owner may elect one of two options offered by Royal to pay the
Mortality and Expense Risk charge, the Tax Expense charge and any Unamortized
Tax charge. Once selected, the option may not be changed. Option 2 may not
be available in all states.
The following chart illustrates the charges and deductions associated with
this Policy. For a more detailed discussion see the descriptions below:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
DEDUCTION OR DEDUCTED FROM ALL WHEN DEDUCTION IS AMOUNT DEDUCTED
CHARGE POLICIES MADE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Cost of Insurance Yes Monthly Individualized
depending on age,
sex and other
factors
- -------------------------------------------------------------------------------
Administrative Yes Monthly .25% of amounts
Charge allocated to the
Separate Account
- -------------------------------------------------------------------------------
Annual Maintenance Only Policies with On the Policy $30.00
Fee an Account Value Anniversary Date
of less than or upon surrender
$50,000 on the of the Policy
Policy Anniversary
Date or date of
surrender
- -------------------------------------------------------------------------------
Surrender Charge Yes Upon surrender or A percentage of
partial surrender the amount
of the Policy surrendered,
depending on the
Policy Year, which
is attributable to
premiums paid
- -------------------------------------------------------------------------------
Tax Expense Charge Yes Under Option 1: Under Option 1:
Monthly .40% of Account
Value for Policy
Under Option 2: Years 1-10
Receipt of premium
payment Under Option 2: 4%
of each premium
payment in all
Policy Years
- -------------------------------------------------------------------------------
Mortality and Yes Monthly Under Option 1:
Expense Risk .90% of Account
Charge Value in Policy
Years 1-10 and
.50%
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
24
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
for Policy Years
11 and beyond.
- -------------------------------------------------------------------------------
Under Option 2:
.65% of Account
Value in Policy
Years 1-10 and
.50% for Policy
years 11 and
beyond
- -------------------------------------------------------------------------------
Unamortized Tax No, only under Upon surrender or A percentage of
Charge Option 1 partial surrender the Account Value
of the Policy depending on the
Policy Year the
surrender takes
place.
- -------------------------------------------------------------------------------
</TABLE>
COST OF INSURANCE CHARGE: The cost of insurance charge covers Royal's
anticipated mortality costs for standard and substandard risks. Current cost
of insurance rates are lower after the tenth Policy Year and are based on
whether 100%, 90% or 80% of the Guideline Single Premium has been paid at
issue. The current cost of insurance charge will not exceed the guaranteed
cost of insurance charge. This charge is a guaranteed maximum monthly rate
multiplied by the Coverage Amount on the Policy Date or any Monthly Activity
Date. For standard risks, the guaranteed cost of insurance rate is 125% of
the 1980 Commissioners Standard Ordinary Smoker/Non-Smoker Mortality Table
through age 90, grading down to 100% of the Commissioners Standard Ordinary
Smoker/Non-Smoker Mortality Table at age 100 (age last birthday). (Unisex
rates may be required in some states.) A table of guaranteed cost of
insurance rates per $1,000 will be included in each Policy; however, Royal
reserves the right to use rates less than those shown in the Table.
Substandard risks and Policies issued employing simplified underwriting
procedures will be charged at a higher cost of insurance rate that will not
exceed rates based on a multiple of the 1980 Commissioners Standard Ordinary
Smoker/Non-Smoker Mortality Table (age last birthday). The multiple will be
based on the Insured's substandard rating.
The Coverage Amount is first set on the Policy Date and then on each Monthly
Activity Date. On such days, it is the Face Amount less the Account Value
subject to a Minimum Coverage Amount. The Coverage Amount remains level
between the Monthly Activity Dates. The Coverage Amount may be adjusted to
continue to qualify the Policies as life insurance Policies under the current
federal tax law. Under that law, the Minimum Coverage Amount is a stated
percentage of the Account Value of the Policy determined on each Monthly
Activity Date. The percentages vary according to the attained age of the
Insured.
<PAGE>
25
EXAMPLE:
Face Amount = $100,000
Account Value on the Monthly Activity Date = $70,000
Insured's attained age = 60
Minimum Coverage Amount percentage for age 60 = 30%
On the Monthly Activity Date, the Coverage Amount is $30,000. This is
calculated by subtracting the Account Value on the Monthly Activity Date
($70,000) from the Face Amount ($100,000), subject to a possible Minimum
Coverage Amount adjustment. This Minimum Coverage Amount is determined by
taking a percentage of the Account Value on the Monthly Activity Date. In
this case, the Minimum Coverage Amount is $21,000 (30% of $70,000). Since
$21,000 is less than the Face Amount less the Account Value ($30,000), no
adjustment is necessary. Therefore, the Coverage Amount will be $30,000.
Assume that the Account Value in the above example was $90,000. The Minimum
Coverage Amount would be $27,000 (30% of $90,000). Since this is greater
than the Face Amount less the Account Value ($10,000), the Coverage Amount
for the Policy Month is $27,000. (For an explanation of the Death Benefit,
see "Policy Benefits and Rights -- Death Benefit.")
Because the Account Value and, as a result, the Coverage Amount under a
Policy may vary from month to month, the cost of insurance charge may also
vary on each Monthly Activity Date.
ADMINISTRATIVE CHARGE: Royal will deduct monthly from the Account Value
attributable to the Separate Account an administrative charge equal to an
annual rate of 0.25%. This charge compensates Royal for administrative
expenses incurred in the administration of the Separate Account and the
Policies.
ANNUAL MAINTENANCE FEE
If the Account Value on a Policy Anniversary or on the date the Policy is
surrendered is less than $50,000, Royal will deduct on such date an annual
maintenance fee of $30. This fee will help reimburse Royal for
administrative and maintenance costs of the Policies. The sum of the monthly
administrative charges and the annual maintenance fee will not exceed the
cost Royal incurs in providing administrative services under the Policies.
Royal reserves the right to waive the Annual Maintenance Fee under certain
conditions.
SURRENDER CHARGE
Upon surrender of the Policy or partial surrenders in excess of the Annual
Withdrawal Amount, a Surrender Charge may be assessed. In Policy Years 1
through 3, this charge is 7.5% of surrendered Account Value attributable to
premiums paid. In Policy Years 4 through 5, this charge is 6%. In Policy
Years 6 through 7, this charge is 4%. In Policy Years 8 through 9, this
charge is 2%. After the ninth Policy Year, there is no charge.
<PAGE>
26
In determining the Surrender Charge and any Unamortized Tax charge discussed
below, any surrender or partial surrender during the first ten Policy Years
will be deemed first from premiums paid and then from earnings. If an amount
equal to all premiums paid has been withdrawn, no charge will be assessed on
a surrender of the remaining Account Value.
The Surrender Charge is imposed to cover a portion of the sales expense
incurred by Royal in distributing the Policies. This expense includes agents
commissions, advertising and the printing of prospectuses. See "Policy
Benefits and Rights -- Amount Payable on Surrender of the Policy."
YOUR OPTIONS
In addition to the deductions and charges described above, you, at the time
the Policy is issued, will elect one of two options described below to pay
charges relating to certain taxes and mortality and expense risk charges.
The option you select may affect Policy Value.
OPTION 1: ASSET-BASED CHARGES: Under this payment option, you will pay:
MORTALITY AND EXPENSE RISK CHARGE: Royal will deduct monthly from the Account
Value attributable to the Separate Account for Policy Years 1 through 10 a
charge equal to an annual rate of 0.90% for the mortality risks and expense
risks Royal assumes in relation to the variable portion of the Policies. In
Policy Years 11 and beyond, the charge drops to an annual rate of 0.50% for
the mortality risks and expense risks Royal assumes in relation to the
variable portion of the Policies. The mortality risk assumed is that the
cost of insurance charges specified in the Policy will be insufficient to
meet claims. Royal also assumes a risk that the Face Amount (the minimum
Death Benefit) will exceed the Coverage Amount on the date of death plus the
Account Value on the date Royal receives written notice of death. The
expense risk assumed is that expenses incurred in issuing and administering
the Policies will exceed the administrative charges set in the Policy. Royal
may profit from the mortality and expense risk charge and may use any profits
for any proper purpose, including any difference between the cost it incurs
in distributing the Policies and the proceeds of the Surrender Charge. The
mortality and expense risk charge is deducted while the Policy is in force,
including the duration of a payment option.
TAX EXPENSE CHARGE: Royal will deduct monthly from the Account Value a
charge equal to an annual rate of 0.40% for the first ten Policy Years. This
charge compensates Royal for premium taxes imposed by various states and
local jurisdictions and for the cost of the capitalization of certain policy
acquisition expenses under Section 848 of the Code. The charge includes a
premium tax deduction of 0.25% and Section 848 costs of 0.15%. The 0.25%
premium tax deduction over ten Policy Years approximates Royal's average
expenses for state and local premium taxes (2.5%). Premium taxes vary,
ranging from zero to more than 4.0%. The premium tax deduction is made
whether or not any premium tax applies. The deduction may be higher or lower
than the premium tax imposed. However, Royal does not expect to make a
profit from this deduction. The 0.15% charge helps reimburse Royal for
approximate expenses incurred under Section 848 of the Code.
UNAMORTIZED TAX CHARGE: Under this option, during the first nine Policy
Years, an Unamortized Tax
<PAGE>
27
charge will be imposed on surrender or partial surrenders. The Unamortized
Tax charge is shown below, as a percentage of Account Value, at the end of
each Policy Year:
POLICY
YEAR RATE
------ ----
1 2.25%
2 2.00%
3 1.75%
4 1.50%
5 1.25%
6 1.00%
7 0.75%
8 0.50%
9 0.25%
10+ 0.00%
After the ninth Policy Year, no Unamortized Tax charge will be imposed.
OPTION 2: FRONTED CHARGES: Under this option, you will pay:
MORTALITY AND EXPENSE RISK CHARGE: In Policy Years 1 through 10, Royal will
deduct monthly from the Account Value attributable to the Separate Account a
charge equal to an annual rate of 0.65% for the mortality risks and expense
risks Royal assumes in relation to the variable portion of the Policies. In
Policy Years 11 and beyond, the charge drops to an annual rate of 0.50%. The
mortality risk assumed is that the cost of insurance charges specified in the
Policy will be insufficient to meet claims. Royal also assumes a risk that
the Face Amount (the minimum Death Benefit) will exceed the Coverage Amount
on the date of death plus the Account Value on the date Royal receives
written notice of death. The expense risk assumed is that expenses incurred
in issuing and administering the Policies will exceed the administrative
charges set in the Policy. Royal may profit from the mortality and expense
risk charge and may use any profits for any proper purpose, including any
difference between the cost it incurs in distributing the Policies and the
proceeds of the Surrender Charge. The mortality and expense risk charge is
deducted while the Policy is in force, including the duration of a payment
option.
TAX EXPENSE CHARGE: Royal will deduct from Premium payments a tax expense
charge equal to an annual rate of 4.0% for all Policy Years. This charge
compensates Royal for premium taxes imposed by various states and local
jurisdictions and for the cost of capitalization of certain policy
acquisition expenses under Section 848 of the Code. The charge includes a
premium tax deduction of 2.5% and a Section 848 cost of 1.5%. The premium
tax deduction approximates Royal's average expenses for state and local
premium taxes. Premium taxes vary, ranging from zero to more than 4.0%. The
premium tax deduction is made whether or not any premium tax applies. The
deduction may be higher or lower than the premium tax imposed. However,
Royal does not expect to make a profit from this deduction. The 0.15% charge
helps reimburse Royal for approximate expenses incurred under Section 848 of
the Code.
<PAGE>
28
This Option may not be available in all states.
OTHER DEDUCTIONS OR CHARGES
CHARGES AGAINST THE FUNDS
The Separate Account purchases shares of the Funds at net asset value. The
net asset value of the Fund shares reflects investment advisory fees and
administrative expenses already deducted from the assets of the Funds. These
charges are described in the Funds' prospectuses accompanying this Prospectus.
TAXES CHARGED AGAINST THE SEPARATE ACCOUNT
Currently, no charge is made to the Separate Account for federal income taxes
that may be attributable to the Separate Account. Royal may, however, make
such a charge in the future. Charges for other taxes, if any, attributable
to the Separate Account may also be made.
POLICY BENEFITS AND RIGHTS
DEATH BENEFIT
While in force, the Policy provides for the payment of the Death Proceeds to
the named beneficiary when the Insured under the Policy dies. The Death
Proceeds payable to the beneficiary equal the Death Benefit less any loans
outstanding. The Death Benefit equals the greater of (1) the Face Amount or
(2) the Account Value multiplied by a specified percentage. The percentages
vary according to the attained age of the Insured and are specified in the
Policy. Therefore, an increase in Account Value may increase the Death
Benefit. However, because the Death Benefit will never be less than the Face
Amount, a decrease in Account Value may decrease the Death Benefit but never
below the Face Amount.
EXAMPLES:
- --------------------------------------------------------------------------
A B
- --------------------------------------------------------------------------
Face Amount $100,000 $100,000
- --------------------------------------------------------------------------
Insured's Age 40 40
- --------------------------------------------------------------------------
Account Value on Date of Death $46,500 $34,000
- --------------------------------------------------------------------------
Specified Percentage 250% 250%
- --------------------------------------------------------------------------
In Example A, the Death Benefit equals $116,250, I.E., the greater of
$100,000 (the Face Amount) or $116,250 (the Account Value at the Date of
Death of $46,500, multiplied by the specified
<PAGE>
29
percentage of 250%). This amount less any outstanding loans constitutes the
Death Proceeds which Royal would pay to the beneficiary.
In Example B, the death benefit is $100,000, I.E., the greater of $100,000
(the Face Amount) or $85,000 (the Account Value of $34,000, multiplied by the
specified percentage of 250%).
All or part of the Death Proceeds may be paid in cash or applied under a
"Payment Option." See "Other Matters -- Settlement Provisions."
ACCOUNT VALUE
The Account Value of a Policy will be computed on each Valuation Day. The
Account Value will vary to reflect the investment experience of the Funds,
the value of the Loan Account and the monthly Deduction Amounts. There is no
minimum guaranteed Account Value.
The Account Value of a particular Policy is related to the net asset value of
the Funds to which premiums on the Policy have been allocated. The Account
Value on any Valuation Day is calculated by multiplying the number of
Accumulation Units credited to the Policy in each Sub-Account as of the
Valuation Day by the Accumulation Unit Value of that Sub-Account, and then
summing the result for all the Sub-Accounts credited to the Policy and the
value of the Loan Account. See "The Policy -- Accumulation Unit Values."
TRANSFER OF ACCOUNT VALUE
While the Policy remains in force, and subject to Royal's transfer rules then
in effect, the Policy Owner may request that part or all of the Account Value
of a particular Sub-Account be transferred to other Sub-Accounts. Royal
reserves the right to restrict the number of such transfers to no more than
12 per Policy Year, with no two transfers being made on consecutive Valuation
Days. However, there are no restrictions on the number of transfers at the
present time. Transfers may be made by written request or by calling toll
free 1-800-[ ] Transfers by telephone may be made by the agent of
record or by the attorney-in-fact pursuant to a power of attorney. Telephone
transfers may not be permitted in some states. The policy of Royal and its
agents and affiliates is that they will not be responsible for losses
resulting from acting upon telephone requests reasonably believed to be
genuine. Royal will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine; otherwise, Royal may be
liable for any losses due to unauthorized or fraudulent instructions. The
procedures Royal follows for transactions initiated by telephone include
requirements that callers provide certain information for identification
purposes. All transfer instructions by telephone are tape recorded. Royal
will send the Policy Owner a confirmation of the transfer within five days
from the date of any instruction. IT IS THE RESPONSIBILITY OF THE POLICY
OWNER TO VERIFY THE ACCURACY OF ALL CONFIRMATIONS OF TRANSFERS AND TO
PROMPTLY ADVISE ROYAL OF ANY INACCURACIES WITHIN 30 DAYS OF RECEIPT OF THE
CONFIRMATION.
Royal may modify the right to reallocate Account Value among the Sub-Accounts
if Royal
<PAGE>
30
determines, in its sole discretion, that the exercise of that right by one or
more Policy Owners is, or would be, to the disadvantage of other Policy
Owners. Any modification could be applied to transfers to or from some or
all of the Sub-Accounts and could include, but not be limited to, the
requirement of a minimum period between each transfer, not accepting transfer
requests of an agent acting under the power of attorney on behalf of more
than one Policy Owner, or limiting the dollar amount that may be transferred
among the Sub-Accounts at one time. These restrictions may be applied in any
manner reasonably designed to prevent any use of the transfer right that
Royal considers to be disadvantageous to other Policy Owners.
As a result of a transfer, the number of Accumulation Units credited to the
Sub-Account from which the transfer is made will be reduced by the number
obtained by dividing the amount transferred by the Accumulation Unit Value of
that Sub-Account on the Valuation Day Royal receives the transfer request.
The number of Accumulation Units credited to the Sub-Account to which the
transfer is made will be increased by the number obtained by dividing the
amount transferred by the Accumulation Unit Value of that Sub-Account on the
Valuation Day Royal receives the transfer request.
POLICY LOANS
While the Policy is in effect, a Policy Owner may obtain, without the consent
of the beneficiary (provided the designation of beneficiary is not
irrevocable), one or both of two types of cash loans from Royal. Both types
of loans are secured by the Policy. The aggregate loans (including the
currently applied for loan) may not exceed, at the time a loan is requested,
90% of the Cash Value.
The loan amount will be transferred pro rata from each Sub-Account
attributable to the Policy (unless the Policy Owner specifies otherwise) to
the Loan Account. The amounts allocated to the Loan Account will earn
interest at a rate of 4% per annum (6% for "Preferred Loans"). The amount of
the Loan Account that equals the difference between the Cash Value and the
total of all premiums paid under the Policy is considered a "Preferred Loan."
For exchanges which take place according to IRC Section 1035(a) that have an
outstanding loan at the time of transfer, the difference between the Account
Value and the total of all premiums paid under the Policy is considered a
Preferred Loan. The loan interest rate that Royal will charge on all loans
is 6% per annum. The difference between the value of the Loan Account and
the Indebtedness will be transferred on a pro-rata basis from the
Sub-Accounts to the Loan Account on each Monthly Activity Date. The proceeds
of a loan will be delivered to the Policy Owner within seven business days of
Royal's receipt of the loan request.
If the aggregate outstanding loan(s) secured by the Policy exceeds the
Account Value of the Policy less any Surrender Charges and due and unpaid
Deduction Amount, Royal will give written notice to the Policy Owner that,
unless Royal receives an additional payment within 61 days to reduce the
aggregate outstanding loan(s) secured by the Policy, the Policy may lapse.
All or any part of any loan secured by a Policy may be repaid while the
Policy is still in effect.
<PAGE>
31
When loan repayments or interest payments are made, they will be allocated
among the Sub-Account(s) in the same percentage as premiums are allocated
(unless the Policy Owner requests a different allocation) and an amount equal
to the payment will be deducted from the Loan Account. Any outstanding loan
at the end of a grace period must be repaid before the Policy will be
reinstated. See "Policy Benefits and Rights -- Lapse and Reinstatement."
A loan, whether or not repaid, will have a permanent effect on the Account
Value because the investment results of each Sub-Account will apply only to
the amount remaining in such Sub-Accounts. The longer a loan is outstanding,
the greater the effect is likely to be. The effect could be favorable or
unfavorable. If the Sub-Accounts earn more than the annual interest rate for
amounts held in the Loan Account, a Policy Owner's Account Value will not
increase as rapidly as it would have had no loan been made. If the
Sub-Accounts earn less than the annual interest rate for amounts held in the
Loan Account, the Policy Owner's Account Value will be greater than it would
have been had no loan been made. Also, if not repaid, the aggregate
outstanding loan(s) will reduce the Death Proceeds and Cash Surrender Value
otherwise payable.
AMOUNT PAYABLE ON SURRENDER OF THE POLICY
While the Policy is in force, you may elect, without the consent of the
beneficiary (provided the designation of beneficiary is not irrevocable), to
fully surrender the Policy. Upon surrender, you will receive the Cash
Surrender Value determined as of the day Royal receives your written request
or the date you request whichever is later. The Cash Surrender Value equals
the Account Value less any Surrender Charges and any Unamortized Tax charge
and all Indebtedness. Royal will pay the Cash Surrender Value of the Policy
within seven days of receipt by Royal of the written request or on the
effective surrender date you request, whichever is later. The Policy will
terminate on the date of receipt of the written request, or the date you
request the surrender to be effective, whichever is later. For a discussion
of the tax consequences of surrendering the Policy, see "Federal Tax
Considerations."
If you choose to apply the surrender proceeds to a payment option (see "Other
Matters -- Settlement Provisions."), the Surrender Charge will not be
imposed to the surrender proceeds applied to the option. In other words, the
surrender proceeds will equal the Cash Surrender Value without reduction for
the Surrender Charge. However, any Unamortized Tax charge, if applicable,
will be deducted from the surrender proceeds to be applied. In addition,
amounts withdrawn from payment Option 1, Option 5 or Option 6 will be
subject to any applicable Surrender Charge.
PARTIAL SURRENDERS
While the Policy is in force, you may elect, by written request, to make
partial surrenders from the Cash Surrender Value. The Cash Surrender Value,
after partial surrender, must at least equal Royal's minimum amount rules
then in effect; otherwise, the request will be treated as a request for full
surrender. The partial surrender will be deducted pro rata from each
Sub-Account, unless you instruct otherwise. The Face Amount will be reduced
proportionate to the reduction in the Account
<PAGE>
32
Value due to the partial surrender. Partial surrenders in excess of the
Annual Withdrawal Amount will be subject to the Surrender Charge and any
Unamortized Tax charges. See "Deductions and Charges --Surrender Charge,"
and "Deductions and Charges -- Policy Owner Option 1." For a discussion of
the tax consequences of partial surrenders, see "Federal Tax Considerations."
BENEFITS AT MATURITY
If the Insured is living on the "Maturity Date" (the anniversary of the
Policy Date on which the Insured is age 100), on surrender of the Policy to
Royal, Royal will pay you the Cash Surrender Value. In such case, the Policy
will terminate and Royal will have no further obligations under the Policy.
(The Maturity Date may be extended by rider where approved, but see "Federal
Tax Considerations -- Income Taxation of Policy Benefits.")
LAPSE AND REINSTATEMENT
The Policy will remain in force until the Cash Surrender Value is
insufficient to cover the Deduction Amount due on a Monthly Activity Date.
Royal will notify you of the deficiency in writing and will provide a 61-day
grace period to pay an amount sufficient to cover the Deduction Amounts due
as well as three. The notice will indicate the amount that must be paid.
The Policy will continue through the grace period, but if no additional
premium payment is made, it will terminate at the end of the grace period.
If the person insured under the Policy dies during the grace period, the
Death Proceeds payable under the Policy will be reduced by the Deduction
Amount(s) due and unpaid. See "Policy Benefits and Rights -- Death Benefit."
If the Policy lapses, you may apply for reinstatement of the Policy by
payment of the reinstatement premium shown in the Policy and any applicable
charges. A request for reinstatement may be made within five years of lapse.
If a loan was outstanding at the time of lapse, Royal will require repayment
of the loan before permitting reinstatement. In addition, Royal reserves the
right to require evidence of insurability satisfactory to Royal.
CANCELLATION AND EXCHANGE RIGHTS
You have a limited right to return a Policy for cancellation. If the Policy
is returned, by mail or personal delivery to Royal or to the agent who sold
the Policy, to be canceled within ten days after delivery of the Policy to
you (a longer free-look period is provided in certain cases), Royal will
return to you, within seven days, the greater of premiums paid for the Policy
less Indebtedness or the sum of (1) the Account Value less any Indebtedness
on the date the returned Policy is received by Royal or its agent and (2) any
deductions under Policy or by the Funds for taxes, charges or fees.
Once the Policy is in effect, it may be exchanged, during the first 24 months
after its issuance, for a non-variable flexible premium adjustable life
insurance Policy offered by Royal (or an affiliated company) on the life of
the Insured. No evidence of insurability will be required. The new Policy
<PAGE>
33
will have, at your election, either the same Coverage Amount as under the
exchanged Policy on the date of exchange or the same Death Benefit. The
effective date, issue date and issue age will be the same as existed under
the exchanged Policy. If a Policy loan was outstanding, the entire loan must
be repaid. There may be a cash adjustment required on the exchange.
SUSPENSION OF VALUATION, PAYMENTS AND TRANSFERS
Royal will suspend all procedures requiring valuation (including transfers,
surrenders and loans) on any day a national stock exchange is closed or
trading is restricted due to an existing emergency, as defined by the
Securities and Exchange Commission, or on any day the Securities and Exchange
Commission has ordered that the right of surrender of the Policies be
suspended for the protection of Policy Owners, until such condition has ended.
LAST SURVIVOR POLICIES
The Policies are offered on both a single life and a "last survivor" basis.
Policies sold on a last survivor basis operate in a manner almost identical
to the single life version. The most important difference is that the last
survivor version involves two Insureds and the Death Proceeds are paid on the
death of the last surviving Insured. The other significant differences
between the last survivor and single life versions are listed below.
1. The cost of insurance charges under the last survivor Policies are
determined in a manner that reflects the anticipated mortality of the two
Insureds and the fact that the Death Benefit is not payable until the death
of the second Insured. See the last survivor illustrations in "Appendix B."
2. To qualify for simplified underwriting under a last survivor
Policy, both Insureds must meet the simplified underwriting standards.
3. For a last survivor Policy to be reinstated, both Insureds must be
alive on the date of reinstatement.
4. The Policy provisions regarding misstatement of age or sex, suicide
and incontestability apply to either Insured.
5. Additional tax disclosures applicable to last survivor Policies are
provided in "Federal Tax Considerations," page 42.
<PAGE>
34
OTHER MATTERS
VOTING RIGHTS
In accordance with its interpretation of presently applicable law, Royal will
vote the shares of the Funds at regular and special meetings of the
shareholders of the Funds in accordance with instructions from Policy Owners
(or the assignee of the Policy, as the case may be) having a voting interest
in the Separate Account. The number of shares held in the Separate Account
which are attributable to each Policy Owner is determined by dividing the
Policy Owner's interest in each Sub-Account by the net asset value of the
applicable shares of the Funds. Royal will vote shares for which no
instructions have been given and shares which are not attributable to Policy
Owners (I.E., shares owned by Royal) in the same proportion as it votes
shares for which it has received instructions. However, if the Investment
Company Act of 1940 or any rule promulgated thereunder should be amended, or
if Royal's present interpretation should change and, as a result, Royal
determines it is permitted to vote the shares of the Funds in its own right,
it may elect to do so.
The voting interests of the Policy Owner (or the assignee) in the Funds will
be determined as follows: Policy Owners may cast one vote for each full or
fractional Accumulation Unit owned under the Policy and allocated to a
Sub-Account, the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by the Policy, amounts transferred from the
Sub-Account(s) to the Loan Account in connection with the loan (see "Policy
Benefits and Rights -- Policy Loans.") will not be considered in determining
the voting interests of the Policy Owner. Policy Owners should review the
Funds prospectus accompanying this Prospectus to determine matters on which
shareholders may vote.
Royal may, when required by state insurance regulatory authorities, disregard
Policy Owners' voting instructions if such instructions require that the
shares be voted so as to cause a change in the sub-classification or
investment objective of one or more of the Funds or to approve or disapprove
an investment advisory Policy for the Funds.
In addition, Royal itself may disregard Policy Owners' voting instructions in
favor of changes initiated by a Policy Owner in the investment policy or the
investment adviser of the Funds if Royal reasonably disapproves of such
changes. A change would be disapproved only if the proposed change is
contrary to state law or prohibited by state regulatory authorities. If
Royal does disregard voting instructions, a summary of that action and the
reasons for such action will be included in the next periodic report to
Policy Owners.
STATEMENTS
Royal will maintain all records relating to the Separate Account and the
Sub-Accounts. At least once each Policy Year, Royal will send you a
statement showing the Coverage Amount and the Account Value of the Policy
(indicating the number of Accumulation Units credited to the Policy in each
Sub-Account and the corresponding Accumulation Unit Value) and any
outstanding loan secured by the Policy as of the date of the statement. The
statement will also show premium paid, and Deduction Amounts under the Policy
since the last statement, and any other information required by any
applicable law or regulation.
<PAGE>
35
LIMIT ON RIGHT TO CONTEST
Royal may not contest the validity of the Policy after it has been in force
during the Insured's lifetime for two years from the Issue Date. If the
Policy is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Coverage Amount as a result of a premium
payment is contestable for two years from its effective date. In addition,
if the Insured commits suicide in the two year period, or such period as
specified in state law, the benefit payable will be limited to the Account
Value less any Indebtedness.
MISSTATEMENT AS TO AGE AND SEX
If the age or sex of the Insured is incorrectly stated, the Death Benefit
will be appropriately adjusted as specified in the Policy.
SETTLEMENT PROVISIONS
The surrender proceeds or Death Proceeds under the Policies may be paid in a
lump sum or may be applied to one of Royal's payment options. The minimum
amount that may be applied under a payment option is $5,000, unless Royal
consents to a lesser amount. UNDER PAYMENT OPTIONS 2, 3 AND 4, NO SURRENDER
OR PARTIAL SURRENDERS ARE PERMITTED AFTER PAYMENTS COMMENCE. FULL SURRENDER
OR PARTIAL SURRENDERS MAY BE MADE FROM PAYMENT OPTION 1 OR OPTION 6, BUT THEY
ARE SUBJECT TO THE SURRENDER CHARGE, IF APPLICABLE. ONLY A FULL SURRENDER IS
ALLOWED FROM PAYMENT OPTION 5. A SURRENDER FROM PAYMENT OPTION 5 WILL ALSO
BE SUBJECT TO THE SURRENDER CHARGE, IF APPLICABLE.
Royal will pay interest of at least 3 1/2% per year on the Death Proceeds
from the date of the Insured's death to the date payment is made or a payment
option is elected. At such times, the proceeds are not subject to the
investment experience of the Separate Account.
The following options are available under the Policies (Royal may offer other
payment options):
Option 1: Interest Income
This option offers payments of interest, at the rate Royal declares, on the
amount applied under his option. The interest rate will never be less than 3
1/2% per year.
Option 2: Life Annuity
A life annuity is an annuity payable during the lifetime of the payee and
terminating with the last payment preceding the death of the payee. This
option offers the largest payment amount of any of the life annuity options,
since there is no guarantee of a minimum number of payments nor a provision
for a death benefit payable to a beneficiary.
<PAGE>
36
It would be possible under this option for a payee to receive only one
annuity payment if he died prior to the due date of the second annuity
payment, two annuity payments if he died before the date of the third annuity
payment, etc.
Option 3: Life Annuity with 120, 180 or 240 Monthly Payments Certain
This annuity option is an annuity payable monthly during the lifetime of the
payee with the provision that payments will be made for a minimum of 120, 180
or 240 months, as elected. If, at the death of the payee, payments have been
made for less than the minimum elected number of months, then the present
value (as of the date of the payee's death) of any remaining guaranteed
payments will be paid in one sum to the beneficiary or beneficiaries
designated, unless other provisions have been made and approved by Royal.
Option 4: Joint and Last Survivor Annuity
An annuity payable monthly during the joint lifetime of the payee and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered by Royal, the payee may elect that the
payment to the survivor be less than the payment made during the joint
lifetime of the payee and a designated second person.
It would be possible under this option for a payee and designated second
person to receive only one payment in the event of the common or simultaneous
death of the parties prior to the due date for the second payment and so on.
Option 5: Payments for a Designated Period
An amount payable monthly for the number of years selected, which may be from
five to 30 years. Under this option, you may, at any time, request a full
surrender and receive, within seven days, the termination value of the Policy
as determined by Royal.
In the event of the payee's death prior to the end of the designated period,
the present value (as of the date of the payee's death) of any remaining
guaranteed payments will be paid in one sum to the beneficiary or
beneficiaries designated unless other provisions have been made and approved
by Royal.
Option 5 is an option that does not involve life contingencies.
Option 6: Policy Proceeds Settlement Option
Proceeds from the Death Benefit left with Royal. These proceeds will remain
in the Sub-Accounts to which they were allocated at the time of death, unless
the beneficiary elects to reallocate them.
<PAGE>
37
Full or partial surrenders may be made at any time.
VARIABLE AND FIXED ANNUITY PAYMENTS: When an Annuity is effected, unless
otherwise specified, the surrender proceeds or Death Proceeds held in the
Sub-Accounts will be applied to provide a variable annuity based on the pro
rata amount in the various Sub-Accounts. Fixed annuities options are also
available. YOU SHOULD CONSIDER WHETHER THE ALLOCATION OF PROCEEDS AMONG
SUB-ACCOUNTS OF THE SEPARATE ACCOUNT FOR YOUR ANNUITY PAYMENTS ARE BASED ON
THE INVESTMENT ALTERNATIVE BEST SUITED TO YOUR RETIREMENT NEEDS.
VARIABLE ANNUITY: The Policy contains tables indicating the minimum dollar
amount of the first monthly payment under the optional variable forms of
annuity for each $1,000 of value of a Sub-Account. The first monthly payment
varies according to the form and type of variable payment annuity selected.
The Policy contains variable payment annuity tables derived from the 1983(a)
Individual Annuity Mortality Table, with ages set back one year and with an
assumed investment rate ("A.I.R.") of 5% per annum. The total first monthly
variable annuity payment is determined by multiplying the proceeds value
(expressed in thousands of dollars) of a Sub-Account by the amount of the
first monthly payment per $1,000 of value obtained from the tables in the
Policy.
The amount of the first monthly variable annuity payment is divided by the
value of an annuity unit (an accounting unit of measure used to calculate the
value of annuity payments) for the appropriate Sub-Account no earlier than
the close of business on the fifth Valuation Day preceding the day on which
the payment is due in order to determine the number of annuity units
represented by the first payment. This number of annuity units remains fixed
during the annuity payment period and in each subsequent month the dollar
amount of the variable annuity payment is determined by multiplying this
fixed number of annuity units by the current annuity unit value.
LEVEL VARIABLE ANNUITY PAYMENTS WOULD BE PRODUCED IF THE INVESTMENT RATE
REMAINED CONSTANT AND EQUAL TO THE A.I.R. IN FACT, PAYMENTS WILL VARY UP OR
DOWN AS THE INVESTMENT RATE VARIES UP OR DOWN RELATIVE TO THE A.I.R.
FIXED ANNUITY: Fixed annuity payments are determined by multiplying the
amount applied to the annuity by a rate (to be determined by Royal) which is
no less than the rate specified in the fixed payment annuity tables in the
Policy. The annuity payment will remain level for the duration of the
annuity.
Royal will make any other arrangements for income payments as may be agreed
on.
BENEFICIARY
You name the beneficiary in the application for the Policy. You may change
the beneficiary (unless irrevocably named) during the Insured's lifetime by
written request to us. If no beneficiary is living
<PAGE>
38
when the Insured dies, the Death Proceeds will be paid to you if living;
otherwise to your estate.
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation.
Royal is not responsible for any payment made or action taken before receipt
of written notice of such assignment. Proof of interest must be filed with
any claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policies.
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
OTHER BUSINESS PROFESSION,
POSITION WITH ROYAL, VOCATION OR EMPLOYMENT FOR
NAME, AGE YEAR OF ELECTION PAST FIVE YEARS; OTHER
DIRECTORSHIPS
- -------------------------------------------------------------------------------
<S> <C> <C>
Gregory A. Boyko, 47 Senior Vice President, Vice President and
1998 Controller (1995-1997),
Treasurer Hartford Life Insurance
Director Company ("Hartford");
Director (1997-Present);
Senior Vice President
(1997-Present), Chief
Financial Officer &
Treasurer (1997-1998); Vice
President & Controller
(1995-1997), Hartford Life
and Accident Insurance
Company; Senior Vice
President, Chief Financial
Officer & Treasurer (1997-
Present), Hartford Life,
Inc.; Chief Financial
Officer (1994-1995), IMG
American Life; Senior Vice
President (1992-1994),
Connecticut Mutual Life
Insurance Company.
- -------------------------------------------------------------------------------
Lynda Godkin, 44 Senior Vice President, Associate General Counsel
1998 (1995-1996); Assistant
Corporate Secretary General Counsel and
Director Secretary (1994-1995);
Counsel (1990-1994),
Hartford; Director (1997-
Present); Senior Vice
President (1997-Present);
General Counsel (1996-
Present); Corporate
Secretary (1995-Present);
Associate General Counsel
(1995-1996); Assistant
General Counsel and
Secretary (1994-1995);
Counsel (1990-1994),
Hartford Life and Accident
Insurance Company; Vice
President and General
Counsel (1997 - Present),
Hartford Life, Inc.
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
39
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------
John P. Ginnetti, 52 Director, 1998 Senior Vice President -
Individual Life and Annuity
Division (1988-1994),
Hartford; Director (1988-
Present); Director (1988-
Present); Executive Vice
President & Director, Asset
Management Services (1994-
Present); Senior Vice
President - Individual Life
and Annuity Division (1988-
1994), Hartford Life and
Accident Insurance Company;
Executive Vice President,
Asset Management, Hartford
Life, Inc. (1997-Present).
- -------------------------------------------------------------------------------
Thomas M. Marra, 39 Director, 1998 Senior Vice President
(1994-1995); Vice President
(1989-1994); Actuary (1987-
1995), Hartford; Director
(1994-Present); Executive
Vice President (1995-
Present); Senior Vice
President (1994-1995);
Director, Individual Life
and Annuity Division (1994-
Present); Actuary (1987-
1997), Hartford Life and
Accident Insurance Company;
Executive Vice President,
Individual Life and
Annuities (1997-Present),
Hartford Life, Inc.
- -------------------------------------------------------------------------------
Charles F. Shabunia, 51 Vice President, 1998 Assistant Vice President,
Controller Hartford (1997-Present)
- -------------------------------------------------------------------------------
Lowndes A. Smith, 58 President, 1998 Chief Operating Officer
Director (1989-1997), Hartford;
Director (1981-Present);
President (1989-Present);
Chief Executive Officer
(1997-Present); Chief
Operating Officer (1989-
1997), Hartford Life and
Accident Insurance Company;
Chief Executive Officer and
President and Director
(1997-Present), Hartford
Life, Inc.
- -------------------------------------------------------------------------------
Raymond P. Welnicki, 49 Director, 1998 Vice President (1993-1994),
Hartford; Director (1994-
Present); Senior Vice
President (1995-Present);
Director, Employee Benefit
Division (1997-Present);
Vice President (1993-1995),
Hartford Life and Accident
Insurance Company; Senior
Vice President, Employee
Benefits (1997-Present),
Hartford Life, Inc.; Board
of Directors, Ethix Corp.
- -------------------------------------------------------------------------------
Lizabeth Zlatkus, 39 Director, 1998 Vice President (1994-1997);
Assistant Vice President
(1992-1994), Hartford;
Director (1994-Present);
Senior Vice President
(1997-Present); Vice
President (1994-1997);
Assistant Vice President
(1992-1994), Hartford Life
and Accident Insurance
Company; Vice President,
Group Life and Disability
(1997-Present), Hartford
Life, Inc.
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
40
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------
Craig R. Raymond, 37 Senior Vice President, Vice President (1993-1997);
1998 Assistant Vice President
Chief Actuary (1992-1993); Actuary (1990-
1994), Hartford; Senior
Vice President (1997-
Present); Chief Actuary
(1995-Present); Vice
President (1993-1997);
Actuary (1990-1995),
Hartford Life and Accident
Insurance Company; Vice
President and Chief Actuary
(1997-Present), Hartford
Life, Inc.
- -------------------------------------------------------------------------------
</TABLE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
- ------------------------------
* Denotes date of election to Board of Directors.
** The Hartford Financial Services Group, Inc. Affiliated Company
HOW WE SELL OUR POLICY
- ----------------------
Royal intends to sell the Policies in all jurisdictions where it is licensed
to do business. The Policies will be sold by life insurance sales
representatives who represent Royal and who are registered representatives of
Hartford Securities Distribution Company, Inc. ("HSD") or certain other
independent, registered broker-dealers. Any sales representative or employee
will have been qualified to sell variable life insurance Policies under
applicable federal and state laws. Each broker-dealer is registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934
and all are members of the National Association of Securities Dealers, Inc.
HSD serves as Principal Underwriter for the securities issued with respect to
the Separate Account. HSD is an affiliate of Royal. The principal business
address of HSD is the same as that of Royal.
The maximum sales commission payable to Royal agents, independent registered
insurance brokers, and other registered broker-dealers is 7.0% of initial and
subsequent premiums.
Broker-dealers or financial institutions are compensated according to a
schedule set forth by HSD and any applicable rules or regulations for
variable insurance compensation. Compensation is generally based on premium
payments made by policyholders or contract owners. This compensation is
usually paid from the sales charges described in this Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HSD, its affiliates or Royal may also make compensation
arrangements with certain broker-dealers or financial institutions based on
total sales by the broker-dealer or financial institution of insurance
products. These payments, which may be different for different broker-dealers
or financial institutions, will be made by HSD, its affiliates or Royal out
of their own assets and will not effect the amounts paid by the policyholders
or contract owners to purchase, hold or surrender variable insurance products.
Royal may provide information on various topics to you and prospective Policy
Owners in advertising, sales literature or other materials. These topics may
include the relationship between sectors of the economy and the economy as a
whole and its effect on various securities markets,
<PAGE>
41
investment strategies and techniques (such as value investing, dollar cost
averaging and asset allocation), the advantages and disadvantages of
investing in tax-advantaged and taxable instruments, customer profiles and
hypothetical purchase scenarios, financial management and tax and retirement
planning, and variable annuities and other investment alternatives, including
comparisons between the Policies and the characteristics of, and market for,
such alternatives.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
- --------------------------------------------
The assets of the Separate Account are held by Royal. The assets of the
Separate Account are kept physically segregated and held separate and apart
from the General Account of Royal. Royal maintains records of all purchases
and redemptions of shares of the Fund. Additional protection for the assets
of the Separate Account is afforded by Royal's blanket fidelity bond, issued
by Aetna Casualty and Surety Company, in the aggregate of $50 million,
covering all of the officers and employees of Royal.
<PAGE>
42
FEDERAL TAX CONSIDERATIONS
--------------------------
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE POLICY OWNER INVOLVED, LEGAL AND TAX ADVICE MAY
BE NEEDED BY A PERSON, EMPLOYER OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF
A POLICY DESCRIBED HEREIN.
It should be understood that any detailed description of the federal income
tax consequences regarding the purchase of these Policies cannot be made in
this Prospectus and that special tax rules may be applicable with respect to
certain purchase situations not discussed herein. In addition, no attempt is
made here to consider any applicable state or other tax laws. For detailed
information, a qualified tax adviser should always be consulted. This
discussion of federal tax considerations is based upon Royal's understanding
of existing Federal income tax laws as they are currently interpreted.
TAXATION OF ROYAL AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Royal which is taxed as a life
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as
a "regulated investment company" under Subchapter M of the Code. Investment
income and realized capital gains on the assets of the Separate Account (the
underlying Funds) are reinvested and are taken into account in determining
the value of the Accumulation Units (see "Policy Benefits and Right - Account
Value"). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Policy.
ROYAL does not expect to incur any federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
federal income taxes. If Royal incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may
assess a charge for such taxes against the Separate Account.
INCOME TAXATION OF POLICY BENEFITS
For federal income tax purposes, the Policies should be treated as life
insurance contracts under Section 7702 of the Code. The death benefit under
a life insurance contract is generally excluded from the gross income of the
beneficiary. Also, a life insurance Policy Owner is generally not taxed on
increments in the contract value until the Policy is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested
in a Policy that is treated as life insurance. Royal intends to monitor
premium levels to assure compliance with the Section 7702 requirements.
<PAGE>
43
During the first fifteen Policy Years, an "income first" rule generally
applies to distributions of cash required to be made under Code Section 7702
because of a reduction in benefits under the Policy.
The Maturity Date Extension Rider allows a Policy Owner to extend the
Maturity Date to the date of the Insured's death. If the Maturity Date of
the Policy is extended by rider, Royal believes that the Policy will continue
to be treated as a life insurance contract for federal income tax purposes
after the scheduled Maturity Date. However, due to the lack of specific
guidance on this issue, the result is not certain. If the Policy is not
treated as a life insurance contract for federal income tax purposes after
the scheduled Maturity Date, among other things, the Death Proceeds may be
taxable to the recipient. The Policy Owner should consult a qualified tax
adviser regarding the possible adverse tax consequences resulting from an
extension of the scheduled Maturity Date.
LAST SURVIVOR POLICIES
Although Royal believes that the last survivor Policies are in compliance
with Section 7702 of the Code, the manner in which Section 7702 should be
applied to certain features of a joint survivorship life insurance contract
is not directly addressed by Section 7702. In the absence of final
regulations or other guidance issued under Section 7702, there is necessarily
some uncertainty whether a last survivor Contract will meet the Section 7702
definition of a life insurance contract.
MODIFIED ENDOWMENT CONTRACTS
A life insurance contract is treated as a "modified endowment contract" under
Section 7702A of the Code if it meets the definition of life insurance in
Section 7702 but fails the "seven-pay" test of Section 7702A. The seven-pay
test provides that premiums cannot be paid at a rate more rapidly than that
allowed by the payment of seven annual premiums using specified computational
rules provided in Section 7702A(c). The large single premium permitted under
the Policy does not meet the specified computational rules for the "seven-pay
test" under Section 7702A(c). Therefore, the Policy will generally be
treated as a modified endowment contract for federal income tax purposes.
However, an exchange under Section 1035 of the Code of a life insurance
contract issued before June 21, 1988 will not cause the new Policy to be
treated as a modified endowment contract if no additional premiums are paid
and there is no change in the death benefit as the result of the exchange.
A contract that is classified as modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That
is, the death benefit is excluded from income and increments in value are not
subject to current taxation. However, loans, distributions or other amounts
received from a modified endowment contract during the life of the Insured
will be taxed to the extent of any accumulated income in the contract
(generally, the excess of account value over premiums paid). Amounts that
are taxable withdrawals will be subject to a 10% additional tax, with certain
exceptions.
<PAGE>
44
All modified endowment contracts that are issued within any calendar year to
the same Policy Owner by one company or its affiliates shall be treated as
one modified endowment contract in determining the taxable portion of any
loan or distributions.
ESTATE AND GENERATION SKIPPING TAXES
When the Insured dies, the Death Proceeds will generally be includible in the
Policy Owner's estate for purposes of federal estate tax if the last
surviving Insured owned the Policy. If the Policy Owner was not the last
surviving Insured, the fair market value of the Policy would be included in
the Policy Owner's estate upon the Policy Owner's death. Nothing would be
includible in the last surviving Insured's estate if he or she neither
retained incidents of ownership at death nor had given up ownership within
three years before death.
The federal estate tax is integrated with the federal gift tax under a
unified rate schedule and unified credit which shelters up to $625,000 (1998)
from the estate and gift tax. The Taxpayer Relief Act of 1997 gradually
raises the credit over the next eight years to $1,000,000. In addition, an
unlimited marital deduction may be available for federal estate and gift tax
purposes. The unlimited marital deduction permits the deferral of taxes until
the death of the surviving spouse (when the Death Proceeds would be available
to pay taxes due and other expenses incurred).
If the Policy Owner (whether or not he or she is an Insured) transfers
ownership of the Policy to someone two or more generations younger, the
transfer may be subject to the generation-skipping transfer tax, the taxable
amount being the value of the Policy. The generation-skipping transfer tax
provisions generally apply to transfers which would be subject to the gift
and estate tax rules. Individuals are generally allowed an aggregate
generation skipping transfer exemption of $1 million. Because these rules
are complex, the Policy Owner should consult with a qualified tax adviser for
specific information if ownership is passing to younger generations.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract
(other than a pension plan policy) will not be treated as a life insurance
contract for any period during which the investments made by the separate
account or underlying fund are not adequately diversified in accordance with
regulations prescribed by the Treasury Department. If a Policy is not treated
as a life insurance contract, the Policy Owner will be subject to income tax
on the annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of
the total assets of the segregated asset account underlying a variable
contract is represented by any one investment, no more than 70% is
represented by any two investments, no more than 80% is represented by any
three investments, and no more than 90% is represented by any four
investments. In determining whether the diversification standards are met,
all securities of the same issuer, all interests in the same real
<PAGE>
45
property project, and all interests in the same commodity are each treated as
a single investment. In addition, in the case of government securities, each
government agency or instrumentality shall be treated as a separate issuer.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company
or the Policy Owner must agree to pay the tax due for the period during which
the diversification requirements were not met.
Royal monitors the diversification of investments in the separate accounts
and tests for diversification as required by the Code. Royal intends to
administer all contracts subject to the diversification requirements in a
manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must
be considered to be owned by the insurance company and not by the variable
contract owner. The Internal Revenue Service ("IRS") has issued several
rulings which discuss investor control. The IRS has ruled that certain
incidents of ownership by the contract owner, such as the ability to select
and control investments in a separate account, will cause the contract owner
to be treated as the owner of the assets for tax purposes. Further, in the
explanation to the temporary Section 817 diversification regulations, the
Treasury Department noted that the temporary regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor, rather than
the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders
may direct their investments to particular sub-accounts without being treated
as the owners of the underlying assets. Guidance on this and other issues
will be provided in regulations or revenue rulings under section 817(d),
relating to the definition of variable contract." The final regulations
issued under Section 817 did not provide guidance regarding investor control,
and as of the date of this Prospectus, no other such guidance has been
issued. Further, Royal does not know if or in what form such guidance will
be issued. In addition, although regulations are generally issued with
prospective effect, it is possible that regulations may be issued with
retroactive effect. Due to the lack of specific guidance regarding the issue
of investor control, there is necessarily some uncertainty regarding whether
a Policy Owner could be considered the owner of the assets for tax purposes.
Royal reserves the right to modify the contracts, as necessary, to prevent
Policy Owners from being considered the owners of the assets in the separate
accounts.
<PAGE>
46
LIFE INSURANCE PURCHASED FOR USE IN SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM")
on the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides
advice as to the internal revenue laws, regulations, and related statutes
with respect to a specific set of facts and a specific taxpayer. In the TAM,
among other things, the IRS concluded that an employee was subject to current
taxation on the excess of the cash surrender value of the policy over the
premiums to be returned to the employer. Purchasers of life insurance
policies to be used in split dollar arrangements are strongly advised to
consult with a qualified tax adviser to determine the tax treatment resulting
from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Policy Owner,
such amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF POLICIES
In certain circumstances, the Code limits the application of specific tax
advantages to individual owners of life insurance contracts. Prospective
Policy Owners which are not individuals should consult a qualified tax
adviser to determine the potential impact on the purchaser.
OTHER
Federal estate tax, 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. A tax adviser should be
consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to life insurance purchasers that are U.S. citizens
or residents. Purchasers that are not U.S. citizens or residents will
generally be subject to U.S. federal income tax and withholding on taxable
distributions from life insurance policies at a 30% rate, unless a lower
treaty rate applies. In addition, purchasers may be subject to state and/or
municipal taxes and taxes that may be imposed by the purchaser's country of
citizenship or residence. Prospective purchasers are advised to consult with
a qualified tax adviser regarding U.S. state, and foreign taxation with
respect to a life insurance policy purchase.
LEGAL PROCEEDINGS
-----------------
There are no material legal proceedings pending to which the Separate Account
is a party.
<PAGE>
47
LEGAL MATTERS
-------------
Legal matters in connection with the issue and sale of flexible premium
variable life insurance Policies described in this Prospectus and the
organization of Royal, its authority to issue the Policies under Connecticut
law and the validity of the forms of the Policies under Connecticut law and
legal matters relating to the federal securities and income tax laws have
been passed on by Lynda Godkin, Senior Vice President, General Counsel and
Corporate Secretary of Royal.
YEAR 2000
---------
Many existing computer programs were originally designed without considering
the impact of the year 2000 and currently use only two digits to identify the
year in the date field. Therefore, on January 1, 2000, unless the software
is corrected or replaced, most computers with time-sensitive software
programs will read the "00" to be the year "1900." This issue affects nearly
all companies and organizations and could cause computer applications and
systems to fail or create erroneous results for any transaction with a date
of January 1, 2000 or later.
As a result, many companies must undertake major projects to address the year
2000 issue and each company's costs and uncertainties will depend on a number
of factors, including its software and hardware and the nature of the
industry. Companies must also coordinate with other entities with which they
electronically interact, including investment advisers, brokers, transfer
agents, customers, creditors and other financial services institutions.
In 1988, Royal's ultimate parent company, Hartford Financial Services Group,
Inc. ("Hartford"), recognized the importance of the year 2000 problem and the
potential material adverse consequences it could have on its business and
clients. By 1990, Hartford was addressing this problem with the aim of
making its computer systems Year 2000 compliant by December 31, 1998.
Hartford has replaced many of its older systems with new, state-of-the-art
systems that are Year 2000 compliant. Currently, many of its legacy systems
are already processing "2000" dates. Costs associated with these changes
have been expensed by the company annually as they are incurred to avoid a
significant financial impact to the company in any one year or in the future.
Such amounts have not been and are not expected to be material to the
company's business, operations or financial condition.
Royal, (through Hartford), is monitoring how other companies with which it
does business are responding to the year 2000 problem through surveys,
regular mailings. In addition, it is in the process of developing a
comprehensive contingency plan. This plan will be fundamental if Royal or a
company with which it conducts business experiences year 2000 difficulties
after December 31, 1999. The failure by Royal or one its suppliers of
financial services to achieve timely and complete compliance could have a
material adverse effect on Royal's ability to conduct its business, including
its ability to accurately and timely respond to customers' surrender and
annuitization requests.
<PAGE>
48
EXPERTS
-------
The audited financial statements and financial statement schedules included
in this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in giving said reports. The principal business address of Arthur
Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.
The hypothetical Policy illustrations included in this Prospectus and the
registration statement with respect to the Separate Account have been
approved by Michael Winterfield, FSA, MAAA, Assistant Vice President and
Director, Individual Annuity Product Management, for ROYAL, and are included
in reliance upon his opinion as to their reasonableness.
REGISTRATION STATEMENT
----------------------
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933 as amended. This Prospectus does
not contain all information set forth in the registration statement, its
amendments and exhibits, to all of which reference is made for further
information concerning the Separate Account, the Funds, Royal, and the
Policies.
<PAGE>
49
APPENDIX A
SPECIAL INFORMATION FOR POLICIES PURCHASED IN NEW YORK
If the Policy is purchased in the State of New York, the following provisions
of the Prospectus are amended as follows:
In the Special Terms subsection of the Prospectus, the definition of Account
Value is deleted and the following definition is substituted:
Account Value: The current value of Accumulation Units plus the value
of the Loan Account under the Policy. In the case of a Policy Owner who
purchases the Policy in the State of New York (the "New York Policy Owner")
and who elects to transfer into the Fixed Account, Account Value is the
current value of the Fixed Account plus the value of the Loan Account under
the Policy.
The following definition is added:
Fixed Account: Part of the General Account of Royal to which a New York
Policy Owner may allocate the entire Account Value.
The definition of Loan Account is deleted and the following definition is
substituted:
Loan Account: An account in Royal's General Account, established for
any amounts transferred from the Sub-Accounts or, if a New York Policy Owner,
from the Fixed Account for requested loans. The Loan Account credits a fixed
rate of interest of 4% per annum that is not based on the investment
experience of the Separate Account.
The following is added to the Prospectus as a separate section following the
section entitled "The Separate Account":
THE FIXED ACCOUNT
THAT PORTION OF THE POLICY RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS
THEREIN ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE
1940 ACT, AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN
REVIEWED BY THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION. THE
FOLLOWING DISCLOSURE ABOUT THE
<PAGE>
50
FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF
THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF
DISCLOSURE.
Under the circumstances described under the heading "Transfer of Entire
Account Value to the Fixed Account," New York Policy Owners may transfer no
less than the entire Account Value to the Fixed Account. Account Value
transferred to the Fixed Account becomes part of the general assets of Royal.
Royal invests the assets of the General Account in accordance with
applicable laws governing the investment of insurance company general
accounts.
Royal currently credits interest to the Account Value transferred to the
Fixed Account under the Policy at the Minimum Credited Rate of 3% per year,
compounded annually. Royal reserves the right to credit a lower minimum
interest rate according to state law. Royal may also credit interest at
rates greater than the minimum Fixed Account interest rate. There is no
specific formula for determining the interest credited to the Account Value
in the Fixed Account.
The following language is added to the section of the Prospectus entitled
"Deductions and Charges -- Administrative Charges":
No Administrative Charge is deducted from Account Value in the Fixed
Account.
The following language is added to the section of the Prospectus entitled
"Deductions and Charges -- Mortality and Expense Risk Charge":
No Mortality and Expense Risk Charge is deducted from Account Value in
the Fixed Account.
The following separate sections are added to the section of the Prospectus
entitled "Policy Benefits":
TRANSFER OF ENTIRE ACCOUNT VALUE TO THE FIXED ACCOUNT
New York Policy Owners may transfer no less than the entire Account Value
into the Fixed Account under the following circumstances: (i) during the
first 18 months following the Date of Issue, (ii) within 30 days following a
Policy Anniversary, or (iii) within 60 days following the effective date of a
material change in the investment policy of the Separate Account which the
New York Policy Owner objects to.
A TRANSFER TO THE FIXED ACCOUNT MUST BE FOR THE ENTIRE ACCOUNT VALUE AND ONCE
THE ACCOUNT VALUE HAS BEEN TRANSFERRED TO THE FIXED ACCOUNT, IT MAY NOT,
UNDER ANY CIRCUMSTANCES, BE TRANSFERRED BACK TO THE SEPARATE ACCOUNT.
<PAGE>
51
For New York Policy Owners who elect to invest in the Fixed Account, Royal
will transfer the entire Account Value from the Separate Account to the Fixed
Account on the Monthly Activity Date next following the date on which Royal
received the transfer request. The Account Value in the Fixed Account on the
date of transfer equals the entire Account Value; plus the value of the Loan
Account; minus the Monthly Deduction Amount applicable to the Fixed Account
and minus the Annual Maintenance Fee, if applicable. On each subsequent
Monthly Activity Date, the Account Value in the Fixed Account equals the
Account Value on the previous Monthly Activity Date; plus any premiums
received since the last Monthly Activity Date; plus interest credited since
the last Monthly Activity Date; minus the Monthly Deduction Amount applicable
to the Fixed Account; minus any partial surrenders taken since the last
Monthly Activity Date and minus any Surrender Charges deducted since the last
Monthly Deduction Date. On each Valuation Date (other than a Monthly
Activity Date), the Account Value of the Fixed Account equals the Account
Value on the previous Monthly Activity Date; plus any premiums received since
the last Monthly Activity Date; plus any interest credited since the last
Monthly Activity Date; minus any partial surrenders taken since the last
Monthly Activity Date and minus any Surrender Charges deducted since the last
Monthly Activity Date.
DEFERRED PAYMENTS
Royal reserves the right to defer payment of any Cash Surrender Values and
loan amounts which are attributable to the Fixed Account for up to six months
from the date of request. If payment is deferred for more than ten days,
Royal will pay interest at the Fixed Account Minimum Credited Interest Rate.
<PAGE>
52
APPENDIX B
ILLUSTRATIONS OF BENEFITS
The tables in Appendix B illustrate the way in which a Policy operates. They
show how the death benefit and surrender value could vary over an extended
period of time assuming hypothetical gross rates of return equal to constant
after tax annual rates of 0%, 6% and 12%. The tables are based on an initial
premium of $10,000. A male age 45, a female age 55 and a male age 65 with
Face Amounts of $44,053, $34,014 and $20,001, respectively, are illustrated
for the single life preferred Policy for both Policy Owner Option 1 and
Policy Owner Option 2. The illustrations for the last survivor preferred
Policy assume male and female of equal ages, including age 55 and 65 for Face
Amounts of $45,872 and $28,491.
The death benefit and surrender value for a Policy would be different from
those shown if the rates of return averaged 0%, 6% and 12% over a period of
years, but also fluctuated above or below those averages for individual
Policy Years. They would also differ if any Policy loan were made during the
period of time illustrated.
The tables reflect the deductions of current Policy charges for Policy Owner
Option 1 and Policy Owner Option 2 and guaranteed Policy charges for a single
gross interest rate. The death benefits and surrender values would change if
the current cost of insurance charges change.
The amounts shown for the death benefit and surrender value as of the end of
each Policy Year take into account an average daily charge equal to an annual
charge of 0.60% of the average daily net assets of the Funds for investment
advisory and administrative services fees. The gross annual investment
return rates of 0%, 6% and 12% on the Fund's assets are equal to net annual
investment return rates (net of the annual charge of 0.60% described above)
of -0.60%, 5.40% and 11.40%, respectively.
The hypothetical returns shown in the tables are without any tax charges that
may be attributable to the Separate Account in the future. In order to
produce after tax returns of 0%, 6%, and 12%, the Separate Account would have
to earn a sufficient amount in excess of 0% or 6% or 12% to cover any tax
charges (see "Deductions and Charges -- Taxes Charged Against the Separate
Account").
The "Premium Paid Plus Interest" column of each table shows the amount which
would accumulate if the initial premium was invested to earn interest, after
taxes of 5% per year, compounded annually.
Royal will furnish upon request, a comparable illustration reflecting the
proposed Insureds age, risk classification, Face Amount or initial premium
requested, and reflecting guaranteed cost of insurance rates. Royal will
also furnish an additional similar illustration reflecting current cost of
insurance rates which may be less than, but never greater than, the
guaranteed cost of insurance rates.
<PAGE>
53
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,897 9,872 44,053 10,816 9,792 44,053
2 11,025 11,843 10,826 44,053 11,669 10,655 44,053
3 11,576 12,872 11,867 44,053 12,596 11,596 44,053
4 12,155 13,995 13,155 44,053 13,605 12,771 44,053
5 12,763 15,218 14,398 44,053 14,704 13,890 44,053
6 13,401 16,551 15,955 44,053 15,900 15,311 44,053
7 14,071 18,003 17,438 44,053 17,204 16,645 44,053
8 14,775 19,586 19,258 44,053 18,625 18,302 44,053
9 15,513 21,311 21,028 44,053 20,176 19,896 44,053
10 16,289 23,191 23,161 44,053 21,870 21,840 44,053
11 17,103 25,442 25,412 44,053 23,917 23,887 44,053
12 17,959 27,915 27,885 44,053 26,182 26,152 44,053
13 18,856 30,641 30,611 44,053 28,695 28,665 44,053
14 19,799 33,663 33,633 46,454 31,490 31,460 44,053
15 20,789 36,997 36,967 49,575 34,598 34,568 46,360
16 21,829 40,670 40,640 52,870 38,030 38,000 49,439
17 22,920 44,704 44,674 57,220 41,801 41,771 53,504
18 24,066 49,134 49,104 61,908 45,941 45,911 57,885
19 25,270 53,999 53,999 66,959 50,488 50,488 62,605
20 26,533 59,377 59,377 72,439 55,516 55,516 67,729
25 33,864 95,181 95,181 110,409 88,983 88,983 103,220
35 55,160 244,173 244,173 258,822 228,122 228,122 241,809
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
54
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,310 9,298 44,053 10,228 9,218 44,053
2 11,025 10,600 9,608 44,053 10,423 9,434 44,053
3 11,576 10,898 9,927 44,053 10,613 9,647 44,053
4 12,155 11,205 10,407 44,053 10,797 10,005 44,053
5 12,763 11,522 10,748 44,053 10,973 10,206 44,053
6 13,401 11,848 11,300 44,053 11,140 10,599 44,053
7 14,071 12,185 11,664 44,053 11,295 10,780 44,053
8 14,775 12,533 12,240 44,053 11,434 11,147 44,053
9 15,513 12,891 12,628 44,053 11,553 11,295 44,053
10 16,289 13,260 13,230 44,053 11,650 11,620 44,053
11 17,103 13,750 13,720 44,053 11,815 11,785 44,053
12 17,959 14,260 14,230 44,053 11,955 11,925 44,053
13 18,856 14,790 14,760 44,053 12,066 12,036 44,053
14 19,799 15,340 15,310 44,053 12,143 12,113 44,053
15 20,789 15,913 15,883 44,053 12,178 12,148 44,053
16 21,829 16,507 16,477 44,053 12,165 12,135 44,053
17 22,920 17,125 17,095 44,053 12,095 12,065 44,053
18 24,066 17,768 17,738 44,053 11,953 11,923 44,053
19 25,270 18,436 18,406 44,053 11,727 11,697 44,053
20 26,533 19,130 19,100 44,053 11,402 11,372 44,053
25 33,864 23,031 23,001 44,053 7,575 7,545 44,053
35 55,160 33,502 33,472 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
55
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,724 8,745 44,053 9,641 8,671 44,053
2 11,025 9,425 8,500 44,053 9,247 8,338 44,053
3 11,576 9,136 8,261 44,053 8,846 7,998 44,053
4 12,155 8,854 8,160 44,053 8,437 7,774 44,053
5 12,763 8,580 7,928 44,053 8,019 7,407 44,053
6 13,401 8,313 7,868 44,053 7,588 7,179 44,053
7 14,071 8,054 7,642 44,053 7,143 6,774 44,053
8 14,775 7,802 7,577 44,053 6,680 6,483 44,053
9 15,513 7,557 7,357 44,053 6,193 6,024 44,053
10 16,289 7,319 7,289 44,053 5,681 5,651 44,053
11 17,103 7,145 7,115 44,053 5,181 5,151 44,053
12 17,959 6,974 6,944 44,053 4,641 4,611 44,053
13 18,856 6,806 6,776 44,053 4,059 4,029 44,053
14 19,799 6,641 6,611 44,053 3,428 3,398 44,053
15 20,789 6,480 6,450 44,053 2,739 2,709 44,053
16 21,829 6,322 6,292 44,053 1,985 1,955 44,053
17 22,920 6,168 6,138 44,053 1,155 1,125 44,053
18 24,066 6,016 5,986 44,053 235 205 44,053
19 25,270 5,867 5,837 44,053 -- -- --
20 26,533 5,721 5,691 44,053 -- -- --
25 33,864 5,035 5,005 44,053 -- -- --
35 55,160 3,852 3,822 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
56
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,530 9,750 44,053 10,443 9,663 44,053
2 11,025 11,517 10,737 44,053 11,333 10,553 44,053
3 11,576 12,599 11,819 44,053 12,307 11,527 44,053
4 12,155 13,787 13,157 44,053 13,373 12,743 44,053
5 12,763 15,089 14,459 44,053 14,543 13,913 44,053
6 13,401 16,517 16,087 44,053 15,827 15,397 44,053
7 14,071 18,084 17,654 44,053 17,235 16,805 44,053
8 14,775 19,803 19,573 44,053 18,783 18,553 44,053
9 15,513 21,688 21,458 44,053 20,485 20,255 44,053
10 16,289 23,756 23,726 44,053 22,358 22,328 44,053
11 17,103 26,063 26,033 44,053 24,462 24,432 44,053
12 17,959 28,598 28,568 44,053 26,792 26,762 44,053
13 18,856 31,400 31,370 44,588 29,377 29,347 44,053
14 19,799 34,504 34,474 47,614 32,255 32,225 44,511
15 20,789 37,922 37,892 50,814 35,446 35,416 47,497
16 21,829 41,687 41,657 54,193 38,963 38,933 50,652
17 22,920 45,823 45,793 58,653 42,827 42,797 54,818
18 24,066 50,365 50,365 63,460 47,070 47,040 59,307
19 25,270 55,386 55,386 68,679 51,729 51,729 64,144
20 26,533 60,902 60,902 74,300 56,881 56,881 69,394
25 33,864 97,625 97,625 113,245 91,170 91,170 105,757
35 55,160 250,445 250,445 265,471 233,729 233,729 247,753
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
57
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,963 9,185 44,053 9,876 9,105 44,053
2 11,025 10,308 9,528 44,053 10,122 9,342 44,053
3 11,576 10,666 9,886 44,053 10,367 9,587 44,053
4 12,155 11,038 10,408 44,053 10,610 9,980 44,053
5 12,763 11,424 10,794 44,053 10,849 10,219 44,053
6 13,401 11,824 11,394 44,053 11,084 10,654 44,053
7 14,071 12,240 11,810 44,053 11,310 10,880 44,053
8 14,775 12,671 12,441 44,053 11,526 11,296 44,053
9 15,513 13,118 12,888 44,053 11,727 11,497 44,053
10 16,289 13,583 13,553 44,053 11,911 11,881 44,053
11 17,103 14,086 14,056 44,053 12,091 12,061 44,053
12 17,959 14,609 14,579 44,053 12,246 12,216 44,053
13 18,856 15,152 15,122 44,053 12,375 12,345 44,053
14 19,799 15,717 15,687 44,053 12,470 12,440 44,053
15 20,789 16,304 16,274 44,053 12,526 12,496 44,053
16 21,829 16,914 16,884 44,053 12,535 12,505 44,053
17 22,920 17,549 17,519 44,053 12,489 12,459 44,053
18 24,066 18,208 18,178 44,053 12,374 12,344 44,053
19 25,270 18,893 18,863 44,053 12,178 12,148 44,053
20 26,533 19,605 19,575 44,053 11,885 11,855 44,053
25 33,864 23,607 23,577 44,053 8,293 8,263 44,053
35 55,160 34,349 34,319 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
58
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,396 8,661 44,053 9,309 8,581 44,053
2 11,025 9,166 8,449 44,053 8,979 8,275 44,053
3 11,576 8,941 8,241 44,053 8,639 7,961 44,053
4 12,155 8,722 8,168 44,053 8,288 7,761 44,053
5 12,763 8,506 7,966 44,053 7,925 7,419 44,053
6 13,401 8,296 7,934 44,053 7,546 7,214 44,053
7 14,071 8,090 7,736 44,053 7,149 6,833 44,053
8 14,775 7,888 7,700 44,053 6,730 6,565 44,053
9 15,513 7,691 7,507 44,053 6,285 6,129 44,053
10 16,289 7,497 7,467 44,053 5,810 5,780 44,053
11 17,103 7,319 7,289 44,053 5,310 5,280 44,053
12 17,959 7,145 7,115 44,053 4,770 4,740 44,053
13 18,856 6,974 6,944 44,053 4,188 4,158 44,053
14 19,799 6,806 6,776 44,053 3,556 3,526 44,053
15 20,789 6,642 6,612 44,053 2,868 2,838 44,053
16 21,829 6,481 6,451 44,053 2,114 2,084 44,053
17 22,920 6,323 6,293 44,053 1,285 1,255 44,053
18 24,066 6,168 6,138 44,053 366 336 44,053
19 25,270 6,016 5,986 44,053 -- -- --
20 26,533 5,867 5,837 44,053 -- -- --
25 33,864 5,167 5,137 44,053 -- -- --
35 55,160 3,960 3,930 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
59
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,897 9,872 34,014 10,770 9,748 34,014
2 11,025 11,843 10,826 34,014 11,575 10,563 34,014
3 11,576 12,872 11,867 34,014 12,452 11,454 34,014
4 12,155 13,995 13,155 34,014 13,410 12,579 34,014
5 12,763 15,218 14,398 34,014 14,458 13,647 34,014
6 13,401 16,551 15,955 34,014 15,603 15,017 34,014
7 14,071 18,003 17,438 34,014 16,857 16,300 34,014
8 14,775 19,586 19,258 34,014 18,228 17,906 34,014
9 15,513 21,311 21,028 34,014 19,729 19,449 34,014
10 16,289 23,191 23,161 34,014 21,376 21,346 34,014
11 17,103 25,443 25,413 34,014 23,380 23,350 34,014
12 17,959 27,944 27,914 34,014 25,617 25,587 34,014
13 18,856 30,739 30,709 36,272 28,126 28,096 34,014
14 19,799 33,820 33,790 39,569 30,935 30,905 36,194
15 20,789 37,209 37,179 43,162 34,033 34,003 39,478
16 21,829 40,937 40,907 47,077 37,439 37,409 43,055
17 22,920 45,049 45,019 50,905 41,197 41,167 46,552
18 24,066 49,587 49,557 55,042 45,345 45,315 50,332
19 25,270 54,603 54,603 59,517 49,928 49,898 54,421
20 26,533 60,135 60,135 65,546 54,953 54,953 59,899
25 33,864 97,305 97,305 103,143 88,921 88,921 94,256
35 55,160 250,325 250,325 262,841 225,387 225,387 236,656
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
60
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,310 9,298 34,014 10,183 9,174 34,014
2 11,025 10,600 9,608 34,014 10,330 9,343 34,014
3 11,576 10,898 9,927 34,014 10,469 9,506 34,014
4 12,155 11,205 10,407 34,014 10,602 9,813 34,014
5 12,763 11,522 10,748 34,014 10,726 9,962 34,014
6 13,401 11,848 11,300 34,014 10,838 10,299 34,014
7 14,071 12,185 11,664 34,014 10,933 10,421 34,014
8 14,775 12,533 12,240 34,014 11,006 10,721 34,014
9 15,513 12,891 12,628 34,014 11,049 10,792 34,014
10 16,289 13,260 13,230 34,014 11,057 11,027 34,014
11 17,103 13,750 13,720 34,014 11,117 11,087 34,014
12 17,959 14,260 14,230 34,014 11,138 11,108 34,014
13 18,856 14,790 14,760 34,014 11,117 11,087 34,014
14 19,799 15,340 15,310 34,014 11,051 11,021 34,014
15 20,789 15,913 15,883 34,014 10,929 10,899 34,014
16 21,829 16,507 16,477 34,014 10,741 10,711 34,014
17 22,920 17,125 17,095 34,014 10,465 10,435 34,014
18 24,066 17,768 17,738 34,014 10,077 10,047 34,014
19 25,270 18,436 18,406 34,014 9,546 9,516 34,014
20 26,533 19,130 19,100 34,014 8,839 8,809 34,014
25 33,864 23,031 23,001 34,014 937 907 34,014
35 55,160 33,502 33,472 35,177 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
61
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,724 8,745 34,014 9,597 8,631 34,014
2 11,025 9,425 8,500 34,014 9,155 8,255 34,014
3 11,576 9,136 8,261 34,014 8,705 7,870 34,014
4 12,155 8,854 8,160 34,014 8,246 7,598 34,014
5 12,763 8,580 7,928 34,014 7,777 7,183 34,014
6 13,401 8,313 7,868 34,014 7,292 6,898 34,014
7 14,071 8,054 7,642 34,014 6,788 6,436 34,014
8 14,775 7,802 7,577 34,014 6,258 6,071 34,014
9 15,513 7,557 7,357 34,014 5,692 5,534 34,014
10 16,289 7,319 7,289 34,014 5,085 5,055 34,014
11 17,103 7,145 7,115 34,014 4,470 4,440 34,014
12 17,959 6,974 6,944 34,014 3,799 3,769 34,014
13 18,856 6,806 6,776 34,014 3,068 3,038 34,014
14 19,799 6,641 6,611 34,014 2,273 2,243 34,014
15 20,789 6,480 6,450 34,014 1,402 1,372 34,014
16 21,829 6,322 6,292 34,014 440 410 34,014
17 22,920 6,168 6,138 34,014 -- -- --
18 24,066 6,016 5,986 34,014 -- -- --
19 25,270 5,867 5,837 34,014 -- -- --
20 26,533 5,721 5,691 34,014 -- -- --
25 33,864 5,035 5,005 34,014 -- -- --
35 55,160 3,852 3,822 34,014 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
62
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,530 9,750 34,014 10,396 9,616 34,014
2 11,025 11,517 10,737 34,014 11,235 10,455 34,014
3 11,576 12,599 11,819 34,014 12,156 11,376 34,014
4 12,155 13,787 13,157 34,014 13,169 12,539 34,014
5 12,763 15,089 14,459 34,014 14,284 13,654 34,014
6 13,401 16,517 16,087 34,014 15,513 15,083 34,014
7 14,071 18,084 17,654 34,014 16,867 16,437 34,014
8 14,775 19,803 19,573 34,014 18,359 18,129 34,014
9 15,513 21,688 21,458 34,014 20,007 19,777 34,014
10 16,289 23,756 23,726 34,014 21,830 21,800 34,014
11 17,103 26,068 26,038 34,014 23,890 23,860 34,014
12 17,959 28,648 28,618 34,091 26,193 26,163 34,014
13 18,856 31,520 31,490 37,193 28,776 28,746 34,014
14 19,799 34,680 34,650 40,575 31,657 31,627 37,038
15 20,789 38,156 38,126 44,261 34,827 34,797 40,399
16 21,829 41,980 41,950 48,276 38,314 38,284 44,061
17 22,920 46,197 46,167 52,202 42,160 42,130 47,641
18 24,066 50,852 50,852 56,446 46,406 46,376 51,510
19 25,270 56,030 56,030 61,072 51,097 51,097 55,696
20 26,533 61,706 61,706 67,259 56,274 56,274 61,338
25 33,864 99,848 99,848 105,838 91,058 91,058 96,521
35 55,160 256,866 256,866 269,709 230,803 230,803 242,343
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
63
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,963 9,185 34,014 9,830 9,062 34,014
2 11,025 10,308 9,528 34,014 10,026 9,246 34,014
3 11,576 10,666 9,886 34,014 10,218 9,438 34,014
4 12,155 11,038 10,408 34,014 10,408 9,778 34,014
5 12,763 11,424 10,794 34,014 10,592 9,962 34,014
6 13,401 11,824 11,394 34,014 10,768 10,338 34,014
7 14,071 12,240 11,810 34,014 10,932 10,502 34,014
8 14,775 12,671 12,441 34,014 11,078 10,848 34,014
9 15,513 13,118 12,888 34,014 11,200 10,970 34,014
10 16,289 13,583 13,553 34,014 11,291 11,261 34,014
11 17,103 14,086 14,056 34,014 11,366 11,336 34,014
12 17,959 14,609 14,579 34,014 11,403 11,373 34,014
13 18,856 15,152 15,122 34,014 11,401 11,371 34,014
14 19,799 15,717 15,687 34,014 11,355 11,325 34,014
15 20,789 16,304 16,274 34,014 11,256 11,226 34,014
16 21,829 16,914 16,884 34,014 11,092 11,062 34,014
17 22,920 17,549 17,519 34,014 10,844 10,814 34,014
18 24,066 18,208 18,178 34,014 10,487 10,457 34,014
19 25,270 18,893 18,863 34,014 9,993 9,963 34,014
20 26,533 19,605 19,575 34,014 9,326 9,296 34,014
25 33,864 23,607 23,577 34,014 1,772 1,742 34,014
35 55,160 34,349 34,319 36,066 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
64
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,396 8,661 34,014 9,263 8,538 34,014
2 11,025 9,166 8,449 34,014 8,884 8,188 34,014
3 11,576 8,941 8,241 34,014 8,494 7,827 34,014
4 12,155 8,722 8,168 34,014 8,091 7,576 34,014
5 12,763 8,506 7,966 34,014 7,674 7,184 34,014
6 13,401 8,296 7,934 34,014 7,239 6,920 34,014
7 14,071 8,090 7,736 34,014 6,781 6,480 34,014
8 14,775 7,888 7,700 34,014 6,293 6,137 34,014
9 15,513 7,691 7,507 34,014 5,766 5,621 34,014
10 16,289 7,497 7,467 34,014 5,194 5,164 34,014
11 17,103 7,319 7,289 34,014 4,580 4,550 34,014
12 17,959 7,145 7,115 34,014 3,909 3,879 34,014
13 18,856 6,974 6,944 34,014 3,179 3,149 34,014
14 19,799 6,806 6,776 34,014 2,385 2,355 34,014
15 20,789 6,642 6,612 34,014 1,516 1,486 34,014
16 21,829 6,481 6,451 34,014 555 525 34,014
17 22,920 6,323 6,293 34,014 -- -- --
18 24,066 6,168 6,138 34,014 -- -- --
19 25,270 6,016 5,986 34,014 -- -- --
20 26,533 5,867 5,837 34,014 -- -- --
25 33,864 5,167 5,137 34,014 -- -- --
35 55,160 3,960 3,930 34,014 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
65
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,897 9,872 20,001 10,684 9,664 20,001
2 11,025 11,843 10,826 20,001 11,394 10,386 20,001
3 11,576 12,872 11,867 20,001 12,169 11,176 20,001
4 12,155 13,995 13,155 20,001 13,020 12,195 20,001
5 12,763 15,218 14,398 20,001 13,963 13,158 20,001
6 13,401 16,551 15,955 20,001 15,014 14,434 20,001
7 14,071 18,003 17,438 20,343 16,197 15,645 20,001
8 14,775 19,592 19,264 21,747 17,541 17,224 20,001
9 15,513 21,336 21,053 23,256 19,080 18,802 20,796
10 16,289 23,223 23,193 25,313 20,764 20,734 22,632
11 17,103 25,486 25,456 27,525 22,783 22,753 24,605
12 17,959 27,979 27,949 29,937 25,008 24,978 26,758
13 18,856 30,702 30,672 32,850 27,437 27,407 29,357
14 19,799 33,705 33,675 35,727 30,117 30,087 31,923
15 20,789 36,992 36,962 39,211 33,043 33,013 35,026
16 21,829 40,618 40,588 42,649 36,279 36,249 38,093
17 22,920 44,586 44,556 46,815 39,812 39,782 41,802
18 24,066 48,945 48,915 51,392 43,663 43,633 45,846
19 25,270 53,734 53,734 56,420 47,854 47,824 50,247
20 26,533 59,026 59,026 61,977 52,410 52,410 55,030
25 33,864 94,418 94,418 99,138 81,777 81,777 85,866
35 55,160 241,783 241,783 244,201 203,041 203,041 205,071
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
66
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,310 9,298 20,001 10,095 9,088 20,001
2 11,025 10,600 9,608 20,001 10,134 9,151 20,001
3 11,576 10,898 9,927 20,001 10,143 9,185 20,001
4 12,155 11,205 10,407 20,001 10,117 9,335 20,001
5 12,763 11,522 10,748 20,001 10,050 9,294 20,001
6 13,401 11,848 11,300 20,001 9,932 9,406 20,001
7 14,071 12,185 11,664 20,001 9,752 9,259 20,001
8 14,775 12,533 12,240 20,001 9,494 9,226 20,001
9 15,513 12,891 12,628 20,001 9,138 8,902 20,001
10 16,289 13,260 13,230 20,001 8,662 8,632 20,001
11 17,103 13,750 13,720 20,001 8,110 8,080 20,001
12 17,959 14,260 14,230 20,001 7,383 7,353 20,001
13 18,856 14,790 14,760 20,001 6,439 6,409 20,001
14 19,799 15,340 15,310 20,001 5,222 5,192 20,001
15 20,789 15,913 15,883 20,001 3,654 3,624 20,001
16 21,829 16,507 16,477 20,001 1,627 1,597 20,001
17 22,920 17,125 17,095 20,001 -- -- --
18 24,066 17,768 17,738 20,001 -- -- --
19 25,270 18,436 18,406 20,001 -- -- --
20 26,533 19,130 19,100 20,086 -- -- --
25 33,864 23,031 23,001 24,183 -- -- --
35 55,160 33,530 33,500 33,865 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
67
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,724 8,745 20,001 9,505 8,549 20,001
2 11,025 9,425 8,500 20,001 8,946 8,066 20,001
3 11,576 9,136 8,261 20,001 8,345 7,543 20,001
4 12,155 8,854 8,160 20,001 7,694 7,087 20,001
5 12,763 8,580 7,928 20,001 6,985 6,449 20,001
6 13,401 8,313 7,868 20,001 6,204 5,863 20,001
7 14,071 8,054 7,642 20,001 5,332 5,049 20,001
8 14,775 7,802 7,577 20,001 4,347 4,209 20,001
9 15,513 7,557 7,357 20,001 3,222 3,120 20,001
10 16,289 7,319 7,289 20,001 1,925 1,895 20,001
11 17,103 7,145 7,115 20,001 428 398 20,001
12 17,959 6,974 6,944 20,001 -- -- 20,001
13 18,856 6,806 6,776 20,001 -- -- 20,001
14 19,799 6,641 6,611 20,001 -- -- 20,001
15 20,789 6,480 6,450 20,001 -- -- 20,001
16 21,829 6,322 6,292 20,001 -- -- 20,001
17 22,920 6,168 6,138 20,001 -- -- 20,001
18 24,066 6,016 5,986 20,001 -- -- 20,001
19 25,270 5,867 5,837 20,001 -- -- 20,001
20 26,533 5,721 5,691 20,001 -- -- 20,001
25 33,864 5,035 5,005 20,001 -- -- 20,001
35 55,160 3,852 3,822 20,001 -- -- 20,001
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
68
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,530 9,750 20,001 10,302 9,522 20,001
2 11,025 11,517 10,737 20,001 11,035 10,255 20,001
3 11,576 12,599 11,819 20,001 11,841 11,061 20,001
4 12,155 13,787 13,157 20,001 12,732 12,102 20,001
5 12,763 15,089 14,459 20,001 13,724 13,094 20,001
6 13,401 16,517 16,087 20,001 14,840 14,410 20,001
7 14,071 18,084 17,654 20,435 16,104 15,674 20,001
8 14,775 19,809 19,579 21,988 17,551 17,321 20,001
9 15,513 21,714 21,484 23,667 19,216 18,986 20,945
10 16,289 23,789 23,759 25,930 21,049 21,019 22,943
11 17,103 26,108 26,078 28,196 23,097 23,067 24,944
12 17,959 28,662 28,632 30,668 25,353 25,323 27,127
13 18,856 31,452 31,422 33,653 27,816 27,786 29,762
14 19,799 34,530 34,500 36,601 30,534 30,504 32,365
15 20,789 37,898 37,868 40,171 33,501 33,471 35,511
16 21,829 41,614 41,584 43,694 36,782 36,752 38,621
17 22,920 45,680 45,650 47,964 40,364 40,334 42,382
18 24,066 50,147 50,147 52,654 44,269 44,239 46,482
19 25,270 55,086 55,086 57,840 48,519 48,489 50,945
20 26,533 60,513 60,513 63,538 53,139 53,139 55,795
25 33,864 96,795 96,795 101,634 82,914 82,914 87,060
35 55,160 247,871 247,871 250,349 205,864 205,864 207,922
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
69
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,963 9,185 20,001 9,733 8,973 20,001
2 11,025 10,308 9,528 20,001 9,812 9,046 20,001
3 11,576 10,666 9,886 20,001 9,864 9,094 20,001
4 12,155 11,038 10,408 20,001 9,883 9,260 20,001
5 12,763 11,424 10,794 20,001 9,864 9,242 20,001
6 13,401 11,824 11,394 20,001 9,797 9,375 20,001
7 14,071 12,240 11,810 20,001 9,670 9,253 20,001
8 14,775 12,671 12,441 20,001 9,469 9,249 20,001
9 15,513 13,118 12,888 20,001 9,174 8,960 20,001
10 16,289 13,583 13,553 20,001 8,764 8,734 20,001
11 17,103 14,086 14,056 20,001 8,226 8,196 20,001
12 17,959 14,609 14,579 20,001 7,515 7,485 20,001
13 18,856 15,152 15,122 20,001 6,590 6,560 20,001
14 19,799 15,717 15,687 20,001 5,397 5,367 20,001
15 20,789 16,304 16,274 20,001 3,859 3,829 20,001
16 21,829 16,914 16,884 20,001 1,868 1,838 20,001
17 22,920 17,549 17,519 20,001 -- -- --
18 24,066 18,208 18,178 20,001 -- -- --
19 25,270 18,893 18,863 20,001 -- -- --
20 26,533 19,605 19,575 20,584 -- -- --
25 33,864 23,607 23,577 24,787 -- -- --
35 55,160 34,378 34,348 34,721 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
70
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,396 8,661 20,001 9,164 8,447 20,001
2 11,025 9,166 8,449 20,001 8,659 7,980 20,001
3 11,576 8,941 8,241 20,001 8,110 7,471 20,001
4 12,155 8,722 8,168 20,001 7,507 7,027 20,001
5 12,763 8,506 7,966 20,001 6,841 6,401 20,001
6 13,401 8,296 7,934 20,001 6,099 5,825 20,001
7 14,071 8,090 7,736 20,001 5,261 5,021 20,001
8 14,775 7,888 7,700 20,001 4,306 4,190 20,001
9 15,513 7,691 7,507 20,001 3,205 3,111 20,001
10 16,289 7,497 7,467 20,001 1,923 1,893 20,001
11 17,103 7,319 7,289 20,001 427 397 20,001
12 17,959 7,145 7,115 20,001 -- -- --
13 18,856 6,974 6,944 20,001 -- -- --
14 19,799 6,806 6,776 20,001 -- -- --
15 20,789 6,642 6,612 20,001 -- -- --
16 21,829 6,481 6,451 20,001 -- -- --
17 22,920 6,323 6,293 20,001 -- -- --
18 24,066 6,168 6,138 20,001 -- -- --
19 25,270 6,016 5,986 20,001 -- -- --
20 26,533 5,867 5,837 20,001 -- -- --
25 33,864 5,167 5,137 20,001 -- -- --
35 55,160 3,960 3,930 20,001 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
71
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED / 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,965 9,939 45,872 10,965 9,939 45,872
2 11,025 11,985 10,965 45,872 11,985 10,965 45,872
3 11,576 13,095 12,086 45,872 13,095 12,086 45,872
4 12,155 14,304 13,459 45,872 14,304 13,459 45,872
5 12,763 15,620 14,795 45,872 15,620 14,795 45,872
6 13,401 17,053 16,453 45,872 17,053 16,453 45,872
7 14,071 18,612 18,043 45,872 18,612 18,043 45,872
8 14,775 20,309 19,978 45,872 20,309 19,978 45,872
9 15,513 22,155 21,870 45,872 22,155 21,870 45,872
10 16,289 24,164 24,134 45,872 24,164 24,134 45,872
11 17,103 26,566 26,536 45,872 26,566 26,536 45,872
12 17,959 29,211 29,181 45,872 29,211 29,181 45,872
13 18,856 32,130 32,100 45,872 32,130 32,100 45,872
14 19,799 35,362 35,332 45,872 35,362 35,332 45,872
15 20,789 38,952 38,922 45,872 38,952 38,922 45,872
16 21,829 42,939 42,909 49,380 42,939 42,909 49,380
17 22,920 47,337 47,307 53,490 47,337 47,307 53,490
18 24,066 52,186 52,186 57,926 52,186 52,186 57,926
19 25,270 57,570 57,570 62,750 57,570 57,570 62,750
20 26,533 63,480 63,480 69,193 63,480 63,480 69,193
25 33,864 103,143 103,143 109,331 103,143 103,143 109,331
35 55,160 268,360 268,360 281,778 261,693 261,693 274,777
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
72
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED / 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,375 9,361 45,872 10,375 9,361 45,872
2 11,025 10,726 9,731 45,872 10,726 9,731 45,872
3 11,576 11,082 10,108 45,872 11,082 10,108 45,872
4 12,155 11,442 10,640 45,872 11,442 10,640 45,872
5 12,763 11,804 11,027 45,872 11,804 11,027 45,872
6 13,401 12,167 11,615 45,872 12,167 11,615 45,872
7 14,071 12,532 12,008 45,872 12,526 12,002 45,872
8 14,775 12,910 12,615 45,872 12,880 12,585 45,872
9 15,513 13,299 13,036 45,872 13,222 12,959 45,872
10 16,289 13,702 13,672 45,872 13,547 13,517 45,872
11 17,103 14,231 14,201 45,872 13,961 13,931 45,872
12 17,959 14,782 14,752 45,872 14,354 14,324 45,872
13 18,856 15,355 15,325 45,872 14,720 14,690 45,872
14 19,799 15,952 15,922 45,872 15,049 15,019 45,872
15 20,789 16,573 16,543 45,872 15,333 15,303 45,872
16 21,829 17,220 17,190 45,872 15,558 15,528 45,872
17 22,920 17,893 17,863 45,872 15,706 15,676 45,872
18 24,066 18,593 18,563 45,872 15,753 15,723 45,872
19 25,270 19,322 19,292 45,872 15,669 15,639 45,872
20 26,533 20,081 20,051 45,872 15,419 15,389 45,872
25 33,864 24,368 24,338 45,872 9,959 9,929 45,872
35 55,160 36,008 35,978 45,872 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
73
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED / 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,784 8,800 45,872 9,784 8,800 45,872
2 11,025 9,537 8,601 45,872 9,537 8,601 45,872
3 11,576 9,286 8,397 45,872 9,286 8,397 45,872
4 12,155 9,031 8,323 45,872 9,031 8,323 45,872
5 12,763 8,768 8,103 45,872 8,768 8,103 45,872
6 13,401 8,509 8,054 45,872 8,496 8,042 45,872
7 14,071 8,257 7,835 45,872 8,212 7,792 45,872
8 14,775 8,012 7,782 45,872 7,910 7,682 45,872
9 15,513 7,773 7,568 45,872 7,584 7,384 45,872
10 16,289 7,540 7,510 45,872 7,229 7,199 45,872
11 17,103 7,372 7,342 45,872 6,893 6,863 45,872
12 17,959 7,207 7,177 45,872 6,509 6,479 45,872
13 18,856 7,046 7,016 45,872 6,067 6,037 45,872
14 19,799 6,887 6,857 45,872 5,559 5,529 45,872
15 20,789 6,731 6,701 45,872 4,969 4,939 45,872
16 21,829 6,578 6,548 45,872 4,282 4,252 45,872
17 22,920 6,428 6,398 45,872 3,472 3,442 45,872
18 24,066 6,280 6,250 45,872 2,506 2,476 45,872
19 25,270 6,135 6,105 45,872 1,344 1,314 45,872
20 26,533 5,993 5,963 45,872 -- -- --
25 33,864 5,321 5,291 45,872 -- -- --
35 55,160 4,150 4,120 45,872 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
74
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED / 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,595 9,815 45,872 10,595 9,815 45,872
2 11,025 11,654 10,874 45,872 11,654 10,874 45,872
3 11,576 12,816 12,036 45,872 12,816 12,036 45,872
4 12,155 14,089 13,459 45,872 14,089 13,459 45,872
5 12,763 15,485 14,855 45,872 15,485 14,855 45,872
6 13,401 17,015 16,585 45,872 17,015 16,585 45,872
7 14,071 18,692 18,262 45,872 18,692 18,262 45,872
8 14,775 20,530 20,300 45,872 20,530 20,300 45,872
9 15,513 22,545 22,315 45,872 22,545 22,315 45,872
10 16,289 24,755 24,725 45,872 24,755 24,725 45,872
11 17,103 27,223 27,193 45,872 27,223 27,193 45,872
12 17,959 29,942 29,912 45,872 29,942 29,912 45,872
13 18,856 32,945 32,915 45,872 32,945 32,915 45,872
14 19,799 36,273 36,243 45,872 36,273 36,243 45,872
15 20,789 39,971 39,941 46,366 39,971 39,941 46,366
16 21,829 44,066 44,036 50,675 44,066 44,036 50,675
17 22,920 48,580 48,550 54,894 48,580 48,550 54,894
18 24,066 53,557 53,557 59,447 53,557 53,557 59,447
19 25,270 59,082 59,082 64,399 59,082 59,082 64,399
20 26,533 65,148 65,148 71,010 65,148 65,148 71,010
25 33,864 105,853 105,853 112,204 105,853 105,853 112,204
35 55,160 275,411 275,411 289,181 268,568 268,568 281,995
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
75
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED / 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,025 9,245 45,872 10,025 9,245 45,872
2 11,025 10,430 9,650 45,872 10,430 9,650 45,872
3 11,576 10,845 10,065 45,872 10,845 10,065 45,872
4 12,155 11,269 10,639 45,872 11,269 10,639 45,872
5 12,763 11,701 11,071 45,872 11,701 11,071 45,872
6 13,401 12,138 11,708 45,872 12,138 11,708 45,872
7 14,071 12,585 12,155 45,872 12,579 12,149 45,872
8 14,775 13,048 12,818 45,872 13,019 12,789 45,872
9 15,513 13,531 13,301 45,872 13,455 13,225 45,872
10 16,289 14,032 14,002 45,872 13,881 13,851 45,872
11 17,103 14,574 14,544 45,872 14,312 14,282 45,872
12 17,959 15,139 15,109 45,872 14,724 14,694 45,872
13 18,856 15,727 15,697 45,872 15,109 15,079 45,872
14 19,799 16,339 16,309 45,872 15,461 15,431 45,872
15 20,789 16,976 16,946 45,872 15,769 15,739 45,872
16 21,829 17,639 17,609 45,872 16,021 15,991 45,872
17 22,920 18,329 18,299 45,872 16,199 16,169 45,872
18 24,066 19,048 19,018 45,872 16,279 16,249 45,872
19 25,270 19,795 19,765 45,872 16,234 16,204 45,872
20 26,533 20,574 20,544 45,872 16,028 15,998 45,872
25 33,864 24,970 24,940 45,872 10,942 10,912 45,872
35 55,160 36,906 36,876 45,872 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
76
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED / 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,454 8,715 45,872 9,454 8,715 45,872
2 11,025 9,274 8,548 45,872 9,274 8,548 45,872
3 11,576 9,087 8,376 45,872 9,087 8,376 45,872
4 12,155 8,894 8,330 45,872 8,894 8,330 45,872
5 12,763 8,691 8,140 45,872 8,691 8,140 45,872
6 13,401 8,489 8,120 45,872 8,476 8,107 45,872
7 14,071 8,291 7,930 45,872 8,245 7,886 45,872
8 14,775 8,098 7,906 45,872 7,995 7,805 45,872
9 15,513 7,908 7,720 45,872 7,719 7,534 45,872
10 16,289 7,721 7,691 45,872 7,410 7,380 45,872
11 17,103 7,550 7,520 45,872 7,073 7,043 45,872
12 17,959 7,382 7,352 45,872 6,687 6,657 45,872
13 18,856 7,217 7,187 45,872 6,245 6,215 45,872
14 19,799 7,055 7,025 45,872 5,735 5,705 45,872
15 20,789 6,896 6,866 45,872 5,146 5,116 45,872
16 21,829 6,740 6,710 45,872 4,458 4,428 45,872
17 22,920 6,587 6,557 45,872 3,649 3,619 45,872
18 24,066 6,437 6,407 45,872 2,684 2,654 45,872
19 25,270 6,289 6,259 45,872 1,524 1,494 45,872
20 26,533 6,144 6,114 45,872 122 92 45,872
25 33,864 5,459 5,429 45,872 -- -- --
35 55,160 4,264 4,234 45,872 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
77
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED / 65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,959 9,933 28,491 10,959 9,933 28,491
2 11,025 11,958 10,939 28,491 11,958 10,939 28,491
3 11,576 13,032 12,024 28,491 13,032 12,024 28,491
4 12,155 14,190 13,347 28,491 14,187 13,344 28,491
5 12,763 15,454 14,631 28,491 15,431 14,608 28,491
6 13,401 16,833 16,235 28,491 16,774 16,176 28,491
7 14,071 18,339 17,771 28,491 18,227 17,660 28,491
8 14,775 19,982 19,652 28,491 19,804 19,475 28,491
9 15,513 21,775 21,490 28,491 21,525 21,241 28,491
10 16,289 23,732 23,702 28,491 23,417 23,387 28,491
11 17,103 26,092 26,062 28,491 25,726 25,696 28,491
12 17,959 28,737 28,707 30,748 28,328 28,298 30,310
13 18,856 31,641 31,611 33,855 31,190 31,160 33,373
14 19,799 34,839 34,809 36,929 34,343 34,313 36,403
15 20,789 38,344 38,314 40,644 37,796 37,766 40,064
16 21,829 42,208 42,178 44,318 41,605 41,575 43,685
17 22,920 46,437 46,407 48,758 45,773 45,743 48,061
18 24,066 51,058 51,058 53,610 50,328 50,328 52,844
19 25,270 56,172 56,172 58,980 55,329 55,329 58,095
20 26,533 61,798 61,798 64,887 60,777 60,777 63,815
25 33,864 99,595 99,595 104,575 95,804 95,804 100,594
35 55,160 258,688 258,688 261,274 238,971 238,971 241,361
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
78
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED / 65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,368 9,355 28,491 10,368 9,355 28,491
2 11,025 10,699 9,705 28,491 10,699 9,705 28,491
3 11,576 11,017 10,044 28,491 11,017 10,044 28,491
4 12,155 11,345 10,545 28,491 11,319 10,519 28,491
5 12,763 11,684 10,908 28,491 11,599 10,824 28,491
6 13,401 12,034 11,483 28,491 11,851 11,302 28,491
7 14,071 12,395 11,872 28,491 12,066 11,545 28,491
8 14,775 12,768 12,474 28,491 12,233 11,942 28,491
9 15,513 13,153 12,890 28,491 12,339 12,078 28,491
10 16,289 13,551 13,521 28,491 12,365 12,335 28,491
11 17,103 14,074 14,044 28,491 12,397 12,367 28,491
12 17,959 14,618 14,588 28,491 12,319 12,289 28,491
13 18,856 15,185 15,155 28,491 12,106 12,076 28,491
14 19,799 15,774 15,744 28,491 11,728 11,698 28,491
15 20,789 16,388 16,358 28,491 11,145 11,115 28,491
16 21,829 17,027 16,997 28,491 10,299 10,269 28,491
17 22,920 17,693 17,663 28,491 9,109 9,079 28,491
18 24,066 18,385 18,355 28,491 7,460 7,430 28,491
19 25,270 19,106 19,076 28,491 5,195 5,165 28,491
20 26,533 19,856 19,826 28,491 2,092 2,062 28,491
25 33,864 24,093 24,063 28,491 -- -- --
35 55,160 35,596 35,566 35,952 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
79
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED / 65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,778 8,795 28,491 9,778 8,795 28,491
2 11,025 9,510 8,576 28,491 9,510 8,576 28,491
3 11,576 9,231 8,347 28,491 9,220 8,337 28,491
4 12,155 8,960 8,258 28,491 8,904 8,206 28,491
5 12,763 8,696 8,036 28,491 8,554 7,904 28,491
6 13,401 8,439 7,987 28,491 8,163 7,724 28,491
7 14,071 8,189 7,770 28,491 7,717 7,321 28,491
8 14,775 7,945 7,717 28,491 7,203 6,993 28,491
9 15,513 7,708 7,505 28,491 6,601 6,422 28,491
10 16,289 7,477 7,447 28,491 5,887 5,857 28,491
11 17,103 7,310 7,280 28,491 5,078 5,048 28,491
12 17,959 7,147 7,117 28,491 4,094 4,064 28,491
13 18,856 6,986 6,956 28,491 2,896 2,866 28,491
14 19,799 6,828 6,798 28,491 1,438 1,408 28,491
15 20,789 6,673 6,643 28,491 -- -- --
16 21,829 6,521 6,491 28,491 -- -- --
17 22,920 6,372 6,342 28,491 -- -- --
18 24,066 6,226 6,196 28,491 -- -- --
19 25,270 6,082 6,052 28,491 -- -- --
20 26,533 5,941 5,911 28,491 -- -- --
25 33,864 5,273 5,243 28,491 -- -- --
35 55,160 4,110 4,080 28,491 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
80
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED / 65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,589 9,809 28,491 10,589 9,809 28,491
2 11,025 11,627 10,847 28,491 11,627 10,847 28,491
3 11,576 12,750 11,970 28,491 12,750 11,970 28,491
4 12,155 13,973 13,343 28,491 13,968 13,338 28,491
5 12,763 15,317 14,687 28,491 15,289 14,659 28,491
6 13,401 16,793 16,363 28,491 16,726 16,296 28,491
7 14,071 18,414 17,984 28,491 18,294 17,864 28,491
8 14,775 20,195 19,965 28,491 20,010 19,780 28,491
9 15,513 22,151 21,921 28,491 21,899 21,669 28,491
10 16,289 24,301 24,271 28,491 23,995 23,965 28,491
11 17,103 26,735 26,705 28,873 26,385 26,355 28,495
12 17,959 29,450 29,420 31,511 29,063 29,033 31,097
13 18,856 32,427 32,397 34,696 32,000 31,970 34,239
14 19,799 35,706 35,676 37,848 35,236 35,206 37,349
15 20,789 39,298 39,268 41,655 38,780 38,750 41,106
16 21,829 43,259 43,229 45,421 42,688 42,658 44,822
17 22,920 47,594 47,564 49,973 46,966 46,936 49,314
18 24,066 52,331 52,331 54,947 51,640 51,640 54,222
19 25,270 57,573 57,573 60,451 56,772 56,772 59,610
20 26,533 63,339 63,339 66,505 62,362 62,362 65,480
25 33,864 102,079 102,079 107,183 98,303 98,303 103,217
35 55,160 265,140 265,140 267,790 245,203 245,203 247,655
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
81
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED / 65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,018 9,238 28,491 10,018 9,238 28,491
2 11,025 10,402 9,622 28,491 10,402 9,622 28,491
3 11,576 10,780 10,000 28,491 10,779 9,999 28,491
4 12,155 11,173 10,543 28,491 11,143 10,513 28,491
5 12,763 11,581 10,951 28,491 11,490 10,860 28,491
6 13,401 12,006 11,576 28,491 11,814 11,384 28,491
7 14,071 12,447 12,017 28,491 12,108 11,678 28,491
8 14,775 12,905 12,675 28,491 12,359 12,129 28,491
9 15,513 13,382 13,152 28,491 12,555 12,325 28,491
10 16,289 13,877 13,847 28,491 12,680 12,650 28,491
11 17,103 14,413 14,383 28,491 12,737 12,707 28,491
12 17,959 14,972 14,942 28,491 12,688 12,658 28,491
13 18,856 15,553 15,523 28,491 12,509 12,479 28,491
14 19,799 16,158 16,128 28,491 12,173 12,143 28,491
15 20,789 16,787 16,757 28,491 11,641 11,611 28,491
16 21,829 17,442 17,412 28,491 10,856 10,826 28,491
17 22,920 18,125 18,095 28,491 9,743 9,713 28,491
18 24,066 18,835 18,805 28,491 8,193 8,163 28,491
19 25,270 19,574 19,544 28,491 6,054 6,024 28,491
20 26,533 20,343 20,313 28,491 3,115 3,085 28,491
25 33,864 24,688 24,658 28,491 -- -- --
35 55,160 36,485 36,455 36,849 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
82
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED / 65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,448 8,709 28,491 9,448 8,709 28,491
2 11,025 9,246 8,522 28,491 9,246 8,522 28,491
3 11,576 9,033 8,326 28,491 9,020 8,313 28,491
4 12,155 8,825 8,265 28,491 8,764 8,208 28,491
5 12,763 8,620 8,073 28,491 8,472 7,934 28,491
6 13,401 8,420 8,053 28,491 8,135 7,780 28,491
7 14,071 8,223 7,864 28,491 7,742 7,402 28,491
8 14,775 8,031 7,840 28,491 7,276 7,101 28,491
9 15,513 7,842 7,655 28,491 6,719 6,555 28,491
10 16,289 7,657 7,627 28,491 6,047 6,017 28,491
11 17,103 7,487 7,457 28,491 5,241 5,211 28,491
12 17,959 7,320 7,290 28,491 4,261 4,231 28,491
13 18,856 7,157 7,127 28,491 3,068 3,038 28,491
14 19,799 6,996 6,966 28,491 1,617 1,587 28,491
15 20,789 6,838 6,808 28,491 -- -- --
16 21,829 6,683 6,653 28,491 -- -- --
17 22,920 6,531 6,501 28,491 -- -- --
18 24,066 6,381 6,351 28,491 -- -- --
19 25,270 6,235 6,205 28,491 -- -- --
20 26,533 6,091 6,061 28,491 -- -- --
25 33,864 5,410 5,380 28,491 -- -- --
35 55,160 4,224 4,194 28,491 -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
PART II
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 82 pages.
The undertaking to file reports.
The Rule 484 undertaking.
The signatures.
(1) The following exhibits included herewith correspond to those required by
paragraph A of the instructions for exhibits to Form N-8B-2.
(A1) Resolution of Board of Directors of Royal Life Insurance Company of
America ("Royal") authorizing the establishment of the Separate
Account.
(A2) Not applicable.
(A3a) Principal Underwriting Agreement. (1)
(A3b) Forms of Selling Agreements. (1)
(A3c) Not applicable.
(A4) Not applicable.
(A5) Form of Modified Single Premium Variable Life Insurance Policy.
(A6a) Charter of Royal.
(A6b) Bylaws of Royal.
(A7) Not applicable.
(A8) Not applicable.
(A9) Not applicable.
(A10) Form of Application for Modified Single Premium Variable Life
Insurance Policies.
- -------------------------
(1) To be filed by amendment.
<PAGE>
(A11) Memorandum describing transfer and redemption procedures.(1)
(2) Opinion and consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
(3) No financial statement will be omitted from the Prospectus pursuant to
Instruction 1 (b) or (c) of Part I.
(4) Not Applicable.
(5) Opinion and Consent of Michael Winterfield, FSA, MAAA.
(6) Consent of Arthur Andersen LLP, Independent Public Accountants.(1)
(7) Power of Attorney.
(8) Not applicable.
<PAGE>
REPRESENTATION OF REASONABLENESS OF FEES
Royal Life Insurance Company of America ("Royal") hereby represents that the
aggregate fees and charges under the Policy are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks
assumed by Royal.
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file
with the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
UNDERTAKINGS AND REPRESENTATIONS AS REQUIRED BY RULE 6e-3(T)
1. Separate Account Two meets the definition of "Separate Account" under
Rule 6e-3(T).
2. Royal undertakes to keep and make available to the Commission upon
request any documents used to support any representation as to the
reasonableness of fees.
UNDERTAKING ON INDEMNIFICATION
Under Section 33-772 of the Connecticut General Statutes, unless limited by
its certificate of incorporation, the Registrant must indemnify a director
who was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in connection with
the proceeding.
The Registrant may indemnify an individual made a party to a proceeding
because he is or was a director against liability incurred in the proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Registrant, and, with respect to any
criminal proceeding, had no reason to believe his conduct was unlawful. Conn.
Gen. Stat. 33-771(a). Additionally, pursuant to Conn. Gen. Stat. 33-776, the
Registrant may indemnify officers and employees or agents for liability
incurred and for any expenses to which they become subject by reason of being
or having been an employee or officer of the Registrant. Connecticut law
does not prescribe standards for the indemnification of officers, employees
and agents and expressly states that their indemnification may be broader
than the right of indemnification granted to directors.
The foregoing statements are specifically made subject to the detailed
provisions of Section 33-770 et seq.
Notwithstanding the fact that Connecticut law obligates the Registrant to
indemnify only a director that was successful on the merits in a suit, the
Registrant's bylaws, provide under Article X:
"The Company shall indemnify to the full extent authorized or
permitted by law any
<PAGE>
person made, or threatened to be made a party to an action, suit or
proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that he, his testator or
intestate is or was a Director, Officer or employee of the company
or serves or served any other enterprise at the request of the
corporation. The foregoing right of indemnification shall not be
deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any By-Laws, agreement, vote
of Shareholders or disinterested Directors or otherwise, and shall
continue as to a person who has ceased to be a Director, Officer,
employee or agent shall inure to the benefit or the heirs,
executors and administrators of such a person."
Additionally, the directors and officers of Royal and Hartford Securities
Distribution Company, Inc. ("HSD") are covered under a directors and officers
liability insurance policy issued to The Hartford Financial Services Group,
Inc. and its subsidiaries. Such policy will reimburse the Registrant for any
payments that it shall make to directors and officers pursuant to law and
will, subject to certain exclusions contained in the policy, further pay any
other costs, charges and expenses and settlements and judgments arising from
any proceeding involving any director or officer of the Registrant in his
past or present capacity as such, and for which he may be liable, except as
to any liabilities arising from acts that are deemed to be uninsurable.
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 foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
INFORMATION REGARDING CERTAIN SALES LOADS, ADMINISTRATIVE,
MANAGEMENT AND OTHER FEES
Not applicable.
<PAGE>
OFFICERS AND DIRECTORS
The principal underwriter for Royal Life Insurance Company of America Separate
Account Two is Hartford Securities Distribution Company, Inc. The following is
a list of Officers and Directors:
Name and Principal Positions and Offices
Business Address With Underwriter
Lowndes A. Smith President and Chief Executive Officer, Director
John P. Ginnetti Executive Vice President, Director
Thomas M. Marra Executive Vice President, Director
Peter W. Cummins Senior Vice President
Lynda Godkin Senior Vice President, General Counsel and
Corporate Secretary
Donald E. Waggaman, Jr. Treasurer
George R. Jay Controller
Unless otherwise indicated, the principal business address of each the
above individuals is P.O. Box 2999, Hartford, Connecticut 06104-2999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it meets all of the requirements for effectiveness of this
Registration Statement under the Securities Act of 1933 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and attested, all in the Town of Simsbury, and
State of Connecticut, on the 6th day of October, 1998.
ROYAL LIFE INSURANCE COMPANY OF AMERICA--
SEPARATE ACCOUNT TWO
(Registrant)
*By: /s/ Lynda Godkin *By: /s/ Marianne O'Doherty
------------------------- -------------------------
Lynda Godkin, Senior Vice President, Marianne O'Doherty
General Counsel and Corporate Secretary Attorney-in-Fact
ROYAL LIFE INSURANCE COMPANY OF AMERICA
(Depositor)
*By: /s/ Lynda Godkin
-------------------------
Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons and in
the capacity and on the date indicated.
<TABLE>
<S> <C>
Gregory A. Boyko, Senior Vice President,
& Treasurer, Director*
John P. Ginnetti, Director*
Lynda Godkin, Senior Vice President,
General Counsel & Corporate Secretary, Director* *By: /s/ Marianne O'Doherty
Thomas M. Marra, Director* ----------------------
Lowndes A. Smith, President, Director Marianne O'Doherty
Raymond P. Welnicki, Director* Attorney-In-Fact
Lizabeth H. Zlatkus, Senior Vice President,
Director* Dated: October 6, 1998
</TABLE>
<PAGE>
EXHIBIT INDEX
(1)(A1) Resolution of Board of Directors of Royal Life Insurance Company of
America ("Royal") authorizing the establishment of the Separate
Account.
(1)(A5) Form of Modified Single Premium Variable Life Insurance Policy.
(1)(A6a) Charter of Royal.
(1)(A6b) Bylaws of Royal.
(1)(10) Form of Application for Modified Single Premium Variable Life
Insurance Policies.
(2) Opinion and Consent of Lynda Godkin, Senior Vice President, General
Counsel, and Corporate Secretary.
(5) Opinion and Consent of Michael Winterfield, FSA, MAAA.
(7) Power of Attorney.
<PAGE>
ROYAL LIFE INSURANCE COMPANY OF AMERICA
CONSENT OF DIRECTORS
The undersigned, being all of the Directors of Royal Life Insurance Company
of America (the "Company"), hereby consent to and ratify the following
action, such action to have the same force and effect as if taken at a
meeting of the Board of Directors duly called and held for such purpose.
ESTABLISHMENT OF SEPARATE ACCOUNT TWO - VARIABLE LIFE
WHEREAS, Section 38a-433 of Connecticut General Statutes permits a domestic
life insurance company to establish one or more separate accounts; and
WHEREAS, the Company desires to establish a separate account pursuant to the
aforementioned Section 38a-433 in connection with the offer and sale of
certain flexible premium variable life insurance contracts (the "Contracts").
NOW, THEREFORE, BE IT
RESOLVED, that the Company hereby establishes a separate account, to be
initially designated "Separate Account Two - Variable Life" (hereinafter, the
"Separate Account"), to which the Company will allocate such amounts as may
be required in connection with the Contracts in accordance with Section
38a-433 and such other law and regulations as may be applicable; and be it
further
RESOLVED, that consistent with the provisions of Section 38a-433, the income,
gains and losses, realized or unrealized, from assets allocated to the
Separate Account shall be credited to or charged against the Separate
Account, without regard to income, gains or losses of the Company; and be it
further
RESOLVED, that each Contract issued by the Company shall provide, in effect,
that the portion of the assets of the Separate Account equal to the reserves
and other Contract liabilities with respect to such account shall not be
chargeable with liabilities arising out of any other business the Company may
conduct; and be it further
RESOLVED, that the appropriate officers of the Company, and each of them,
with full power to act without the others, be and hereby are severally
authorized and directed to take all actions that, in their sole discretion,
may be necessary or desirable from time to time (i) to establish and
designate one or more investment divisions of the Separate Account, (ii) to
redesignate or eliminate any such investment division, (iii) to change or
modify the designation of the Separate Account to any other desirable and
appropriate designation, (iv) to establish, amend, modify or change in
accordance with applicable law and regulation the terms and conditions
pursuant to which interests in the Separate Account will be sold to contract
owners, (v) to establish, amend, modify or change such procedures, standards
and other arrangements as may be necessary or appropriate for the operation
of the Separate Account, and (vi) with advice of counsel, to comply with the
requirements of such laws and regulations as may be applicable to the
establishment and operation of the Separate Account; and be it further
RESOLVED, that the appropriate officers of the Company, and each of them,
with full power to act without the others, be and hereby are severally
authorized and directed to execute and deliver such papers, documents and
instruments and to take such further action as they may deem necessary or
desirable to carry out the purposes and intent of the foregoing resolutions.
<PAGE>
/s/ Gregory Boyko /s/ John P. Ginnetti
- ------------------------- -------------------------
Gregory A. Boyko John P. Ginnetti
/s/ Lynda Godkin /s/ Thomas M. Marra
- ------------------------- -------------------------
Lynda Godkin Thomas M. Marra
/s/ Lowndes A. Smith /s/ Raymond P. Welnicki
- ------------------------- -------------------------
Lowndes A. Smith Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus
- -------------------------
Lizabeth H. Zlatkus
Dated as of: September 1, 1998
<PAGE>
ROYAL LIFE INSURANCE COMPANY
HARTFORD, CONNECTICUT 06104-2999
(a stock insurance company, herein called the "Company")
Will pay the Death Proceeds to the Beneficiary upon receipt of due proof of
the Insured's death while this policy was in force.
Signed for the Company
/s/ Lynda Godkin /s/ Lowndes A. Smith
Lynda Godkin, SECRETARY Lowndes A. Smith, PRESIDENT
READ YOUR POLICY CAREFULLY
This is a legal contract between You and Us.
RIGHT TO EXAMINE POLICY
We want You to be satisfied with the policy You have purchased. We urge You
to examine it closely. If, for any reason, You are not satisfied, You may
deliver or mail the policy to Us or to the agent from whom it was purchased
anytime during Your free look period. Your free look period begins on the
day You receive Your policy and ends on the latest of: (a) ten days after You
receive it, (b) 45 days after You sign the application, and (c) ten days
after We mail You the Notice of Withdrawal Right. In such event, the policy
will be rescinded and We will pay an amount equal to the greater of the
premiums paid for the policy, less any indebtedness, or the sum of (i) the
Account Value, less any indebtedness, on the date the returned policy is
received by Us or the agent from whom it was purchased and, (ii) any
deductions under the policy or by the Funds for taxes, charges, or fees.
CASH SURRENDER VALUE PAYABLE ON MATURITY DATE
DEATH PROCEEDS PAYABLE AT DEATH
NON-PARTICIPATING
THE DEATH PROCEEDS AND CASH VALUES PROVIDED BY THIS CONTRACT ARE BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT. THEY ARE VARIABLE AND NOT
GUARANTEED AS TO A FIXED DOLLAR AMOUNT. SEE PAGE 6 FOR A DESCRIPTION OF THE
DEATH BENEFIT.
MODIFIED SINGLE PREMIUM VARIABLE
LIFE INSURANCE POLICY
VL-ROYAL SAMPLE PRINTED IN U.S.A.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Policy Specifications 3
Definitions 5
Death Benefit 6
Premiums 7
Valuation Provisions 8
Account Value, Cash Value, and Cash Surrender Value 9
Monthly Deduction Amount 10
Annual Maintenance Fee 11
Transfers 11
Termination and Maturity Date 12
Reinstatement 13
Full Surrender 13
Partial Surrenders, Annual Withdrawal Amount, and Surrender Charges 13
Policy Loans 14
Payments by Us 15
Taxation 15
The Contract 16
Ownership and Beneficiary 17
Exchange Option 18
Income Settlement Options 18
</TABLE>
VL-ROYAL SAMPLE Page 2 PRINTED IN U.S.A.
<PAGE>
POLICY SPECIFICATIONS
<TABLE>
<S> <C> <C> <C>
DATE OF ISSUE: [ JULY 25, 1997 ] INSURED: [ JOHN DOE ]
POLICY DATE: [ MAY 15, 1997 ] ISSUE AGE / SEX: [ 35 MALE ]
SCHEDULED
MATURITY DATE: [ MAY 15, 2062 ] INSURANCE CLASS: [ PREFERRED ]
POLICY NUMBER: [ SPVL12345 ] INITIAL FACE AMOUNT: [ $100,000 ]
OWNER: [ JOHN DOE ] INITIAL PREMIUM: [ $14,500 ]
BENEFICIARY: [ MARY DOE ] INITIAL GUIDELINE PREMIUM PERCENTAGE: [ 100% ]
</TABLE>
SEPARATE ACCOUNT: ROYAL LIFE INSURANCE COMPANY
SEPARATE ACCOUNT TWO
<TABLE>
<CAPTION>
SUBACCOUNT FUND
- ---------- ----
<S> <C>
[ADVISERS FUND HARTFORD ADVISERS FUND, INC.
BOND FUND HARTFORD BOND FUND, INC.
CAPITAL APPRECIATION FUND HARTFORD CAPITAL APPRECIATION FUND, INC.
DIVIDEND AND GROWTH FUND HARTFORD DIVIDEND AND GROWTH FUND, INC.
INDEX FUND HARTFORD INDEX FUND, INC.
INTERNATIONAL ADVISERS FUND HARTFORD INTERNATIONAL ADVISERS FUND, INC.
INTERNATIONAL OPPORTUNITIES FUND HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
MIDCAP FUND HARTFORD MIDCAP FUND, INC.
MONEY MARKET FUND HVA MONEY MARKET FUND, INC.
MORTGAGE SECURITIES FUND HARTFORD MORTGAGE SECURITIES FUND, INC.
SMALL COMPANY FUND HARTFORD SMALL COMPANY FUND, INC.
STOCK FUND HARTFORD STOCK FUND, INC.]
</TABLE>
OR OTHER FUNDS AS MAY BE MADE AVAILABLE FROM TIME TO TIME.
INITIAL ALLOCATION OF NET PREMIUMS: MONEY MARKET SUBACCOUNT 100%
VL-ROYAL SAMPLE Page 3 PRINTED IN U.S.A.
<PAGE>
POLICY SPECIFICATIONS
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
AND MONTHLY MAXIMUM COST OF INSURANCE RATES PER $1,000
<TABLE>
<CAPTION>
MINIMUM MAXIMUM MINIMUM MAXIMUM MINIMUM MAXIMUM
DEATH COST OF DEATH COST OF DEATH COST OF
ATT BENEFIT INSURANCE ATT BENEFIT INSURANCE ATT BENEFIT INSURANCE
AGE PERCENT RATE AGE PERCENT RATE AGE PERCENT RATE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
35 250.00 0.1442 57 142.00 0.9133 79 106.00 6.0592
36 250.00 0.1817 58 138.00 0.9625 80 105.00 6.6650
37 250.00 0.1983 59 134.00 1.0150 81 105.00 7.3525
38 250.00 0.2175 60 130.00 1.0775 82 105.00 8.1342
39 250.00 0.2383 61 128.00 1.1558 83 105.00 9.0367
40 250.00 0.2633 62 126.00 1.2567 84 105.00 10.0150
41 243.00 0.2900 63 124.00 1.3792 85 105.00 11.0542
42 236.00 0.3167 64 122.00 1.5158 86 105.00 12.1458
43 229.00 0.3433 65 120.00 1.6600 87 105.00 13.2792
44 222.00 0.3700 66 119.00 1.8067 88 105.00 14.4600
45 215.00 0.3983 67 118.00 1.9483 89 105.00 15.6875
46 209.00 0.4275 68 117.00 2.0917 90 105.00 17.0483
47 203.00 0.4575 69 116.00 2.2475 91 104.00 18.5133
48 197.00 0.4900 70 115.00 2.4317 92 103.00 20.1383
49 191.00 0.5258 71 113.00 2.6650 93 103.00 22.0467
50 185.00 0.5642 72 111.00 2.9508 94 103.00 24.6025
51 178.00 0.6050 73 109.00 3.2908 95 102.00 28.4183
52 171.00 0.6517 74 109.00 3.6783 96 102.00 34.4900
53 164.00 0.7033 75 108.00 4.1017 97 101.00 44.7700
54 157.00 0.7558 76 107.00 4.5517 98 101.00 61.9967
55 150.00 0.8100 77 107.00 5.0217 99 101.00 83.3333
56 146.00 0.8633 78 106.00 5.5183
</TABLE>
THE MINIMUM BENEFIT PERCENTAGES ARE DETERMINED TO COMPLY WITH SECTION 7702 OF
THE INTERNAL REVENUE CODE.
THE MAXIMUM COST OF INSURANCE RATES DO NOT EXCEED 100% OF THE COST OF INSURANCE
RATES BASED ON THE 1980 COMMISSIONERS STANDARD ORDINARY SMOKER OR NONSMOKER
MORTALITY TABLE, AGE LAST BIRTHDAY.
POLICY LOAN INTEREST RATE: 6.00%
VL-ROYAL SAMPLE Page 4 PRINTED IN U.S.A.
<PAGE>
POLICY SPECIFICATIONS
POLICY CHARGES
DEDUCTIONS FROM PREMIUM PAYMENTS
--------------------------------
TYPE OF CHARGE PERCENT OF PREMIUMS PAID
FEDERAL TAX 0.00%
PREMIUM TAX 0.00%
DEDUCTIONS FROM ACCOUNT VALUE
------------------------------
TYPE OF CHARGE POLICY YEARS CHARGE (IN DOLLARS)
OR PERCENT OF VALUE
ANNUAL MAINTENANCE FEE ALL $30 (1)
FEDERAL TAX ANNUAL RATE 1-10 0.15% (2)
PREMIUM TAX ANNUAL RATE 1-10 0.25% (2)
ADMINISTRATION ANNUAL RATE ALL [0.25%] (2)
MORTALITY AND EXPENSE 1-10 0.90% (2)
RISK ANNUAL RATE 11+ 0.50% (2)
(1) THE ANNUAL CONTRACT MAINTENANCE FEE IS A SINGLE CHARGE ON A CONTRACT. IT
IS DEDUCTED PROPORTIONALLY FROM THE INVESTMENT OPTIONS IN USE AT THE
TIME OF THE CHARGE. IT IS APPLIED ONLY IN CASES WHERE THE ACCOUNT VALUE
FOR THE ENTIRE CONTRACT IS LESS THAN $50,000.
(2) CHARGES DEDUCTED MONTHLY BASED ON ACCOUNT VALUE.
UNAMORTIZED TAX CHARGE UPON SURRENDER
AS A PERCENTAGE OF THE AMOUNT SURRENDERED
-----------------------------------------
POLICY YEAR RATE POLICY YEAR RATE
1 2.25% 6 1.00%
2 2.00% 7 0.75%
3 1.75% 8 0.50%
4 1.50% 9 0.25%
5 1.25% 10+ 0.00%
VL-ROYAL SAMPLE Page 4A PRINTED IN U.S.A.
<PAGE>
POLICY SPECIFICATIONS
POLICY CHARGES
(ALTERNATE SPEC PAGE - SEE PAGE 11 - TAX EXPENSE CHARGES)
DEDUCTIONS FROM PREMIUM PAYMENTS
--------------------------------
TYPE OF CHARGE PERCENT OF PREMIUMS PAID
FEDERAL TAX 1.5%
PREMIUM TAX 2.5%
DEDUCTIONS FROM ACCOUNT VALUE
------------------------------
TYPE OF CHARGE POLICY YEARS CHARGE (IN DOLLARS)
OR PERCENT OF VALUE
ANNUAL MAINTENANCE FEE ALL $30 (1)
FEDERAL TAX ANNUAL RATE 1-10 0.00% (2)
PREMIUM TAX ANNUAL RATE 1-10 0.00% (2)
ADMINISTRATION ANNUAL RATE ALL [0.25%] (2)
MORTALITY AND EXPENSE 1-10 0.65% (2)
RISK ANNUAL RATE 11+ 0.50% (2)
(1) THE ANNUAL CONTRACT MAINTENANCE FEE IS A SINGLE CHARGE ON A CONTRACT. IT
IS DEDUCTED PROPORTIONALLY FROM THE INVESTMENT OPTIONS IN USE AT THE TIME
OF THE CHARGE. IT IS APPLIED ONLY IN CASES WHERE THE ACCOUNT VALUE FOR
THE ENTIRE CONTRACT IS LESS THAN $50,000.
(2) CHARGES DEDUCTED MONTHLY BASED ON ACCOUNT VALUE.
UNAMORTIZED TAX CHARGE UPON SURRENDER
AS A PERCENTAGE OF THE AMOUNT SURRENDERED
-----------------------------------------
POLICY YEAR RATE POLICY YEAR RATE
1 0.00% 6 0.00%
2 0.00% 7 0.00%
3 0.00% 8 0.00%
4 0.00% 9 0.00%
5 0.00% 10+ 0.00%
VL-ROYAL SAMPLE Page 4A PRINTED IN U.S.A.
<PAGE>
POLICY SPECIFICATIONS
SURRENDER CHARGES
POLICY YEAR RATE POLICY YEAR RATE
1 7.5% 6 4.0%
2 7.5% 7 4.0%
3 7.5% 8 2.0%
4 6.0% 9 2.0%
5 6.0% 10+ 0.0%
SURRENDER CHARGE RATE APPLIED AS A PERCENTAGE OF THE LESSER PREMIUM PAYMENTS
OR THE AMOUNT SURRENDERED.
ANNUAL WITHDRAWAL AMOUNT: THE GREATER OF:
(A) 10% OF PREMIUM PAYMENTS PER CONTRACT YEAR ON
A NON-CUMULATIVE BASIS; OR
(B) THE EXCESS OF THE ACCOUNT VALUE OVER PREMIUM
PAID.
VL-ROYAL SAMPLE Page 4B PRINTED IN U.S.A.
<PAGE>
DEFINITIONS
The definitions in this section apply to the following words and phrases
whenever and wherever they appear in this policy.
ACCOUNT: any of the Sub-Accounts.
ACCOUNT VALUE: the value of the Sub-Accounts and the Loan Account.
ACCUMULATION UNIT: an accounting unit used to calculate the value of a
Sub-Account.
ANNUITY UNIT: An accounting unit of measure used to calculate the amount of
annuity payments under the variable annuity option.
ATTAINED AGE: the Issue Age plus the number of fully completed Policy Years.
CASH SURRENDER VALUE: the Cash Value less all Indebtedness.
CASH VALUE: the Account Value less any applicable Surrender Charges and tax
charges due upon surrender.
COMPANY, WE, US, OUR: the Company referred to on the first page of this
policy.
DATE OF ISSUE: the date shown on Page 3 from which Suicide and
Incontestability provisions are measured.
DEATH PROCEEDS: the amount which We will pay upon the death of the Insured.
FACE AMOUNT: on the Policy Date, the Face Amount equals the Initial Face
Amount. Thereafter it may change in accordance with the terms of the Partial
Withdrawal provision.
FUNDS: the registered open end management investment companies in which the
assets of the Separate Account may be invested.
INDEBTEDNESS: All monies owed to the Company from the Owner. This includes
all outstanding loans on this policy, including any interest due or accrued,
and due and unpaid monthly deduction amount and annual maintenance fee,
arising during a Grace Period.
INITIAL FACE AMOUNT: the amount shown on Page 3.
INSURED: the person whose life is insured under this policy as shown on Page
3.
IN WRITING: in a written form satisfactory to Us.
ISSUE AGE: as of the Policy Date, the Insured's age on his/her last birthday.
LOAN ACCOUNT: an Account established for any amounts transferred from the
Sub-Accounts as a result of loans. The Account is credited with interest and
is not based on the experience of any Separate Account.
VL-ROYAL SAMPLE Page 5 PRINTED IN U.S.A.
<PAGE>
DEFINITIONS (CONTINUED)
MONTHLY ACTIVITY DATE: the Policy Date and the same date in each succeeding
month as the Policy Date except that whenever the Monthly Activity Date falls
on a date other than a Valuation Day, the Monthly Activity Date will be
deemed the next Valuation Day.
NET PREMIUM: the premium payments less the applicable charges shown on Page
4A.
OWNER: the Owner of the policy as shown on Page 3.
POLICY ANNIVERSARY: an anniversary of the Policy Date. Similarly, Policy
Years are measured from the Policy Date.
POLICY DATE: the date shown on Page 3 from which Policy Anniversaries and
Policy Years are determined.
POLICY LOAN RATE: the interest rate charged on policy loans.
PREMIUM TAX: the average amount of tax charged by a state or municipal
entity on premium payments.
PRO-RATA BASIS: an allocation method based on the proportion of the Account
Value in each Sub-Account.
SCHEDULED MATURITY DATE: the date, shown on Page 3, on which the policy will
mature.
SEPARATE ACCOUNT: an Account established by Us to separate the assets
funding the variable benefits for the class of contracts to which this policy
belongs from the other assets of the Company. The assets in the Separate
Account are not chargeable with liabilities arising out of any other business
that We may conduct. The Separate Account and the Funds which are the
underlying securities of the Separate Account are listed on Page 3.
SUB-ACCOUNTS: the subdivisions of the Separate Account. These are shown on
Page 3.
VALUATION DAY: the date on which a Sub-Account is valued. This occurs every
day We are open and the New York Stock Exchange is open for trading.
VALUATION PERIOD: the period of time between the close of business on
successive Valuation Days.
YOU, YOUR: the Owner of the policy.
DEATH BENEFIT
GENERAL
On any day the Death Benefit is the greater of:
(a) the Face Amount on date of Insured's death; and
(b) the Minimum Death Benefit described on the following page.
VL-ROYAL SAMPLE Page 6 PRINTED IN U.S.A.
<PAGE>
DEATH BENEFIT (CONTINUED)
MINIMUM DEATH BENEFIT
To ensure that the policy continues to qualify as life insurance under the
Internal Revenue Code, We will automatically increase the Death Benefit so
that it will never be less than the appropriate Attained Age percentage of
the Account Value. The Minimum Death Benefit is the Account Value on the
date of death multiplied by the applicable percent shown in the table of
Minimum Death Benefit Percentages on Page 4.
DEATH PROCEEDS
The Death Proceeds are the amount which We will pay on the death of the
Insured. This equals the Death Benefit less any Indebtedness.
PREMIUMS
GENERAL
All premiums are payable either:
(a) to Us at the address shown on the premium notice; or
(b) to Our authorized agent in exchange for a receipt signed by Our President
or Secretary and countersigned by such agent.
Checks should be made payable to the Company.
INITIAL PREMIUM PAYMENTS
You will have the option of setting Your Initial Premium Guideline Percentage
at 80%, 90%, or 100% of the Guideline Premium Limitation established by
Federal tax law. The Initial Premium is due on the Policy Date. No
insurance is effective until the Initial Premium is paid. The Initial
Premium and the Initial Premium Guideline Percentage You chose are shown on
Page 3.
SUBSEQUENT PREMIUM PAYMENTS
Subject to a $50 minimum, We will accept additional premiums at any time.
The actual amount and frequency of any payments made will affect the Cash
Value and the amount and duration of insurance provided by this policy. Any
Subsequent Premium Payment that results in an increase in the Death Benefit
will be accepted only after We approve evidence of insurability.
VL-ROYAL SAMPLE Page 7 PRINTED IN U.S.A.
<PAGE>
PREMIUMS (CONTINUED)
PREMIUM ALLOCATION
The Initial Net Premium will be allocated to the Money Market Sub-Account on
the date We receive the premium, or the Policy Date if it occurs after the
date We receive the premium.
The Accumulated Value in this Money Market Sub-Account will then be allocated
to the Sub-Accounts, in whole percentages according to the premium allocation
specified in the application, on the latest of:
(a) 45 days after the application is signed;
(b) 10 days after We receive the premium;
(c) 10 days after We mail You the Notice of Withdrawal Right; or
(d) the date We receive the final requirement to put the policy in force.
Any additional Premiums, less any applicable charges, received by Us prior to
such date will be allocated to the Money Market Sub-Account.
Upon written request, You may change the premium allocation. Subsequent Net
Premiums will be allocated to the Sub-Accounts according to Your most recent
instructions.
GRACE PERIOD
This policy will terminate 61 days after a Monthly Activity Date on which the
Cash Surrender Value is less than zero. The 61-day period is the Grace
Period. If sufficient premium is not paid by the end of the Grace Period, the
policy will terminate without value. The Company will mail the Owner and any
assignee written notice of the amount of premium that will be required to
continue this policy in force at least 61 days before the end of the Grace
Period. The premium required will be no greater than the amount required to
pay three Monthly Deduction Amounts as of the day the Grace Period began. If
that premium is not paid by the end of the Grace Period, this policy will
terminate.
PREMIUM LIMITATION
If premiums are received which would cause the policy to fail to meet the
definition of a life insurance contract in accordance with the Internal
Revenue Code, We will refund the excess premium payments. We will refund
such premium payments and interest thereon within 60 days after the end of a
Policy Year.
VALUATION PROVISIONS
SUB-ACCOUNT ACCUMULATION UNITS
Amounts allocated to Sub-Accounts are applied to provide Accumulation Units
in each Sub-Account. The number of Accumulation Units credited to each
Sub-Account is determined by dividing the amount allocated to a Sub-Account
by the dollar value of one Accumulation Unit for such Sub-Account. The
number of Your Accumulation Units will not be affected by any subsequent
change in the value of the units. The Accumulation Unit Values in each
Sub-Account may increase or decrease daily as described on the following page.
VL-ROYAL SAMPLE Page 8 PRINTED IN U.S.A.
<PAGE>
VALUATION PROVISIONS (CONTINUED)
SUB-ACCOUNT ACCUMULATION UNIT VALUE
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by a Net Investment Factor for
that Sub-Account for the Valuation Period then ended. The Net Investment
Factor for each of the Sub-Accounts is equal to the net asset value per share
of the corresponding Fund at the end of the Valuation Period (plus the per
share amount of any dividend or capital gain distributions paid by that Fund
in the Valuation Period then ended) divided by the net asset value per share
of the corresponding Fund at the beginning of the Valuation Period.
EMERGENCY PROCEDURE
If a national stock exchange is closed (except for holidays or weekends) or
trading is restricted due to an existing emergency as defined by the
Securities and Exchange Commission so that We cannot value the Sub-Accounts,
We may postpone all procedures which require valuation of the Sub-Accounts
until valuation is possible. Any provision of this policy which specifies a
Valuation Day will be superseded by the emergency procedure.
ACCOUNT VALUE, CASH VALUE, AND
CASH SURRENDER VALUE
GENERAL
Your Account Value on the Policy Date equals the Initial Net Premium less the
Monthly Deduction Amount for the first policy month as described on Page 4A.
On each subsequent Monthly Activity Date, Your Account Value equals:
(a) the sum of Your Accumulated Values in the Sub-Accounts; plus
(b) the value of Your Loan Account, if any; minus,
(c) the appropriate Monthly Deduction Amount; minus
(d) the Annual Maintenance Fee, if any.
On each Valuation Day (other than a Monthly Activity Date), Your Account Value
equals:
(a) the sum of Your Accumulated Values in the Sub-Accounts; plus
(b) the value of Your Loan Account, if any.
ACCUMULATED VALUE - SUB-ACCOUNTS
Your Accumulated Value in any Sub-Account equals:
(a) the number of Your Accumulation Units in that Sub-Account on the
Valuation Day; multiplied by
(b) that Sub-Account's Accumulation Unit Value on the Valuation Day.
VL-ROYAL SAMPLE Page 9 PRINTED IN U.S.A.
<PAGE>
ACCOUNT VALUE, CASH VALUE, AND
CASH SURRENDER VALUE (CONTINUED)
CASH VALUE AND SURRENDER CHARGES
A Surrender Charge and a charge for unpaid tax charges, if applicable, will
be subtracted from the Account Value to determine the Cash Value. These
charges and the Policy Years during which they will be applied are shown on
Page 4A.
CASH SURRENDER VALUE
Your Cash Surrender Value is equal to Your Cash Value minus the Indebtedness,
if any. Indebtedness includes all outstanding loans, including any interest
due or accrued, Monthly Deduction Amount, and Annual Maintenance Fee, arising
during a Grace Period.
MONTHLY DEDUCTION AMOUNT
GENERAL
The Monthly Deduction Amount equals:
(a) the Cost of Insurance Charge; plus
(b) the Administrative Charge; plus
(c) the Mortality and Expense Risk Charge; plus
(d) the tax charges, if applicable.
The Monthly Deduction Amount will be taken on a Pro-Rata Basis from the
Sub-Accounts on each Monthly Activity Date.
COST OF INSURANCE CHARGE
The Maximum Cost of Insurance charge for any Monthly Activity Date is equal to:
(a) the Maximum Cost of Insurance rate per $1,000 shown on Page 4; multiplied
by
(b) the coverage amount; divided by
(c) $1,000.
On any Monthly Activity Date the coverage amount equals the Death Benefit less
the Account Value on that date prior to assessing the Monthly Deduction Amount.
We can use Cost of Insurance Charges that are lower than the Maximum Cost of
Insurance Rates shown on Page 4. Charges will be determined based on Our
expectation as to future experience. Any change We make will be on a uniform
basis for Insureds for the same Issue Age, sex, premium band, and insurance
class and whose coverage has been in force for the same length of time. No
change in insurance class or cost will occur on account of deterioration of
the Insured's health.
ADMINISTRATIVE CHARGE
The Administrative Charge for any Monthly Activity Date is equal to:
(a) the Administration Annual Rate divided by 12; multiplied by
(b) the sum of Your Accumulated Values in the Sub-Accounts on the Monthly
Activity Date, prior to assessing the Monthly Deduction Amount.
The Administration Annual Rate is that shown on Page 4A.
VL-ROYAL SAMPLE Page 10 PRINTED IN U.S.A.
<PAGE>
MONTHLY DEDUCTION AMOUNT (CONTINUED)
MORTALITY AND EXPENSE RISK CHARGE
The Mortality and Expense Risk Charge for any Monthly Activity Date is equal to:
(a) the Mortality and Expense Risk Annual Rate divided by 12; multiplied by
(b) the sum of Your Accumulated Values in the Sub-Accounts on the Monthly
Activity Date, prior to assessing the Monthly Deduction Amount.
The Mortality and Expense Risk Annual Rate is that shown on Page 4A.
TAX EXPENSE CHARGES
At the time that You applied for this policy, You elected to pay the Federal
and Premium Tax Charges either as a one time payment or amortized over ten
years.
If you elected to make a one time payment, the charges will be deducted from
Your premium payment(s) upon receipt by Us. The charges, which are a
percentage of Your premium payment(s), appear on Page 4A under Deductions
From Premium Payments.
If You elected to pay amortized charges, those charges will be deducted from
Your Account Value. The charges, which are a percentage of Your Account
Value, appear on Page 4A under Deductions From Account Value. Deductions
will be made on each Monthly Activity Date occurring during the first ten
years of the Policy and are equal to:
(a) the Federal and PremiumTax Rates divided by 12; multiplied by
(b) the Account Value on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount.
If you surrender this policy in full within nine years of the Policy Date, any
Premium Tax due and unpaid will be deducted from Your Cash Value at surrender.
ANNUAL MAINTENANCE FEE
An Annual Maintenance Fee shown on Page 4A will be taken on a Pro-Rata Basis
from the Sub-Accounts if applicable on each Policy Anniversary.
TRANSFERS
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as this policy is in effect, You may transfer
amounts among the Sub-Accounts. However, We reserve the right to limit the
number of transfers to no more frequently than 12 per Policy Year with no two
transfers being made on consecutive valuations days. Subject to the
following paragraph, any such limitations will apply to all Owners.
VL-ROYAL SAMPLE Page 11 PRINTED IN U.S.A.
<PAGE>
TRANSFERS (CONTINUED)
The right to reallocate Account Values between the Accounts is subject to
modification if the Company determines, in its sole opinion, that the
exercise of that right by one or more Owners is, or would be, to the
disadvantage of other Owners. Any modification could be applied to transfers
to or from some or all of the Sub-Accounts and could include, but not be
limited to, the requirement of a minimum time period between each transfer,
not accepting transfer requests of an agent acting under a power of attorney
on behalf of more than one Owner, or limiting the dollar amount that may be
transferred between the Sub-Accounts by a Owner at any one time. Such
restrictions may be applied in any manner reasonably designed to prevent any
use of the transfer right which is considered by the Company to be to the
disadvantage of other Owners.
TRANSFERS TO OR FROM SUB-ACCOUNTS
In the event of a transfer from a Sub-Account, the number of Accumulation
Units credited to the Sub-Account from which the transfer is made will be
reduced. The reduction will be determined by dividing:
1. the amount transferred; by
2. the Accumulation Unit Value for that Sub-Account as of the next Valuation
Day after We receive Your request for transfer In Writing.
In the event of a transfer to a Sub-Account, We will increase the number of
Accumulation Units credited to that Sub-Account. The increase will equal:
1. the amount transferred; divided by
2. the Accumulation Unit Value for that Sub-Account as of the next Valuation
Day after We receive Your request for transfer In Writing.
TERMINATION AND MATURITY DATE
TERMINATION
The policy will terminate upon the earliest of the following events:
(a) Maturity Date of the policy; or
(b) full surrender of the policy; or
(c) the end of the Grace Period; or
(d) the death of the Insured.
MATURITY DATE
No insurance coverage will be effective on or after the Maturity Date. Any
Cash Surrender Value as of the Maturity Date will be paid to You.
VL-ROYAL SAMPLE Page 12 PRINTED IN U.S.A.
<PAGE>
REINSTATEMENT
Prior to the death of the Insured, and unless this policy has been
surrendered for cash, this policy may be reinstated prior to the Maturity
Date provided:
(a) You make Your request within five years;
(b) satisfactory evidence of insurability is submitted;
(c) any policy loan is repaid or reinstated; and
(d) sufficient premium must be paid to:
(i) cover all Monthly Deduction Amounts and Annual Maintenance Fee that
are due and unpaid during the Grace Period, and
(ii) keep the policy in force for three months after the date of
reinstatement.
The Face Amount of the reinstated policy cannot exceed the Face Amount at the
time of lapse. The Account Value on the reinstatement date will equal:
(a) the Cash Value at the time of termination; plus
(b) Net Premiums attributable to premiums paid at the time of reinstatement;
minus
(c) the Monthly Deduction Amounts that were due and unpaid during the Grace
Period; plus
(d) the Surrender Charge at the time of reinstatement.
The Surrender Charges will be based on the number of policy years from the
original Policy Date.
Upon reinstatement, any Indebtedness at the time of termination must be repaid
or carried over to the reinstated policy.
FULL SURRENDER
You may terminate this policy at any time before the Maturity Date by
submitting a request to Us In Writing. We will pay You the Cash Surrender
Value at the time of surrender, which includes any applicable tax charges not
previously deducted, and Our liability under this policy will cease.
The amount You will receive will be the Account Value less:
(a) any Indebtedness;
(b) any applicable due and unpaid tax charges as specified on Page 4A; and
(c) any applicable Surrender Charge as specified on Page 4A.
PARTIAL SURRENDERS, ANNUAL WITHDRAWAL AMOUNT,
AND SURRENDER CHARGES
PARTIAL SURRENDERS
You may request, In Writing, a partial surrender of Cash Surrender Values at
any time before the Maturity Date provided the Cash Surrender Value remaining
after the surrender is at least equal to Our minimum premium amount rules
then in effect. If the remaining Cash Surrender Value following such
surrender is less than Our minimum premium amount rules, We will terminate
the policy and pay the Cash Surrender Value. Unless specified otherwise, the
partial surrender amount will be deducted on a Pro-Rata Basis from the
Sub-Accounts. The Face Amount of the policy will be reduced proportional to
the reduction in Account Value due to the partial surrender. For Federal Tax
purposes, any surrenders will be deemed to be first from earnings, to the
extent that they exist, and then from the premium payments.
VL-ROYAL SAMPLE Page 13 PRINTED IN U.S.A.
<PAGE>
PARTIAL SURRENDERS, ANNUAL WITHDRAWAL AMOUNT,
AND SURRENDER CHARGES (CONTINUED)
ANNUAL WITHDRAWAL AMOUNT
Surrender Charges applicable to this policy are described on Page 4A.
However, on a noncumulative basis, You may make partial surrenders during any
Policy Year up to the Annual Withdrawal Amount shown on Page 4B. Surrender
Charges will not be assessed against such amounts. Surrender of the Account
Values in excess of the above and additional surrenders made in any Policy
Year will be subject to the Surrender Charge, as described on Page 4A, if
applicable.
SURRENDER CHARGES
Subject to the Annual Withdrawal Amount, surrenders of Account Values
attributable to premium payments may be subject to a Surrender Charge
("charge"), and the due and unpaid tax charges.
For Surrender Charge purposes, during the first ten policy years, all
surrenders will be first from premium payments and then from earnings. If an
amount equal to all premium payments has been surrendered, a charge will not
be assessed against the surrender of the remaining Account Value.
After the ninth Policy Year, all surrenders will be free of Surrender Charges
and due and unpaid tax charges. Only the Annual Maintenance Fee will be
charged.
No Surrender Charges will be assessed in the event the policy terminates due
to the death of the Insured, or upon the exercise of the Annual Withdrawal
Amount.
POLICY LOANS
GENERAL
At any time while this policy is in force, You may borrow against this policy
by assigning it to Us as sole security.
LOAN AMOUNTS
Any new loan taken may not exceed 90% of the Cash Value less 100% of existing
loans, if any, on the date We grant a loan. Loan amounts will be subject to
a minimum of $25.00. Before advancing the loan amount, We may withhold an
amount sufficient to pay interest on total loans to the end of the Policy
Year and any Monthly Deduction Amounts due on or before the next Policy
Anniversary. All loan amounts will be transferred from the Sub-Accounts to
the Loan Account. Unless You specify otherwise, the amounts will be
transferred on a Pro-Rata Basis.
If total loans equals or exceeds the Cash Value, this policy will terminate
61 days after We have mailed notice to Your last known address and that of
any assignee of record. If sufficient loan repayment is not made by the end
of this Grace Period, the policy will end without value.
CREDITED INTEREST
Except for Preferred Loans described below, the Loan Account will be credited
with interest at a rate equal to the Policy Loan Rate applicable to that
Indebtedness, minus 2%.
VL-ROYAL SAMPLE Page 14 PRINTED IN U.S.A.
<PAGE>
POLICY LOANS (CONTINUED)
PREFERRED LOAN
If the Cash Value exceeds the total of all premiums paid since issue, a
Preferred Loan is available. The amount available for a Preferred Loan is
the amount by which the Cash Value exceeds total premiums paid. The amount
of the Loan Account which equals a Preferred Loan will be credited with
interest at a rate equal to the Policy Loan Rate. The amount of loans that
qualifies as a Preferred Loan is determined on each Monthly Activity Date.
LOAN REPAYMENTS
All or part of a loan may be repaid at any time that:
(a) the policy is in force; and
(b) the Insured is alive.
However, each payment must be at least $50 or 100% of the outstanding loan
balance.
The amount of a loan repayment will be deducted from the Loan Account and will
be allocated among the Sub-Accounts in the same percentage as premiums are
allocated.
LOAN INTEREST
Loan interest will accrue daily by a rate not to exceed the Policy Loan
Interest Rate shown on Page 4. The difference between the value of the Loan
Account and the Indebtedness will be transferred on a Pro-Rata Basis from the
Sub-Accounts to the Loan Account on each Monthly Activity Date.
PAYMENTS BY US
GENERAL
We will pay Death Proceeds, Cash Surrender Values, partial surrenders, and
loan amounts attributable to the Sub-Accounts within seven days after We
receive all the information needed to process the payment unless:
(a) the New York Stock Exchange is closed on other than customary weekend and
holiday closings or trading on the New York Stock Exchange is restricted
as determined by the Securities and Exchange Commission (SEC); or
(b) an emergency exists, as determined by the SEC, as a result of which
disposal of securities is not reasonably practicable to determine the
value of the Sub-Accounts; or
(c) the SEC, by order, permits postponement for the protection of policy
Owners.
TAXATION
We do not expect to incur any federal, state, or local income tax on the
earnings or realized capital gains attributable to the Separate Account.
Based upon these expectations, no charge is currently being made to the
Separate Account for federal, state, or local income taxes. If We incur
income taxes attributable to the Separate Account or determine that such
taxes will be incurred, We may assess a charge for taxes against the policy
in the future.
VL-ROYAL SAMPLE Page 15 PRINTED IN U.S.A.
<PAGE>
THE CONTRACT
ENTIRE CONTRACT
The entire contract consists of this policy and the application, a copy of
which is attached. The contract is made in consideration of the application
and the payment of the Initial Premium. We will not use any statement to
cancel this policy or to defend a claim under it, unless that statement is
contained in an attached written application. All statements in the
application will, in the absence of fraud, be deemed representations and not
warranties.
MODIFICATION
The only way this contract may be modified is by a written agreement signed
by Our President, or one of Our Vice Presidents, Secretaries, or Assistant
Secretaries.
NON-PARTICIPATION
This policy is non-participating. It does not share in Our surplus earnings,
so You will receive no dividends under it.
MISSTATEMENT OF AGE AND/OR SEX
On the date of death of the Insured, the Death Benefit will be reduced or
increased by the difference between the Death Benefit at the misstated age
and/or sex of the Insured and the Death Benefit that would have been provided
by the last Cost of Insurance Charge at the correct age and/or sex of the
Insured, if:
(a) the age of the Insured is misstated; or
(b) the sex of an Insured is misstated.
SUICIDE
If, within two years from the Date of Issue, the Insured dies by suicide,
while sane or insane, Our liability will be limited to the premiums paid less
Indebtedness and less any partial surrenders.
If, within two years from the effective date of any increase the Face Amount
for which evidence of insurability was obtained, the Insured dies by suicide,
while sane or insane, Our liability with respect to the increase in the Face
Amount will be limited to the additional premium paid which increased the
Face Amount.
INCONTESTABILITY
We cannot contest this policy after it has been in force, during the
Insured's lifetime, for two years from its Date of Issue.
Any increase in the Face Amount for which evidence of insurability was
obtained, will be incontestable only after the increase has been in force,
during the Insured's lifetime, for two years from the effective date of the
increase.
SEPARATE ACCOUNTS
We will have exclusive and absolute ownership and control of the assets of
Our Separate Accounts. The assets of a Fund will be available to cover the
liabilities of Our general Account only to the extent that those assets
exceed the liabilities of that Separate Account arising under the variable
life insurance contracts supported by that Separate Account. The assets of a
Fund will be valued at least as often as any contract benefits vary, but at
least monthly. Our determination of the value of an Accumulation Unit by the
method described in this policy will be conclusive. The investment policy of
the Separate Account will not be changed without the approval of the
Insurance Commissioner of the state where this policy is issued for delivery.
VL-ROYAL SAMPLE Page 16 PRINTED IN U.S.A.
<PAGE>
THE CONTRACT (CONTINUED)
REPORTS TO THE OWNER
We will send You a report at least once each Policy Year showing:
(a) the current Account Value, Cash Value, and Face Amount;
(b) the premiums paid, Monthly Deduction Amounts, and loans since the last
report;
(c) the amount of any Indebtedness;
(d) notifications required by the provisions of this policy; and
(e) any other information required by the Insurance Department of the state
where this policy was delivered.
We will send You any shareholder reports of the Funds and any other notices,
reports, or documents required by law.
OWNERSHIP AND BENEFICIARY
CHANGE OF OWNER OR BENEFICIARY
The Owner and Beneficiary will be those named in the application until You
change them. To change the Owner or Beneficiary, notify Us In Writing while
the Insured is alive. After We receive written notice, the change will be
effective as of the date You signed such notice, whether or not the Insured
is living when We receive it. However, the change will be subject to any
payment We made or actions We may have taken before We received the request.
ASSIGNMENT
You may assign this policy. Until You notify Us In Writing, no assignment
will be effective against Us. We are not responsible for the validity of any
assignment.
VOTING RIGHTS
The Company shall notify the Owner of any Fund shareholders meeting at which
the shares held for the Owner's Account may be voted and shall also send
proxy materials and a form of instruction by means of which the Owner can
instruct the Company with respect to the voting of the shares held for the
Owner's Account. In connection with the voting of Fund shares held by it, the
Company shall arrange for the handling and tallying of proxies received from
Owners. The Company will vote the Fund shares held by it in accordance with
the instructions received from the Owners having the right to give voting
instructions. If an Owner desires to attend any meeting which shares held
for the Owner's benefit may be voted, the Owner may request the Company to
furnish a proxy or otherwise arrange for the exercise of voting rights with
respect to the Fund shares held for such Owner's Account.
In the event that the Owner gives no instructions or leaves the manner of
voting discretionary, the Company will vote such shares of the appropriate
Fund in the same proportion as shares of that Fund for which instructions
have been received. Also, the Company will vote the Fund shares in this
proportionate manner which are held by the Company for its own Account.
SUBSTITUTION
The Company reserves the right to substitute the shares of another registered
investment company for the shares of any Fund already purchased or to be
purchased in the future by the Separate Account provided that the
substitution has been approved by the Securities and Exchange Commission.
VL-ROYAL SAMPLE Page 17 PRINTED IN U.S.A.
<PAGE>
OWNERSHIP AND BENEFICIARY (CONTINUED)
CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT
At the Company's election and subject to any necessary vote by persons having
the right to give instructions with respect to the voting of the Fund shares
held by the Sub-Accounts, the Variable Account may be operated as a
management company under the Investment Company Act of 1940 or it may be
deregistered under the Investment Company Act of 1940 in the event
registration is no longer required. Deregistration of the Variable Account
requires an order by the Securities and Exchange Commission.
OWNER'S RIGHTS
While the Insured is alive and no Beneficiary is irrevocably named, You may:
(a) exercise all the rights and options that this policy provides or that We
permit;
(b) assign this policy; and
(c) agree with Us to any change to this policy.
NO NAMED BENEFICIARY
If no named Beneficiary survives the Insured, then, unless this policy
provides otherwise:
(a) You will be the Beneficiary; or
(b) if You are the Insured, Your estate will be the Beneficiary.
EXCHANGE OPTION
If this policy is in effect, You may exchange it any time during the 24 months
following its Date of Issue for a permanent life insurance contract offered by
Us on the life of the Insured without evidence of insurability.
The new policy will be issued by Us:
1. with an amount at risk which equals or is less than the amount at risk in
effect on the Exchange Date;
2. with premiums based on the same risk classification as this policy.
This exchange is subject to adjustments in payments and Account Values to
reflect variances, if any, in the payments and Account Values under this policy
and the new policy.
INCOME SETTLEMENT OPTIONS
GENERAL
The Cash Surrender Value or the Death Proceeds may be paid in a lump sum or
may be applied to one of the following payment options. The minimum amount
that may be placed under a payment option is $5,000, unless We consent to a
lesser amount. Under Options 2, 3, and 4, no surrender or partial
withdrawals are permitted after payments commence. Full surrenders or
partial withdrawals may be made from Options 1 or 6. Only a full surrender
is allowed from Option 5.
VL-ROYAL SAMPLE Page 18 PRINTED IN U.S.A.
<PAGE>
INCOME SETTLEMENT OPTIONS (CONTINUED)
We will pay interest of at least 3 1/2% per year on the Death Proceeds from
the date of the Insured's death to the date payment is made or an Income
Settlement Option is elected. At such time the proceeds are not subject to
the investment experience of a Separate Account.
If any payee is a corporation, partnership, association, assignee, or
fiduciary, an option may be chosen only with Our consent.
The following options are available:
OPTION 1: INTEREST INCOME
This option offers payments of interest, at the rates We declare, on the
amount applied under this option. The interest rate will never be less than
3 1/2% per year.
OPTION 2: LIFE ANNUITY
A life annuity is an annuity payable during the lifetime of the payee and
terminating with the last payment preceding the death of the payee. This
option offers the largest payment amount of any of the life annuity options
since there is no guarantee of a minimum number of payments nor a provision
for a Death Benefit payable to a Beneficiary.
It would be possible under this option for a payee to receive only one
annuity payment if he died prior to the due date of the second annuity
payment, two if he or she died before the date of the third annuity payment,
etc.
OPTION 3: LIFE ANNUITY WITH 120, 180, OR 240 MONTHLY PAYMENTS CERTAIN
This annuity option is an annuity payable monthly during the lifetime of the
payee with the provision that payments will be made for a minimum of 120,
180, or 240 months, as elected. If, at the death of the payee, payments have
been made for less than the minimum elected number of months, then the
present value as of the date of the payee's death, of any remaining
guaranteed payments will be paid in one sum to the Beneficiaries designated
unless other provisions have been made and approved by Us.
OPTION 4: JOINT AND LAST SURVIVOR ANNUITY
An annuity payable monthly during the joint lifetime of the payee and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered by Us, the payee may elect that the
payment to the survivor be less than the payment made during the joint
lifetime of the payee and a designated second person.
It would be possible under this option for a payee and designated second
person to receive only one payment in the event of the common or simultaneous
death of the parties prior to the due date for the second payment and so on.
OPTION 5: PAYMENTS FOR A DESIGNATED PERIOD
An amount payable monthly for the number of years selected which may be from 5
to 30 years. Under this option, You may, at any time, request a full surrender
and receive, within seven days, the Cash Surrender Value.
VL-ROYAL SAMPLE Page 19 PRINTED IN U.S.A.
<PAGE>
INCOME SETTLEMENT OPTIONS (CONTINUED)
In the event of the payee's death prior to the end of the designated period,
the present value as of the date of the payee's death, of any remaining
guaranteed payments will be paid in one sum to the Beneficiary or
Beneficiaries designated unless other provisions have been made and approved
by Us.
Option 5 is an option that does not involve life contingencies.
OPTION 6: DEATH PROCEEDS REMAINING WITH THE COMPANY
Proceeds from the Death Benefit may be left with the Company. These proceeds
will remain in the Sub-Accounts to which they were allocated at the time of
death unless the Beneficiary elects to reallocate them. Full or partial
withdrawals may be made at any time.
ALLOCATION OF ANNUITY
If an annuity option is effected, unless otherwise specified, the Cash
Surrender Value or Death Proceeds held in the Sub-Accounts will be applied to
provide a variable annuity based on the Pro-Rata amount in the various
Sub-Accounts. Fixed annuity options are also available.
VARIABLE ANNUITY AND FIXED DOLLAR ANNUITY
VARIABLE ANNUITY - A variable annuity is an annuity with payments increasing
or decreasing in amount in accordance with the net investment results of the
Sub-Accounts. After the first monthly payment for a variable annuity has
been determined by using the appropriate Variable Payment Annuity Tables, a
number of Sub-Account Annuity Units is determined by dividing that first
monthly payment by the appropriate Sub-Account Annuity Unit value on the
effective date of the annuity payments. The Annuity Unit value for each
Sub-Account will depend on the investment experience of the applicable Funds.
Once variable annuity payments have begun, the number of Annuity Units
remains fixed with respect to a particular Sub-Account. If the Owner elects
that continuing annuity payments be based on a different Sub-Account, the
number will change effective with that election but will remain fixed in
number following such election.
The dollar amount of the second and subsequent variable annuity payments is
not predetermined and may increase or decrease from month to month. The
actual amount of each variable annuity payment after the first is determined
by multiplying the number of Sub-Account Annuity Units by the Sub-Account
Annuity Unit value. The Sub-Account Annuity Unit value will be determined no
earlier than the fifth Valuation Day preceding the date the annuity payment
is due.
FIXED DOLLAR ANNUITY - A fixed dollar annuity is an annuity with payments
which remain fixed as to dollar amount throughout the payment period. Fixed
annuity payments are determined by multiplying the amount applied to the
annuity by a rate to be determined by Us which is not less than the rate
specified in the Fixed Payment Annuity Tables. The annuity payment will
remain level for the duration of the annuity.
DESCRIPTION OF TABLES
The attached tables show the minimum dollar amount of the first monthly
payments for each $1,000 applied under the options. Under Option 2 and 3,
the amount of each payment will depend upon the age and sex of the payee at
the time the first payment is due. Under Option 4, the amount of each
payment will depend upon the sex of both payees and their ages at the time
the first payment is due.
VL-ROYAL SAMPLE Page 20 PRINTED IN U.S.A.
<PAGE>
INCOME SETTLEMENT OPTIONS (CONTINUED)
The variable payment annuity tables for Options 2, 3, and 4 are based on the
1983a Individual Annuity Mortality Table projected to the year 2000 using
Projection Scale G and an interest rate of 5% per year. The table for Option
5 is based on an interest rate of 5% per year.
The fixed annuity payment tables for Options 2, 3, and 4 are based on the
1983a Individual Annuity Mortality Table projected to the year 2000 using
Projection Scale G and an interest rate of 3% per year. The table for Option
5 is based on an interest rate of 3% per year.
The annuity tables for the Second through Fourth Options are age dependent.
If the first annuity payment is made before the year 2000, the amount of that
payment will be based on the Annuitant's then attained age (i.e., age as of
last birthday). For annuity payments beginning in the year 2000 or later,
the amount of the first payment will be based on an age a specified number of
years younger than the Annuitant's then attained age. The age setback is as
follows:
DATE OF FIRST PAYMENT AGE SETBACK
2000 - 2009 1 year
2010 - 2019 3 years
2010 - 2029 4 years
2030 - 2039 5 years
2040 or later 6 years
VL-ROYAL SAMPLE Page 21 PRINTED IN U.S.A.
<PAGE>
VARIABLE PAYMENT ANNUITY TABLES
AMOUNT OF FIRST MONTHLY PAYMENT
FOR EACH $1,000 APPLIED TO
VARIABLE PAYMENT ANNUITIES
Second and subsequent annuity payments, when based on the investment experience
of a Separate Account, are variable and are not guaranteed as to fixed dollar
amount.
SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
MALE PAYEE FEMALE PAYEE
MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS GUARANTEED
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AGE NONE 120 180 240 NONE 120 180 240
- -----------------------------------------------------------------------------------------------------------------------------------
35 $4.68 $4.67 $4.66 $4.64 $4.52 $4.52 $4.51 $4.50
40 4.86 4.85 4.82 4.79 4.65 4.65 4.64 4.62
45 5.10 5.07 5.03 4.97 4.83 4.82 4.80 4.77
50 5.41 5.35 5.28 5.20 5.06 5.04 5.01 4.97
51 5.48 5.41 5.34 5.24 5.12 5.09 5.06 5.01
52 5.55 5.48 5.40 5.30 5.17 5.14 5.11 5.05
53 5.63 5.55 5.46 5.35 5.23 5.20 5.16 5.10
54 5.71 5.63 5.53 5.40 5.30 5.26 5.22 5.15
55 5.80 5.70 5.60 5.45 5.37 5.33 5.28 5.20
56 5.89 5.79 5.67 5.51 5.44 5.40 5.34 5.26
57 5.99 5.88 5.74 5.57 5.52 5.47 5.40 5.31
58 6.10 5.97 5.82 5.62 5.60 5.54 5.47 5.37
59 6.21 6.07 5.90 5.68 5.69 5.62 5.54 5.43
60 6.33 6.17 5.98 5.74 5.79 5.71 5.62 5.49
61 6.46 6.28 6.07 5.80 5.89 5.80 5.70 5.55
62 6.60 6.40 6.16 5.86 6.00 5.90 5.78 5.61
63 6.75 6.52 6.25 5.91 6.11 6.00 5.86 5.67
64 6.91 6.64 6.34 5.97 6.23 6.11 5.95 5.74
65 7.09 6.78 6.43 6.02 6.37 6.22 6.04 5.80
66 7.27 6.91 6.52 6.08 6.51 6.34 6.14 5.87
67 7.47 7.06 6.62 6.12 6.66 6.47 6.24 5.93
68 7.68 7.21 6.71 6.17 6.82 6.60 6.34 5.99
69 7.91 7.36 6.81 6.22 7.00 6.74 6.44 6.05
70 8.15 7.52 6.90 6.26 7.19 6.89 6.54 6.11
75 9.65 8.35 7.30 6.41 8.41 7.74 7.06 6.34
80 11.78 9.16 7.59 6.48 10.24 8.70 7.46 6.46
85 14.73 9.80 7.74 6.51 13.00 9.55 7.69 6.50
90 18.62 10.21 7.80 6.51 17.00 10.10 7.79 6.51
</TABLE>
JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
AGE OF AGE OF FEMALE PAYEE
MALE
PAYEE 35 40 45 50 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $4.38 $4.42 $4.47 $4.52 $4.56 $4.59 $4.62 $4.64 $4.65 $4.66 $4.67 $4.68
40 4.41 4.47 4.54 4.60 4.66 4.71 4.75 4.79 4.81 4.83 4.85 4.85
45 4.43 4.51 4.60 4.68 4.77 4.85 4.91 4.97 5.01 5.05 5.07 5.08
50 4.45 4.55 4.65 4.76 4.88 5.00 5.10 5.19 5.26 5.31 5.35 5.37
55 4.47 4.57 4.70 4.84 4.99 5.15 5.30 5.44 5.56 5.65 5.71 5.75
60 4.49 4.60 4.73 4.90 5.09 5.30 5.52 5.73 5.92 6.07 6.17 6.24
65 4.50 4.61 4.76 4.95 5.17 5.43 5.73 6.04 6.34 6.59 6.79 6.91
70 4.50 4.63 4.78 4.98 5.23 5.54 5.92 6.34 6.79 7.21 7.55 7.80
75 4.51 4.64 4.80 5.01 5.28 5.63 6.07 6.60 7.22 7.87 8.46 8.91
80 4.51 4.64 4.81 5.03 5.31 5.69 6.18 6.81 7.60 8.52 9.45 10.24
85 4.52 4.65 4.82 5.04 5.34 5.73 6.25 6.96 7.89 9.07 10.40 11.67
90 4.52 4.65 4.82 5.05 5.35 5.75 6.30 7.05 8.09 9.49 11.21 13.03
</TABLE>
PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF
NO. OF MONTHLY NO. OF MONTHLY NO. OF MONTHLY NO. OF MONTHLY NO. OF MONTHLY NO. OF MONTHLY
YEARS PAYMENTS YEARS PAYMENTS YEARS PAYMENTS YEARS PAYMENTS YEARS PAYMENTS YEARS PAYMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
a 5 $18.74 10 $10.51 15 $7.82 20 $6.51 25 $5.76 30 $5.28
6 15.99 11 9.77 16 7.49 21 6.33 26 5.65
7 14.02 12 9.16 17 7.20 22 6.17 27 5.54
8 12.56 13 8.64 18 6.94 23 6.02 28 5.45
9 11.42 14 8.20 19 6.71 24 5.88 29 5.36
</TABLE>
The monthly payment for any combination of ages not shown will be quoted upon
request.
VL-ROYAL SAMPLE PRINTED IN U.S.A.
<PAGE>
FIXED PAYMENT ANNUITY TABLES
AMOUNT OF MONTHLY PAYMENTS
FOR EACH $1,000 APPLIED TO
FIXED PAYMENT ANNUITIES
Payments are fixed and are guaranteed as to fixed dollar amount.
SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
MALE PAYEE FEMALE PAYEE
MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS GUARANTEED
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AGE NONE 120 180 240 NONE 120 180 240
- -----------------------------------------------------------------------------------------------------------------------------------
35 $3.41 $3.40 $3.39 $3.38 $3.23 $3.23 $3.22 $3.22
40 3.61 3.60 3.58 3.56 3.39 3.38 3.38 3.37
45 3.87 3.85 3.82 3.77 3.59 3.58 3.57 3.55
50 4.19 4.15 4.10 4.03 3.84 3.83 3.81 3.77
51 4.27 4.22 4.17 4.08 3.90 3.89 3.86 3.82
52 4.34 4.29 4.23 4.14 3.97 3.95 3.92 3.88
53 4.43 4.37 4.30 4.20 4.03 4.01 3.98 3.93
54 4.51 4.45 4.37 4.26 4.10 4.08 4.04 3.99
55 4.60 4.54 4.45 4.32 4.18 4.15 4.11 4.04
56 4.70 4.62 4.53 4.39 4.25 4.22 4.18 4.11
57 4.80 4.72 4.61 4.45 4.34 4.30 4.25 4.17
58 4.91 4.82 4.69 4.51 4.42 4.38 4.32 4.23
59 5.03 4.92 4.78 4.58 4.52 4.47 4.40 4.30
60 5.15 5.03 4.87 4.64 4.61 4.56 4.48 4.37
61 5.28 5.14 4.96 4.71 4.72 4.66 4.57 4.44
62 5.42 5.26 5.06 4.78 4.83 4.76 4.66 4.51
63 5.57 5.39 5.16 4.84 4.95 4.86 4.75 4.58
64 5.74 5.52 5.26 4.90 5.07 4.98 4.85 4.65
65 5.91 5.66 5.36 4.96 5.21 5.10 4.95 4.72
66 6.10 5.81 5.46 5.02 5.35 5.22 5.05 4.79
67 6.29 5.96 5.56 5.08 5.51 5.36 5.16 4.86
68 6.50 6.11 5.66 5.13 5.67 5.50 5.26 4.93
69 6.73 6.28 5.76 5.18 5.85 5.65 5.37 5.00
70 6.97 6.44 5.86 5.23 6.04 5.80 5.49 5.06
75 8.45 7.32 6.31 5.40 7.26 6.69 6.04 5.32
80 10.55 8.17 6.62 5.48 9.07 7.69 6.48 5.45
</TABLE>
JOINT AND LAST SURVIVOR ANNUITY
<TABLE>
<CAPTION>
AGE OF AGE OF FEMALE PAYEE
MALE
PAYEE 35 40 45 50 55 60 65 70 75 80
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35 $3.07 $3.14 $3.20 $3.25 $3.30 $3.33 $3.35 $3.37 $3.39 $3.40
40 3.11 3.20 3.28 3.36 3.42 3.48 3.52 3.55 3.57 3.59
45 3.15 3.25 3.36 3.46 3.56 3.64 3.71 3.76 3.80 3.83
50 3.17 3.29 3.42 3.56 3.69 3.82 3.92 4.01 4.08 4.12
55 3.19 3.32 3.47 3.64 3.81 3.99 4.16 4.29 4.40 4.48
60 3.20 3.34 3.51 3.70 3.92 4.15 4.39 4.61 4.79 4.93
65 3.21 3.36 3.54 3.75 4.00 4.29 4.61 4.94 5.24 5.48
70 3.22 3.37 3.56 3.78 4.06 4.40 4.80 5.25 5.70 6.12
75 3.22 3.38 3.57 3.81 4.11 4.48 4.95 5.51 6.15 6.80
80 3.23 3.38 3.58 3.82 4.14 4.54 5.05 5.71 6.52 7.45
</TABLE>
PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF
NO. OF MONTHLY NO. OF MONTHLY NO. OF MONTHLY NO. OF MONTHLY NO. OF MONTHLY NO. OF MONTHLY
YEARS PAYMENTS YEARS PAYMENTS YEARS PAYMENTS YEARS PAYMENTS YEARS PAYMENTS YEARS PAYMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $17.91 10 $9.61 15 $6.87 20 $5.51 25 $4.71 30 $4.18
6 15.14 11 8.86 16 6.53 21 5.32 26 4.59
7 13.16 12 8.24 17 6.23 22 5.15 27 4.47
8 11.68 13 7.71 18 5.96 23 4.99 28 4.37
9 10.53 14 7.26 19 5.73 24 4.84 29 4.27
</TABLE>
The monthly payment for any combination of ages not shown will be quoted upon
request.
VL-ROYAL SAMPLE PRINTED IN U.S.A.
<PAGE>
ROYAL LIFE INSURANCE COMPANY
HARTFORD, CONNECTICUT 06104-2999
MODIFIED SINGLE PREMIUM VARIABLE
LIFE INSURANCE POLICY
VL-ROYAL SAMPLE PRINTED IN U.S.A.
<PAGE>
ROYAL LIFE INSURANCE COMPANY OF AMERICA
CERTIFICATE AMENDING AND RESTATING
CERTIFICATE OF INCORPORATION
BY ACTION OF THE BOARD OF DIRECTORS AND SOLE SHAREHOLDER
1. The name of the corporation is Royal Life Insurance Company of America.
2. The Certificate of Incorporation is amended and restated by the following
resolution of each of the Board of Directors and the Sole Shareholder of
the corporation:
RESOLVED, that the Certificate of Incorporation is hereby amended and
restated to read as follows:
Section 1. The name of the corporation is Royal Life Insurance
Company of America.
Section 2. The duration of the corporation shall be perpetual.
Section 3. The corporation shall have the purposes and powers to
write any and all forms of insurance which any other corporation
now or hereafter chartered by Connecticut and empowered to do an
insurance business may now or hereafter may lawfully do; to accept
and to cede reinsurance; to issue policies and contracts for any
kind or combinations of kinds of insurance; to issue policies or
contract either with or without participation in profits; to
acquire and hold any or all of the shares or other securities of
any insurance corporation; to and engage in any lawful act or
activity for which corporations may be formed under the Stock
Corporation Act. The corporation is authorized to exercise the
powers herein granted in any state, territory or jurisdiction of
the United States or in any foreign country.
Section 4. The authorized capital stock shall be two million, five
hundred thousand dollars ($2,500,000) divided into twenty-five
thousand (25,000) shares of common capital stock with a par value
of one hundred dollars ($100) each and said corporation is
authorized to increase the same from time to time to any amount or
amounts not exceeding five million dollars (5,000,000). Said
corporation may change the par value and number of shares of its
issued and outstanding capital stock provided the par value shall
not be less than ten dollars ($10) per share and the aggregate par
value shall not be altered by such change. No such change shall be
valid unless approved by a vote of at least two-thirds of the stock
represented at a meeting of the stockholders duly warned and held
for that purpose nor
<PAGE>
unless a majority of the directors shall make, sign and swear to
and file in the office of the secretary of the state a certificate
stating that such change has been duly approved by said
stockholders and setting forth a copy of a vote of the
stockholders, which vote shall show the details of such change.
Section 5. The street address of the corporation's registered
office in the State of Connecticut is 200 Hopmeadow Street,
Simsbury, Connecticut 06089. The corporation's registered agent is
Lynda Godkin. The registered agent's business address is 200
Hopmeadow Street, Simsbury, Connecticut 06089 and her residence
address is 11 Duncaster Wood Road, Granby, Connecticut 06035.
3. The above resolution was consented to by the Board of Directors and the
sole Shareholder of the Corporation. The number of shares of the
Corporation's common capital stock entitled to vote thereon was 25,000
and the vote required for adoption was 16,666 shares. The vote favoring
adoption was 25,000 shares, which is the greatest vote required to pass
the resolution.
Dated at Simsbury, Connecticut this 18th day of September, 1998
We hereby declare, under penalty of false statement, that the statements made in
the foregoing Certificate are true.
ROYAL LIFE INSURANCE COMPANY OF AMERICA
By: /s/ Lynda Godkin
----------------------------------------
Lynda Godkin, Senior Vice President
and Corporate Secretary
<PAGE>
BY-LAWS
ROYAL LIFE INSURANCE COMPANY OF AMERICA
<PAGE>
ARTICLE I
OFFICES
The executive office of the Company shall be maintained at 150 William
Street, New York, New York. The Company may have and maintain such other
offices, both within and without New York, as the Board of Directors may,
from time to time, determine or the business of the Company may require.
ARTICLE II
SHAREHOLDERS
Section 1. Annual Meeting.
The Annual Meeting of the Shareholders shall be held at the executive
office of the Company or at such other places either within or outside the
State of New York as may be designated in the Notice of Meeting, on the third
Wednesday in March in each year at an hour fixed by the Chairman, unless such
day shall be a legal holiday, in which event it shall be held on the next
succeeding day, not a holiday.
Section 2. Special Meeting.
Special Meeting of the Shareholders for the consideration of such
matters as may be named in the call for such meetings shall be held at such
time and place within or without the State of New York as shall be stated in
the Notice of Meeting or in a duly executed Waiver of Notice thereof. The
business transacted at any Special Meeting of Shareholders shall be limited
to the purposes stated in the Notice.
<PAGE>
ARTICLE IV
COMMITTEES
The Board of Directors, by resolution adopted by a majority of the
entire Board, may designate from among its members an Executive Committee, an
Investment Committee and other committees, each consisting of three or more
Directors, and each of which to the extent permitted by law and in the
resolution shall have all the authority of the Board in the management of the
business affairs of the Company and shall have power to authorize the seal of
the Company to be affixed to all papers which may require it.
ARTICLE V
MEETING NOTICE AND PROCEDURE
Section 1. Notice.
Notice of all meetings of Shareholders shall be given at least ten days
and not more than forty days prior to the date of such meeting. Notice for
all other meetings shall be given at least one day before the meeting.
Notice addressed to the last known address of the person entitled thereto
shall be deemed given when deposited, postpaid, with the postal service.
Section 2. Waiver of Notice.
Notice of meetings may be waived either specifically or generally.
Attendance, without objection, at a meeting shall waive notice of such
meeting.
Section 3. Quorum.
Unless otherwise established by law or these By-Laws, a quorum shall
consist of one-third (1/3). If a quorum fails to attend any meeting, the
majority present may adjourn the meeting until a quorum shall attend.
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
Section 1. Board of Directors.*
The Board of Directors shall consist of five to thirteen members as
elected by the Shareholders, and shall elect one of its members Chairman.
Section 2. Term.
The Directors shall be elected at the Annual Meeting of the
Shareholders, and each Director elected shall serve until the next succeeding
Annual Meeting and until his successor shall have been elected and qualified.
Section 3. Vacancies.
Vacancies and newly created directorship resulting from any increase in
the number of Directors may be filled by election at an Annual Meeting or at
a Special Meeting of Shareholders or Directors called for that purpose. A
Director elected to fill a vacancy, or a newly created directorship, shall
hold office until the next succeeding Annual Meeting of Shareholders and
until his successor shall have bee elected and qualified.
Section 4. Compensation.
Directors as such shall not receive any stated salaries for their
services, but by resolution of the Board of Directors a fixed sum and
expensed of attendance, if any, may be allowed provided that nothing herein
contained shall be construed to preclude any Director from serving the
Company in any other capacity and receiving compensation therefor.
*Amended 31 March 1990
<PAGE>
Section 5. Action by Consent.
Any action may be taken without a meeting if all entitled to vote
thereon consent in writing to the adoption of a resolution authorizing the
action.
Section 6. Attendance at Meetings.
Shareholders may attend meetings in person or by proxy. Members of the
Board of Directors, or any committee thereof, may participate in a meeting of
such Board or committed by means of a conference telephone or similar
equipment which allows all persons participating in the meeting to hear each
other at the same time. Participation by such means shall constitute
presence in person at such meeting.
Section 7. Call for Meeting.
The Chairman, President or any officer may call a meeting. Upon demand
by one-tenth (1/10) of those entitled to notice, the Corporate Secretary
shall call a meeting.
ARTICLE VI
CUSTODIAN*
All Company funds available for investment shall be deposited with a
duly appointed Custodian which shall retain such funds and all Company
investments and collect all interest and dividends thereon. It shall act
under the direction of the Investment Committee as communicated to it by the
Investment Officer provided, however, that if investments or cash funds are
to be delivered without receipt of equivalent value, the Custodian shall also
require a copy of a resolution from the Investment Committed certified by the
Investment Officer; and further provided that the Investment Officer may
confer authority for the transfer of funds and/or securities to the order of
the Company or to any other member Company of Royal Insurance or to any Royal
Insurance pool account and further provided that the Investment Officer may
confer authority for the transfer of funds and/or securities to be deposited
with regulatory commissions or departments, as may be required by law.
*Amended July 31, 1980
<PAGE>
ARTICLE VII
OFFICERS
Section 1. Election.
The officers of the Company shall be elected by the Board of Directors
at its first meeting after each Annual Meeting of Shareholders and there
shall be a President, one or more Vice Presidents, an Investment Officer, an
Assistant Investment Officer and a Corporate Secretary. The Board of
Directors may appoint such other officers and agents as it shall deem
necessary who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by
the Board. Any number of offices may be held by the same person except that
the same person cannot serve as President and Corporate Secretary.
Section 2. Term.
The officers of the Company shall hold office until their successors are
elected and qualify. Any officer elected by the Board of Directors may be
removed at any time by the affirmative vote of a majority of the Board of
Directors. The Chairman between meetings of the Board of Directors may
appoint such other officers as he shall deem necessary and may fill any
vacancy occurring in any office of the Company.
Section 3. President.
The President shall be responsible for the general management of the
affairs of the Company and shall perform any and all duties incidental to his
office. He shall have a special supervision and care over the property of
the Company. He shall have power to sigh conveyances of real estate,
satisfaction pieces for mortgages paid off, and all other papers and acts to
which the seal of the Company is affixed.
<PAGE>
Section 4. Vice President.
The Vice President shall, in the absence or incapacity of the President,
perform all the duties of that office. The Vice President shall perform such
other duties as the Board of Directors may from time to time prescribe and in
addition shall have the power, subject to such limitations as may be imposed
by the Board of Directors or the President, to enter into such contracts and
undertakings on behalf of the Company as may be required to carry on its
ordinary course of business.
Section 5. Investment Officer.
The Investment Officer shall act as Secretary of the Investment
committee on all actions pertaining to investment and cash finds. The
Assistant Investment Officer shall perform such duties as may be assigned by
the Investment Officer. In the absence or incapacity of the Investment
Officer, an Assistant Investment Officer shall have and may exercise the
power of the Investment Officer.
Section 6. Corporate Secretary.
The corporate Secretary shall give and serve all notices and shall
attend and keep Minutes of all meeting s of the Shareholders and the Board of
Directors. When required, he shall also issue notices, attend and keep
minutes of meetings or any committee of the Board of Directors. He shall
have the power to certify the incumbency of officers of the Company and the
minutes of the Board of Directors, its committees, and of Shareholders
meetings, and he shall attest the seal of the Company when required. In the
absence or incapacity of the Corporate Secretary or any other officer shall
have and may exercise the powers of the Corporate Secretary.
<PAGE>
ARTICLE VIII
POLICIES AND UNDERWRITING UNDERTAKINGS
All policies and underwriting undertakings shall be valid when signed by
the President, a Vice President, an attorney-in-fact or any other authorized
official or agent of the Company, and, where required by law, such policies
and undertakings may be attested and sealed with the seal of the Company.
The President or a Vice President or any person designated by either of
them may appoint and authorize attorneys-in-fact, officials and agents of the
Company to accomplish the purposes set forth in this Article.
ARTICLE IX
AMENDMENTS
These By-Laws may be altered, amended or repealed or new By-Laws may be
adopted at any regular or special meeting of the Shareholders or of the Board
of Directors, by the affirmative vote of a majority of the Shareholders or
the Directors.
ARTICLE X
INDEMNIFICATION
The Company shall indemnify to the full extent authorized or permitted
by law any person made, or threatened to be made a party to an action, suit
or proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that he, his testator or intestate is or was a director,
officer or employee of the company or serves or served any other enterprise
at the request of the corporation. The foregoing right or indemnification
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any By-Laws, agreement, vote of
Shareholders or disinterested Directors or otherwise, and shall continue as
to a person who has ceased to be a Director, Officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such
a person.
<PAGE>
ARTICLE XI
SEAL
A facsimile of the corporate seal is given below.
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK)
I, THORNTON R. LAND, Corporate Secretary of ROYAL LIFE INSURANCE
COMPANY OF AMERICA, do hereby certify that the foregoing is a full, true and
correct copy of the By-Laws of said Company now in full force and effect, as
they appear on the minutes of the Company.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and
affixed the seal of the Company this 3rd day of Sept. 1980.
/s/ Thornton R. Land
----------------------
Corporate Secretary
Subscribed and sworn to before
me this 3rd day of Sept. 1980.
/s/ Dennis T. Haver
- ----------------------
Dennis T. Haver
Notary Public, State of New York
<PAGE>
AGENT: THIS NOTICE MUST BE REMOVED AND LEFT WITH THE PROPOSED INURED(S)
ROYAL LIFE INSURANCE COMPANY OF AMERICA
NATIONAL SERVICE CENTER ADDRESS:
200 HOPMEADOW STREET
SIMSBURY, CT 06089
INVESTIGATIVE CONSUMER REPORT PRE-NOTIFICATION
Federal and state laws require notification that, in connection with your
application, we may request an investigative consumer report. In addition,
such a report may be requested subsequently to update our records if you
apply for additional coverage. You may request to be interviewed in
connection with the preparation of the investigative consumer report. Within
5 business days of receiving your written request, we will inform you whether
or not an investigative consumer report was requested and, if such a report
was requested, the address and telephone number of the investigative agency
to which the request was made. By contracting the local office and providing
proper identification, you may inspect or, for the appropriate fee, receive a
copy of such report. The investigative agency may retain information they
gather and disclose it at a later date to other persons.
Typically the report will contain information as to character, general
reputation, personal characteristics and mode of living, which information is
obtained through an interview with you or an adult member of your family,
employers or business associates, financial sources, friends, neighbors or
others with whom you are acquainted. The information will consist, when
applicable, of a confirmation of your identity, age, residence, marital
status, and past and present employment including occupational duties,
financial information, driving record, sports and recreational activities,
health history, use of alcohol or drugs, if any, living conditions and type
of community. The information in the report will not be used to determine
your sexual orientation.
MEDICAL INFORMATION BUREAU (MIB) PRE-NOTIFICATION
Information regarding your insurability will be treated as confidential. Royal
Life Insurance Company of America may, however, make a brief report thereon to
the Medical Information Bureau, a non-profit membership organization of life
insurance companies, which operates an information exchange on behalf of its
members. If you apply to another Bureau member company for life or health
insurance coverage, or a claim for benefits is submitted to such a company, the
Bureau, upon request will supply such a company, with the information in its
file.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the bureau's file, you may contact the Bureau and seek a
correction in accordance with the procedures set forth in the Federal Fair
Credit Reporting Act. The address of the Bureau's information office is Post
Office Box 105, Essex Station, Boston, Massachusetts 02112. Telephone number
(617) 426-3660.
Royal Life Insurance Company of America may also release information in their
files to other life insurance companies to whom you may apply for life of health
insurance or to whom a claim for benefits may be submitted.
PERSONAL HISTORY INTERVIEW
We may follow-up your application for insurance with a personal history
interview. This is a phone call placed to you at the request of our
underwriting office. Its purpose is to make sure that our application
information is accurate and complete.
Our interviewers are trained to conduct their calls in a friendly, professional
manner. The nature of the information discussed is always treated as personal
and confidential.
<PAGE>
<TABLE>
<CAPTION>
<S><C>
APPLICATION FOR MODIFIED SINGLE PREMIUM FIRST CLASS MAIL TO: ROYAL LIFE INSURANCE COMPANY
VARIABLE LIFE INSURANCE POLICY OF AMERICA
200 HOPMEADOW STREET
SIMSBURY, CT 06089
ROYAL LIFE INSURANCE COMPANY OF AMERICA
- --------------------------------------------------------------------------------------------------------
1 (a). PROPOSED INSURED INFORMATION / / Owner / / Joint Owner
_________________________________________ _________________________________________________
First Name Middle Last Social Security Number
Address:
_________________________________________ / / Male / / Female DOB: ____________
Street
_________________________________________ Place of Birth: _______ Occupation:______________
City State Zip
- --------------------------------------------------------------------------------------------------------
1. (b) PROPOSED SECOND INSUREDS INFORMATION / / Owner / / Joint Owner
_________________________________________ _________________________________________________
First Name Middle Last Social Security Number
Address:
_________________________________________ / / Male / / Female DOB: ____________
Street
_________________________________________ Place of Birth: _______ Occupation:______________
City State Zip
- --------------------------------------------------------------------------------------------------------
2. OWNER INFORMATION (COMPLETE INFORMATION BELOW IF OWNER IS NOT THE PROPOSED INSURED, PROPOSED SECOND
INSURED OR PROPOSED INSUREDS JOINTLY. IF ADDITIONAL OWNER INFORMATION IS REQUIRED,
PLEASE NOTE IN SECTION 7 SPECIAL REMARKS.)
_________________________________________ _________________________________________________
First Name Middle Last Social Security Number
Address:
_________________________________________ / / Male / / Female DOB: ____________
Street
_________________________________________ Place of Birth: _______ Occupation:______________
City State Zip
- --------------------------------------------------------------------------------------------------------
3. BENEFICIARY INFORMATION (IF ADDITIONAL BENEFICIARIES, PLEASE NOTE IN SECTION 7 SPECIAL REMARKS.)
PRIMARY BENEFICIARY
__________________________________________ _________________________________________________
First Name Middle Last Social Security Number or Tax ID Number
Address: _________________________________________________
__________________________________________ Relationship to Proposed Insured
Street
__________________________________________ Trust Date:______________________________________
City State Zip
Contingent Beneficiary
__________________________________________ _________________________________________________
First Name Middle Last Social Security Number or Tax ID Number
Address: _________________________________________________
__________________________________________ Relationship to Proposed Insured
Street
__________________________________________ ___________________ Trust Date:_____________
City State Zip % of Death Benefit
APPLICATION (Continue to next page)
<PAGE>
4. PLAN OF INSURANCE ______________ INITIAL PREMIUM $____________ INITIAL FACE AMOUNT $____________
Option I ______ Option 2 ______ MATURITY EXTENSION RIDER / / Yes / / No
Are you purchasing this insurance to replace any life insurance in force? / / Yes / / No
________________________________________ _________________________________________________
If yes, Company name Estimated Transfer Amount
Is there an outstanding loan on the policy being replaced? ? / / Yes / / No Loan Amount $____________
(IF YES, PLEASE SUBMIT EXCHANGE AGREEMENT FORM FOUND IN BACK OF THE PROSPECTUS.)
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUM ALLOCATION (MUST TOTAL 100%) (Minimum percentage allocation is 10% and must be in whole numbers.)
Small Company Fund _____% Stock Fund _______% Advisers Fund _____%
Capital Appreciation Fund _____% Index Fund _______% Bond Fund _____%
MidCap Fund _____% Dividend and Growth Fund _______% Mortgage Securities Fund _____%
International Opport. Fund _____% International Advisers Fund _______% HVA Money Market Fund _____%
Other ________________________________________________ _______%
5. DOLLAR COST AVERAGING (DCA)
IS DCA ELECTED? / / YES / / NO
(If yes, please complete DCA Election form found in back of the prospectus.)
<CAPTION>
6. SUITABILITY PROPOSED
PROPOSED SECOND
INSURED INSURED
------- -------
<S> <C> <C>
YES NO YES NO
a. Do you believe that this policy is consistent with your insurance needs and
Financial objectives? / / / / / / / /
b. DO YOU UNDERSTAND THAT THE AMOUNT AND DURATION OF THE
DEATH BENEFIT MAY VARY, DEPENDING ON THE INVESTMENT
PERFORMANCE OF THE VARIABLE ACCOUNTS? / / / / / / / /
c. DO YOU UNDERSTAND THAT THE POLICY VALUES MAY
INCREASE OR DECREASE, POSSIBLY TO ZERO, DEPENDING
ON THE INVESTMENT PERFORMANCE OF THE
VARIABLE ACCOUNTS? / / / / / / / /
d. Did you receive the current prospectus for the life policy applied for? / / / / / / / /
e. Do you understand that the initial premium will be allocated to the Money
Market Sub-Account until the expiry of the Right to Examine Policy Period? / / / / / / / /
7. Special Remarks (In this section, please note the question number that you are addressing.)
________________________________________________________________________________________________
________________________________________________________________________________________________
8. Have you in the past 12 months smoked one or more cigarettes?
Proposed Insured Yes / / No / /
Proposed Second Insured Yes / / No / /
- ------------------------------------------------------------------------------------------------------------------------------------
SIMPLIFIED UNDERWRITING: If the answers to this section are "NO", Then proceed to
section 13. FULL UNDERWRITING: if any of these Questions are answered "YES",
or the age or premium exceeds the simplified underwriting guidelines, please
complete the entire application. Include details Of "YES" responses under
Section 11.
<CAPTION>
PROPOSED
PROPOSED SECOND
INSURED INSURED
------- -------
<S> <C> <C>
YES NO YES NO
a. Have you ever had or been treated for cancer, insulin dependent diabetes,
heart disease and/or related surgery, chest pain, stroke, disease of the nervous
system, muscular disorder, Alzheimer's disease or dementia, or any lung or
breathing disorder? / / / / / / / /
b. In the past 5 years have you had or been treated or hospitalized for a nervous or
psychological disorder, epilepsy, kidney failure, liver disorder or been advised
to have treatment for alcohol or drug abuse? / / / / / / / /
c. Has the proposed insured ever been diagnosed by a member of the medical
profession as having Acquired Deficiency Syndrome (AIDS), AIDS Related
Complex (ARC), or other immune deficiency disorder? / / / / / / / /
d. Have you ever been declined for life insurance? / / / / / / / /
- ------------------------------------------------------------------------------------------------------------------------------------
APPLICATION (Continue to next page)
<PAGE>
<CAPTION>
10. FULL UNDERWRITING Proposed
Proposed Second
PLEASE ANSWER ALL QUESTIONS. (Explain "Yes" answers under Section 10) Insured Insured
------- -------
<S> <C> <C>
YES NO YES NO
a. During the past 5 years have you consulted a physician or visited a clinic or
hospital as a patient? / / / / / / / /
b. Have you ever been treated for a heart murmur, high blood pressure or other heart,
blood or circulatory disorder or diabetes (whether or not on insulin)? / / / / / / / /
c. Have you ever been treated for convulsions, brain or spinal cord disorders?
/ / / / / / / /
d. Have you ever been treated for any disease of the bones, joints, muscles, lymph
gland, stomach, intestines or any immune disorder? / / / / / / / /
e. Have you had insurance offered with an extra premium? / / / / / / / /
f. Do you plan to travel or reside outside the United States? / / / / / / / /
(If yes, state when, where, how long).
g. Have you flown in the past 2 years as a pilot or student pilot? / / / / / / / /
h. Have you participated in the past 2 years in any type of vehicle racing, sky or
scuba diving or hang gliding? / / / / / / / /
i. Have you in the past 3 years been convicted or, pleaded guilty or no contest to:
driving under the influence of alcohol an/or drugs, speeding, reckless driving, or
had your license suspended? / / / / / / / /
j. Have you in the past 12 months smoked cigarettes, cigars, pipes or used chewing
tobacco? / / / / / / / /
If yes, specify substance.___________________________________________________
k. Proposed Insured Height_______ft. ________in. Weight________lbs.
l. Proposed Second Insured Height_______ft. ________in. Weight________lbs.
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11. GIVE COMPLETE DETAILS INCLUDING NAMES AND ADDRESSES OF DOCTORS, HOSPITALS AND TELEPHONE NUMBER.
Item # _______ ___________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________
Item # _______ ___________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________
Item # _______ ___________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________
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<CAPTION>
12. OTHER INSURANCE INFORCE/APPLIED FOR: PROPOSED
PROPOSED SECOND
INSURED INSURED
------- -------
<S> <C> <C>
YES NO YES NO
Do you have life insurance in force or applied for? / / / / / / / /
(Give company, amount and year of issue)
_________________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________________
APPLICATION (Continue to next page)
</TABLE>
<PAGE>
13. AGREEMENT, ACKNOWLEDGMENT AND AUTHORIZATION
AGREEMENT AND ACKNOWLEDGMENT
Each of the undersigned declares that: the statements and answers contained
in this application are complete and true to the best of each person's
knowledge and belief: and each agrees that coverage can take effect only if
the Proposed Insured(s) is/are alive and all answers material to the risk are
still true and complete when the policy is delivered and paid for. I/We
agree that the statements and answers contained in this application shall
form the basis of any contract for life insurance that may be issued; and a
copy of his application shall be attached to and made part of the policy.
Except as provided in the Conditional Receipt with the same date as this
application, the insurance applied for will not take effect until: (a) the
policy is issued, delivered to the policyholder; and (b) the initial premium
is paid; while (c) each Proposed Insured(s) is/are living and his/her
insurability is the same as described in this application.
If the initial premium accompanies this application, I/we acknowledge
possession of the Conditional Receipt and certify that I/we have read it.
The terms and conditions of the receipt, to which I/we agree, have been
explained to me/us fully by the agent and I/we understand them.
I/We agree that only any Officer of the Company may alter the terms of the
application, the Conditional Receipt or the policy or waive any of the
Company's rights or requirements.
AUTHORIZATION TO OBTAIN, RELEASE AND DISCLOSE INFORMATION I/We authorize: 1)
any licensed physician, medical practitioner, hospital, clinic or any other
medically related facility, insurance company, the Medical Information Bureau
or other organization, institution or person that has any records or
knowledge of me/us or my/our health to give this data to Royal Life Insurance
Company of America (Royal) or its reinsurers. 2) the medical, surgical, drug
or alcohol use mental health or emotional health information requested to be
used to determine my/our insurability and/or eligibility for any benefits in
the event of a claim. 3) Royal or its reinsurers to give any information
about me/us or my/our health to the Medical Information Bureau, other
insurance companies in which I/we may have policies, or to whom I/we may
apply, or to whom a claim for benefits may be submitted and as may be
required by law.
I/We understand that if I/we request details about any of the medical
information gathered about me/us or my/our children which relates to this
application; (a) the medical information; and, (b) the identity of the
medical care institution or the medical person who provided the information;
shall be released to me/us or to a licensed medical person or my/our choice.
Upon written request, I/we will receive details of the method I/we must use
to exercise my/our right to access, correct and amend any information
gathered about me/us or my/our children which relates to this application.
I/We may revoke, in writing , the right to use this consent form except to
the extent that action has already been taken.
This consent form will expire: two years from the date of the contract; or,
one year form the date below, if no contract has yet been issued. I/We know
that I/we may request to receive a copy of this authorization. A photocopy
of this consent form is as valid as the original.
<TABLE>
<CAPTION>
<S><C>
SIGNED AT ____________________________ THIS ________________DAY OF ___________________/________.
City State
__________________________________________ ______________________________________________
SIGNATURE OF PROPOSED INSURED SIGNATURE OF PROPOSED SECOND INSURED
(PARENT OR GUARDIAN IF UNDER 15 YEARS OF AGE) (PARENT OR GUARDIAN IF UNDER 15 YEARS OF AGE)
__________________________________________ ______________________________________________
SIGNATURE OF LICENSED AGENT/ SIGNATURE OF APPLICANT/OWNER
REGISTERED REPRESENTATIVE IF OTHER THAN PROPOSED INSURED(s)
$
__________________________________________ ______________________________________________
OWNERS'S S.S. NO./TAX I.D. NO. AMOUNT RECEIVED WITH APPLICATION
APPLICATION (Continue to next page)
<PAGE>
REGISTERED REPRESENTATIVE REPORT
PLEASE PRINT ALL INFORMATION CLEARLY
Information - Complete for all Applications
Broker/Dealer Name: ______________________________________________________________________________________________________________
____________________________ _________________ ____________________________ ________________________
Reg. Rep Name Reg. Rep Code Social Security Number Split %
____________________________ _________________ ____________________________ ________________________
Joint Reg. Rep Name Reg. Rep Code Social Security Number Split %
Reg. Representative Telephone:______________________________ Fax Number:____________________________________
Proposed Insured Telephone: Home:__________________________ Business:______________________________________
Best time to call Proposed Insured:____________________________________________________________________________
Assistant's Name___________________________ Assistant's Telephone Number:____________________
- ------------------------------------------------------------------------------------------------------------------------------------
Do you have knowledge or reason to believe that replacement of existing life insurance or annuities is involved in this transaction?
- ------------------------------------------------------------------------------------------------------------------------------------
COMMISSION PROGRAM - Contact your home office for program information.
/ / Program A / / Program B / / Program C / / Firm Default
- ------------------------------------------------------------------------------------------------------------------------------------
Estimated annual income, net worth and marital status or Proposed Insured(s) and Applicant (if different)?
Give the purpose of this insurance and the nature of the Owner/Applicant's interest.
- ------------------------------------------------------------------------------------------------------------------------------------
JUVENILE COVERAGE - If any insured is under age 19, please complete the following:
a) Applicant's relationship to proposed insured _______________________________
b) Amount of insurance on each parents life _________________________________
c) Amount of insurance on each sibling _____________________________________
d) Income/Net worth of parents ____________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER CERTIFICATION - COMPLETE FOR ALL APPLICATIONS
1. I asked each question separately; the answers were recorded as given; and, they are complete and accurate to the best of
my knowledge and belief.
2. I am duly licensed in the state in which this application was signed.
3. I have given the Proposed Insured(s) the appropriate Disclosure documents.
4. I am a NASD Registered Representative.
5. I have compiled with state and federal laws on disclosure, cost comparison and replacement.
6. I have reviewed the purchase of this insurance policy as to suitability.
7. I have explained to the applicant that this policy is not effective until a policy is issued by our National Service
Center.
8. I have provided a compliance illustration with this application.
- ------------------------------------------------------------------------------------------------------------------------------------
X__________________________________________
Signature(s) of Writing Registered Representative(s)
Hartford Life Use Only:
F.O. #____ STAFF CODE _______ ADVANCED UND. CODE _______ MARKETING CODE ______
</TABLE>
<PAGE>
CONDITIONAL RECEIPT
THIS RECEIPT IS VALID ONLY ON PROPOSED INSURED(S) AGE 80 OR LESS, WITH AMOUNTS
FOR NOT IN EXCESS OF THE INITIAL PREMIUM PLUS $500,000.
If any person proposed for coverage has answered "Yes" to any question in
Section 9, no payment may be accepted with the application.
- --------------------------------------------------------------------------------
If the proposed insured qualifies for simplified underwriting, or answered "no"
to all the question in Section 9, an advance payment may be accepted and the
Conditional Receipt may be given ONLY under the following conditions:
1. The Proposed Insured(s) appear(s) to be standard risks, in all respects.
2. The Conditional Receipt is given and the advance premium is collected only
at the time the application is taken and signed.
3. The application does not contain a request for postdating.
4. The agent does not make an advance payment for the Proposed Insured or
Applicant. If this is done, loss of the agent's license could result.
5. For policies requiring full underwriting, the Proposed Insured(s) is/are 80
years old or less, age last birthday.
- --------------------------------------------------------------------------------
1. NO COVERAGE WILL BECOME EFFECTIVE PRIOR TO DELIVERY OF THE POLICY APPLIED
FOR UNLESS AND UNTIL ALL THE CONDITIONS OF THIS RECEIPT HAVE BEEN FULFILLED
EXACTLY.
a) The amount of payment taken with the application must be equal to full
initial premium and for the amount of insurance, which may become
effective prior to delivery of the policy.
b) All medical examinations, test, x-rays and electrocardiograms required
by the Company must be completed and received at its National Service
Center in Minneapolis, Minnesota within 60 days from the date of
completion of this application.
c) As of the effective date, as defined below, each person proposed for
insurance in this application must be a risk insurable in accordance
with the Company's rules, limits, and standards for the plan and the
amount applied for without any modification either as to plan, amount,
riders and/or the rate of premium paid.
d) As of the effective date, the state of health and all factors
affecting the insurability of each and every person proposed for
insurance must be as stated in the application.
2. Subject to the conditions of paragraph 1 insurance, as provided by the
terms and conditions of the policy applied for and in use on the effective
date, but for an amount not exceeding that specified in paragraph 3, will
become effective as of the effective date. "Effective date", as used
herein, is the later of: (a) the date of completion of the application, or
(b) the date of completion of all medical examinations, tests, x-rays and
electrocardiograms required by the Company. The effective date is
determined separately for each person proposed for coverage.
3. The total amount of insurance which may become effective on any person
proposed for insurance shall not exceed the initial premium plus $500,000.
4. If one or more of the conditions of paragraph 1 have not been fulfilled
exactly, there shall be no liability on the part of the Company except to
return the applicable payment in exchange for this Receipt.
5. NO AGENT OR ANY OTHER PERSON IS AUTHORIZED BY THE COMPANY TO WAIVE OR
MODIFY IN ANY WAY ANY OF THE PROVISIONS OF THIS CONTINUAL RECEIPT.
If all the conditions are not fulfilled exactly, the insurance will take effect
when the policy is delivered to the owner stated in the application; but only if
at the time of such delivery there has been no change in insurability as
represented in the application.
All premium checks must be made payable to the Insurance Company. Do not make
checks payable to the agent or leave the payee blank.
Received a check totaling $___________from ______________________________ in
connection with the application for life insurance totaling
$________________________, bearing the same date as this Conditional Receipt.
Dated at _______________ this _________ day of ______________________/_________.
______________________________________
Signature of Agent
I acknowledge possession of this receipt and certify that I have read it and the
agreement in the application. The terms and conditions of this receipt, to
which I agree, and the agreement in this application have been explained to me
fully by the agent and I understand them.
______________________________________
Signature of Applicant
THIS RECEIPT IS TO BE DETACHED AND GIVEN TO THE APPLICANT AT THE TIME OF
APPLICATION IF ANY MONEY IS TAKEN.
<PAGE>
[LOGO]
October 6, 1998 LYNDA GODKIN
Senior Vice President, General Counsel
Corporate Secretary
Board of Directors
Royal Life Insurance Company of America
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT TWO ("Separate Account")
ROYAL LIFE INSURANCE COMPANY OF AMERICA ("Company")
Dear Sir/Madam:
In my capacity as General Counsel of the Company, I have supervised the
establishment of the Separate Account by the Board of Directors of the
Company as a separate account for assets applicable to Policies offered by
the Company pursuant to Connecticut Law. I have participated in the
preparation of the registration statement for the Separate Account on Form
S-6 under the Securities Act of 1933 with respect to the Policies.
I am of the following opinion:
1. The Separate Account is a duly authorized and existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
2. To the extent so provided under the Policiess, that portion of the assets
of the Separate Account equal to the reserves and other contract
liabilities with respect to the Separate Account will not be chargeable
with liabilities arising out of any other business that the Company may
conduct.
3. The Policies, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations
of the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
registration statement for the Policies and the Separate Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
[LOGO]
MICHAEL R. WINTERFIELD, FSA, MAAA
Assistant Vice President
Director, Individual Annuity Product Management
October 2, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir:
This opinion is furnished in connection with the Form S-6 Registration
Statement under the Securities Act of 1933, as amended ("Securities Act"), of
a certain modified single premium variable life insurance policy (the
"Policy") that will be offered and sold by Royal Life Insurance Company and
certain units of interest to be issued in connection with the Policy.
The hypothetical illustrations of the Policy used in the Form S-6
Registration Statement accurately reflect reasonable estimates of projected
performance of the Policy under the stipulated rates of investment return,
the contractual expense deductions and guaranteed cost-of-insurance rates,
and utilize a reasonable estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Form S-6
Registration Statement and to the reference to my name under the heading
"Experts" in the Prospectus included as a part of such Form S-6 Registration
Statement.
Very truly yours,
/s/ Michael Winterfield
Michael Winterfield, FSA, MAAA
<PAGE>
ROYAL LIFE INSURANCE COMPANY OF AMERICA
POWER OF ATTORNEY
Gregory A. Boyko
John P. Ginnetti
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Thomas S. Clark to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the Royal Life Insurance Company of America under the
Securities Act of 1933 and/or the Investment Company Act of 1940.
/s/ Gregory A. Boyko Dated as of September 15, 1998
- ------------------------------
Gregory A. Boyko
/s/ John P. Ginnnetti Dated as of September 15, 1998
- ------------------------------
John P. Ginnnetti
/s/ Lynda Godkin Dated as of September 15, 1998
- ------------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated as of September 15, 1998
- ------------------------------
Thomas M. Marra
/s/ Lowndes A. Smith Dated as of September 15, 1998
- ------------------------------
Lowndes A. Smith
/s/ Raymond P. Welnicki Dated as of September 15, 1998
- ------------------------------
Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus Dated as of September 15, 1998
- ------------------------------
Lizabeth H. Zlatkus
